Healthcare Business News

Pa. court orders state to replace medical liability funds

By Andis Robeznieks
Posted: April 15, 2010 - 6:30 pm ET

A Pennsylvania state court ruled that the state Legislature improperly transferred $808 million from a medical liability fund and used it to help pay other expenses and now must put the money back.

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It was a 4-1 decision, and Dan Pellegrini, the dissenting judge called it a “personal windfall to doctors, with the consequential effect of making 2009-2010 budget out of balance,” and said the majority opinion gets the judiciary involved in the budget process, which the state constitution defines as being the role of the governor and the Legislature.

The case was argued Feb. 10 with the Pennsylvania Medical Society, the Hospital & Healthsystem Association of Pennsylvania, Geisinger Health System, and other providers arguing against the transfer of $708 million from the Health Care Provider Retention Account, which helped offset medical malpractice costs, and $100 from Mcare, the state’s medical liability fund which is maintained by hospital and physician premiums.

In the ruling, it was noted that the funds are generated by the petitioners’ assessments and fees and not by taxes so the money belongs “to the providers and not generally to the Commonwealth.”

“The Commonwealth’s concern that a decision in this case in Petitioners’ favor may imperil the budget process is, therefore, without merit,” the majority concluded.



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