The Wisconsin Supreme Court has ordered the state government to return $200 million drawn from a fund established to mitigate the costs of medical liability.
Court orders Wis. to return $200 million
Under a 1975 law, healthcare providers are required to pay assessments into the fund and carry a certain level of malpractice insurance. The fund pays out the portion malpractice claims in excess of that limit.
In 2007 state lawmakers approved legislation providing for the transfer of $200 million from the liability fund to prop up the Medicaid program. The transfer caused assessments to rise by nearly 10%, and the fund had to draw a loan from the state's investment fund to cover a negative balance.
The Wisconsin Medical Society filed a lawsuit in 2007 to challenge the transfer, which was dismissed by a lower court that ruled the fund did not create contractual obligations to providers, before reaching the Supreme Court on appeal. “This ruling sends an important message that the fund is not a piggy bank,” the society's president, Thomas Luetzow, said in a news release.
Justice David Prosser, writing for the majority, concludes that providers “have a constitutionally protected property interest in the fund.”
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