The doctors who control the Mutual Insurance Company of Arizona are more than willing to compromise--but only when they get their own way. And their antics during the latest session of the legislature show they know how to use their friends to do just that.
Last year Governor Rose Mofford took a lot of heat for vetoing a pair of bills the medical community and its major insurance company wanted. One would have granted immunity for doctors, nurses and hospitals in certain cases where a mother or infant was injured during childbirth. The other would have allowed doctors found guilty of malpractice to pay out damages to the injured party over a long period of time.
To help placate the doctors, Mofford appointed a special commission to study the malpractice problem and propose ways of lowering insurance premiums. That commission came up with an interim report this spring, with the recommendations quickly converted into four separate pieces of legislation. The first three were approved by the legislature :
--A revised version of the "periodic payment" bill. While not as onerous as the one Mofford vetoed last year, it was still fought tooth and nail by the Arizona Trial Lawyers Association. MICA supported the change, promising to lower premiums 5 percent if it becomes law. --A subsidy on medical malpractice premiums for rural obstetricians, who have been hit hard by the high rates. MICA, which insures most of these doctors, thought it was a good idea. --A request for the Arizona Supreme Court to revamp its rules about how malpractice trials are handled. Both MICA and the trial lawyers supported this proposal.
But MICA lost its enthusiasm for the commission's work when members said the state insurance director should have the authority to review--and, if necessary, reduce--what the company has squirreled away in reserves. (That's the millions in premium payments set aside each year that MICA anticipates will be needed for malpractice payouts in the future.) The company came totally unglued when it realized the legislation would allow the director to order refunds of excess reserves to every doctor who'd been charged too much: both current policyholders and those who'd left MICA to find cheaper insurance elsewhere.
Insurance director Susan Gallinger ordered such a review of reserves last year after disclosures by New Times about the way the doctor-owned company was doing business. Gallinger's review concluded that over several years, the company had overcharged doctors, giving it $18 million more in reserves than necessary. But she found that the largely laissez-faire state regulations enacted by the Republican legislature left her powerless to do anything about it.
What Gallinger did have at her disposal was public opinion. And, using that, she essentially forced MICA "voluntarily" to reduce its reserves by refunding most of the $18 million to Arizona doctors. But MICA insists it only owes refunds to doctors still with the company, and not a cent to those who have left. That issue is now in court, as several former policyholders have sued MICA for their share of the refund. Although the bill Gallinger wanted wouldn't affect the lawsuit, from MICA's standpoint, it couldn't be happening at a worse time.
The bill had only one public hearing in the Arizona Senate, and MICA officials didn't object. Instead, MICA lobbyist Mike Low waited until it went to a conference committee, which is supposed to work out differences between the House and Senate versions of the bill. There--where no public testimony is allowed--he got lawmakers to insert language to limit the refunds to current policyholders, leaving former policyholders out in the cold. Low argues it's not fair to allow refunds of excess reserves to go to former customers when the company cannot charge these same people if it turns out that the rates they charged in previous years were too low. But his real concern is more pragmatic: The changes he demanded--and got--give ammunition to MICA's side of the pending case. They put the legislature on record as telling former policyholders to go jump in a lake.
That should have been the end of the story, with MICA getting its way as the legislature was expected to rubber-stamp the revised bill. But House Democrats vowed a floor fight to put the bill back the way it was before Low tinkered with it, and the logic of their arguments even persuaded enough Republicans to promise to go along to put them in the majority. So Low complained to House Majority Leader Jim Meredith, whose father is a doctor. Meredith responded by refusing to bring the bill to the floor, therefore killing it. And that was just fine with MICA: No bill at all was just as good as a gutted one.
(Tucson Democrat Cindy Resnick did try to force the bill to the floor so it could be changed. Meredith, however, outflanked her by making a procedural motion that would kill the bill entirely. Several Republicans who supported Resnick were not happy, but unwritten GOP rules require blind party loyalty where procedural motions are concerned.)
The only thing left now is whether Mofford will let MICA get away with what it did.
Mofford aide Joyce Geyser says the governor wanted all four commission recommendations enacted. The way the session ended, Geyser says, MICA got the legislature to approve only the bills it liked and managed to gut--and then kill--the one it didn't.
Meredith insists that Geyser isn't exactly a disinterested party in the whole spat. He points out her husband, Michael, is a radiologist who used to be insured by MICA and might benefit if the refund lawsuit is successful. But Geyser notes she was willing to accept either version of the bill.
Despite the failure of the insurance-regulation bill, all indications are that Mofford will sign the other bills MICA likes sometime this week. And that will prove to MICA that it really doesn't have to deal in good faith in trying to solve the problem of high insurance rates. All it needs is a few friends in the right places.
IT'S TOUGH TO GET INTO PRISON Would you go to a public meeting if you had to sign up five days in advance and give authorities your date of birth and social security number?
That's exactly what state prison officials are demanding from anyone who wants to watch how the embattled state Board of Pardons and Paroles operates when deciding which inmates should be released from prison. Worse yet, Attorney General Bob Corbin--who has built a reputation fighting for open meetings--says he doesn't see anything wrong with it.
The parole board routinely meets in prisons around the state. Mike Arra, spokesman for the state Department of Corrections, says it makes more sense for board members to travel to the prisons rather than have to take the time and expense--as well as the security risk--of bringing prisoners to Phoenix for parole interviews.
Arra says the sign-up requirement is designed to ensure that certain kinds of people do not get into prisons. These include convicted felons, individuals who have lost visitation privileges for inmates, and anyone who in the "sole discretion" of the prison warden "is a threat to the safety or security of the system." "The whole purpose is to know who all is in the hearing room with the inmates to provide the best possible security," he says.
The way it works, Arra explains, prison authorities get the list of names and other information of those who want to come to a board meeting. This information is fed into computers to see if that person is wanted or if there is any reason he or she should not be allowed within the prison walls.
The policy, enacted last year, drew the ire of Donna Leone Hamm, director of Middle Ground, a prisoner advocacy group. Her objections went beyond the chilling effect of having to be screened to attend a public meeting.
She notes, for example, that one can lose visitation privileges for something as innocuous as allowing children to misbehave or kissing too long. "Why should someone be precluded from attending a parole board hearing to support a family member because of that?" she asks. And she doesn't like giving wardens the unrestricted power to bar anyone considered to be a threat to security, "whatever that means."
Hamm went to court and got an injunction, barring the corrections department from making her register ahead of time. But prison officials, who don't take no for an answer--even from a judge--have interpreted the court ruling in its narrowest sense: They say it applies only to her and the rest of us will have to live by the rules.
And what about the open-meetings law? Arra says the rules were approved by the Attorney General's Office, which is good enough for him.
Corbin says it comes down to a question of balancing the public's right to know with the risk of an inmate escaping. He says the courts recognize those types of conflicts, such as when they allow random drug testing of railroad workers because of a need for public safety.
Arra insists the new rules aren't designed to discourage public attendance at the board meetings. But the department seems to be doing everything it can to throw roadblocks in the way of those who want to make the trip to Florence to watch the parole board in action. Even those who want to go to every meeting will have to go through the registration procedure each time. Why? "We need to know how many people are coming," he says.
Perhaps they're going to serve tea and crumpets at the next one.
The changes Low demanded put the legislature on record as telling former policyholders to go jump in a lake.
But prison officials don't take no for an answer--even from a judge.
