Monday, May 16, 2016
Ind. Gov't. - "Volatile malpractice fees frustrate doctors, hospitals"
John Russell of the IBJ has a long, deep story in this week's issue on the Indiana Patient’s Compensation Fund. A sample:
Indiana has paid a total of $2.4 billion in medical malpractice awards since the fund was created in 1975, including more than $100 million a year every year since 2008.A sidebar explains how the fund works.
And that could rise. A law that takes effect in July 2017 will raise the cap on malpractice awards from $1.25 million to $1.65 million—the first increase in nearly two decades. [ILB: more about the new law]
The fund, administered by the Indiana Department of Insurance, is still solvent, with a balance of more than $118 million as of Jan. 1. But the balance has dipped as low as $4.3 million in 2003, and has surged as high as $189 million in 2009.
And while the state continues to write big checks to malpractice victims and families, the fees paid by hospitals and physicians haven’t kept up. The fund has rung up annual losses in 10 of the last 18 years.
When the balance dips, the Insurance Department tries to replenish the fund by raising rates. Last year, after another double-digit increase in fees, the fund scored a small surplus of $4.9 million, following losses in four of the previous five years.
The fund acts as pooled risk, providing insurance protection to health care providers and compensation to patients in cases of medical negligence. Under the system, doctors and hospitals, through their insurance companies, are responsible for paying for the first $250,000 of any award. The state fund pays any excess, up to $1 million.
The unusual combination of caps and a statewide pool helps keep liability low for doctors and hospitals. In turn, that keeps their malpractice insurance rates low.
Posted by Marcia Oddi on May 16, 2016 08:09 AM
Posted to Indiana Government