Pennsylvania Court Rules in Favor of Physicians on Mcare Fund

Commonwealth Court gives Pa. health care providers win in medical malpractice insurance battle

Matt Miller | [email protected] By Matt Miller | [email protected] The Patriot-News
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on August 12, 2013 at 5:42 PM, updated August 12, 2013 at 7:25 PM
A divided Commonwealth Court has ordered Pennsylvania’s insurance commissioner to recalculate how much health care providers should pay to support a state-managed fund that helps cover the cost of damage awards in medical malpractice cases.

Millions of dollars are at issue in the ruling regarding the Medical Care Availabilty and Reduction of Error Fund.

“There is a lot at stake here,” Denise Zimmerman, executive vice president of the Pennsylvania Medical Society, said Monday.

The full dollar amount involved in the dispute, and how medical providers might receive compensation, remains to be seen pending the results of the court-ordered recalculation of CARE assessments for 2009 through 2011, she said.

The court’s decision in the so-called MCARE Fund case marks a victory for Zimmerman’s agency, the Hospital & Healthsystem Association of Pennsylvania and the Pennsylvania Podiatric Medical Association.

The groups had petitioned Commonwealth Court, claiming their members had been significantly over-assessed on payments to support the MCARE Fund.

The Legislature established MCARE about a decade ago to try to control medical malpractice insurance costs. Health care providers must pay into that fund, along with purchasing private malpractice insurance, to ensure that damage awards in medical malpractice cases don’t go unpaid.

The assessments health care providers must pay vary depending on factors including the region they serve and the risks involved in their medical specialties, Zimmerman said.

The medical provider associations claimed in their court challenge that they were overcharged to support MCARE from 2009 to 2011, because state officials weren’t including carryover balances for the fund in calculating the amount of money the fund needed annually.

A majority of the court agreed that was not fair.

For example, Judge Mary Hannah Leavitt noted in the majority opinion on the case that in calculating its assessments for 2009, MCARE overseers ignored the fact that the fund had a $104 million carryover balance from 2008. That year, the state required participants to pay more that $204 million into MCARE.

Similar scenarios occurred for 2010 and 2011.

Had MCARE officials included the fund’s carryover balances in the assessment calculations, the amount the medical providers would have been asked to pay into MCARE during those years “would have been significantly lower,” Leavitt wrote.

While medical association officials argued that including carryovers in MCARE assessment calculations made sense, state officials countered that there was no provision for doing that in the law that created the fund.

Leavitt noted that instead of applying the 2008 carryover to assessment reduction for 2009, the state transferred $100 million out of MCARE in 2009 and channeled it to the state’s general fund. Commonwealth Court ruled that the transfer was illegal, but state officials have petitioned the state Supreme Court to hear an appeal of the ruling.

Judge Bonnie Brigance Leadbetter and President Judge Dan Pellegrini disagreed with the Commonwealth Court majority decision ordering a recalculation of the MCARE assessments. In her dissenting opinion, Leadbetter argued that the Legislature didn’t require that budget carryovers be considered in calculating the annual MCARE fund assessments.








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