Pennsylvania Gov. Tom Corbett announced the assessment for the state’s Medical Care Availability and Reduction of Error (Mcare) Fund — a medical liability coverage fund run by the state — will decrease 48 percent for 2015 coverage.
Corbett said on Thursday the lower assessment for 2015 coverage reflects improvement in the state’s medical malpractice climate due in part to tort reforms — including the Fair Share Act and enactment of Apology Rule legislation — as well as other factors, such as the operational benefits of Mcare.
“When Mcare claim payments go down, the savings are immediately passed on to healthcare providers,” said Corbett.
Mcare assessments are based on rates at the Joint Underwriting Association (JUA). The assessment rate for 2015 will drop to 12 percent of the JUA rates, compared to 23 percent in 2014. The assessment was also further reduced by using funds not needed to pay claims in prior years.
Claim payments for the 2015 assessment year were $156 million, compared to $194 million for the 2014 assessment year.
An additional $61 million in funds remaining from prior years was also used in the new assessment calculation, according to the announcement. This is based on methodology agreed to in the recent lawsuit settlements challenging certain previous assessments.
The Corbett administration announced earlier in October that the state has agreed to pay $139 million in refunds and also cut what providers must pay into the Mcare Fund by $61 million. The settlement resolves a suit filed by groups representing doctors and hospitals in 2009 after the state transferred $100 million from the Mcare Fund to the state’s general fund under then-Gov. Ed Rendell.
The Corbett administration said some examples of the overall, expected savings from the lower assessment for 2015 coverage would include:
• A neurosurgeon in Philadelphia, who paid $36,447 in 2014, will pay $19,016 in 2015. Neurosurgeons in Allegheny or Dauphin counties, who paid $20,273 in 2014, will pay $10,577 in 2015.
• A family physician in Philadelphia, who paid $5,054 in 2014, will pay $2,637 in 2015. Family physicians in Allegheny or Dauphin counties, who paid $2,881 in 2014, will pay $1,503 in 2015.
The Mcare Act, enacted in 2002, created the Mcare Fund, a special fund of the Pennsylvania Insurance Department that provides medical malpractice liability coverage. The law requires all hospitals and practicing physicians to have at least $1 million of medical liability coverage — $500,000 of which must be obtained from a private insurance carrier, the Joint Underwriting Association, or a self-insured program. The other $500,000 is obtained from Mcare.
Assessments are paid into the Mcare Fund rather than premiums. The assessment formula includes claim payments and expenses from the previous claims year.
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