THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY RAFFERTY, ERICKSON, ORIE, WARD, ARGALL, KASUNIC, WASHINGTON, ALLOWAY, GREENLEAF, LEACH, TOMLINSON, PIPPY, MENSCH, BOSCOLA, O'PAKE, BAKER, STACK, LOGAN, FONTANA AND DINNIMAN, MARCH 19, 2010

SENATOR CORMAN, APPROPRIATIONS, RE-REPORTED AS AMENDED, SEPTEMBER 28, 2010   

AN ACT

Amending the act of March 20, 2002 (P.L.154, No.13), entitled

"An act reforming the law on medical professional liability;

providing for patient safety and reporting; establishing the

Patient Safety Authority and the Patient Safety Trust Fund;

abrogating regulations; providing for medical professional

liability informed consent, damages, expert qualifications,

limitations of actions and medical records; establishing the

Interbranch Commission on Venue; providing for medical

professional liability insurance; establishing the Medical

Care Availability and Reduction of Error Fund; providing for

medical professional liability claims; establishing the Joint

Underwriting Association; regulating medical professional

liability insurance; providing for medical licensure

regulation; providing for administration; imposing penalties;

and making repeals," further providing for medical

professional liability insurance, for Medical Care

Availability and Reduction of Error Fund and for actuarial

data; and providing for conflict.

<--

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Sections 711(d), 712(c)(2), (d) and (e)(3) and

<--

745 of the act of March 20, 2002 (P.L.154, No.13), known as the

Medical Care Availability and Reduction of Error (Mcare) Act,

are amended to read:

Section 711.  Medical professional liability insurance.

* * *

(d)  Basic coverage limits.--A health care provider shall

insure or self-insure medical professional liability in

accordance with the following:

(1)  For policies issued or renewed in the calendar year

2002, the basic insurance coverage shall be:

(i)  $500,000 per occurrence or claim and $1,500,000

per annual aggregate for a health care provider who

conducts more than 50% of its health care business or

practice within this Commonwealth and that is not a

hospital.

(ii)  $500,000 per occurrence or claim and $1,500,000

per annual aggregate for a health care provider who

conducts 50% or less of its health care business or

practice within this Commonwealth.

(iii)  $500,000 per occurrence or claim and

$2,500,000 per annual aggregate for a hospital.

(2)  For policies issued or renewed in the calendar years

2003, 2004 and 2005, and each year thereafter, the basic

insurance coverage shall be:

(i)  $500,000 per occurrence or claim and $1,500,000

per annual aggregate for a participating health care

provider that is not a hospital.

(ii)  $1,000,000 per occurrence or claim and

$3,000,000 per annual aggregate for a nonparticipating

health care provider.

(iii)  $500,000 per occurrence or claim and

$2,500,000 per annual aggregate for a hospital.

[(3)  Unless the commissioner finds pursuant to section

<--

745(a) that additional basic insurance coverage capacity is

not available, for policies issued or renewed in calendar

year [2006] 2018 and each year thereafter subject to

<--

paragraph (4), the basic insurance coverage shall be:

(i)  $750,000 per occurrence or claim and $2,250,000

per annual aggregate for a participating health care

provider that is not a hospital.

(ii)  $1,000,000 per occurrence or claim and

$3,000,000 per annual aggregate for a nonparticipating

health care provider.

(iii)  $750,000 per occurrence or claim and

$3,750,000 per annual aggregate for a hospital.

If the commissioner finds pursuant to section 745(a) that

additional basic insurance coverage capacity is not

available, the basic insurance coverage requirements shall

remain at the level required by paragraph (2); and the

commissioner shall conduct a study every two years until the

commissioner finds that additional basic insurance coverage

capacity is available, at which time the commissioner shall

increase the required basic insurance coverage in accordance

with this paragraph.

(4)  Unless the commissioner finds pursuant to section

745(b) that additional basic insurance coverage capacity is

not available, for policies issued or renewed three years

after the increase in coverage limits required by paragraph

(3) and for each year thereafter, the basic insurance

coverage shall be:

(i)  $1,000,000 per occurrence or claim and

$3,000,000 per annual aggregate for a participating

health care provider that is not a hospital.

(ii)  $1,000,000 per occurrence or claim and

$3,000,000 per annual aggregate for a nonparticipating

health care provider.

(iii)  $1,000,000 per occurrence or claim and

$4,500,000 per annual aggregate for a hospital.

If the commissioner finds pursuant to section 745(b) that

additional basic insurance coverage capacity is not

available, the basic insurance coverage requirements shall

remain at the level required by paragraph (3); and the

commissioner shall conduct a study every two years until the

commissioner finds that additional basic insurance coverage

capacity is available, at which time the commissioner shall

increase the required basic insurance coverage in accordance

with this paragraph.]

<--

* * *

Section 712.  Medical Care Availability and Reduction of Error

Fund.

* * *

(c)  Fund liability limits.--

* * *

(2)  [The] Subject to section 711(d)(3) and (4), the 

<--

limit of liability of the fund for each participating health

care provider shall be [as follows:

<--

(i)  For calendar year 2003 and each year thereafter,

the limit of liability of the fund shall be] $500,000 for

<--

each occurrence and $1,500,000 per annual aggregate.

[(ii)  If the basic insurance coverage requirement is

<--

increased in accordance with section 711(d)(3) and,

notwithstanding subparagraph (i), for each calendar year

following the increase in the basic insurance coverage

requirement, the limit of liability of the fund shall be

$250,000 for each occurrence and $750,000 per annual

aggregate.

(iii)  If the basic insurance coverage requirement is

increased in accordance with section 711(d)(4) and,

notwithstanding subparagraphs (i) and (ii), for each

calendar year following the increase in the basic

insurance coverage requirement, the limit of liability of

the fund shall be zero.]

<--

* * *

<--

(d)  Assessments.--

<--

(1)  For calendar year 2003 [and for each year

thereafter] through 2010, the fund shall be funded by an

assessment on each participating health care provider.

Assessments shall be levied by the department on or after

January 1 of each year. The assessment shall be based on the

prevailing primary premium for each participating health care

provider and shall, in the aggregate, produce an amount

sufficient to do all of the following:

(i)  Reimburse the fund for the payment of reported

claims which became final during the preceding claims

period.

(ii)  Pay expenses of the fund incurred during the

preceding claims period.

(iii)  Pay principal and interest on moneys

transferred into the fund in accordance with section

713(c).

(iv)  Provide a reserve that shall be 10% of the sum

of subparagraphs (i), (ii) and (iii).

(1.1)  For calendar year 2011 and each year thereafter,

the fund shall be funded by an assessment on each

participating health care provider. Assessments shall be

levied by the department on or after January 1 of each year.

The assessment shall be based on the prevailing primary

premium for each participating health care provider and

shall, in the aggregate, produce an amount equal to the sum

of the following amounts minus the projected fund balance at

the close of the calendar year preceding the assessment year:

(i)  The reported claims which became final during

the preceding claims period.

(ii)  The expenses of the fund incurred during the

preceding claims period.

(iii)  The outstanding principal and interest on

moneys transferred into the fund in accordance with

section 713(c).

(iv)  Ten percent of the sum of subparagraphs (i),

(ii) and (iii).

(1.2)  Paragraph (1.1) is not intended to validate or

refute any position advanced by any party in proceedings

challenging any assessment prior to the effective date of

this paragraph. The outcome of those proceedings shall be

based upon the statutory language in effect on the day before

the effective date of this paragraph.

(2)  The department shall notify all basic insurance

coverage insurers and self-insured participating health care

providers of the assessment by November 1 for the succeeding

calendar year.

(3)  Any appeal of the assessment shall be filed with the

department.

(e)  Discount on surcharges and assessments.--

* * *

[(3)  For calendar years [2005] 2018 and thereafter, if

<--

the basic insurance coverage requirement is increased in

accordance with section 711(d)(3) or (4), the department may

discount the aggregate assessment imposed under subsection

(d) by an amount not to exceed the aggregate sum to be

deposited in the fund in accordance with subsection (m).]

<--

* * *

[Section 745.  Actuarial data.

<--

(a)  [Initial study] Study.--The following shall apply:

<--

(1)  No later than April 1, [2005] 2017, each insurer

<--

providing medical professional liability insurance in this

Commonwealth shall file loss data as required by the

commissioner. For failure to comply, the commissioner shall

impose an administrative penalty of $1,000 for every day that

this data is not provided in accordance with this paragraph.

(2)  [By July 1, 2005] After the filing under paragraph

<--

(1) and before July 2, 2017, the commissioner shall [conduct] 

<--

complete and present a study regarding the availability of

additional basic insurance coverage capacity to the chairman

<--

and minority chairman of the Banking and Insurance Committee

of the Senate and to the chairman and minority chairman of

the Insurance Committee of the House of Representatives. The

study shall include an estimate of the total change in

medical professional liability insurance loss-cost resulting

from implementation of this act prepared by an independent

actuary. The fee for the independent actuary shall be borne

by the fund. In developing the estimate, the independent

actuary shall consider all of the following:

(i)  The most recent [accident year] claim and

<--

ratemaking data available.

(ii)  Any other relevant factors within or outside

this Commonwealth in accordance with sound actuarial

principles.

(b)  Additional study.--[The] If additional basic insurance

<--

coverage capacity is found under subsection (a) and limits are

increased under section 711(d)(3), the following shall apply:

(1)  Three years following the increase of the basic

insurance coverage requirement in accordance with section

711(d)(3), each insurer providing medical professional

liability insurance in this Commonwealth shall file loss data

with the commissioner upon request. For failure to comply,

the commissioner shall impose an administrative penalty of

$1,000 for every day that this data is not provided in

accordance with this paragraph.

(2)  Three months following the request made under

paragraph (1), the commissioner shall [conduct] complete and

<--

present a study regarding the availability of additional

basic insurance coverage capacity to the chairman and

<--

minority chairman of the Banking and Insurance Committee of

the Senate and to the chairman and minority chairman of the

Insurance Committee of the House of Representatives. The

study shall include an estimate of the total change in

medical professional liability insurance loss-cost resulting

from implementation of this act prepared by an independent

actuary. The fee for the independent actuary shall be borne

by the fund. In developing the estimate, the independent

actuary shall consider all of the following:

(i)  The most recent [accident year] claim and

<--

ratemaking data available.

(ii)  Any other relevant factors within or outside

this Commonwealth in accordance with sound actuarial

principles.]

<--

Section 1.1.  The act is amended by adding a section to read:

<--

Section 749.  Conflict.

This chapter does not affect any other statutory provision

which:

(1)  relates to the participation of a health care

provider in the fund; and

(2)  is in effect on the effective date of this section.

Section 2.  This act shall take effect in 60 days. as

<--

follows:

(1)  The amendment of section 712(d) of the act shall

take effect immediately.

(2)  The remainder of this act shall take effect in 60

days.