Protection wanted for state's malpractice fund

JASON STEIN
http://www.madison.com

Doctors want to protect a state fund for compensating victims of medical malpractice from budget raids by state officials, saying they have a plan to take hundreds of millions of dollars out of the reach of lawmakers and Gov. Jim Doyle.

Any change to the fund could have possible impacts on the rates paid by doctors who contribute to it, the compensation available for victims with big claims and the amount of money available for the overall state budget.

But the plan from the Wisconsin Medical Society is facing skepticism from some on both sides of the issue, and so far Doyle – who in past budgets has sought to transfer money from the fund for health programs – has yet to say whether he supports it.

Under the plan, the Patients Compensation Fund, with assets of some three-quarters of a billion dollars, would be reformed as a quasi-public body known as an authority, said Medical Society lobbyist Mark Grapentine. As a compromise, the group has talked with the governor’s office about the possibility of taking a one-time sum out of the fund.

“We believe that if you could reorganize the fund to an authority model it could be a win- win for everybody,” Grapentine said.

The discussion is part of a broader debate over what should be done with the money in state funds that is gathered through specific fees or taxes and aimed toward a targeted purpose like roads or environmental cleanup. Tonight, Doyle may offer more details on his plans for those funds as he presents a two-year budget that attempts to close a potential $1.6 billion shortfall.

In an interview last week, the Democratic governor said he was open to the Medical Society proposal.

“I am willing to discuss it. I think there are legitimate issues that have to be addressed,” Doyle said.

Doctors and hospitals around the state pay into the fund, which supplements doctors’ malpractice insurance and is used to help compensate victims who win damages of more than $1 million.

At the end of June, the fund had assets of $746.4 million, according to the Legislative Fiscal Bureau. Its surplus was $59.9 million – an amount the Medical Society has talked about transferring out of the fund as part of a deal to make the fund an authority, Grapentine said.

Mike Prentiss, a spokesman for Sen. Minority Leader Scott Fitzgerald, R-Juneau, said it shouldn’t be necessary to cut such a deal to protect the fund.

Robert Kraig, a spokesman for health-care advocacy group Citizen Action of Wisconsin, questioned whether the fund needed protecting. Since the money had ultimately come from patients, it was appropriate to use money from the fund for health programs like Medicaid, he said.

Doyle has said the fund has too much money, saying its surplus is “almost getting embarrassing.” Grapentine disagreed, saying the fund is already seeing back-to-back yearly increases in doctors’ fees. It also faces higher risk because of a 2005 state Supreme Court ruling allowing for the possibility of unlimited damages for malpractice victims’ pain and suffering for cases within a certain period, he said.

Eileen Mallow, assistant deputy commissioner of insurance for the state, said that there was no guarantee that shifting the patients fund to an authority model would actually protect the money from budget raids by lawmakers and the governor. The change could also hurt the fund’s tax-free status, she said.

Grapentine said the Medical Society plan would keep the fund free from taxes.

In the past two budgets, Doyle proposed transferring $200 million and then $179 million out of the fund to cover costs for Medicaid and other health programs. For the budget to be unveiled today, Doyle has said so far that he wants to tap the fund for part of the cost of $30 million in proposed incentives to promote the use of electronic medical records.
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