CAMC General Hospital in downtown Charleston.

CHARLESTON – For the first time a West Virginia doctor has bought freedom from malpractice insurance. It only took a million dollars.

Charleston Area Medical Center has agreed to allow a physician to practice on a self insured basis, with a $1 million trust in place.

The doctor took advantage of a new state law allowing self insurance. The Legislature passed the law to keep doctors in West Virginia.

Bill Foster and Paul "Kip" Reese of the Foster Law Firm set up the trust.

Foster said some West Virginia obstetricians and surgeons pay more than $200,000 a year for malpractice insurance.

He said, "A physician at $150,000 or greater should consider this."

He said, "Since these physicians are putting up their own money, you can be sure they are going to be careful."

Foster would not identify his client.

Reese said, "It was one of those happenstance things where everything fell into place. It took less than three weeks. It really flew."

He said, "The hospital was very understanding and cooperative."

Dina Mohler, associate general counsel for CAMC said, "I don't want credit. Kip gave me credit. I don't want it to sound like I did it."

She said, "Kip had done a lot of the leg work. He had an actuary lined up. He had a third-party administrator lined up. He had advisers lined up. He had a bank lined up."

She said in 2003 the Legislature passed a medical malpractice reform bill that seemed to indicate doctors could insure themselves.

She said the hospital developed a policy of what self insurance might look like. She said trustees adopted it last year.

This year, she said, the Legislature codified requirements for self insurance.

Mohler said, "Luckily, or happily I suppose, the policy that we had implemented largely reflected what ultimately ended up in the statute."

Reese said the law requires a trust of one million in cash or cash equivalents.

He said his client and the hospital agreed that an asset could count as a cash equivalent if the trust could liquidate it in 15 to 30 days.

Mohler said real estate and personal property would not be appropriate as cash equivalents.

She said, "This is serious business and there is an element of risk. I think it works under limited circumstances but it's not right for everyone."

She said a doctor considering self insurance should check with counsel.

She said, "It does offer a physician an alternative. We have not seen how it will work in real life yet."

Foster said, "This is not meant to eat at the base of commercial insurance. This is for people who don't fit neatly into the box of commercial insurance."

He said United Bank guaranteed the trust and bolstered it as a solid trust.

He said, "Anyone can create a trust. The hurdle has been telling the facilities that this is a viable trust."

He said, "Now that the state's largest hospital approves, it should be like dominoes."

Mohler said she did not know if small hospitals would deal with the burden.

"You have to check on things," she said. "There are reports that the physician or the trustee must make to the hospital."

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