Recent trends have had an overall stabilizing impact on the medical malpractice market, but several emerging issues may present challenges for insurers and actuaries, attendees at the Casualty Loss Reserve Seminar were told.

Christian Coleianne, associate director and actuary, Aon Risk Consultants, Inc., said the environment in hospital professional liability right now seems relatively stable. Citing findings from Aon's 2008 Hospital Professional Liability Benchmarking Survey, Coleianne noted that the frequency of claims continues to be "non-increasing" or flat, while the severity of claims (at the $2 million occurrence limit) is increasing moderately at a 3 percent annual rate.

However, Coleianne identified several emerging issues of interest, including "never events," overall medical inflation, changes to liability laws, and Federal healthcare reform. "Never events" describe a list of 28 hospital-acquired conditions that are preventable and should never occur.

According to Aon's findings, four hospital-acquired conditions "pressure ulcer, injury, object left in surgery, and infection" account for 12.2 percent of total hospital professional liability costs. One out of every six hospital professional liability claims is also due to these four hospital acquired conditions.

Coleianne explained that since October 2008, the Centers for Medicare and Medicaid Services (CMS) will no longer reimburse for 10 specific hospital-acquired conditions.

"CMS has ruled that these 'never events' are all preventable. So preventable in fact, that they should never happen and therefore will not be reimbursed. As a result, 'never events' may lead to strict liability and some attorneys may look at this as an opportunity," he said.

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