Patient compensation funds (PCFs) refer to programs in 9 states that cover the excess costs of a medical malpractice claim. If, for example, a medical practitioner has $100,000 of malpractice coverage, faces a $300,000 claim, and is a member of their state's PCF, the state will cover the costs above what insurance pays. Think of it as extra malpractice insurance above and beyond a regular insurer.
In most states, patient compensation funds are maintained through surcharges that eligible physicians submit to the state's fund. The requirements for eligibility are different in every state, so it's important to understand the costs and details of each state's fund.
PCFs have existed since the 1970s to combat a crisis of medical malpractice suits. States were willing to provide extra insurance coverage to ensure that healthcare providers had a hospitable climate in which to practice. So far, 9 states have implemented some form of patient compensation fund.
Indiana state law does not require a healthcare practitioner to carry any malpractice insurance. However, to be a member of the Indiana's PCF, a practitioner must have malpractice insurance up to $250,000 per patient, and by paying an insurance surcharge. Indiana's PCF covers members for any liability over $250,000, but caps payouts at $1 million.
Kansas requires medical facilities to partake in its PCF, which is funded by private insurance companies. The private companies collect surcharges from hospitals and other practitioners and submit the surcharges to the state. Kansas covers any liability above what private insurance covers, but may make payouts to plaintiffs in installments, if the sums are too large.
In Louisiana, the state insurance patient compensation fund covers payments above $100,000, and stockpiles the fund with insurance surcharges for participating practitioner.
Nebraska's PCF covers all practitioners eligible under the Hospital-Medical Liability Act, and who pay a yearly surcharge. The PCF covers claims in excess of $500,000, but has a total cap of $1.75 million.
New Mexico's PCF has some very specific laws. Punitive damages and medical care are not capped, but awards are capped at $600,000. Claims are reviewed by the New Mexico Medical Review Commission. Healthcare providers who are members of the PCF cannot be sued after a three-years following the incident, unless the plaintiff is a child under the age of six. New Mexico does have an expansive program, even allowing PCF applications from nurse anesthetists, PAs, chiropractors, podiatrists, and outpatient facilities.
To qualify for New York's PCF, doctors must have minimum coverage of $3.9 million in aggregate or $1.3 million per case, and must have hospital privileges. The PCF offers extra coverage up to $3 million in aggregate and $1 million per case. Interestingly, New York's PCF is taxpayer funded, so eligible practitioners do not have to pay surcharges.
Pennsylvania introduced its Medical Professional Liability Catastrophe Loss Fund in 1975. In 2002, an updated version of the PCF was named the The Medical Care Availability and Reduction of Error Fund (MCARE). Membership in this PCF is required for all Pennsylvania physicians, and covers claims in excess of $500,000. However, Pennsylvania's PCF is running a deficit of about $2 billion, and is being phased out in the near future.
In South Carolina, the PCF is available to practitioners who pay a yearly fee, and who have minimum coverage of $600,000 per aggregate or $200,000 per claim. The state PCF covers awards over $100,000 per claim or $300,000 annually.
Wisconsin state law requires every health care practitioner that maintains a permanent practice of at least 240 hours a year to participate in the PCF and pay surcharges. Practitioners must also maintain primary malpractice coverage of $1 million for each incident, and $3 million per year.
In addition to this list, Florida, Wyoming, and Oregon have inactive PCFs. Florida and Virginia have PCFs that are limited in scope, only covering liabilities related to infants with particular injuries.
PCFs can be enormously useful because of the extra coverage that they provide. However, they vary greatly by state, and come with extra costs. If you are in a state with an optional PCF, consider your options carefully before joining.