Penn. Agrees to $200M Settlement in Med Mal Fund Case

Health care providers will be getting $200 million from the state of Pennsylvania in a settlement announced on Oct. 16 over litigation about a massive fund set up to help doctors pay malpractice insurance premiums.

Pennsylvania Gov. Tom Corbett’s administration said the state would pay $139 million in refunds, starting in a year and-a-half, and cut what providers must pay into the Medical Care Availability and Reduction of Error fund by $61 million through a revised formula.

Groups that represent doctors and hospitals sued in 2009 after the state transferred $100 million from the Mcare Fund, as it is known, to the state’s general fund to help balance the budget under then-Gov. Ed Rendell.

The groups argued they were being overcharged, allowing the state to accumulate a large surplus in the fund.

Gov. Corbett said the settlement will help cut malpractice insurance costs and preserve Pennsylvania’s system of doctors and hospitals. Hospital and Healthsystem Association of Pennsylvania president Andy Carter hailed the agreement. “The health care providers will receive essential medical liability savings, and Gov. Corbett has signaled once again that improving the medical liability climate is a top priority,” Carter said.

The other parties were the Pennsylvania Medical Society and the Pennsylvania Podiatric Medical Association.