News in brief - Oct. 10, 2005

AMA settles suit with former exec - Doctors in disaster areas get extension to file Health Net claims - Texas Medical Liability Trust to cut rates again - New medical society in Minn. to address violence - Maryland physicians may get subsidy if liability rates hold steady - Defibrillator malfunctions on the upswing

AMA settles suit with former exec

The American Medical Association settled a lawsuit with former Executive Vice President E. Ratcliffe Anderson Jr., MD, ending four years of litigation.

In 2001, Dr. Anderson filed a breach-of-contract lawsuit of more than $5 million against the AMA. His complaint said the AMA Board of Trustees had breached his contract when it stripped him of the power to hire or fire the AMA's general counsel.

At the time, the board called the lawsuit "frivolous" and vowed to "vigorously defend" against the claims. The board fired Dr. Anderson soon after he filed the lawsuit.

Last month, the AMA and Dr. Anderson announced the settlement and agreed on a joint statement. The statement read: "Prior to this settlement, Dr. Anderson's claim against three former trustees was voluntarily dismissed without a finding of wrongdoing and without payment of any compensation. That dismissal and this settlement in no way constitute an acknowledgement of any evidence of improper conduct by any party.

"Dr. Anderson remains steadfast in his belief as to the integrity of his actions as CEO of the AMA. The AMA remains steadfast in its belief as to the appropriateness of actions taken by its Board of Trustees.

"The parties have agreed and the court has ordered that the terms of the settlement shall remain confidential."

The AMA hired Dr. Anderson in 1998. He followed P. John Seward, MD, who resigned as EVP in the wake of the endorsement deal controversy with Sunbeam Corp. In January 2002, Michael D. Maves, MD, MBA, succeeded Dr. Anderson as executive vice president and chief executive officer.

Doctors in disaster areas get extension to file Health Net claims

Physicians who live or practice in regions that were declared disaster areas after Hurricane Katrina have an additional 60 days to file a claim in a class-action settlement doctors forged with California-based Health Net in May. The claims are now due Nov. 20.

The extension, which U.S. District Court Judge Federico Moreno has approved, gives physicians who were affected by the hurricane a chance to track down any information that might have been lost or damaged in the storm. The original deadline for filing claims with the insurer was Sept. 21.

More than 700,000 doctors are part of class-action lawsuits against the nation's largest HMOs. They accuse the companies of conspiring to systematically underpay physicians by downcoding and bundling claims.

Several insurers, including Health Net, Aetna, CIGNA Healthcare, Prudential Insurance Co. of America, and WellPoint, already have settled their cases. Coventry, Humana, PacifiCare Health Systems, and UnitedHealthcare and are expected to go to trial next year.

Texas Medical Liability Trust to cut rates again

The physician-owned insurance company Texas Medical Liability Trust said it would lower rates for the third straight year since the state's voters passed a tort reform referendum.

The company plans to cut liability premiums by 5% for all physicians. The new rates take effect Jan. 1, 2006. The company cut rates by 12% in 2004 and by 5% this year after a constitutional amendment passed in 2003 capped awards for noneconomic damages in medical liability cases at $250,000.

Physicians who hold policies with Texas Medical Liability Trust also can expect to receive a dividend this year, company executives announced. The trust declared a $10 million dividend, which it credited to projected earnings in 2005.

Physicians will see the dividend as a lump-sum credit on their policies when they renew in 2006, company officials said.

New medical society in Minn. to address violence

To increase awareness among physicians and other health care professionals about the effects of violence and abuse, the Minnesota-based Academy on Violence and Abuse was launched last month.

American Medical Association President J. Edward Hill, MD, and Minnesota Medical Assn. member David McCollum, MD, spoke at the unveiling.

The AVA is a national, academic medical society headquartered in Chanhassen, Minn. Society organizers said their goal is to advance health, education and research on the recognition, treatment and prevention of violence and abuse.

Dr. McCollum, who is on the AVA's board of directors, said most health care workers have horror stories about treating someone who has been abused. Dr. Hill said that with greater understanding of violence, its symptoms and root causes, physicians and other health care workers can intervene and prevent harm.

Maryland physicians may get subsidy if liability rates hold steady

In a letter to the Maryland Insurance Administration, the state's attorney general said a law granting subsidies to physicians to help them pay liability insurance bills should still apply even if insurers do not increase their rates for next year.

Attorney General J. Joseph Curran Jr. acknowledged the law literally reads that the state should not subsidize liability costs if rates do not increase. But "this appears to be attributable to an oversight in the drafting of the statute," he wrote.

"The statute as a whole demonstrates a legislative intent to subsidize physician malpractice premiums for a limited period at a gradually declining rate," Curran said in the letter. "The legislative history confirms that intent."

Curran's opinion became necessary after a company announced it would not raise premiums for next year, prompting the insurance administration to question whether the subsidy program for physicians should continue.

Defibrillator malfunctions on the upswing

An FDA study found that implantable cardiac defibrillator malfunctions serious enough to require replacements have gone up since the mid-1990s. Agency researchers examined ICD and pacemaker malfunctions between 1990 and 2002 and found that annually 20.7 out of every 1,000 ICDs had to be replaced. The study found that 4.6 out of every 1,000 pacemakers needed replacing.

The ICD-replacement rate trended down during the first half of the 1990s, the FDA's report said, but then climbed again with more than 50% of the malfunctions occurring between 1999 and 2002. Pacemaker or ICD malfunctions were directly responsible for 61 deaths, according to the agency. The study tracked more than 400,000 ICDs and 2.25 million pacemakers. Researchers speculated that ICDs' smaller size may have caused more battery, capacitor and circuitry problems.