1Amending the act of March 20, 2002 (P.L.154, No.13), entitled
2"An act reforming the law on medical professional liability;
3providing for patient safety and reporting; establishing the
4Patient Safety Authority and the Patient Safety Trust Fund;
5abrogating regulations; providing for medical professional
6liability informed consent, damages, expert qualifications,
7limitations of actions and medical records; establishing the
8Interbranch Commission on Venue; providing for medical
9professional liability insurance; establishing the Medical
10Care Availability and Reduction of Error Fund; providing for
11medical professional liability claims; establishing the Joint
12Underwriting Association; regulating medical professional
13liability insurance; providing for medical licensure
14regulation; providing for administration; imposing penalties;
15and making repeals," further providing for medical
16professional liability insurance, for Medical Care
17Availability and Reduction of Error Fund and for actuarial
18data; and providing for conflict.

19The General Assembly of the Commonwealth of Pennsylvania
20hereby enacts as follows:

21Section 1. Sections 711(d), 712(c)(2), (d) and (e)(3) and
22745 of the act of March 20, 2002 (P.L.154, No.13), known as the
23Medical Care Availability and Reduction of Error (Mcare) Act,
24are amended to read:

25Section 711. Medical professional liability insurance.

26* * *

1(d) Basic coverage limits.--A health care provider shall
2insure or self-insure medical professional liability in
3accordance with the following:

4(1) For policies issued or renewed in the calendar year
52002, the basic insurance coverage shall be:

6(i) $500,000 per occurrence or claim and $1,500,000
7per annual aggregate for a health care provider who
8conducts more than 50% of its health care business or
9practice within this Commonwealth and that is not a
10hospital.

11(ii) $500,000 per occurrence or claim and $1,500,000
12per annual aggregate for a health care provider who
13conducts 50% or less of its health care business or
14practice within this Commonwealth.

15(iii) $500,000 per occurrence or claim and
16$2,500,000 per annual aggregate for a hospital.

17(2) For policies issued or renewed in the calendar years
182003, 2004 and 2005, and each calendar year thereafter, the
19basic insurance coverage shall be:

20(i) $500,000 per occurrence or claim and $1,500,000
21per annual aggregate for a participating health care
22provider that is not a hospital.

23(ii) $1,000,000 per occurrence or claim and
24$3,000,000 per annual aggregate for a nonparticipating
25health care provider.

26(iii) $500,000 per occurrence or claim and
27$2,500,000 per annual aggregate for a hospital.

28(3) Unless the commissioner finds pursuant to section
29745(a) that additional basic insurance coverage capacity is
30not available, for policies issued or renewed in calendar

1year [2006] 2019 and each calendar year thereafter subject to
2paragraph (4), the basic insurance coverage shall be:

3(i) $750,000 per occurrence or claim and $2,250,000
4per annual aggregate for a participating health care
5provider that is not a hospital.

6(ii) $1,000,000 per occurrence or claim and
7$3,000,000 per annual aggregate for a nonparticipating
8health care provider.

9(iii) $750,000 per occurrence or claim and
10$3,750,000 per annual aggregate for a hospital.

11If the commissioner finds pursuant to section 745(a) that
12additional basic insurance coverage capacity is not
13available, the basic insurance coverage requirements shall
14remain at the level required by paragraph (2); and the
15commissioner shall conduct a study every two years until the
16commissioner finds that additional basic insurance coverage
17capacity is available, at which time the commissioner shall
18increase the required basic insurance coverage in accordance
19with this paragraph.

20(4) Unless the commissioner finds pursuant to section
21745(b) that additional basic insurance coverage capacity is
22not available, for policies issued or renewed three calendar
23years after the increase in coverage limits required by
24paragraph (3) and for each calendar year thereafter, the
25basic insurance coverage shall be:

26(i) $1,000,000 per occurrence or claim and
27$3,000,000 per annual aggregate for a participating
28health care provider that is not a hospital.

29(ii) $1,000,000 per occurrence or claim and
30$3,000,000 per annual aggregate for a nonparticipating

1health care provider.

2(iii) $1,000,000 per occurrence or claim and
3$4,500,000 per annual aggregate for a hospital.

4If the commissioner finds pursuant to section 745(b) that
5additional basic insurance coverage capacity is not
6available, the basic insurance coverage requirements shall
7remain at the level required by paragraph (3); and the
8commissioner shall conduct a study every two years until the
9commissioner finds that additional basic insurance coverage
10capacity is available, at which time the commissioner shall
11increase the required basic insurance coverage in accordance
12with this paragraph.

13* * *

14Section 712. Medical Care Availability and Reduction of Error
15Fund.

16* * *

17(c) Fund liability limits.--

18* * *

19(2) [The] Subject to section 711(d)(3) and (4), the
20limit of liability of the fund for each participating health
21care provider shall be as follows:

22(i) For calendar year 2003 and each year thereafter,
23the limit of liability of the fund shall be $500,000 for
24each occurrence and $1,500,000 per annual aggregate.

25(ii) If the basic insurance coverage requirement is
26increased in accordance with section 711(d)(3) and,
27notwithstanding subparagraph (i), for each calendar year
28following the increase in the basic insurance coverage
29requirement, the limit of liability of the fund shall be
30$250,000 for each occurrence and $750,000 per annual

1aggregate.

2(iii) If the basic insurance coverage requirement is
3increased in accordance with section 711(d)(4) and,
4notwithstanding subparagraphs (i) and (ii), for each
5calendar year following the increase in the basic
6insurance coverage requirement, the limit of liability of
7the fund shall be zero.

8(d) Assessments.--

9(1) For calendar year 2003 [and for each year
10thereafter] through 2013, the fund shall be funded by an
11assessment on each participating health care provider.
12Assessments shall be levied by the department on or after
13January 1 of each year. The assessment shall be based on the
14prevailing primary premium for each participating health care
15provider and shall, in the aggregate, produce an amount
16sufficient to do all of the following:

17(i) Reimburse the fund for the payment of reported
18claims which became final during the preceding claims
19period.

20(ii) Pay expenses of the fund incurred during the
21preceding claims period.

22(iii) Pay principal and interest on moneys
23transferred into the fund in accordance with section
24713(c).

25(iv) Provide a reserve that shall be 10% of the sum
26of subparagraphs (i), (ii) and (iii).

27(1.1) For calendar year 2014 and for each calendar year 
28thereafter, the fund shall be funded by an assessment on each 
29participating health care provider. Assessments shall be 
30levied by the department on or after January 1 of each year. 

1The assessment shall be based on the prevailing primary 
2premium for each participating health care provider and 
3shall, in the aggregate, produce an amount equal to the sum 
4of the following amounts minus the projected fund balance at 
5the close of the calendar year preceding the assessment year:

6(i) The reported claims which became final during
7the preceding claims period.

8(ii) The expenses of the fund incurred during the
9preceding claims period.

10(iii) The outstanding principal and interest on
11moneys transferred into the fund in accordance with
12section 713(c).

13(iv) Ten percent of the sum of subparagraphs (i),
14(ii) and (iii).

15(1.2) No assessment receipts or fund balances of the
16fund may be transferred from the fund for other purposes.
17Fund assessment receipts and fund balances may only be used
18to pay claims against the fund, administrative costs of the
19fund or assessment credits provided in paragraph (1.1).

20(1.3) Paragraph (1.1) shall not be construed to validate
21or refute any position advanced by any party in proceedings
22challenging any assessment prior to the effective date of
23this paragraph. The outcome of those proceedings shall be
24based upon the statutory language in effect on the day before
25the effective date of this paragraph.

26(2) The department shall notify all basic insurance
27coverage insurers and self-insured participating health care
28providers of the assessment by November 1 for the succeeding
29calendar year.

30(3) Any appeal of the assessment shall be filed with the

1department.

2(e) Discount on surcharges and assessments.--

3* * *

4(3) For calendar years [2005] 2019 and thereafter, if
5the basic insurance coverage requirement is increased in
6accordance with section 711(d)(3) or (4), the department may
7discount the aggregate assessment imposed under subsection
8(d) by an amount not to exceed the aggregate sum to be
9deposited in the fund in accordance with subsection (m).

10* * *

11Section 745. Actuarial data.

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

13(1) [No later than April 1, 2005] Between January 1, 
142018, and April 1, 2018, each insurer providing medical
15professional liability insurance in this Commonwealth shall
16file loss data as required by the commissioner. For failure
17to comply, the commissioner shall impose an administrative
18penalty of $1,000 for every day that this data is not
19provided in accordance with this paragraph.

20(2) [By July 1, 2005] After the filing under paragraph 
21(1) and before July 2, 2018, the commissioner shall [conduct]
22complete and present a study regarding the availability of
23additional basic insurance coverage capacity to the chairman 
24and minority chairman of the Banking and Insurance Committee 
25of the Senate and to the chairman and minority chairman of 
26the Insurance Committee of the House of Representatives. The
27study shall include an estimate of the total change in
28medical professional liability insurance loss-cost resulting
29from implementation of this act prepared by an independent
30actuary. The fee for the independent actuary shall be borne

1by the fund. In developing the estimate, the independent
2actuary shall consider all of the following:

3(i) The most recent [accident year] claim and
4ratemaking data available.

5(ii) Any other relevant factors within or outside
6this Commonwealth in accordance with sound actuarial
7principles.

8(b) Additional study.--[The] If additional basic insurance 
9coverage capacity is found under subsection (a) and limits are 
10increased under section 711(d)(3), the following shall apply:

11(1) Three years following the increase of the basic
12insurance coverage requirement in accordance with section
13711(d)(3), each insurer providing medical professional
14liability insurance in this Commonwealth shall file loss data
15with the commissioner upon request. For failure to comply,
16the commissioner shall impose an administrative penalty of
17$1,000 for every day that this data is not provided in
18accordance with this paragraph.

19(2) Three months following the request made under
20paragraph (1), the commissioner shall [conduct] complete and 
21present a study regarding the availability of additional
22basic insurance coverage capacity to the chairman and 
23minority chairman of the Banking and Insurance Committee of 
24the Senate and to the chairman and minority chairman of the 
25Insurance Committee of the House of Representatives. The
26study shall include an estimate of the total change in
27medical professional liability insurance loss-cost resulting
28from implementation of this act prepared by an independent
29actuary. The fee for the independent actuary shall be borne
30by the fund. In developing the estimate, the independent

1actuary shall consider all of the following:

2(i) The most recent [accident year] claim and
3ratemaking data available.

4(ii) Any other relevant factors within or outside
5this Commonwealth in accordance with sound actuarial
6principles.

7Section 2. The act is amended by adding a section to read:

8Section 749. Conflict.

9This chapter does not affect any other statutory provision
10which:

11(1) relates to the participation of a health care
12provider in the fund; and

13(2) is in effect on the effective date of this section.

14Section 3. This act shall take effect as follows:

15(1) The amendment of section 712(d) of the act shall
16take effect immediately.

17(2) The remainder of this act shall take effect in 60
18days.