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                                 HOUSE AMENDED
        PRIOR PRINTER'S NOS. 1488, 1491, 1510         PRINTER'S NO. 1621

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 1137 Session of 2007


        INTRODUCED BY D. WHITE, RAFFERTY, PILEGGI, ORIE, SCARNATI,
           ROBBINS, ERICKSON, GORDNER, C. WILLIAMS, FONTANA, MADIGAN,
           ARMSTRONG, PIPPY, FERLO, WONDERLING, WAUGH, BAKER, REGOLA,
           BROWNE AND BOSCOLA, OCTOBER 23, 2007

        AS REPORTED FROM COMMITTEE ON INSURANCE, HOUSE OF
           REPRESENTATIVES, AS AMENDED, DECEMBER 5, 2007

                                     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 the Medical Care
    17     Availability and Reduction of Error Fund and for actuarial
    18     data; providing for the Medical Care Availability and          <--
    19     Reduction of Error (Mcare) FOR PENNSYLVANIANS (MCAP) Reserve   <--
    20     Fund; and further providing for abatement program, for the     <--
    21     Health Care Provider Retention Account and for expiration;     <--
    22     AND PROVIDING FOR EXPIRATION OF CERTAIN SECTIONS.

    23     The General Assembly of the Commonwealth of Pennsylvania
    24  hereby enacts as follows:
    25     Section 1.  Sections 711, 712 and 745 of the act of March 20,
    26  2002 (P.L.154, No.13), known as the Medical Care Availability

     1  and Reduction of Error (Mcare) Act, are amended to read:
     2  Section 711.  Medical professional liability insurance.
     3     (a)  Requirement.--A health care provider providing health
     4  care services in this Commonwealth shall:
     5         (1)  purchase medical professional liability insurance
     6     from an insurer which is licensed or approved by the
     7     department; or
     8         (2)  provide self-insurance.
     9     (b)  Proof of insurance.--A health care provider required by
    10  subsection (a) to purchase medical professional liability
    11  insurance or provide self-insurance shall submit proof of
    12  insurance or self-insurance to the department within 60 days of
    13  the policy being issued.
    14     (c)  Failure to provide proof of insurance.--If a health care
    15  provider fails to submit the proof of insurance or self-
    16  insurance required by subsection (b), the department shall,
    17  after providing the health care provider with notice, notify the
    18  health care provider's licensing authority. A health care
    19  provider's license shall be suspended or revoked by its
    20  licensure board or agency if the health care provider fails to
    21  comply with any of the provisions of this chapter.
    22     (d)  Basic coverage limits.--A health care provider shall
    23  insure or self-insure medical professional liability in
    24  accordance with the following:
    25         (1)  For policies issued or renewed in the calendar year
    26     2002, the basic insurance coverage shall be:
    27             (i)  $500,000 per occurrence or claim and $1,500,000
    28         per annual aggregate for a health care provider who
    29         conducts more than 50% of its health care business or
    30         practice within this Commonwealth and that is not a
    20070S1137B1621                  - 2 -     

     1         hospital.
     2             (ii)  $500,000 per occurrence or claim and $1,500,000
     3         per annual aggregate for a health care provider who
     4         conducts 50% or less of its health care business or
     5         practice within this Commonwealth.
     6             (iii)  $500,000 per occurrence or claim and
     7         $2,500,000 per annual aggregate for a hospital.
     8         (2)  For policies issued or renewed in the calendar years
     9     2003, 2004 and 2005, the basic insurance coverage shall be:
    10             (i)  $500,000 per occurrence or claim and $1,500,000
    11         per annual aggregate for a participating health care
    12         provider that is not a hospital.
    13             (ii)  $1,000,000 per occurrence or claim and
    14         $3,000,000 per annual aggregate for a nonparticipating
    15         health care provider.
    16             (iii)  $500,000 per occurrence or claim and
    17         $2,500,000 per annual aggregate for a hospital.
    18         (3)  Unless the commissioner finds pursuant to section
    19     745(a) that additional basic insurance coverage capacity is
    20     not available, for policies issued or renewed in calendar
    21     year 2006 and each year thereafter subject to paragraph (4),
    22     the basic insurance coverage shall be:
    23             (i)  Up to $750,000 per occurrence or claim and
    24         $2,250,000 per annual aggregate for a participating
    25         health care provider that is not a hospital.
    26             (ii)  Up to $1,000,000 per occurrence or claim and
    27         $3,000,000 per annual aggregate for a nonparticipating
    28         health care provider.
    29             (iii)  Up to $750,000 per occurrence or claim and
    30         $3,750,000 per annual aggregate for a hospital.
    20070S1137B1621                  - 3 -     

     1     If the commissioner finds pursuant to section 745(a) that
     2     additional basic insurance coverage capacity is not
     3     available, the basic insurance coverage requirements shall
     4     remain at the level required by paragraph (2); and the
     5     commissioner shall conduct a study every [two years] year
     6     until the commissioner finds that additional basic insurance
     7     coverage capacity is available, at which time the
     8     commissioner shall increase the required basic insurance
     9     coverage in accordance with this paragraph.
    10         (4)  Unless the commissioner finds pursuant to section
    11     745(b) that additional basic insurance coverage capacity is
    12     not available, for policies issued or renewed [three] two
    13     years after the increase in coverage limits required by
    14     paragraph (3) and for each year thereafter, the basic
    15     insurance coverage shall be:
    16             (i)  Up to $1,000,000 per occurrence or claim and
    17         $3,000,000 per annual aggregate for a participating
    18         health care provider that is not a hospital.
    19             (ii)  Up to $1,000,000 per occurrence or claim and
    20         $3,000,000 per annual aggregate for a nonparticipating
    21         health care provider.
    22             (iii)  Up to $1,000,000 per occurrence or claim and
    23         $4,500,000 per annual aggregate for a hospital.
    24     If the commissioner finds pursuant to section 745(b) that
    25     additional basic insurance coverage capacity is not
    26     available, the basic insurance coverage requirements shall
    27     remain at the level required by paragraph (3); and the
    28     commissioner shall conduct a study every [two years] year
    29     until the commissioner finds that additional basic insurance
    30     coverage capacity is available, at which time the
    20070S1137B1621                  - 4 -     

     1     commissioner shall increase the required basic insurance
     2     coverage in accordance with this paragraph.
     3         (5)  The amount of basic insurance coverage per
     4     occurrence or claim under paragraphs (3) and (4) shall be no
     5     less than $500,000 and shall be set in $50,000 increments.
     6         (6)  In no event shall the total coverage for basic
     7     primary insurance and the fund, per occurrence or claim, be
     8     less than $1,000,000 or less than $3,000,000 per annual
     9     aggregate for a participating or nonparticipating health care
    10     provider, except hospitals which have total coverage limits
    11     of not less than $1,000,000 per occurrence or less than
    12     $4,500,000 per annual aggregate.
    13     (e)  Fund participation.--A participating health care
    14  provider shall be required to participate in the fund.
    15     (f)  Self-insurance.--
    16         (1)  If a health care provider self-insures its medical
    17     professional liability, the health care provider shall submit
    18     its self-insurance plan, such additional information as the
    19     department may require and the examination fee to the
    20     department for approval.
    21         (2)  The department shall approve the plan if it
    22     determines that the plan constitutes protection equivalent to
    23     the insurance required of a health care provider under
    24     subsection (d).
    25     (g)  Basic insurance liability.--
    26         (1)  An insurer providing medical professional liability
    27     insurance shall not be liable for payment of a claim against
    28     a health care provider for any loss or damages awarded in a
    29     medical professional liability action in excess of the basic
    30     insurance coverage required by subsection (d) unless the
    20070S1137B1621                  - 5 -     

     1     health care provider's medical professional liability
     2     insurance policy or self-insurance plan provides for a higher
     3     limit.
     4         (2)  If a claim exceeds the limits of a participating
     5     health care provider's basic insurance coverage or self-
     6     insurance plan, the fund shall be responsible for payment of
     7     the claim against the participating health care provider up
     8     to the fund liability limits.
     9     (h)  Excess insurance.--
    10         (1)  No insurer providing medical professional liability
    11     insurance with liability limits in excess of the fund's
    12     liability limits to a participating health care provider
    13     shall be liable for payment of a claim against the
    14     participating health care provider for a loss or damages in a
    15     medical professional liability action except the losses and
    16     damages in excess of the fund coverage limits.
    17         (2)  No insurer providing medical professional liability
    18     insurance with liability limits in excess of the fund's
    19     liability limits to a participating health care provider
    20     shall be liable for any loss resulting from the insolvency or
    21     dissolution of the fund.
    22     (i)  Governmental entities.--A governmental entity may
    23  satisfy its obligations under this chapter, as well as the
    24  obligations of its employees to the extent of their employment,
    25  by either purchasing medical professional liability insurance or
    26  assuming an obligation as a self-insurer, and paying the
    27  assessments under this chapter.
    28     (j)  Exemptions.--The following participating health care
    29  providers shall be exempt from this chapter:
    30         (1)  A physician who exclusively practices the specialty
    20070S1137B1621                  - 6 -     

     1     of forensic pathology.
     2         (2)  A participating health care provider who is a member
     3     of the Pennsylvania military forces while in the performance
     4     of the member's assigned duty in the Pennsylvania military
     5     forces under orders.
     6         (3)  A retired licensed participating health care
     7     provider who provides care only to the provider or the
     8     provider's immediate family members.
     9  Section 712.  Medical Care Availability and Reduction of Error
    10                 Fund.
    11     (a)  Establishment.--There is hereby established within the
    12  State Treasury a special fund to be known as the Medical Care
    13  Availability and Reduction of Error Fund. Money in the fund
    14  shall be used to pay claims against participating health care
    15  providers for losses or damages awarded in medical professional
    16  liability actions against them in excess of the basic insurance
    17  coverage required by section 711(d), liabilities transferred in
    18  accordance with subsection (b) and for the administration of the
    19  fund.
    20     (b)  Transfer of assets and liabilities.--
    21         (1)  (i)  The money in the Medical Professional Liability
    22         Catastrophe Loss Fund established under section 701(d) of
    23         the former act of October 15, 1975 (P.L.390, No.111),
    24         known as the Health Care Services Malpractice Act, is
    25         transferred to the fund.
    26             (ii)  The rights of the Medical Professional
    27         Liability Catastrophe Loss Fund established under section
    28         701(d) of the former Health Care Services Malpractice Act
    29         are transferred to and assumed by the fund.
    30         (2)  The liabilities and obligations of the Medical
    20070S1137B1621                  - 7 -     

     1     Professional Liability Catastrophe Loss Fund established
     2     under section 701(d) of the former Health Care Services
     3     Malpractice Act are transferred to and assumed by the fund.
     4     (c)  Fund liability limits.--
     5         (1)  For calendar year 2002, the limit of liability of
     6     the fund created in section 701(d) of the former Health Care
     7     Services Malpractice Act for each health care provider that
     8     conducts more than 50% of its health care business or
     9     practice within this Commonwealth and for each hospital shall
    10     be $700,000 for each occurrence and $2,100,000 per annual
    11     aggregate.
    12         (2)  The limit of liability of the fund for each
    13     participating health care provider shall be as follows:
    14             (i)  For calendar year 2003 and each year thereafter,
    15         the limit of liability of the fund shall be $500,000 for
    16         each occurrence and $1,500,000 per annual aggregate.
    17             (ii)  If the basic insurance coverage requirement is
    18         increased in accordance with section 711(d)(3) or (4)
    19         and, notwithstanding subparagraph (i), for each calendar
    20         year following the increase in the basic insurance
    21         coverage requirement, the limit of liability of the fund
    22         shall be [$250,000 for each occurrence and $750,000 per
    23         annual aggregate.
    24             (iii)  If the basic insurance coverage requirement is
    25         increased in accordance with section 711(d)(4) and,
    26         notwithstanding subparagraphs (i) and (ii), for each
    27         calendar year following the increase in the basic
    28         insurance coverage requirement, the limit of liability of
    29         the fund shall be zero] $1,000,000 per occurrence and
    30         $3,000,000 per annual aggregate, except hospitals which
    20070S1137B1621                  - 8 -     

     1         shall be $1,000,000 per occurrence and $4,500,000 per
     2         annual aggregate, minus the amount the commissioner
     3         determines for basic insurance coverage under section
     4         711(d)(3) and (4).
     5     (d)  Assessments.--
     6         (1)  For calendar year 2003 and for each year thereafter,
     7     the fund shall be funded by an assessment on each
     8     participating health care provider. Assessments shall be
     9     levied by the department on or after January 1 of each year.
    10     The assessment shall be based on the prevailing primary
    11     premium for each participating health care provider and
    12     shall, in the aggregate, produce an amount sufficient to do
    13     all of the following:
    14             (i)  Reimburse the fund for the payment of reported
    15         claims which became final during the preceding claims
    16         period.
    17             (ii)  Pay expenses of the fund incurred during the
    18         preceding claims period.
    19             (iii)  Pay principal and interest on moneys
    20         transferred into the fund in accordance with section
    21         713(c).
    22             (iv)  Provide a reserve that shall be 10% of the sum
    23         of subparagraphs (i), (ii) and (iii).
    24         (2)  The department shall notify all basic insurance
    25     coverage insurers and self-insured participating health care
    26     providers of the assessment by November 1 for the succeeding
    27     calendar year. Beginning January 1, 2008, the department
    28     shall bill and collect the assessment from all participating
    29     health care providers.
    30         (3)  Any appeal of the assessment shall be filed with the
    20070S1137B1621                  - 9 -     

     1     department.
     2         (4)  FOR CALENDAR YEAR BEGINNING JANUARY 1, 2008, THE      <--
     3     DEPARTMENT MAY DELAY OR SUSPEND THE COLLECTION OF ASSESSMENTS
     4     UNTIL THE REQUIREMENTS UNDER SECTION 752(B) ARE MET.
     5     (e)  Discount on surcharges and assessments.--
     6         (1)  For calendar year 2002, the department shall
     7     discount the aggregate surcharge imposed under section
     8     701(e)(1) of the Health Care Services Malpractice Act by 5%
     9     of the aggregate surcharge imposed under that section for
    10     calendar year 2001 in accordance with the following:
    11             (i)  Fifty percent of the aggregate discount shall be
    12         granted equally to hospitals and to participating health
    13         care providers that were surcharged as members of one of
    14         the four highest rate classes of the prevailing primary
    15         premium.
    16             (ii)  Notwithstanding subparagraph (i), 50% of the
    17         aggregate discount shall be granted equally to all
    18         participating health care providers.
    19             (iii)  The department shall issue a credit to a
    20         participating health care provider who, prior to the
    21         effective date of this section, has paid the surcharge
    22         imposed under section 701(e)(1) of the former Health Care
    23         Services Malpractice Act for calendar year 2002 prior to
    24         the effective date of this section.
    25         (2)  For calendar years 2003 and 2004, the department
    26     shall discount the aggregate assessment imposed under
    27     subsection (d) for each calendar year by 10% of the aggregate
    28     surcharge imposed under section 701(e)(1) of the former
    29     Health Care Services Malpractice Act for calendar year 2001
    30     in accordance with the following:
    20070S1137B1621                 - 10 -     

     1             (i)  Fifty percent of the aggregate discount shall be
     2         granted equally to hospitals and to participating health
     3         care providers that were assessed as members of one of
     4         the four highest rate classes of the prevailing primary
     5         premium.
     6             (ii)  Notwithstanding subparagraph (i), 50% of the
     7         aggregate discount shall be granted equally to all
     8         participating health care providers.
     9         (3)  For calendar years 2005 and thereafter, if the basic
    10     insurance coverage requirement is increased in accordance
    11     with section 711(d)(3) or (4), the department may discount
    12     the aggregate assessment imposed under subsection (d) by an
    13     amount not to exceed the aggregate sum to be deposited in the
    14     fund in accordance with subsection (m).
    15     (f)  Updated rates.--The joint underwriting association shall
    16  file updated rates for all health care providers with the
    17  commissioner by May 1 of each year. The department shall review
    18  and may adjust the prevailing primary premium in line with any
    19  applicable changes which have been approved by the commissioner.
    20     (g)  Additional adjustments of the prevailing primary
    21  premium.--The department shall adjust the applicable prevailing
    22  primary premium of each participating health care provider in
    23  accordance with the following:
    24         (1)  The applicable prevailing primary premium of a
    25     participating health care provider which is not a hospital
    26     may be adjusted through an increase in the individual
    27     participating health care provider's prevailing primary
    28     premium not to exceed 20%. Any adjustment shall be based upon
    29     the frequency of claims paid by the fund on behalf of the
    30     individual participating health care provider during the past
    20070S1137B1621                 - 11 -     

     1     five most recent claims periods and shall be in accordance
     2     with the following:
     3             (i)  If three claims have been paid during the past
     4         five most recent claims periods by the fund, a 10%
     5         increase shall be charged.
     6             (ii)  If four or more claims have been paid during
     7         the past five most recent claims periods by the fund, a
     8         20% increase shall be charged.
     9         (2)  The applicable prevailing primary premium of a
    10     participating health care provider which is not a hospital
    11     and which has not had an adjustment under paragraph (1) may
    12     be adjusted through an increase in the individual
    13     participating health care provider's prevailing primary
    14     premium not to exceed 20%. Any adjustment shall be based upon
    15     the severity of at least two claims paid by the fund on
    16     behalf of the individual participating health care provider
    17     during the past five most recent claims periods.
    18         (3)  The applicable prevailing primary premium of a
    19     participating health care provider not engaged in direct
    20     clinical practice on a full-time basis may be adjusted
    21     through a decrease in the individual participating health
    22     care provider's prevailing primary premium not to exceed 10%.
    23     Any adjustment shall be based upon the lower risk associated
    24     with the less-than-full-time direct clinical practice.
    25         (4)  The applicable prevailing primary premium of a
    26     hospital may be adjusted through an increase or decrease in
    27     the individual hospital's prevailing primary premium not to
    28     exceed 20%. Any adjustment shall be based upon the frequency
    29     and severity of claims paid by the fund on behalf of other
    30     hospitals of similar class, size, risk and kind within the
    20070S1137B1621                 - 12 -     

     1     same defined region during the past five most recent claims
     2     periods.
     3     (h)  Self-insured health care providers.--A participating
     4  health care provider that has an approved self-insurance plan
     5  shall be assessed an amount equal to the assessment imposed on a
     6  participating health care provider of like class, size, risk and
     7  kind as determined by the department.
     8     (i)  Change in basic insurance coverage.--If a participating
     9  health care provider changes the term of its medical
    10  professional liability insurance coverage, the assessment shall
    11  be calculated on an annual basis and shall reflect the
    12  assessment percentages in effect for the period over which the
    13  policies are in effect.
    14     (j)  Payment of claims.--Claims which became final during the
    15  preceding claims period shall be paid on or before December 31
    16  following the August 31 on which they became final.
    17     (k)  Termination.--Upon satisfaction of all liabilities of
    18  the fund, the fund shall terminate. Any balance remaining in the
    19  fund upon such termination shall be returned by the department
    20  to the participating health care providers who participated in
    21  the fund in proportion to their assessments in the preceding
    22  calendar year.
    23     (l)  Sole and exclusive source of funding.--Except as
    24  provided in subsection (m), the surcharges imposed under section
    25  701(e)(1) of the Health Care Services Malpractice Act and
    26  assessments on participating health care providers and any
    27  income realized by investment or reinvestment shall constitute
    28  the sole and exclusive sources of funding for the fund. Nothing
    29  in this subsection shall prohibit the fund from accepting
    30  contributions from nongovernmental sources. A claim against or a
    20070S1137B1621                 - 13 -     

     1  liability of the fund shall not be deemed to constitute a debt
     2  or liability of the Commonwealth or a charge against the General
     3  Fund.
     4     (m)  Supplemental funding.--Notwithstanding the provisions of
     5  75 Pa.C.S. § 6506(b) (relating to surcharge) to the contrary,
     6  beginning January 1, 2004, and for a period of nine calendar
     7  years thereafter, all surcharges levied and collected under 75
     8  Pa.C.S. § 6506(a) by any division of the unified judicial system
     9  shall be remitted to the Commonwealth for deposit in the Medical
    10  Care Availability and Restriction of Error Fund. These funds
    11  shall be used to reduce surcharges and assessments in accordance
    12  with subsection (e). Beginning January 1, 2014, and each year
    13  thereafter, the surcharges levied and collected under 75 Pa.C.S.
    14  § 6506(a) shall be deposited into the General Fund.
    15     (n)  Waiver of right to consent to settlement.--A
    16  participating health care provider may maintain the right to
    17  consent to a settlement in a basic insurance coverage policy for
    18  medical professional liability insurance upon the payment of an
    19  additional premium amount.
    20  Section 745.  Actuarial data.
    21     (a)  Initial study.--The following shall apply:
    22         (1)  No later than April 1, 2005, each insurer providing
    23     medical professional liability insurance in this Commonwealth
    24     shall file loss data as required by the commissioner. For
    25     failure to comply, the commissioner shall impose an
    26     administrative penalty of $1,000 for every day that this data
    27     is not provided in accordance with this paragraph.
    28         (2)  By July 1, 2005, the commissioner shall conduct a
    29     study regarding the availability of additional basic
    30     insurance coverage capacity. The study shall include an
    20070S1137B1621                 - 14 -     

     1     estimate of the total change in medical professional
     2     liability insurance loss-cost resulting from implementation
     3     of this act prepared by an independent actuary. The fee for
     4     the independent actuary shall be borne by the fund. In
     5     developing the estimate, the independent actuary shall
     6     consider all of the following:
     7             (i)  The most recent accident year and ratemaking
     8         data available.
     9             (ii)  Any other relevant factors within or outside
    10         this Commonwealth in accordance with sound actuarial
    11         principles.
    12     (b)  Additional study.--The following shall apply:
    13         (1)  Three years following the increase of the basic
    14     insurance coverage requirement in accordance with section
    15     711(d)(3), each insurer providing medical professional
    16     liability insurance in this Commonwealth shall file loss data
    17     with the commissioner upon request. For failure to comply,
    18     the commissioner shall impose an administrative penalty of
    19     $1,000 for every day that this data is not provided in
    20     accordance with this paragraph.
    21         (2)  Three months following the request made under
    22     paragraph (1), the commissioner shall conduct a study
    23     regarding the availability of additional basic insurance
    24     coverage capacity. The study shall include an estimate of the
    25     total change in medical professional liability insurance
    26     loss-cost resulting from implementation of this act prepared
    27     by an independent actuary. The fee for the independent
    28     actuary shall be borne by the fund. In developing the
    29     estimate, the independent actuary shall consider all of the
    30     following:
    20070S1137B1621                 - 15 -     

     1             (i)  The most recent accident year and ratemaking
     2         data available.
     3             (ii)  Any other relevant factors including economic
     4         considerations within or outside this Commonwealth in
     5         accordance with sound actuarial principles.
     6     Section 2.  Chapter 7 of the act is amended by adding
     7  subchapters A SUBCHAPTER to read:                                 <--
     8                            SUBCHAPTER E                            <--
     9          MEDICAL CARE AVAILABILITY AND REDUCTION OF ERROR
    10                        (MCARE) RESERVE FUND
    11  Section 751.  Establishment.
    12     There is established within the State Treasury a special fund
    13  to be known as the Medical Care Availability and Reduction of
    14  Error (Mcare) Reserve Fund.
    15  Section 752.  Allocation.
    16     Money in the Medical Care Availability and Reduction of Error
    17  (Mcare) Reserve Fund shall be allocated annually as follows:
    18         (1)  Fifty percent of the total amount in the Medical
    19     Care Availability and Reduction of Error (Mcare) Reserve Fund
    20     shall remain in the Medical Care Availability and Reduction
    21     of Error (Mcare) Reserve Fund for the sole purpose of
    22     reducing the unfunded liability of the fund.
    23         (2)  Twenty-five percent of the total amount in the
    24     Medical Care Availability and Reduction of Error (Mcare)
    25     Reserve Fund shall be transferred to the Patient Safety Trust
    26     Fund for use by the Department of Public Welfare for
    27     implementing section 407.
    28         (3)  Twenty-five percent of the total amount in the
    29     Medical Care Availability and Reduction of Error (Mcare)
    30     Reserve Fund shall be transferred to the Medical Safety
    20070S1137B1621                 - 16 -     

     1     Automation Fund.
     2                            SUBCHAPTER F
     3                   MEDICAL SAFETY AUTOMATION FUND
     4  Section 762.  Medical Safety Automation Fund established.
     5     There is established within the State Treasury a special fund
     6  to be known as the Medical Safety Automation Fund. No money in
     7  the Medical Safety Automation Fund shall be used until
     8  legislation is enacted for the purpose of providing medical
     9  safety automation system grants to health care providers under
    10  the act of July 19, 1979 (P.L.130, No.48), known as the Health
    11  Care Facilities Act, a group practice or a community-based
    12  health care provider.
    13                            SUBCHAPTER E                            <--
    14            MEDICAL CARE AVAILABILITY FOR PENNSYLVANIANS
    15                        (MCAP) RESERVE FUND
    16  SECTION 751.  ESTABLISHMENT.
    17     THERE IS ESTABLISHED WITHIN THE STATE TREASURY A SPECIAL FUND
    18  TO BE KNOWN AS THE MEDICAL CARE AVAILABILITY FOR PENNSYLVANIANS
    19  (MCAP) RESERVE FUND.
    20  SECTION 752.  ALLOCATION.
    21     (A)  ANNUAL ALLOCATION.--MONEY IN THE MEDICAL CARE
    22  AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE FUND SHALL BE
    23  ALLOCATED ANNUALLY AS FOLLOWS:
    24         (1)  FIFTY PERCENT OF THE TOTAL AMOUNT IN THE MEDICAL
    25     CARE AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE FUND
    26     SHALL REMAIN IN THE MEDICAL CARE AVAILABILITY FOR
    27     PENNSYLVANIANS (MCAP) RESERVE FUND FOR THE SOLE PURPOSE OF
    28     REDUCING THE UNFUNDED LIABILITY OF THE FUND.
    29         (2)  FIFTY PERCENT OF THE TOTAL AMOUNT IN THE MEDICAL
    30     CARE AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE FUND
    20070S1137B1621                 - 17 -     

     1     SHALL BE DEDICATED TO FUNDING THE PROGRAM ESTABLISHED UNDER
     2     SUBSECTION (B).
     3     (B)  ENACTMENT OF LEGISLATION.--NO MONEY IN THE MEDICAL CARE
     4  AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE FUND SHALL BE
     5  USED UNTIL LEGISLATION IS ENACTED THAT PROVIDES BOTH ASSISTANCE
     6  TO CERTAIN SMALL BUSINESS EMPLOYERS IN COVERING THEIR LOW WAGE
     7  UNINSURED AND ACCESS TO AFFORDABLE HEALTH INSURANCE COVERAGE FOR
     8  UNINSURED LOW-INCOME ADULT PENNSYLVANIANS.
     9     Section 3.  Section 1102 of the act, amended October 27, 2006
    10  (P.L.1198, No.128), is amended to read:
    11  Section 1102.  Abatement program.
    12     (a)  Establishment.--There is hereby established within the
    13  Insurance Department a program to be known as the Health Care
    14  Provider Retention Program. The Insurance Department, in
    15  conjunction with the Department of Public Welfare, shall
    16  administer the program. The program shall provide assistance in
    17  the form of assessment abatements to health care providers for
    18  calendar years 2003, 2004, 2005, 2006 [and], 2007 and 2008 AND    <--
    19  2007, except that licensed podiatrists shall not be eligible for
    20  calendar years 2003 and 2004, and nursing homes shall not be
    21  eligible for calendar years 2003, 2004 and 2005.
    22     (b)  Other [abatement.--] abatements.--
    23         (1)  Emergency physicians not employed full time by a
    24     trauma center or working under an exclusive contract with a
    25     trauma center shall retain eligibility for an abatement
    26     pursuant to section 1104(b)(2) for calendar years 2003, 2004,
    27     2005 and 2006. Commencing in calendar year 2007, these
    28     emergency physicians shall be eligible for an abatement
    29     pursuant to section 1104(b)(1).
    30         (2)  Birth centers shall retain eligibility for abatement
    20070S1137B1621                 - 18 -     

     1     pursuant to section 1104(b)(2) for calendar years 2003, 2004,
     2     2005, 2006 and 2007. Commencing in calendar year 2008, birth
     3     centers shall be eligible for an abatement pursuant to
     4     section 1104(b)(1).
     5     Section 4.  Section 1112 of the act, added December 22, 2005
     6  (P.L.458, No.88), is amended to read:
     7  Section 1112.  Health Care Provider Retention Account.
     8     (a)  Fund established.--There is established within the
     9  General Fund a special account to be known as the Health Care
    10  Provider Retention Account. Funds in the account shall be
    11  subject to an annual appropriation by the General Assembly to
    12  the Department of Public Welfare. The Department of Public
    13  Welfare shall administer funds appropriated under this section
    14  consistent with its duties under section 201(1) of the act of
    15  June 13, 1967 (P.L.31, No.21), known as the Public Welfare Code.
    16     (b)  Transfers from Mcare Fund.--By December 31 of each year,
    17  the Secretary of the Budget may transfer from the Medical Care
    18  Availability and Reduction of Error (Mcare) Fund established in
    19  section 712(a) to the account an amount equal to the difference
    20  between the amount deposited under section 712(m) and the amount
    21  granted as discounts under section 712(e)(2) for that calendar
    22  year.
    23     (c)  Transfers from account.--The Secretary of the Budget may
    24  annually transfer from the account to the Medical Care
    25  Availability and Reduction of Error (MCARE) Fund an amount up to
    26  the aggregate amount of abatements granted by the Insurance
    27  Department under section 1104(b).
    28     (c.1)  Transfers to the Medical Care Availability and          <--
    29  Reduction of Error (Mcare) Reserve Fund.--If the Secretary of
    30  the Budget makes a transfer from the account under subsection
    20070S1137B1621                 - 19 -     

     1  (c), the remaining funds in the account shall be transferred to
     2  the Medical Care Availability and Reduction of Error (Mcare)
     3  Reserve Fund. If the Secretary of the Budget does not make a
     4  transfer from the account under subsection (c), all of the funds
     5  in the account shall be transferred to the Medical Care
     6  Availability and Reduction of Error (Mcare) Reserve Fund.
     7     (C.1)  TRANSFERS TO THE MEDICAL CARE AVAILABILITY FOR          <--
     8  PENNSYLVANIANS (MCAP) RESERVE FUND.--IF THE SECRETARY OF THE
     9  BUDGET MAKES A TRANSFER FROM THE ACCOUNT UNDER SUBSECTION (C),
    10  THE REMAINING FUNDS IN THE ACCOUNT SHALL BE TRANSFERRED TO THE
    11  MEDICAL CARE AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE
    12  FUND. IF THE SECRETARY OF THE BUDGET DOES NOT MAKE A TRANSFER
    13  FROM THE ACCOUNT UNDER SUBSECTION (C), ALL OF THE FUNDS IN THE
    14  ACCOUNT SHALL BE TRANSFERRED TO THE MEDICAL CARE AVAILABILITY
    15  FOR PENNSYLVANIANS (MCAP) RESERVE FUND.
    16     (d)  Other deposits.--The Department of Public Welfare may
    17  deposit any other funds received by the department which it
    18  deems appropriate in the account.
    19     (e)  Administration assistance.--The Insurance Department
    20  shall provide assistance to the Department of Public Welfare in
    21  administering the account.
    22     Section 5.  Section 1115 of the act, amended October 27, 2006
    23  (P.L.1198, No.128), is amended to read:
    24  Section 1115.  Expiration.
    25     The Health Care Provider Retention Program established under
    26  this chapter shall expire December 31, [2008] 2009 2011.          <--
    27     Section 6.  Section 5106 of the act is amended to read:
    28  Section 5106.  Expiration.
    29     Section 312 shall expire on December 31, [2007] 2008.
    30     SECTION 7.  IF THE REQUIREMENTS OF SECTION 752(B) OF THE ACT   <--
    20070S1137B1621                 - 20 -     

     1  ARE NOT SATISFIED WITHIN 90 DAYS AFTER ENACTMENT, SECTIONS 711,
     2  712(D), (E), (G), (H) AND (I) OF THE ACT SHALL EXPIRE JUNE 30,
     3  2008. IF THESE SECTIONS EXPIRE ON JUNE 30, 2008, THE FUND SHALL
     4  CONTINUE TO BE RESPONSIBLE FOR PAYMENT OF CLAIMS AGAINST
     5  PARTICIPATING HEALTH CARE PROVIDERS AS OF JUNE 30, 2008, UP TO
     6  THE FUND LIABILITY LIMITS AS OF JUNE 30, 2008, TO THE EXTENT THE
     7  FUND WOULD HAVE BEEN RESPONSIBLE FOR PAYMENT OF SUCH CLAIMS IF
     8  SECTIONS 711, 712(D), (E), (G), (H) AND (I) OF THE ACT DID NOT
     9  EXPIRE JUNE 30, 2008.
    10     Section 7 8.  This act shall take effect immediately.          <--














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