In Pennsylvania, medical malpractice claims for injuries that happen in the state are strongly influenced by the Medical Care Availability and Reduction of Error Fund (MCARE) statute. MCARE plays a huge role not only in medical malpractice claims but also in how hospitals and other medical providers insure themselves against those claims. MCARE also provides much of the funding that compensates successful medical malpractice claims against healthcare providers in the state.
Pennsylvania's Medical Care Availability and Reduction of Error Fund
MCARE was passed in 2002 in order to replace Pennsylvania's prior medical malpractice statute, the Medical Professional Liability Catastrophe Loss Fund, also known as the CAT Fund. The aim of MCARE was to provide reasonable compensation for people who were victimized by negligent doctors and other healthcare professionals who committed malpractice, while also reigning in malpractice premiums in the state, which had risen to some of the highest levels in the nation while the CAT Fund controlled the law. In its essence, MCARE is a state-managed pool of funds that are to be used to compensate medical malpractice victims in the state of Pennsylvania, working like an excess liability coverage for healthcare providers.
Under MCARE, healthcare providers who obtain at least half of their business within the state of Pennsylvania are required to maintain two layers of liability insurance: A “primary” insurance policy obtained from a private insurer that will cover the first $500,000 of a malpractice claim, and an excess liability coverage through MCARE that will cover another $500,000. This excess liability coverage is obtained by paying a regular premium into the MCARE Fund. If healthcare providers are not able to prove that they are maintaining this level of insurance, the MCARE fund's regulatory body can report them to whatever organization is in charge of their licensing, which can initiate license suspension or revocation.
Funding for MCARE
Importantly, none of the money that is in the MCARE fund and that is available for medical malpractice victims comes from taxes. Instead, the MCARE fund is filled by the premiums made by healthcare providers in Pennsylvania, and fees and interest that those funds accumulate. In the past, MCARE funds also came from fines for traffic violations under the AutoCAT Fund, as well as payments from the Health Care Provider Retention Account (HCPRA) to cover unpaid premiums from healthcare providers in Pennsylvania. However, both of those funding sources for MCARE ended in 2010, as state lawmakers have moved to phase out the MCARE system.
MCARE Phase Out
The medical malpractice fund that MCARE provides, however, is only a temporary one as the law itself requires that it be closed out in the future. To make this happen, the Pennsylvania Department of Insurance is required to reassess the MCARE fund every other year, with the intention of closing it as needs are met. The process of phasing out MCARE involves requiring private insurers – the “primary” level of liability insurance that medical providers need to maintain – to cover more and more of the burden of compensating successful medical malpractice claims.
This phase-out period, however, may take decades. Because MCARE makes compensation payments to medical malpractice victims, and because it is often the case that malpractice victims have no way of knowing that they were hurt until years after the event, it is completely foreseeable that the MCARE fund will be making compensatory payments for years or even decades after the phase-out period has begun.
MCARE and Medical Malpractice Claims
In Pennsylvania, MCARE works like a safety net for people who have suffered terrible injuries in a medical malpractice situation. Oftentimes, medical malpractice can cause injuries that require hundreds of thousands of dollars in additional medical costs. By requiring medical providers in Pennsylvania to keep $500,000 of primary insurance on hand in order to keep their licensing, MCARE works as a guarantee that malpractice victims can gain at least that much in compensation for their injuries.
However, MCARE's safety net extends past this amount, helping those who have suffered truly terrible or even fatal accidents or instances of medical malpractice. By requiring these medical providers to keep MCARE's excess liability coverage of another $500,000 per occurrence, MCARE doubles the amount that malpractice victims can rest assured will be available. This makes a huge difference for people who have gone through the worst and most expensive kinds of injuries from the negligence of a doctor or other medical professional. If the MCARE fund did not provide this additional coverage, malpractice victims would find themselves unable to recover all of the costs of their recovery, leaving them to pay for the costs of their medical care out of their own pocket. In some cases, this could amount to millions of dollars over a long period of time.
Importantly, though, the amount of insurance that the MCARE fund requires is based on a single “occurrence.” According to the leading Pennsylvania Supreme Court case, Kinney-Lindstron v. MCARE, an occurrence under the MCARE law is an act of negligence or malpractice by the doctor. Crucially, this means that even if multiple people are hurt by the instance of malpractice, the primary insurance and the excess liability of insurance provided by MCARE will only total $1 million.
Pennsylvania Medical Malpractice Attorneys at Gilman & Bedigian
Pennsylvania's MCARE statute governs a lot of the aspects associated with pursuing a medical malpractice claim in the state of Pennsylvania, even if it only does so behind the scenes by requiring healthcare providers to keep a certain level of insurance coverage. This makes a full understanding of the sometimes complex compensation structure a crucial thing to have if you want to be successful on a medical malpractice claim.
The medical malpractice attorneys at the Philadelphia law office of Gilman & Bedigian represent those who are hurt by the negligence of healthcare professionals. Contact us online or call our law office at (800) 529-6162 for a free consultation.