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News and Information Article
Commission also recommends maintaining public financial support for health
care providers
HARRISBURG, Pa., Nov. 30 // -- Insurance Commissioner Diane
Koken announced today that the Medical Care Availability and Reduction of
Error (Mcare) Commission has delivered its final report, outlining a broad
range of recommendations to ensure that Pennsylvanians will continue to
have access to quality health care.
The Commission recommended future policies to the Governor and the
General Assembly to manage the unfunded liabilities of the Mcare Fund, as
well as provide continued public support to health care providers to make
medical malpractice insurance costs manageable while the medical
malpractice situation continues to improve.
The Commission was created by Act 88 of 2005 and required to present a
final report by the end of November 2006. The commission was to study,
review and make recommendations on appropriate and effective methods to
address future unfunded liabilities of the Mcare fund, including the
continuation of the abatement program
"The commissions recommendations center on two initiatives," said
Commissioner Koken. "The first is implementation of a realistic plan to
phase out the Commonwealths Mcare Fund program and return all medical
malpractice insurance coverage to the private market as soon as possible.
This is a move that is strongly supported by physicians and hospitals.
"The commission also supports continued use of the public funds that
are currently dedicated to the Mcare abatement to keep costs manageable
until the Mcare Fund is phased out and then ease the transition and impact
on health- care providers as the Mcare Fund is replaced by the private
market.
"This report is the result of much hard work and constructive dialogue
between representatives of Pennsylvanias legal and medical communities and
is presented to the legislature and Governor for their consideration."
The commissions membership included eight private citizen appointees
selected by the leaders of the General Assembly as well as the
commonwealths Insurance Commissioner and Budget and Revenue secretaries.
The Insurance Commissioner chaired the group. The recommendations made
today were the result of numerous meetings of the commission and hours
spent with consultants and other experts developing and reviewing data,
trends and projections in the professional liability insurance marketplace.
The highlights of the commissions recommendations are:
-- To continue the states Mcare abatement program which subsidizes
health care providers catastrophic malpractice claims payments until
Mcare coverage has been phased out. The Mcare abatement program was
initially proposed by Governor Edward G. Rendell in 2003 to encourage
health care providers to continue practicing in the Commonwealth and
has defrayed nearly $1 billion of malpractice expenses for
Pennsylvania health care providers;
-- To privatize Mcare malpractice coverage as directed under the Act 13
of 2002 as soon as is feasible, ideally in the period between 2008
and 2011. Currently, most health care providers are required to buy
$1 million in malpractice coverage - the first $500,000 from the
private market and the remaining $500,000 from the government-run
Mcare Fund;
-- To eliminate the Mcare assessments paid by health-care providers to
support the Mcare Fund once private insurers begin covering the
entire amount of required malpractice insurance, thereby reducing
health-care providers medical malpractice costs;
-- To use the public funds currently committed to the Mcare abatement
program to retire the unfunded liabilities of the Mcare Fund, once
the Mcare program ends;
-- To use any remaining currently committed public funds to mitigate
increases in health care provider malpractice insurance costs, with a
target of limiting the maximum increase in aggregate medical
malpractice liability insurance costs in Pennsylvania to 10 percent
annually; and
-- To aggressively promote health-care quality initiatives, which will,
among other things, reduce future malpractice expenses and maximize
public funds that can be dedicated to health care services.
"Id like to thank the commission members and the advisory committee
members for their hard work in developing innovative solutions to an issue
which has been debated for more than 30 years by groups with varying
interests," Koken said. "This report contains practical and achievable
ideas for consideration by the legislature and the Governor."
Under Governor Rendells leadership, there has been continued
stabilization and improvement in the medical malpractice market in
Pennsylvania.
Mcare pay-outs have declined for the third consecutive year. The two
largest private medical malpractice carriers have not increased their base
rates in two years and over the past four years, four new insurance
companies and 29 risk retention groups have started writing med mal
insurance in Pennsylvania. The number of physicians practicing in
Pennsylvania has remained constant at about 35,000, and the number of
medical malpractice cases filed has dropped nearly 38 percent since 2003.
In 2006, the Mcare Commission held six meetings and hosted a public
hearing. Commission members included: Commissioner Koken; Budget Secretary
Michael J. Masch; Revenue Secretary Gregory C. Fajt; Sen. Gibson E.
Armstrong; Rep. Steven R. Nickol; Joseph G. Cesare, MD; Steven A. Shapiro,
MD; Joshua Port, MD; Don Matusow, Esq.; and David F. Simon, Esq.
The commission report, meeting minutes and the oral and written
testimony from the public hearing can be found on the Mcare website at
http://www.mcare.state.pa.us.
The Mcare Program is operated under the provisions of Act 13 of 2002
and is administered by the Pennsylvania Insurance Department. Its purpose
is to ensure reasonable compensation for persons injured due to medical
negligence in cases where claims fall in the range from $500,000 to $1
million per claim.
CONTACT: Rosanne Placey or Melissa Fox
(717) 787-3289
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