Pennsylvania has a long history of high medical malpractice premiums. Many attempts have been made to reform the Quaker Stateâs medical liability system; some have been more successful than others. In the early 1970s, Pennsylvania faced the same malpractice crisis that was affecting many U.S. states. Premiums were skyrocketing, and the commonwealthâs then-largest medical liability insurer, Argonaut, threatened to stop writing policies altogether. In 1975, Argonaut sought to increase premiums by 200 percent for many specialties. In response, the Pennsylvania Medical Society and General Assembly worked together to pass the Health Care Services Malpractice Act (Act 111) of 1975, becoming one of the first states to pass wide-ranging legislative reforms in response to the medical liability crisis gripping the country. The act created the Medical Professional Catastrophic Loss (CAT) Fund. The CATâFund was the United Statesâ first public patient compensation fund (PCF), a state-established liability-funding instrument that provides medical professional liability coverage in excess of a physicianâs primary insurance limits. Several other provisions to restrict attorney fees, mandate arbitration panels and establish a collateral source rule were also included, but these were found to be unconstitutional by the Pennsylvania Supreme Court.
Pennsylvania has continued to reform its medical liability system since Act 111 was passed. In 1996, legislation limiting punitive damages to $100,000 was passed, CAT Fund surcharges were reduced, physicians were allowed to provide affidavits of non-involvement, meaning that they could swear under oath that they were not involved in a case and be cleared of wrongdoing and a four-year moratorium was placed on further medical liability legislation. However, difficulties in the Pennsylvania market continued, with three of the five major malpractice insurers in the state ceasing to write in Pennsylvania by the early 2000s. In response, the Medical Care Availability & Reduction of Error Act (Mcare) was passed in 2002. Its reforms were comprehensive, addressing both medical errors in the healthcare system and reforms to the legal system and the medical malpractice industry.
The Mcare Act sought to emphasize patient safety and reduce medical errors, creating a Patient Safety Authority and requiring all hospitals to incorporate detailed patient safety plans. It also included a range of legal reforms to restrict frivolous law suits by instituting stronger expert witness qualifications and sanctioning lawyers who brought frivolous claims. Additionally, McareÂ restructured the states CATFund, renaming it the Mcare Fund and equipping it with $400 million in state subsidies to reduce physician assessments. It also increased assessments for doctors with excessive claims and required insurers to offer patient-safety discounts and credits.