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Medical Malpractice

Many Troubled New York Hospitals Are Trimming or Eliminating Malpractice Insurance

Posted Jul 16, 2012 7:58 AM CDT
By Debra Cassens Weiss

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Several hospitals in New York City are eliminating or trimming malpractice insurance, and at least two of them have no further reserves to pay claims.

Some hospitals in other cities, particularly jurisdictions known for large malpractice awards, are also going uninsured, the New York Times reports.

Malpractice lawyers suing uninsured hospitals told the newspaper they are forced to accept installment payments or to try to pin more blame on the insured physicians.

A 2009 survey by New York State’s Health Department found that three hospitals in New York City were completely self-insured and 12 others were partly self-insured, including one that went bankrupt in 2010, the story says. Hospitals contacted by the New York Times said their coverage had not changed. Many hospitals had set aside money to pay claims, though the amount was insufficient in several cases, according to the newspaper’s review.

Two of the uninsured hospitals—Interfaith Medical Center and Wyckoff Heights Medical Center—had no money set aside for claims, the story says. It was unclear whether a third—Kingsbrook Jewish Medical Center—had any reserves.

Some hospitals do cover or subsidize insurance purchases by their physicians. Interfaith is one of them. The hospital’s chief executive, Luis Hernandez, told the Times that claims are paid from “working capital.” The hospital has already closed its obstetric unit because of a case that resulted in a $12.9 million award that is being paid by the hospital in installments.

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