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 There are a number of reasons why the West Virginia Medical Association has teamed up with an insurance company, Medical Assurance, to allege that meritless malpractice claims are driving up insurance rates for doctors.  More than 690,000 reasons, actually. And they're supposed to be 
  • ecret.
    Medical Assurance has paid the state Medical Association at least $115,000 a year since 1995, or an estimated $690,000 to date, as part of a confidential agreement. 
     This secret deal requires association members to lobby legislators on the company's behalf - as they did during last week's White Coat Day at the Legislature, and the catered legislative reception the evening before.  As part of this agreement, Medical Assurance offers individual doctors reasons to lobby. Association members can reap a share of the $208 million company's annual profits, as well as a series of breaks on their premiums - provided they buy their policies from Medical Assurance.  In exchange for such perks, association members "shall assist Medical Assurance, as requested," with fact-finding projects, while the two groups "shall cooperate and assist each other in monitoring proposed legislation and administrative regulations in West Virginia," the agreement says.  There's more to the price tag. No other insurance company can advertise or otherwise promote itself at association meetings or in its journal, brochures and other publications, according to the agreement. The 
  • ecret deal further requires the association to include any
  •  articles or advertisements from Medical Assurance in its publications when requested.  Medical Assurance has provided the information for the "talking points" that association members have wielded when talking to reporters and lawmakers. The points blame the insurer's rising rates on "the frequency and severity" of mostly "meritless" lawsuits.  Few if any of the "talking points" are supported, however, by a Gazette analysis of malpractice claims resolved in the last eight years, as reported to the state Board of Medicine.  Medical Assurance has barred association members from disclosing the agreement or its terms. The agreement, which is stamped "confidential" across each page, can be shared with association members only on a "need-to-know" basis, it says.  The Gazette obtained a copy after it was listed as an exhibit in a December filing from Medical Assurance to the U.S. Securities and Exchange Commission.  As a business that sells stock to the public, Medical Assurance is required to file such documents with the SEC. The insurance giant's annual report to stockholders may shed more light on the current "crisis" campaign.   Medical Assurance's report called low insurance premiums "a disservice in the long run to insureds, investors and employees."  "We are also continually reviewing the adequacy of our rates in every 
  • tate in which we operate," CEO and Dr. A. Derrill Crowe wrote. "Despite
  •  the rampant cost-cutting by shortsighted insurers seeking to gain market 
  • hare at any cost, we will not hesitate to raise prices if our rate
  •  reviews reveal the necessity of higher premiums."  Association members have also cited the talking points to allege that West Virginia has among the highest costs racked up by an insurer to defend a doctor against a malpractice claim. These tort costs force insurers like Medical Assurance to raise the rates they charge doctors, association members contend.  But Medical Assurance actually wants the highest tort costs of any insurance company, according to the annual SEC report.  "In 1999 we continued to lead our industry in spending on the cost of claims," Crowe boasts. "At first glance this may seem extravagant, but take the time to understand the long-term benefits and you understand why we are committed to the aggressive defense of claims."  As for those benefits, Crowe wrote, "We win more cases, discourage frivolous lawsuits and build policyholder loyalty."  "Aggressive defense of claims"  Dr. Evangeline C. Pizarro does not understand any benefit, long-term or
     otherwise, from Medical Assurance's "aggressive defense of claims."  Pizarro has quit her Wheeling practice and lives in fear of losing her house because of that defensive stance, a lawsuit she filed against the insurance company
  • aid.
  •   Pizarro alleges that Medical Assurance ignored her when she repeatedly asked the insurer to settle a malpractice claim filed against her.  The family suing Pizarro offered to settle the case for $300,000 - well within the $1 million policy she had with Medical Assurance. But the insurer refused; its "aggressive defense of claims" includes an avoidance of settlement.  Pizarro's lawyer, provided by Medical Assurance, told her not to worry about the rejected settlement offer. The lawyer, William A. Davis, 
  • aid it was "not her money" and "it was not like you could lose your house
  •  or anything," the suit alleges.  Pizarro's case went to trial in August. The Belmont County, Ohio, jury returned a $7.5 million verdict against her. The judge in the case may award the family even more: Their lawyers allege that because Medical Assurance refused to try and settle the case in "good faith," the family deserves interest dating back to when they first filed 
  • uit in July 1998.
  •   Pizarro agrees in her suit that Medical Assurance "failed to act in good faith." She sued after Medical Assurance balked at honoring her insurance policy and pledging to pay the jury award.  Medical Assurance has asked a judge to dismiss Pizarro's lawsuit. Their defense: Pizarro may not have known it, but she promised 
  • ot to sue Medical Assurance when she signed her policy with them.
  •   That policy includes a clause requiring doctors to submit disputes to binding arbitration. Pizarro says she knew nothing of the clause when she 
  • igned the policy. Her lawyer in the suit against the insurer, Patrick
  •  Cassidy of Wheeling, questions how many other doctors realize they signed this right away when they decided to do business with Medical Assurance.  "They have not had any direct influence"  West Virginia Medical Association Director Evan Jenkins said he knew little of Pizarro's allegations when he met with Gazette editors and a reporter last month. Jenkins also said he did not know whether his members knew they had signed binding arbitration clauses when they bought insurance from Medical Assurance.  In addition to their secret deal, the association publicly lists Medical Assurance as its preferred carrier. Jenkins 
  • aid he believed most doctors disagree with Pizarro's assessment of
  •  Medical Assurance.  "I think that the medical community embraces this aggressive defense policy," he
  • aid.
  •   Jenkins did not return a half-dozen phone messages left last week requesting comment on the secret agreement. Dr. John Holloway, the group's president, said Friday that he did not know how much money Medical Assurance has provided.  Holloway also said the association's legislative committee, and not Medical Assurance, has crafted its lobbying agenda.  "Obviously, we've had lots of conversations with them about the liability climate, but they have not had any direct influence." Holloway 
  • aid.
  •   Frank O'Neil, a vice president of Medical Assurance at its Alabama headquarters, would not say how much money has been paid to the association. "Our agreement on that is confidential," he
  • aid.
  • "It's 
  • omething that I'd rather not tell our competitors."
  •   O'Neil did say that Medical Assurance expected to share no profits with West Virginia doctors this year, citing premium-loss ratio figures. He agreed with Holloway on the insurer's sway over the association.  "We help supply information to the association when requested," he 
  • aid.
  • "As far as I know, the association develops those talking points and their literature on their own."  To contact staff writer Lawrence Messina, use e-mail or call 348-4869.  
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