November 14, 2005

Dear Midwife,

The National College of Midwifery is exploring the possibility of starting a risk purchasing group or a risk retention group (essentially, a purchasing coop or a self-insurance group) for malpractice insurance. This would be a nationwide group of out-of-hospital birth providers, both CNMs and licensed and/or certified midwives, as well as possibly Naturopath midwives, who would band together either to form a larger, more appealing client for an existing insurance carrier, or (if our numbers are large enough) to form our own insurance carrier to insure ourselves. Please note that this policy would NOT cover CNMs doing in-hospital births, nor would it cover birth centers. For CNMs doing both hospital and out-of-hospital births, it would only cover her out-of-hospital births. My preference would be to form a risk retention group in which the members retain ownership of the assets, and have full say in how the policy is structured and administered. However, our insurance agent for this project does not think we can get a large enough group to make this idea float. Such a pool needs quite a large sum of money to remain solvent in case of claims-at least $1 million to start. For example, in the policy that the College held last year with Lloyds, the claims that were paid outstripped the premium that the college paid on behalf of the members.

In order to reduce the chances of the pool going bankrupt should one of the members of the group have a claim in which damages were awarded, we would base the policy on the concept of mandatory mediation and arbitration. Each participating midwife would be required to sign a contract with each of her clients stating that in the case of an adverse outcome, the client and midwife agree to engage in mediation to resolve the conflict. If the mediation were not successful, they would agree to submit the case to the binding arbitration of a judge, who would hear expert testimony presented by lawyers for both sides, and then make a ruling that would be binding on both parties. The advantage of this system is that mediation has been shown to reduce the number of claims by one third, and if the case goes before a judge for binding arbitration and the judge rules in the client's favor, judges are not known to award the multi-million dollar awards for which juries have become known in this country. This represents a large cost-savings to the pool, allowing it to stay afloat should a claimant be awarded damages.

The members of the group would also be required to provide proof that they engage in peer review on a regular basis. Births of twins and breeches, which are known to the midwife in advance of the birth, would be excluded from the policy, though of course the midwife would be free to attend these births subject to the laws in her state should she and the client so choose. Surprise twins and breeches would be covered. The VBAC issue is currently being reviewed by the College. While our instinct is to retain VBAC as a low risk birth, we are assessing NACC's controversial study to see if it has any validity whatsoever, by seeking reviews from qualified experts.

If you are interested purchasing liability insurance, and want to explore whether a risk retention or risk purchasing group would work for you, please fill out the questionnaire below and return it to me via e-mail at elizabet@taosnet.com. Mention "Risk Purchasing Group" in the message subject.

We will submit this collated information to our insurance agent, who will work to find us a carrier willing to offer us a quote (if we decide to form a risk purchasing group) or will let us know what kind of premiums we'd be looking at if we started a risk purchasing group. We have no idea if we will be able to get a large enough number of participants to make this type of policy feasible or affordable. This letter in no way implies that we are offering membership in an existing policy. It's just a small step toward a trial balloon.

The policy would need at least a part-time administrator to check credentials, handle incident reports, and keep client contracts on file. The cost of the administrator's salary would be built into the premium. The College would not be the umbrella for the policy, which would form its own non-profit group, nor would College staff administrate the policy. It would be way to big for our tiny staff to handle.

Please feel free to call me at the number above if you have any questions or ideas. I am particularly interested in ideas on how to reduce the financial risk inherent in this kind of endeavor, so that it can become sustainable. In the ideal world toward which we are all working, there would exist a nationally funded resource to pay the medical bills for children who experience birth injuries. It appears that most lawsuits against birth practitioners are brought by parents who are cornered by ongoing, staggering medical bills for their child. In the interim, while we're stuck with the system as it exists, this potential policy may provide a way for midwives to keep practicing and billing insurance companies and Medicaid for their services, while avoiding participation in an exploitive insurance industry that is oblivious to their needs and realities.

Warmly,

Beth Enson, Dean of Students

Survey For Potential Members in a Malpractice Insurance Risk Purchasing or Risk Retention Group

You may cut and paste the following form into an email to: elizabet@taosnet.com, add your answers, and send.

Your name:

Address:

Phone #:

email address:

Are you a (check those that apply): ____homebirth CNM
____Licensed Midwife ___CPM

How many births do you attend as primary midwife each month? ______ How many as the assistant or second midwife? _______ (If you work for a birth center, divide the number of cases the Center does by the number of midwives on staff)

Number of births you have attended in your career: __________

Maximum you could pay in annual premium for liability insurance:
Less than $5000:____ $5000:____ $10,000:____
$15,000:____ $20,000:____ other:_____

Level of coverage you would need for insurance or medicaid reimbursement:
$1 million/$3 million___________
$200,000/$600/000___________

Would you be interested in a pro-rated policy whose premiums would be based on the number of births attended per month or year?

Have you ever had a claim made against you by a client? If so,

Were damages awarded by a court?

Was the case settled out of court?

Was the case dismissed?

Is the case pending?

Anything else you would like to say about the case:

Do your clients sign informed consent agreements?

How do you screen your clients for drug abuse? Domestic violence?

Emotional illness?

(A large number of the incidents fielded by members in the College's malpractice policy last year involved clients who had lied about the above items, and then filed claims.)

Are you a Medicaid provider? If so, what percentage of your clients receive Medicaid?

Home :: Site Map :: Contact :: Join :: View Members Only Section
What is MANA? :: News :: Definitions :: Conferences :: Resources :: Links