Patient Compensation Funds
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| In response to the increased cost and reduced availability of medical malpractice insurance, about one-third of the states have created Patient Compensation Funds (PCF), which are malpractice liability funding mechanisms. Under PCF statutes, the liability of healthcare providers and institutions is limited to a specified amount, and the state establishes funds to compensate success malpractice plaintiffs for damages in excess of that specified amount. The provider or institution buys basic malpractice limits of coverage from a private insurer and further coverage through the PCF.
Some states mandate enrollment by healthcare providers and institutions in its PCF, but others make it voluntary. In some cases, participation in a fund provides for a cap on total damages to a successful plaintiff. Criticism of mandatory enrollment in a state's PCF includes the claim that the physician or facility ends up paying two premiums, one to the private insurer and the other to the state. In a state where the fund is having financial difficulty, this may not relieve the financial burden of malpractice coverage.
Many states that have created PCFs also have established PCF oversight boards to administer, manage, operate, and defend the PCF in order to timely and efficiently serve the needs of the state's citizens. The goal of an oversight board is generally to ensure the longevity of the PCF by maintaining its financial stability. Most oversight boards define their mission as the maintenance of sufficient solvency to hold surcharge rates to moderate levels, to promptly resolve and fairly compensate legitimate victims of medical malpractice, and to resist and defend against unmeritorious and/or exaggerated claims. Copyright 2010 LexisNexis, a division of Reed Elsevier Inc. |