Pennsylvania Renews Doctors’ Subsidy

December 19, 2005

About 30,000 health care providers would receive a state subsidy for a fourth straight year to help them pay their medical malpractice insurance bills, under legislation sent to Gov. Ed Rendell for his signature.

The legislation benefits doctors who pay into a state-run program that provides catastrophic medical malpractice insurance for claims that rise above $500,000. It was passed unanimously by the state Senate late Wednesday and the House of Representatives on Thursday.

The Legislature and Rendell have approved three years of subsidies for doctors, covering 2003 through 2005, at an annual cost of about $220 million, and paid out of cigarette tax revenues and overflows from a state automobile insurance fund.

Rendell first proposed the subsidy to help doctors afford rising insurance premiums until tougher restrictions on filing medical malpractice lawsuits designed to lower insurance costs could take effect.

Doctors are required to carry $500,000 in primary coverage from the private insurance marketplace.

The subsidy pays half of the assessment into the state’s MCare program for most of the state’s doctors. Certain high-risk specialists including orthopedic surgeons, general surgeons, neurosurgeons, obstetrician-gynecologists, emergency physicians, nurse-midwives and physicians who deliver babies in rural areas would be relieved of their entire MCare assessment.

A doctor who accepts the subsidy must stay in Pennsylvania through the end of the following year.

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