Physicians sue again to safeguard Pennsylvania's liability fund

Pennsylvania physicians have filed yet another lawsuit in an effort to preserve what's left of the state's medical liability insurance fund after the governor in October approved a $100 million withdrawal to balance the state's budget.

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

Gov. Ed Rendell and state lawmakers have said they plan to use what they contend is excess money in the Mcare pool to fund health care expansions and other budgetary needs.

But physicians said the additional funds were meant to cover liability claims still pending in the courts. Those outstanding claims will cost an estimated $1.7 billion, according to the lawsuit filed Oct. 12 by the Pennsylvania Medical Society and state hospitals. Any money left in Mcare after paying the claims is supposed to go toward abating the fees doctors pay into the fund, said J. Scot Chadwick, PMS director of governmental affairs.

Depleting the Mcare funds essentially amounts to an illegal tax on physicians who paid into the fund in exchange for insurance coverage, he said. The raid also will deter recruiting efforts if new doctors entering the state are taxed to pay for any future Mcare debts.

"That's like paying the mortgage and not getting the house," Chadwick said.

The newest physician lawsuit is asking the Commonwealth Court to halt the state's fund transfer while the case is litigated. In a separate legal action, they also are asking the court to protect an estimated $700 million set aside in another funding pool to subsidize doctors' Mcare premiums after the state failed to release the money.

A preliminary hearing on the two issues was scheduled for Nov. 17. Rendell's office declined to comment on the pending litigation.