Pennsylvania Governor Corbett Announces Medical Care Availability and Reduction of Error Fund (Mcare) Settlement

HARRISBURG, Pa., Oct. 16, 2014 /PRNewswire-USNewswire/ -- Governor Tom Corbett today announced the Mcare settlement agreement with the Pennsylvania Medical Society (PAMED), The Hospital & Healthsystem Association of Pennsylvania (HAP) and the Pennsylvania Podiatric Medical Association that resolves a five-year dispute over fund transfers and assessments.

"Making sure Pennsylvanians have access to quality, affordable health care is one of my top priorities," said Gov. Corbett. "Today's final settlement enables the commonwealth to reduce medical malpractice costs for health care providers which, in turn, ensures access to robust networks of hospitals, medical doctors and specialists."

In 2009, PAMED and HAP filed litigation in Commonwealth Court challenging the state's transfer of $100 million from Mcare to the state's general fund. In separate litigation filed by PAMED, HAP and the Pennsylvania Podiatric Medical Association (PPMA), the assessment calculation formula was also challenged. The Mcare Fund's reserves were alleged to be higher than the 10 percent prescribed in law.

This settlement resolution provides that:

• Health care providers will be reimbursed approximately $139 million from an Assessment Relief Fund representing a portion of their assessment payments in 2009-2012 and 2014. Refunds will not be available for up to 18 months.
• Starting in 2015, there will be a new assessment calculation formula that will reduce Mcare assessments by $61 million from the projected 2014 year-end Fund balance.
• The commonwealth will retain the $100 million that was transferred out of the fund.

The Mcare Act, enacted in March 2002, created the Mcare Fund, a special fund of the Pennsylvania Insurance Department providing medical malpractice liability coverage. The law requires all hospitals and practicing physicians to have at least $1 million of medical liability coverage—$500,000 of which must be obtained from a private insurance carrier, the Joint Underwriting Association, or a self-insured program, and the other $500,000 is obtained from Mcare.

Assessments are paid into the Mcare Fund rather than premiums. The assessment formula includes claim payments and expenses from the previous claims year.    

Media contact:   Rosanne Placey, Insurance, 717-787-3289

SOURCE Pennsylvania Office of the Governor

Related Links

http://www.governor.state.pa.us