Christine Jordan Sexton
Nearly $1 billion was paid last year to close out nearly 3,000 medical malpractice claims leveled against health providers in Florida, a newly released report from state regulators shows.
The report, prepared by the Office of Insurance Regulation (OIR), showed that about one-third of those claims were filed as a result of patients who had died.
Roughly $949 million was paid in 2021 to close a total of 2,680 malpractice claims, which was up slightly from 2020, when companies closed 2,494 medical malpractice claims.
Despite closing more claims in 2021, though, the payout was less than what was paid the previous year, when the industry paid $1.5 billion.
Meanwhile, of the nearly $1 billion spent last year, $766 million was paid for damages. The remainder was spent on loss adjustment expenses, which are the costs companies pay to investigate and settle claims.
The report notes, though, that not every closed claim resulted in a payment. “Whether due to an outcome of the courts, arbitration, or a plaintiff discontinuing pursuit of a claim, some claims are closed without any payment settlement,” the report notes.
Nearly one-third of the closed claims in 2021 (872) involved patients who died. Another 310 cases involved insured patients who received care that resulted in the loss of limbs, blindness, partial or complete paralysis, or left them brain dead.
Hospital inpatient settings were the most commonly reported claim location for malpractice, accounting for 1,324, or nearly half of the claims closed last year.
Hospital emergency rooms and physicians’ offices were the second- and third-most commonly reported claim locations for malpractice, accounting for 308 and 306 of the closed claims, respectively.
There often is a lengthy gap between when medical malpractice occurs, when a claim is filed and when a claim is settled. According to the OIR analysis for the 2021 closed claims, on average, a claim was filed 496 days after the malpractice occurred, and a claim was closed 733 days after it was filed.
In addition to highlighting closed claims data, the OIR report tracks market data such as premiums collected, medical malpractice rates and market competitiveness
About $837 million in medical malpractice premiums were written in Florida in 2021, making Florida the third-largest state in terms of medical malpractice premiums written in 2021, behind New York and California.
Physicians and surgeons account for nearly 59% of the 2021 written premiums, paying $459.5 million for coverage. On average, medical malpractice rates for physicians went up 6.2% last year.
Most physicians purchase their medical malpractice coverage from an insurance company. The Doctor’s Company collected $112.1 million in premiums from Florida physicians in 2021, more than any other carrier. MAG Mutual Insurance Company and Medical Protective Company collected roughly $98 million and $94.2 million, respectively, last year.
But surplus lines insurers and risk retention groups also offer access to medical malpractice. Surplus lines insurers primarily focus on coverage for unique risks. Risk retention groups (RRGs) are liability insurance companies owned by its members. RRGs allow businesses with similar insurance needs to pool their risks and form an insurance company that they operate under state regulated guidelines.
The report shows that hospitals paid $59,278,726 in malpractice premiums in 2021. Nearly 62% of that money was paid for coverage provided by risk retention groups, while 33% was for surplus lines coverage.
Meanwhile, “other” health care facilities paid $113.6 million in malpractice premiums in 2021, nearly 92% of which was paid to surplus lines carriers. The report notes that other health care facilities include nursing homes, blood banks and MRI centers.
Six entities, including four retention groups, entered the Florida medical malpractice marketplace in 2021. Four licensed insurance carriers withdrew from the Florida market in 2021 and five entities surrendered their registrations.
