PRINTER'S NO. 3511
No. 2394 Session of 2004
INTRODUCED BY BARD, GODSHALL, ARMSTRONG, HALUSKA, DAILEY, BAKER,
BALDWIN, BARRAR, CAPPELLI, CRAHALLA, EGOLF, FAIRCHILD,
FORCIER, GOODMAN, HERMAN, HERSHEY, KILLION, LEH, MACKERETH,
McILHATTAN, McNAUGHTON, O'NEILL, ROSS, RUBLEY, SATHER,
SCAVELLO, THOMAS, WATSON, WRIGHT, WILT, CLYMER, E. Z. TAYLOR,
BOYD AND S. MILLER, MARCH 23, 2004
REFERRED TO COMMITTEE ON INSURANCE, MARCH 23, 2004
AN ACT
1 Amending the act of March 20, 2002 (P.L.154, No.13), entitled
2 "An act reforming the law on medical professional liability;
3 providing for patient safety and reporting; establishing the
4 Patient Safety Authority and the Patient Safety Trust Fund;
5 abrogating regulations; providing for medical professional
6 liability informed consent, damages, expert qualifications,
7 limitations of actions and medical records; establishing the
8 Interbranch Commission on Venue; providing for medical
9 professional liability insurance; establishing the Medical
10 Care Availability and Reduction of Error Fund; providing for
11 medical professional liability claims; establishing the Joint
12 Underwriting Association; regulating medical professional
13 liability insurance; providing for medical licensure
14 regulation; providing for administration; imposing penalties;
15 and making repeals," further providing for medical
16 professional liability insurance, for Medical Care
17 Availability and Reduction of Error Fund and for extended
18 claims; providing for filing of rates; and further providing
19 for actuarial data.
20 The General Assembly of the Commonwealth of Pennsylvania
21 hereby enacts as follows:
22 Section 1. Section 711(d) of the act of March 20, 2002
23 (P.L.154, No.13), known as the Medical Care Availability and
24 Reduction of Error (Mcare) Act, is amended to read:
1 Section 711. Medical professional liability insurance.
2 * * *
3 (d) Basic coverage limits.--A health care provider shall
4 insure or self-insure medical professional liability in
5 accordance with the following:
6 (1) For policies issued or renewed in the calendar year
7 2002, the basic insurance coverage shall be:
8 (i) $500,000 per occurrence or claim and $1,500,000
9 per annual aggregate for a health care provider who
10 conducts more than 50% of its health care business or
11 practice within this Commonwealth and that is not a
12 hospital.
13 (ii) $500,000 per occurrence or claim and $1,500,000
14 per annual aggregate for a health care provider who
15 conducts 50% or less of its health care business or
16 practice within this Commonwealth.
17 (iii) $500,000 per occurrence or claim and
18 $2,500,000 per annual aggregate for a hospital.
19 (1.1) For policies issued or renewed in the calendar
20 years 2003 and 2004, the basic insurance coverage shall be:
21 (i) $500,000 per occurrence or claim and $1,500,000
22 per annual aggregate for a participating health care
23 provider that is not a hospital.
24 (ii) $1,000,000 per occurrence or claim and
25 $3,000,000 per annual aggregate for a nonparticipating
26 health care provider.
27 (iii) $500,000 per occurrence or claim and
28 $1,500,000 per annual aggregate for a hospital.
29 (2) For policies issued or renewed in the calendar years
30 [2003, 2004 and 2005,] 2005 and thereafter the basic
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1 insurance coverage shall be:
2 (i) $500,000 per occurrence or claim and $1,500,000
3 per annual aggregate for a participating health care
4 provider that is not a hospital.
5 (ii) [$1,000,000] $500,000 per occurrence or claim
6 and [$3,000,000] $1,500,000 per annual aggregate for a
7 nonparticipating health care provider.
8 (iii) $500,000 per occurrence or claim and
9 $2,500,000 per annual aggregate for a hospital.
10 [(3) Unless the commissioner finds pursuant to section
11 745(a) that additional basic insurance coverage capacity is
12 not available, for policies issued or renewed in calendar
13 year 2006 and each year thereafter subject to paragraph (4),
14 the basic insurance coverage shall be:
15 (i) $750,000 per occurrence or claim and $2,250,000
16 per annual aggregate for a participating health care
17 provider that is not a hospital.
18 (ii) $1,000,000 per occurrence or claim and
19 $3,000,000 per annual aggregate for a nonparticipating
20 health care provider.
21 (iii) $750,000 per occurrence or claim and
22 $3,750,000 per annual aggregate for a hospital.
23 If the commissioner finds pursuant to section 745(a) that
24 additional basic insurance coverage capacity is not
25 available, the basic insurance coverage requirements shall
26 remain at the level required by paragraph (2); and the
27 commissioner shall conduct a study every two years until the
28 commissioner finds that additional basic insurance coverage
29 capacity is available, at which time the commissioner shall
30 increase the required basic insurance coverage in accordance
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1 with this paragraph.
2 (4) Unless the commissioner finds pursuant to section
3 745(b) that additional basic insurance coverage capacity is
4 not available, for policies issued or renewed three years
5 after the increase in coverage limits required by paragraph
6 (3) and for each year thereafter, the basic insurance
7 coverage shall be:
8 (i) $1,000,000 per occurrence or claim and
9 $3,000,000 per annual aggregate for a participating
10 health care provider that is not a hospital.
11 (ii) $1,000,000 per occurrence or claim and
12 $3,000,000 per annual aggregate for a nonparticipating
13 health care provider.
14 (iii) $1,000,000 per occurrence or claim and
15 $4,500,000 per annual aggregate for a hospital.
16 If the commissioner finds pursuant to section 745(b) that
17 additional basic insurance coverage capacity is not
18 available, the basic insurance coverage requirements shall
19 remain at the level required by paragraph (3); and the
20 commissioner shall conduct a study every two years until the
21 commissioner finds that additional basic insurance coverage
22 capacity is available, at which time the commissioner shall
23 increase the required basic insurance coverage in accordance
24 with this paragraph.]
25 * * *
26 Section 2. Section 712(c) of the act is amended and the
27 section is amended by adding a subsection to read:
28 Section 712. Medical Care Availability and Reduction of Error
29 Fund.
30 * * *
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1 (c) Fund liability limits.--
2 (1) For calendar year 2002, the limit of liability of
3 the fund created in section 701(d) of the former Health Care
4 Services Malpractice Act for each health care provider that
5 conducts more than 50% of its health care business or
6 practice within this Commonwealth and for each hospital shall
7 be $700,000 for each occurrence and $2,100,000 per annual
8 aggregate.
9 [(2) The limit of liability of the fund for each
10 participating health care provider shall be as follows:
11 (i) For calendar year 2003 and each year thereafter,
12 the limit of liability of the fund shall be $500,000 for
13 each occurrence and $1,500,000 per annual aggregate.
14 (ii) If the basic insurance coverage requirement is
15 increased in accordance with section 711(d)(3) and,
16 notwithstanding subparagraph (i), for each calendar year
17 following the increase in the basic insurance coverage
18 requirement, the limit of liability of the fund shall be
19 $250,000 for each occurrence and $750,000 per annual
20 aggregate.
21 (iii) If the basic insurance coverage requirement is
22 increased in accordance with section 711(d)(4) and,
23 notwithstanding subparagraphs (i) and (ii), for each
24 calendar year following the increase in the basic
25 insurance coverage requirement, the limit of liability of
26 the fund shall be zero.]
27 (2) For calendar years 2003 and 2004, the limit of
28 liability of the fund shall be $500,000 for each occurrence
29 and $1,500,000 per annual aggregate.
30 (c.1) Coverage elimination.--The commissioner shall
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1 eliminate the liability coverage provided by the fund to
2 participating health care providers no later than December 31,
3 2004. Upon this action by the commissioner, the limit of
4 liability of the fund shall thereafter be zero for any claims
5 that occur after December 31, 2004.
6 * * *
7 Section 3. Sections 715(a) and 745 of the act are amended to
8 read:
9 Section 715. Extended claims.
10 (a) General rule.--If a medical professional liability claim
11 against a health care provider who was required to participate
12 in the Medical Professional Liability Catastrophe Loss Fund
13 under section 701(d) of the act of October 15, 1975 (P.L.390,
14 No.111), known as the Health Care Services Malpractice Act, is
15 made more than four years after the breach of contract or tort
16 occurred and if the claim is filed within the applicable statute
17 of limitations and statute of repose, the claim shall be
18 defended by the department if the department received a written
19 request for indemnity and defense within 180 days of the date on
20 which notice of the claim is first given to the participating
21 health care provider or its insurer. Where multiple treatments
22 or consultations took place less than four years before the date
23 on which the health care provider or its insurer received notice
24 of the claim, the claim shall be deemed for purposes of this
25 section to have occurred less than four years prior to the date
26 of notice and shall be defended by the insurer in accordance
27 with this chapter.
28 * * *
29 Section 745. Actuarial data.
30 [(a) Initial study.--The following shall apply:
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1 (1)] No later than April 1, 2005, each insurer providing
2 medical professional liability insurance in this Commonwealth
3 shall file loss data as required by the commissioner. For
4 failure to comply, the commissioner shall impose an
5 administrative penalty of $1,000 for every day that this data
6 is not provided in accordance with this [paragraph] section.
7 [(2) By July 1, 2005, the commissioner shall conduct a
8 study regarding the availability of additional basic
9 insurance coverage capacity. The study shall include an
10 estimate of the total change in medical professional
11 liability insurance loss-cost resulting from implementation
12 of this act prepared by an independent actuary. The fee for
13 the independent actuary shall be borne by the fund. In
14 developing the estimate, the independent actuary shall
15 consider all of the following:
16 (i) The most recent accident year and ratemaking
17 data available.
18 (ii) Any other relevant factors within or outside
19 this Commonwealth in accordance with sound actuarial
20 principles.
21 (b) Additional study.--The following shall apply:
22 (1) Three years following the increase of the basic
23 insurance coverage requirement in accordance with section
24 711(d)(3), each insurer providing medical professional
25 liability insurance in this Commonwealth shall file loss data
26 with the commissioner upon request. For failure to comply,
27 the commissioner shall impose an administrative penalty of
28 $1,000 for every day that this data is not provided in
29 accordance with this paragraph.
30 (2) Three months following the request made under
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1 paragraph (1), the commissioner shall conduct a study
2 regarding the availability of additional basic insurance
3 coverage capacity. The study shall include an estimate of the
4 total change in medical professional liability insurance
5 loss-cost resulting from implementation of this act prepared
6 by an independent actuary. The fee for the independent
7 actuary shall be borne by the fund. In developing the
8 estimate, the independent actuary shall consider all of the
9 following:
10 (i) The most recent accident year and ratemaking
11 data available.
12 (ii) Any other relevant factors within or outside
13 this Commonwealth in accordance with sound actuarial
14 principles.]
15 Section 4. This act shall take effect in 60 days.
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