Pennsylvania Hospitals, Docs Sue over Malpractice Fund

Pennsylvania hospitals and doctors are suing the state to obtain hundreds of millions in unspent dollars they say should be devoted to a state fund that helps doctors pay for medical malpractice insurance.

Industry associations representing both groups said the state owes doctors and other health care providers anywhere from $446 million to $616 million in reimbursements for bills paid into the fund known as MCare.

The lawsuits were filed in Commonwealth Court by the Hospital & Healthsystem Association of Pennsylvania and the Pennsylvania Medical Society.

The MCare subsidy lapsed earlier this year amid a stalemate between Democratic Gov. Ed Rendell and Republican lawmakers over expanding a state health insurance program for uninsured adults.

State cigarette tax revenue and surcharges paid by motorists cited for moving violations underwrite the subsidy, but the lawsuits claim that the state has not transferred all of the cigarette tax revenue into the insurance fund, leaving it without enough money to pay future liabilities.

MCare began in 2003 when premiums surged by double-digit percentages annually, although they have stabilized in recent years. The program pays medical malpractice awards and settlements above $500,000 and subsidizes the premiums providers pay for coverage. Doctors have argued that the subsidy is vital to retaining the state’s complement of physicians, particularly those in high-risk specialties such as obstetrics and gynecology who pay higher malpractice premiums.