Surcharge at the heart of covering high insurance

A practice of 150 obstetrician-gynecologists in Connecticut is planning to charge an extra $500 per pregnancy starting Sept. 1 in response to its high medical liability premiums, even though the state attorney general say such a surcharge probably is illegal. The group, Women’s Health Connecticut, based in Avon, released a statement saying the surcharge is intended to force a solution to the state’s medical malpractice crisis. The practice will forego the surcharges if state legislators pass meaningful medical malpractice reform, a spokesman says.

Patients will be billed directly if employers or insurers don’t pay the surcharge, the practice reports. Connecticut Attorney General Richard Blumenthal says the plan is "most likely illegal." He recently urged any patient charged the fee to contact his office so that investigators could respond.

"This sizeable surcharge raises serious and significant legal questions, and I am investigating its potential violations of laws or contracts," he says. "Any woman charged this $500 fee should immediately contact my office, because it may in fact be not only illegitimate, but an illegal requirement. I sympathize with physicians who face increasing medical malpractice costs — particularly obstetricians and gynecologists. But imposing a surcharge is unreasonable and unauthorized, unless the doctors are able to negotiate it with the health care coverage providers."

Blumenthal says the fee also threatens to deter pregnant women from seeking health care. The $500 surcharge, or any fee that contradicts a physicians’ contract agreement with an insurance company or other health benefits provider, would violate state law in most instances, he says. Medicaid requires a participating provider to accept only what Medicaid pays for covered services.

Beyond insurance payment

In the case of insurance plan subscribers, the surcharge appears to violate statutes "which plainly say that enrollees can’t be billed for any sums owed beyond what the insurance company would pay — except for copays and deductibles," Blumenthal says.

In mid-May, Connecticut Gov. John G. Rowland vetoed tort reform passed by the state Legislature. Physician groups supported the veto because the bill did not contain a cap on noneconomic damages. Women’s Health Connecticut announced its surcharge plan days after the veto. The group said proceeds would go to a special fund to pay for liability premiums, which it said rose from $250 per delivery in 2002 to about $1,000 currently. The group pays $98,750 a year in premiums per doctor and expects that figure to rise to $100,000 to $125,000. The practice delivers 12,000 babies a year.