Ophthalmic Mutual Insurance Co. refractive surgery claims experience favorable overall

April 15, 2008

Media reports about LASIK malpractice cases might suggest refractive surgeons are a high-risk group for liability insurance and should be paying higher premiums. A review of claims received by the Ophthalmic Mutual Insurance Co. provides a more accurate picture.

New Orleans-The Ophthalmic Mutual Insurance Co. (OMIC) experience with claims for refractive surgery reflects generally good news, according to data reported by James J. Salz, MD, at refractive surgery subspecialty day at the annual meeting of the American Academy of Ophthalmology.

Although the number of total claims and LASIK claims has been increasing along with a rise in the number of covered ophthalmologists, there has been a recent encouraging trend in 2005 and 2006 for a decrease in the ratio of claims to insureds. Further, the dollar amounts for most settled claims are not exorbitantly high, and the company has a good record in winning claims that go to trial, said Dr. Salz, clinical professor of ophthalmology, University of Southern California, Los Angeles, and a member of the OMIC board of directors.

"We are pretty happy with the claims experience for OMIC overall. However, we also have very stringent criteria for insurance eligibility," Dr. Salz said. Currently, OMIC is providing coverage for approximately 3,300 ophthalmologists. The number of open claims in 2006 was about 460, down from the peak of about 520 in 2004.

"Taking a 5-year average, the number of claims opened per year for cataract surgery was more than two-fold higher than for LASIK, while the average number of claims for LASIK was comparable to those involving retina and for general claims," Dr. Salz said.

The average settlement per closed claim per specialty averaged per year for the period 2002 to 2006 was highest for oculoplastic surgery, at almost $220,000; a particularly high claim of almost $380,000 in 2006 contributed to that number. The average annual settlement for LASIK was about $125,000, which is slightly lower than the average for retina and comparable to that for glaucoma and cataract.

An analysis of claims frequency for refractive surgery of the past 15 years shows that claims can be mostly ascribed to LASIK procedures, Dr. Salz said. The first LASIK claim was filed in 1998, and a total of seven claims were received by OMIC that year. The annual number of claims in 2002 was at 55 but decreased to 36 the next year and was even lower subsequently.

"The 2002 experience was pretty alarming. We started to think that maybe we should be charging refractive surgeons a higher premium. However, the number of claims for LASIK has gone down since that year even though the number of OMIC insureds performing LASIK has gone up," Dr. Salz said.

The average settlement for LASIK during the period from 2001 to 2006 was $124,000. There was, however, a fairly wide variation in average settlement per year that predominantly reflected the impact of a few large claims in individual years. In 2001 there were three cases with an average settlement of about $31,700. In 2003 there were 12 cases settled at an average of $156,200 each. The number of claims and settlement averages decreased in 2004 and 2005. Due to two very high settlements in 2006-one for almost $1 million, another for $2.5 million, and a third relatively high settlement for about $450,000-the average settlement in that year was nearly $243,000.

"Most claims are not excessively high," Dr. Salz said.

OMIC seeks settlement in cases where it appears that the defendant is unlikely to win at trial. Of the cases that have gone to court, 80% of claims have verdicts for the defense.

Ophthalmologists interested in being insured by OMIC can refer to the Web page for guidelines ( http://www.omic.com/). All ophthalmologists, regardless of whether they are OMIC-insured, can download copies of informed consents for cataract and refractive surgery from the OMIC Web site.