The one-two punch of rising inflation and downward pressure on reimbursement rates has made these extremely challenging times for running a physician practice. And just as it seems that things can’t get any tougher, a newly published American Medical Association (AMA) report finds that malpractice premium costs are climbing at rates not seen since the turn of the century.
After nearly a decade of fairly stable rates, year-to-year medical liability insurance premiums have increased significantly in each of the past three years, according to the AMA Policy Research Perspectives report, which is based on data published in the Annual Rate Survey Issue of the Medical Liability Monitor (MLM), considered the nation’s most comprehensive source of data on medical liability insurance premiums.
The increases, which are being driven by deteriorating underwriting results, lower loss reserve margins, and lower returns on investment that began before the pandemic started, are also significant in size. According to the report, 7.5 percent of all premiums increased 10 percent or more in 2021, as compared to only 1.0 percent in 2016, 0.1 percent in 2017, 3.9 percent in 2018, 3.6 percent in 2019, and 5.2 percent in 2020. Increases of 10 percent or more were reported in 12 states, including Delaware, Georgia, Kentucky, Idaho, Illinois, Michigan, Missouri, Oregon, Texas, South Carolina, Washington, and West Virginia.