HARRISBURG – Gov. Tom Corbett has announced that Pennsylvania physicians and hospitals will see significant savings in the cost of the catastrophic level of medical malpractice insurance coverage next year.
The assessment for Medical Care Availability and Reduction of Error Fund (Mcare) for 2015 will decrease 48 percent from the prior year.
“The announcement reflects improvement in our medical malpractice climate due in part to tort reforms, including the Fair Share Act and enactment of Apology Rule legislation, as well as other factors, such as the operational benefits of Mcare,” said Corbett.
“When Mcare claim payments go down, the savings are immediately passed on to healthcare providers.”
Mcare assessments are based upon rates at the Joint Underwriting Association (JUA). The assessment rate for 2015 will drop to 12 percent of the JUA rates, compared to 23 percent in 2014. The assessment was also further reduced by using funds not needed to pay claims in prior years.
Claim payments for the 2015 assessment year were $156 million, compared to $194 million for the 2014 assessment year. An additional $61 million in funds remaining from prior years was also used in the new assessment calculation. This is based on methodology agreed to in the recent lawsuit settlements challenging certain previous assessments.
Some examples of the overall, expected savings would include:
A neurosurgeon in Philadelphia, who paid $36,447 in 2014, will pay $19,016 in 2015. Neurosurgeons in Allegheny or Dauphin counties, who paid $20,273 in 2014, will pay $10,577 in 2015.
A family physician in Philadelphia, who paid $5,054 in 2014, will pay $2,637 in 2015. Family physicians in Allegheny or Dauphin counties, who paid $2,881 in 2014, will pay $1,503 in 2015.
The Mcare Act, enacted in March 2002, created the Mcare Fund, a special fund of the Pennsylvania Insurance Department that provides 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. 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.
Further information on specific 2015 assessment rates for health care providers will be available shortly on the Insurance Department Web site. Go towww.insurance.pa.gov. Click on “Mcare” on the left-hand tab, and go to Assessment Rating Information.