Kenneth M. Greene wasn't sure how his 1,500 patients would react when he asked them for a $10 contribution to help pay his $11,000 malpractice insurance bill.
"The medical malpractice insurance crisis has come full force to Maryland," the 47-year-old Towson internist declared in a letter he sent last December. A "small donation . . . is necessary if we are to continue to keep our doors open."
Nine hundred miles away in North Palm Beach, Fla., family physician Ira G. Warshaw launched a similar plan. Warshaw asked his 3,000 patients to send him a check for $125 ($25 if they were under 25) to help defray his $30,000 insurance bill, which has quadrupled since 2002. If patients didn't send him money, Warshaw warned in a letter earlier this year, he might be forced to stop participating with Medicare and some health plans.
"I felt like I was drowning, really," said Warshaw, a solo practitioner who said he felt "some guilt" about his request but was also grappling with a $100,000 debt from a failed venture in group practice. He felt compelled to act, he said, after his income dipped below the national average for his specialty, roughly $140,000.
Greene and Warshaw are among the pioneers of a new -- and controversial -- tactic that is being viewed with keen interest by medical groups around the country: the malpractice surcharge. Both doctors say their letters were so successful at generating funds that they plan to send another appeal before next year's insurance bills are due.
Rising expenses and static reimbursements have led a growing number of physicians, most of them in the less lucrative primary care specialties of pediatrics, family practice and internal medicine, to begin charging so-called access fees for services they once provided for free. These include filling out camp and disability forms, taking after-hours phone calls, and answering e-mail questions. Some are also dunning patients for canceled appointments.
Presented as voluntary
A malpractice surcharge, some doctors say, is simply one more access fee, although it is usually presented as voluntary to avoid running afoul of Medicare rules that prohibit such mandatory charges. Its appeal is enhanced by the anger many doctors feel about rising insurance rates, which has touched off a fierce political battle in Maryland and other states.
"Physicians are getting crushed by the combination of malpractice cost shocks and declining reimbursement," said T. Michael Preston, executive director of MedChi, the Maryland state medical society. "As a result, there is great interest in surcharges or access fees."
Two-thirds of Maryland physicians, Greene among them, are insured by Medical Mutual Liability Insurance Society of Maryland, which increased rates an average of 28 percent this year. Last week the state insurance commissioner approved an average rate increase of 33 percent for 2005.
The Bush administration, backed by the American Medical Association (AMA) and other medical groups, is pushing legislation to limit liability costs, and reduce what the president last week called "junk lawsuits" that are driving "good docs" from practice. They advocate capping the amount of money patients harmed by medical negligence could collect from doctors and hospitals.
Maryland Gov. Robert Ehrlich (R) has endorsed reducing the state's cap on certain kinds of damages, but he faces fierce opposition from some leading lawmakers and trial lawyers' groups. Opponents of caps say premium increases are caused by cyclical variations in the economy and investment losses by insurance companies, not by outsized payouts. And they note that in Maryland, studies have found that rather than fleeing the state, the number of doctors has increased in recent years.
'Something's gotta give'
In addition to lobbying for caps at the state and national level, AMA officials are studying the issue of malpractice surcharges and may develop guidelines for members.
"Something's gotta give," said orthopedic surgeon Peter Lavine, president of the Medical Society of the District of Columbia. "One huge benefit is that [surcharges] will engage the public, which really isn't that engaged in the debate."
But some consumer advocates and medical ethicists warn that asking patients for more money at a time when they are facing other sharp increases in health costs may backfire. And officials of some groups, including the Medical Group Management Association (MGMA) which represents 1,900 practices employing 237,000 doctors, have warned their members to tread carefully before adding access fees, even voluntary ones, that some patients may regard as coercive.
MGMA executive director William Jessee points to a March letter from the office of the Department of Health and Human Services inspector general warning doctors that if they charge extra fees for covered services, they might face legal action. Because Medicare reimbursement includes an allocation for malpractice insurance, MedChi's Preston said, a mandatory malpractice fee would violate federal rules. A voluntary donation would not.
Whether surcharges are permissible or not, medical ethicist Art Caplan warns that doctors who ask their patients for extra dollars to help pay their bills risk "galvanizing patients into complete hostility."
"It seems to me unethical to charge somebody for something that has nothing to do with services," said Caplan, director of the Center for Bioethics at the University of Pennsylvania. "The patient population is well aware of the malpractice problem, but perceives it rightly as a special interest battle" involving doctors, lawyers and lawmakers.
"I think it's disgraceful -- a cynical attempt to get patients [angry]" in the hope that they will pressure legislators to limit damage awards, said Arthur Levin, director of the Center for Medical Consumers, a New York-based advocacy group.
"Here we have a privileged group of professionals making more money than most Americans ever dream of, saying, 'When the going gets tough, I'll take it out of the hide of my patients,' " added Levin. The solution to malpractice rate hikes, he said, "is not to pass onto patients the cost of doing business."
Health insurers are not enthusiastic about the idea, either. Walt Cherniak, a spokesman for Aetna, one of the nation's largest health insurers, said that while the company "understands the pressures physicians are under and supports the need for meaningful malpractice reform, we don't think it's appropriate for our members to be caught in the middle." He said Aetna would not pay such a surcharge and would take action against a doctor who levied a mandatory fee of this sort.
While the costs of running a practice, including insurance premiums, have risen in recent years, physicians incomes do not appear to have dropped.
Data released by the MGMA found that between 1999 and 2003, the average reportable compensation of primary care physicians rose nearly 9 percent, to $156,902. Specialists fared better; their incomes rose more than 20 percent in the past four years from an average of nearly $246,000 to $296,000.
Greene, the Towson internist, isn't doing nearly that well. Last year, he said, he earned about $100,000. "My practice on the business side has always been kind of borderline," said the solo practitioner, who sees about two patients per hour -- about half the national average.
$5,000 in donations
"Part of it is my personality, the way I feel I should practice medicine," said Greene, who said that many of the patients he treats have cerebral palsy or mental retardation. In his 13 years of practice, he said, he has never faced a malpractice suit or disciplinary action.
After his premium increased from $8,000 to $11,000 last year, Greene said, he was alarmed. He knew he couldn't raise his rates: 95 percent of his patients are covered by the five or six insurance plans with which he has contracts. Family responsibilities prohibit him from working longer hours, he said.
"I sat down and thought, 'How am I going to get out of this bind?' " he recalled. Then he drafted a letter and spent about $1,000 to print and mail it.
About 75 percent of his patients sent him money, said Greene, who received $5,000 -- more than he needed to offset the malpractice increase.
One couple told him they were leaving the practice, fearing that if they didn't send him a donation he might hold it against them, "which I wouldn't have. I don't bring that issue into the examination room with me."
Greene said he has heard a few expressions of disapproval from other doctors. He attributes such criticism to the culture of medicine "that says as a doctor you're supposed to suck up adversity."
But to family physician John Egerton, the issue is a matter of equity.
"Patients pay an enormous premium for their health insurance," said Egerton, who practices in Friendswood, Tex., and has seen his malpractice premium triple in the past three years, from $4,000 to $13,000.
"To say to a patient, 'Give me some money because I'm not as rich as I was last year' isn't the answer," Egerton said. "Everyone has problems."