Senate Approves Senator White's Bill Extending MCARE

SB 1137 also sets the stage for a phase out of the program

The Senate today approved Senate Bill 1137, a measure introduced by Senator Don White (R-41) to extend the MCARE program, which provides a financial safety net to help Pennsylvania’s health care providers cover their medical malpractice insurance costs.

Recognizing that the authorization of the MCARE (Medical Care Availability and Reduction of Error) program ends at the end of December 2007, Senator White, Chairman of the Senate Banking and Insurance Committee, introduced legislation to extend it for one year and prepare for its eventual elimination.

Changes in the marketplace and the success of a reform package passed by the Legislature and enacted by Governor Mark Schweiker in 2002, means Pennsylvania will likely be able to phase out the program in the foreseeable future, according to Senator White.

"I am pleased that the Senate has acted quickly to pass this legislation. As it stands now, MCARE authorization ends at the end of the calendar year. My bill extends the program for one year and makes preparations for phasing out the plan in the future," Senator White said. "I hope the House will act just as quickly to put this legislation on the Governor’s desk."

The five-year-old MCARE program helps physicians pay a portion of their medical malpractice insurance premiums. The fund helps pay toward the cost of the $500,000 in MCARE fund coverage that the state requires each doctor to secure, in addition to the $500,000 in primary coverage from the private marketplace. MCARE assistance is financed primarily by a 25-cent tax on cigarettes and a surcharge on traffic citations.

Senator White's bill allows the state Insurance Commissioner to more gradually shift health care providers from publicly funded to privately-purchased medical malpractice insurance coverage. It would also:

Require the Insurance Commissioner to make an annual determination, no later than July 1, on the capacity of medical malpractice insurance available to providers in the Commonwealth. Under current law, the Commissioner makes a determination bi-annually. An annual determination will allow the Insurance Commissioner greater flexibility in determining the overall availability of private medical liability insurance coverage.
Permit the Insurance Commissioner to increase the threshold of private coverage required to be carried by providers in increments as little as $50,000. Current law requires the commissioner to increase the level of medical liability coverage in increments no less than $250,000.

Currently, the Commonwealth allocates approximately $220 million annually through the MCARE fund to assist doctors, hospitals, nursing homes and other medical providers with the purchase of medical liability coverage.

"MCARE has played a vital role in keeping providers in Pennsylvania, but thanks to the success of the MCARE reforms enacted in 2002, the Commonwealth's role can be reduced and hopefully eliminated in the near future. Through those reforms, we are seeing improvements in medical liability markets and a stabilization of premiums, which have resulted in premium costs being reduced to a level approximately $115 million below the $220 million allocation," Senator White said. "My legislation establishes basic, common sense restrictions on how dollars not needed for the abatement can be used."

Under Senator White's bill, funds not used for premium costs would have to be allocated as follows:

50 percent would be placed in an escrow account to reduce the unfunded liability of the MCARE fund;
25 percent would be used to establish a medical safety automation fund (electronic medical records) for grants to health care providers;
25 percent would be used to support the reduction of health care associated infections.

Contact:

Joe Pittman
(717) 787-8724