Insurance Companies Inflated Medical Malpractice Claims

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A study performed by the non-profit watchdog group, Foundation for Taxpayer and Consumer Rights, found that Insurers consistently overstated their estimated amounts paid out in claims, inflating their losses by an AVERAGE of 46% between 1986 and 1994. These misleading numbers were supported by documents filed with state regulators and in statements made to public officials, the Insurance Journal and Washinton Post reported.

FTCR's study found that isurance companies reported claim losses of $39 billion dollars when they only paid out $27 billion in claims. The insurance claims study alleges that insurance companies are passing off their investment and financial losses on to doctors,

not increasing premiums as a result of claims.

"By inflating their estimated 'losses' as much as 66 percent, medical malpractice insurance companies have misled regulators, lawmakers and the public and overcharged physicians and other health care providers," said FTCR's Harvey Rosenfield. "Because all insurance companies use the same flawed accounting practices, it is likely that the insurance industry is responsible for several billion dollars in premium overcharges over the last few years, a period during which premiums have soared. The nation's economic stability and security demands that the insurance industry's accounting practices be investigated, and reforms put in place such as those that were made after widespread financial fraud was uncovered at Enron, WorldCom, Arthur Andersen and other corporations."

This study reinforces what we have believed for some time. When their investments go south, the oligopolistic insurance companies use their colossal influence and deep resources to mount campaigns and efforts to blame medical malpractice losses on personal injury lawyers, shift premium costs to all doctors, increase costs to patients and putting more of the burden on the US government.