SC won't hear hospital's appeal in self-insured doctor's case

John O'Brien Mar. 1, 2007, 10:24am

CAMC General Hospital

SC won't hear hospital's appeal in self-insured doctor's case


CHARLESTON, W. Va. - Dr. R.E. Hamrick often wondered why, if he'd never paid out a medical malpractice claim, his medical malpractice insurance premium was so high.

So his next move was only natural after the state's Legislature passed a few tort reform measures in 2003.

"When this all came out, he was paying hundreds of thousands of dollars in malpractice insurance when over 20 years he'd never paid out for a claim," said Richard Walters, an attorney with Miller, Weiler and Walters in Charleston.

"Because of the medical malpractice crisis, he was still paying six figures."

Hamrick, fed up with the premiums, decided to insure himself.

A private practice surgeon who works frequently at Charleston Area Medical Center, Hamrick had the $1 million needed to put into an actuarially sound fund in order to qualify for the caps on non-economic damages passed in 2003's Medical Professional Liability Act.

With that, he had no need for an insurer. CAMC argued that his fund was not sound and did not comply with the act, though Kanawha Circuit Judge James Stucky did not agree with the hospital, and the state Supreme Court decided Tuesday that it would not hear the appeal.

When he set up the fund in 2004, CAMC pulled his privileges on a Friday and told him he could not work with his patients. Walters recalled that on Monday he was in Circuit Court, Wednesday in Supreme Court and Thursday earned the injunction under which Hamrick has been working since.

CAMC ordered that his scheduled surgeries be cancelled -- not transferred to another surgeon.

"They've been fighting Dr. Hamrick this whole time. We're trying to figure out why they are spending all their time and effort trying to make sure he can't self-insure himself. What's the harm in that?" Walters said. "They didn't have any good answers."

In fact, CAMC in 2006 adopted a policy that allowed physicians to insure themselves.

"You can go against CAMC and win," Walters said.

The decision will probably do little to ease the malpractice insurance crisis considered by many to be happening.

"The tort reform has helped the nature of the environment in West Virginia," Walters said. "Not just in medical malpractice but litigation in general -- whether it's real or perceived -- insurers come in and provide premiums that are going to be sky-high because their perception is they are going to be paying millions of dollars."

Walters pointed at the recent Tawney, et al. v. Columbia Natural Resources decision in Roane County, where a group of natural gas royalty owners claimed they were underpaid by CNR.

A jury awarded the group $134.3 million in compensatory damages and $270 million in non-economic damages, though Walters said he did not know if the awards were justified or not.

But to some in the business world the award reinforced West Virginia's recent ranking by the American Tort Reform Association as the No. 1 Judicial Hellhole in the country.

"If allowed to stand, the verdict would have far-reaching negative implications for all gas producers in West Virginia and would reinforce the hostile legal environment all businesses face in West Virginia," the company said.

The caps passed in 2003 on non-economic damages make it a little easier for malpractice insurers. Only $250,000 in punitive damages may be claimed on a normal malpractice case, and $500,000 is the limit on a wrongful death case.

Still, Hamrick was paying nearly $100,000 a year for insurance before he decided things needed to change. His case also brought about Thursday a Supreme Court decision that the hospital Medical Staff Executive Committee's meetings must be open to everyone, and doctors will get more time to speak their minds at them.

His damages case for being improperly denied his privileges and having his relationship with his patients interfered with is remanded to Kanawha Circuit Court, though Stucky has recused himself from it. Judge Paul Zakaib is currently assigned the case.

Walters said at least one other doctor has followed Hamrick's lead and become self-insured.

"The Legislature opened the opportunity for physicians," Walters said.

"(Hamrick) said, 'Why am I wasting this money? I'll set up my own fund instead of paying these premiums.'"

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