Princeton Insurance

Back to School For Medical Pros

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This article by Barbara Fox was prepared for the November 20, 2002 edition of U.S. 1 Newspaper. All rights reserved.

MIIX Advantage

The Medical Inter-Insurance Exchange (MIIX) was founded

in 1977 as a cooperative exchange providing medical malpractice insurance

for doctors in New Jersey and Pennsylvania. At that time major insurance

companies were leaving the market. The Medical Society of New Jersey

worked with the state to create an insurance company to underwrite

professional liability insurance. It was physician supported.

In 1997 it made plans to reorganize as a stock company instead of

reciprocal insurance exchange, and it trades on the New York Stock

Exchange. It made the largest distribution of stock to policyholders

of any medical professional liability insurer, with the average physician

receiving $15,000 in stock. (That year the stock was trading at $18,

but it is about $1.50 now.)

Pundits date MIIX’s difficulties from the date that its former president

was arrested for growing marijuana plants in his attic, but what really

caused the trouble was its attempts at expansion to other states,

including Pennsylvania. At its peak MIIX had 36 percent of the market

share in New Jersey, but 50 percent of its business was written outside

of the state.

Nationally, the median jury award more than doubled from 1996 to 2000,

when it was $1 million. In Philadelphia, juries have been provocatively

generous. And even in cases where the plaintiff gets no money, it

costs an average of $66,000 to defend the case.

"Jury verdicts would be normally $150,000 but are coming back

at $100 million," says Emmalee Morrison, spokesperson for MIIX/Advantage.

Runaway jury verdicts like that are called "the lottery mentality,"

she says. "They are usually appealed but the final numbers never

go out to the public to make the headlines. But it still costs dollars

to go to court. At the end of the day, the company has to look at

the risk level."

Some companies lost so much money they simply closed down. Phico,

a Pennsylvania-based company, closed and had no money left to pay

claims. Phico was said to have underpriced its competition and it

had about a six percent share of the New Jersey business. But apparently

it was using its reserve funds (set aside for future claims) for its

day to day expenses and has been closed down.

MIIX, in contrast, had to take a huge amount from its reserves in

the fourth quarter of 2001 to pay claims, but it is not bankrupt.

It is classified as a "solvent runoff" because it is able

to pay all its existing claims. It just isn’t selling any new policies.

"MIIX had $1.2 billion in reserves set aside for those existing

policy holders," says Morrison, "but we knew we couldn’t continue

to write in an expansion state, i.e. not New Jersey." MIIX is

still trading on the New York Stock Exchange. "The actuaries are

hoping that with less expenses the value of the shares should increase,"

says Morrison.

The New Jersey business was significantly more profitable than the

out-of-state business, Morrison says. "For one thing we have history

here. We know the players, we know the market. And the flagship company

is here."

So a new company, MIIX/Advantage, was formed just for New Jersey doctors.

CEO Patricia Costante, 45, went to the department of banking insurance

and requested permission to start another company. An alumna of Douglass

College, she has an MBA from New York University and joined MIIX in

1996. "The new company wouldn’t be here if it weren’t for her

ability to be a communicator," says Morrison. "She is a physician

advocate above anything else. After all the things that happened this

year, many professionals would have walked away and let it die. She

wanted to create an option. The landscape was very bleak in terms

of physician options and carriers in the state. and I think she has

a very good rapport across the state. She was tramping north to south,

raising capital to start the new company."

In a 90-day campaign to raise $30 million, MIIX raised $28.5 million

and started issuing policies on September 1. Doctors pay a contribution

to start the company plus they pay premiums that average $11,000 each.

Each founder gets one vote, and in the first offering more than 2,500

physicians were enrolled.

"If you are currently insured with MIIX, you can pay a capital

contribution and be accepted. If you are a new physician you would

have to go through regular underwriting requirements."

MIIX/Advantage differs from the original MIIX, which had a board that

consisted only of doctors. The new board is smaller and has diverse


The MIIX Group Inc. (MHU), 2 Princess Road, Lawrenceville

08648-2382. Patricia Costante, CEO. 609-896-2404; fax, 609-896-2910.

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Princeton Insurance

Last year Princeton Insurance Company wrote $146.2 million

worth of premiums in malpractice insurance for individual practices

and institutions, including more than 8,000 physicians in New Jersey.

It also covers medical malpractice in Maryland, Delaware, and Virginia

but has cut off its malpractice coverage in Pennsylvania. "The

legal situation has not been good for us," says Karen Meyers,

spokesperson, "and we have decided to reallocate our surplus elsewhere."

Meyers defends the decision to pull out of Pennsylvania by emphasizing

how the company picked up the slack for New Jersey doctors. "We

tried to be responsible. This year we took on 3,100 additional physicians

from New Jersey as a result of difficulties that our competitors were

facing — mostly from MIIX but not all. We tried to be responsible.

We did what we could."

It also does small business and workers comp insurance for small business

in 16 states and offers malpractice insurance to other health care

practices, such as dentists, podiatrists, optometrists, mental health

workers, and allied health care providers like EMTs and physical therapists.

It sells directly to doctors and small businesses or through the agents

listed below.

Princeton Insurance Companies, 746 Alexander Road,

Princeton 08543-6305. Donald E. Smith, president. 609-452-9404; fax,

609-734-8461. Home page:

Bollinger Inc., 437 Wall Street, Princeton 08540.

888-452-2200; fax, 609-497-1274. Home page:

Borden-Perlman Insurance, 2850 Brunswick Pike,

Box 6710, Lawrenceville 08648-6710. Cara Giquinto. 609-896-3434; fax,

609-895-1468. Home page:

Pavese-McCormick, 10 Kirkpatrick Street, Box 732,

New Brunswick 08903-0732. Mike McCormick. 732-247-9800; fax, 732-828-0061.

Home page:

Princeton Risk Managers Inc., 435 Wall Street,

Princeton 08540-1567. Gabrielle Griffith, agent. 609-924-9222; fax,


Rue Insurance, 3812 Quakerbridge Road, Box 3006,

Hamilton 08619-0006. Robert Cottone, manager, healthcare practice.

609-586-7474; fax, 609-586-3991. Home page:

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Back to School For Medical Pros

Doctors often complain about non-doctors making decisions

on reimbursement. Who are the people pushing the paper to make those

decisions? They work in an occupation labeled "health information

coding," and if you are looking to change careers, the future

for coders is bright.

Go to the county colleges — Mercer, Middlesex, and Raritan Valley

— for courses in coding and other areas that will help you get

and keep jobs in doctors’ and dentists’ offices and in medical insurance


The health information coding certificate at Middlesex,

for instance, includes six required courses, 39 three-hour sessions

that cost about $10 an hour. Call 732-906-2556. Start with anatomy

and physiology and progress to terminology and the nitty-gritty of

coding for everything from emergency room charts to endoscopy reports.

A medical billing course is optional.

A medical transcription certificate at Middlesex teaches

you to take the doctors’ dictated audiotapes and transcribe them.

If it seems daunting, it is, because such dictation is only slightly

more clear than the doctors’ legendarily illegible handwriting. But

insurance companies urge more doctors to use this method of making

notes because stymies malpractice suits. Be forewarned: "This

program requires a significant amount of work outside the classroom,"

warns the brochure, and it promises that at the end of the course

students will have gained only a "basic" knowledge of transcription.

To even take the course you must have a minimum typing speed of 45

words per minute plus other significant secretarial skills. One of

the five required courses is on the legal aspects of health information,

but you start out with 78 hours of anatomy and terminology at about

$10 per hour. Call 732-906-2556.

The medical records technician certificate at Mercer has

twice-weekly sessions starting Wednesday, January 15, at 6:30 p.m.

Six three-hour sessions cost $130. Call 609-586-9446. Described as

a "jump-start" course, it does not require a medical or scientific

background and appeals to those with test-phobia — it gives self-evaluation

quizzes. Follow that with an advanced records course, one on medical

billing, one on anatomy, two on coding, and one on insurance, law,

and ethics. Electives might be medical transcription, business communications,

and management courses.

Preparation for dental X-ray technicians starts Tuesday,

January 7, from 4 to 7:30 p.m. at Mercer Vo-Tech, 1070 Klockner Road,

though the course is sponsored by MCCC. Call 609-586-9446. Taught

by Charlene Fenster, the 14-session course prepares the student for

the state license examination and costs $532 including lab fees and

clinical practice.

A dental radiology course at Raritan Valley College is done in collaboration

with UMDNJ and starts Wednesday, March 12. Cost for 90 credit hours

is $475. Call 908-218-8871.

Pharmacy technicians can take Mercer’s certificate course

starting Tuesday, January 14, at 6 p.m., on the topic of Pharmacology

Review. Taught by Lawrence Goldman, these courses can be used to get

an entry-level position or to take the national exam. The five-course

certificate program costs $1,150. Call 609-586-9446.

A new certificate in drug development and clinical research

starts at Mercer Thursday, January 23, at 6:30 p.m., with an eight-session

foundation course taught by Lauren Murphy and Michael Toscani. Cost:

$675. Those signing up should have a BS in life science, nursing,

pharmacy, medical technology, or statistics (609-586-9446).

A clinical research certificate is also offered by Raritan Valley

in collaboration with Barnett International/PAREXEL. (908-218-8871).

The courses cost about $40 per hour. In the spring semester they include

career opportunities in clinical research and developing clinical

data management skills.

RVCC also has courses for physical therapy aides, patient care assistants,

and pharmacy technicians. Its medical terminology course begins Monday,

January 27, seven sessions for $274. It has an ophthalmic assistant

course starting Tuesday, April 22, at 6:30 to 9 p.m. The 20-sessions

cost $849 including materials. (Call 908-218-8871.)

According to a Rutgers study commissioned by the HealthCare

Institute of New Jersey, the workforce in pharmaceutical industry

and in medical technology is expected to grow from 66,000 jobs to

more than 80,000 in the next eight years. Such predictions may encourage

those making career decisions now.

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