Gov. Jim Doyle and the Legislature legally used $200 million from Wisconsin’s medical malpractice fund to help balance the state budget, a judge has ruled.
The decision, if it stands, spares the state from immediately paying the $200 million back into the fund with interest and attorneys fees for the Wisconsin Medical Society.
The fund was created in 1975 to fight the rising costs of malpractice insurance for doctors. The fund covers malpractice claims that exceed doctors’ insurance coverage. All doctors and nurse anesthetists practicing more than 240 hours a year must pay into the account.
The fund held more than $840 million in September 2007. Doyle proposed moving $200 million into the 2007-09 state budget to help fill a shortfall in funding for medical assistance programs, and the Legislature approved the move.
The medical society, which represents more than 12,000 doctors statewide, sued last year, claiming the transfer was an illegal raid that puts patients and doctors at risk.
The society contended the fund belongs to health care providers, not the public, since the providers are the beneficiaries. Seizing part of it amounted to a violation of their property rights, the society argued.
State attorneys countered the society has no property interest in the fund. It’s a government account, just like any other fund created by state law. They also argued the state is immune from such a claim.
Dane County Circuit Judge Michael Nowakowski wrote in his ruling the state is indeed immune from such claims and the society has no property rights to the fund.
The society can’t sell the account or exercise any other control over it, Nowakowski said. Neither the society nor individual health care providers have a right to a refund of unused money in the account, the judge added.
He went on to say transfers between government funds are common, noting the 2005-07 budget moved $235.4 million from the state’s road fund to Medicaid.
“‘Beneficiaries’ of such state funds do not obtain property rights simply by paying mandatory fees into them,” Nowakowski wrote. “After all, it would be amazing to learn that drivers own the transportation trust fund simply because they pay vehicle registration fees into it.”
The society issued a statement saying the decision victimizes patients and their families.
“The Fund’s assets are not general revenue. These dollars are held in a trust for the benefit of injured patients, their families and contributing health care professionals,” society attorney Ruth Heitz said in the statement.
The society plans to review its options and find the best way to overturn the transfer, Heitz said.
Doyle spokesman Lee Sensenbrenner referred questions to the state Department of Administration, which crafts the executive budget. DOA Secretary Michael Morgan issued a statement saying he was pleased with the ruling.
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