Pennsylvania physicians, hospitals sue to preserve liability premium subsidies

Pennsylvania physicians and hospitals are turning to the courts to stave off what they see as efforts by the governor and lawmakers to hold hostage the state's medical liability assistance program.

Gov. Edward G. Rendell has pledged not to replenish the aid -- which subsidizes doctors' insurance premiums -- until the Legislature approves his plan to cover the uninsured.

But doctors and hospitals claim the move is illegal and unconstitutional, according to separate lawsuits filed in December 2008 by the Pennsylvania Medical Society and the Hospital & Healthsystem Assn. of Pennsylvania. The organizations sued the state in the Commonwealth Court of Pennsylvania in a bid to safeguard the estimated $600 million set aside to fund the abatement program. Physicians and hospitals say the account was designated by law to help recruit and retain doctors as well as ensure access to care.

"In the interest of preserving high-quality care in Pennsylvania, we must make sure those funds are used for the purpose they were designated," said Pennsylvania Medical Society President Daniel J. Glunk, MD.

Doctors and other health care professionals contribute annually to the Medical Care Availability and Reduction of Error Fund, or Mcare, which was authorized under a 2002 tort reform package. Physicians in the state are required to have $1 million in liability insurance, but the fund subsidizes half of their premiums.

A separate pool, financed by cigarette taxes, was created to keep doctors practicing in the state by paying their Mcare assessments and covering the fund's claims payouts, estimated at $1.8 billion. But the state last year failed to release the $600 million that has accumulated in the abatement fund after Senate Republicans came to a stalemate with the governor over his proposal to cover the uninsured.

Rendell has said he would use the money to cover health care expansions, while other Democratic lawmakers have expressed an intent to tap the funds to cover a projected $500 million budget shortfall.

Rendell spokesman Chuck Ardo said the physician and hospital organizations are misreading the legislation. The statute allows the state to spend the money on other health care projects, not strictly Mcare, he said.