655.23(5)
(5) While health care liability insurance, self-insurance or a cash or surety bond under
sub. (3) (d) remains in force, the health care provider, the health care provider's estate and those conducting the health care provider's business, including the health care provider's health care liability insurance carrier, are liable for malpractice for no more than the limits expressed in
sub. (4) or the maximum liability limit for which the health care provider is insured, whichever is higher, if the health care provider has met the requirements of this chapter.
655.23(5m)
(5m) The limits set forth in
sub. (4) shall apply to any joint liability of a physician or nurse anesthetist and his or her corporation or partnership under
s. 655.002 (1) (d) or
(e).
655.23(7)
(7) Each health care provider shall comply with this section and with
s. 655.27 (3) (a) before exercising any rights or privileges conferred by his or her health care provider's license. The commissioner shall notify the board that issued the license of a health care provider that has not complied with this section or with
s. 655.27 (3) (a). The board that issued the license may suspend, or refuse to issue or to renew the license of any health care provider violating this section or
s. 655.27 (3) (a).
655.23(8)
(8) No health care provider who retires or ceases operation after July 24, 1975, shall be eligible for the protection provided under this chapter unless proof of financial responsibility for all claims arising out of acts of malpractice occurring after July 24, 1975, is provided to the commissioner in the form prescribed by the commissioner.
655.23 Annotation
Insurer is liable under (5) up to policy limits. Patients Fund v. St. Paul Ins. Co. 116 W (2d) 537, 342 NW (2d) 693 (1984).
655.23 Annotation
That a self-insurance plan could have or should have been approved is irrelevant. Under sub. (3) (a) the plan must actually be approved for a provider to be qualified as a self-insurer. Patients Compensation Fund v. St. Mary's Hospital, 209 W (2d) 17, 561 NW (2d) 797 (Ct. App. 1997).
655.23 Annotation
Under sub. (5) "those conducting the health care provider's business" comprise a class of persons broader than, but inclusive of, the provider's employes, including nurses. For liability purposes those conducting the provider's business are treated as a unit and do not have personal exposure. Patients Compensation Fund v. Lutheran Hospital, 216 W (2d) 49, 573 NW (2d) 572 (Ct. App. 1997).
655.23 Annotation
This section is not preempted by federal law. Opthalmic Mutual Insurance Co. v. Muisser, 143 F 3d 1062 (1998).
655.24
655.24
Insurance policy forms. 655.24(1)
(1) No insurer may enter into or issue any policy of health care liability insurance until its policy form has been submitted to and approved by the commissioner under
s. 631.20 (1). The filing of a policy form by any insurer with the commissioner for approval shall constitute, on the part of the insurer, a conclusive and unqualified acceptance of all provisions of this chapter, and an agreement by it to be bound hereby as to any policy issued by it to any health care provider.
655.24(1m)
(1m) Notwithstanding
sub. (1), the issuance of a policy of health care liability insurance by an insurer to a health care provider constitutes, on the part of the insurer, a conclusive and unqualified acceptance of all of the provisions of this chapter, and an agreement by it to be bound under the provisions of this chapter as to any policy issued by it to a health care provider.
655.24(2)
(2) Every policy issued under this chapter shall be deemed conclusively to provide all of the following:
655.24(2)(a)
(a) That the insurer agrees to pay in full all of the following:
655.24(2)(a)1.
1. Attorney fees and other costs incurred in the settlement or defense of any claims.
655.24(2)(a)2.
2. Any settlement, arbitration award or judgment imposed against the insured under this chapter up to the limits expressed in
s. 655.23 (4), or the maximum liability limit for which the health care provider is insured, whichever is greater.
655.24(2)(a)3.
3. Any portion or all of the interest, as determined by the board of governors, on an amount recovered against the insured under this chapter for which the insured is liable under
s. 807.01 (4),
814.04 (4) or
815.05 (8).
655.24(2)(b)
(b) That any termination of the policy by cancellation or nonrenewal is not effective as to patients claiming against those covered by the policy unless the insured has been notified as provided in
sub. (3) and
s. 631.36, except that an insurer may cancel a health care provider's policy under
s. 631.36 (2) if the health care provider is no longer licensed to practice medicine or nursing.
655.24(3)
(3) A notice of cancellation or nonrenewal that is required under
sub. (2) (b) issued to a health care provider who is a natural person must inform the health care provider that his or her license to practice medicine or nursing may be suspended or not renewed if the health care provider has no insurance or insufficient insurance. The insurer shall retain a copy of each notice issued under
sub. (2) (b) for not less than 10 years from the date of mailing or delivery of the notice and shall furnish a copy to the commissioner upon request.
655.24(4)
(4) The insurer shall, upon termination of a policy of health care liability insurance issued under this chapter by cancellation or nonrenewal, notify the commissioner of the termination.
655.245
655.245
Insurance policy limitations. 655.245(1)
(1) No policy of health care liability insurance may permit a health care provider to reject any settlement agreed upon between the claimant and the insurer.
655.245(2)
(2) A policy of health care liability insurance may permit the insurer to make payments for medical expenses prior to any determination of fault. Such payments are not an admission of fault. Such payments may be deducted from any judgment or arbitration award, but shall not be repaid regardless of the judgment or award. Nothing in this subsection shall restrict the insurer's right of comparative contribution or indemnity in accordance with the laws of this state.
655.25
655.25
Availability and effectiveness for health care liability insurance. 655.25(1)(1) No policy of health care liability insurance written under the provisions of
s. 619.04 may be canceled or nonrenewed except for nonpayment of premiums unless the health care provider's license is revoked by the appropriate licensing board. A health care provider whose license is revoked shall be permitted to buy out in cases of a claims-made policy.
655.25 History
History: 1975 c. 37.
655.26
655.26
Reports on claims paid. 655.26(1)
(1) In addition to any information required by the commissioner under
s. 601.42, by the 15th day of each month, each insurer that writes health care liability insurance in this state and each self-insurer approved under
s. 655.23 (3) (a) shall report the following information to the medical examining board and the board of governors on each claim paid during the previous month for damages arising out of the rendering of health care services:
655.26(1)(a)
(a) The name and address of the policyholder or self-insured entity and the name and address of any individual on whose behalf the claim was paid.
655.26(1)(b)
(b) The profession of the individual or the type of facility or entity on whose behalf the claim was paid.
655.26(1)(c)
(c) The health care provider's medical specialty, if the provider is a physician.
655.26(1)(d)
(d) A description of the injury, including its cause and severity.
655.26(1)(e)
(e) Whether the claim was paid as a result of a settlement, a patients compensation panel award or a court award.
655.26(1)(g)
(g) The number and amounts of any previous claims paid by the insurer or self-insurer for damages arising out of the rendering of health care services by the insured, the self-insurer or the employes of the insured or self-insurer. Only claims paid on or after July 20, 1985, are required to be reported under this paragraph.
655.26(1)(h)
(h) Any additional information requested by the medical examining board or the board of governors.
655.26(2)
(2) By the 15th day of each month, the board of governors shall report the information specified in
sub. (1) to the medical examining board for each claim paid by the fund during the previous month for damages arising out of the rendering of health care services by a health care provider or an employe of a health care provider.
655.26(3)
(3) If more than one payment will be made on a claim, the first report filed under
sub. (1) or
(2) after the first payment is made on the claim shall include the total amount of the award or settlement and the projected schedule and amounts of payments.
655.26(4)
(4) Any person who in good faith provides information to the medical examining board or the board of governors under this section is immune from civil liability for his or her acts or omissions in providing such information.
PATIENTS COMPENSATION FUND
655.27
655.27
Patients compensation fund. 655.27(1)
(1)
Fund. There is created a patients compensation fund for the purpose of paying that portion of a medical malpractice claim which is in excess of the limits expressed in
s. 655.23 (4) or the maximum liability limit for which the health care provider is insured, whichever limit is greater, paying future medical expense payments under
s. 655.015 and paying claims under
sub. (1m). The fund shall provide occurrence coverage for claims against health care providers that have complied with this chapter, and against employes of those health care providers, and for reasonable and necessary expenses incurred in payment of claims and fund administrative expenses. The coverage provided by the fund shall begin July 1, 1975. The fund shall not be liable for damages for injury or death caused by an intentional crime, as defined under
s. 939.12, committed by a health care provider or an employe of a health care provider, whether or not the criminal conduct is the basis for a medical malpractice claim.
655.27(1m)(a)(a) The fund shall pay that portion of a claim described in
par. (b) against a health care provider that exceeds the limit expressed in
s. 655.23 (4) or the maximum liability limit for which the health care provider is insured, whichever limit is greater.
655.27(1m)(b)
(b) A health care provider who engages in the activities described in
s. 146.37 (1g) and
(3) shall be liable for not more than the limits expressed under
s. 655.23 (4) or the maximum liability limit for which the health care provider is insured, whichever limit is greater, if he or she is found to be liable under
s. 146.37, and the fund shall pay the excess amount, unless the health care provider is found not to have acted in good faith during those activities and the failure to act in good faith is found by the trier of fact, by clear and convincing evidence, to be both malicious and intentional.
655.27(2)
(2) Fund administration and operation. Management of the fund shall be vested with the board of governors. The commissioner shall either provide staff services necessary for the operation of the fund or, with the approval of the board of governors, contract for all or part of these services. Such a contract is subject to
s. 16.765, but is otherwise exempt from
subch. IV of ch. 16. The commissioner shall adopt rules governing the procedures for creating and implementing these contracts before entering into the contracts. At least annually, the contractor shall report to the commissioner and to the board of governors regarding all expenses incurred and subcontracting arrangements. If the board of governors approves, the contractor may hire legal counsel as needed to provide staff services. The cost of contracting for staff services shall be funded from the appropriation under
s. 20.145 (2) (u).
655.27(3)(a)(a)
Assessment. Each health care provider shall pay an annual assessment, which, subject to
pars. (b) to
(br), shall be based on the following considerations:
655.27(3)(a)1.
1. Past and prospective loss and expense experience in different types of practice.
655.27(3)(a)2.
2. The past and prospective loss and expense experience of the fund.
655.27(3)(a)2m.
2m. The loss and expense experience of the individual health care provider which resulted in the payment of money, from the fund or other sources, for damages arising out of the rendering of medical care by the health care provider or an employe of the health care provider, except that an adjustment to a health care provider's fees may not be made under this subdivision prior to the receipt of the recommendation of the patients compensation fund peer review council under
s. 655.275 (5) (a) and the expiration of the time period provided, under
s. 655.275 (7), for the health care provider to comment or prior to the expiration of the time period under
s. 655.275 (5) (a).
655.27(3)(a)3.
3. Risk factors for persons who are semiretired or part-time professionals.
655.27(3)(a)4.
4. For a health care provider described in
s. 655.002 (1) (d),
(e) or
(f), risk factors and past and prospective loss and expense experience attributable to employes of that health care provider other than employes licensed as a physician or nurse anesthetist.
655.27(3)(am)
(am)
Assessments for peer review council. The fund, a mandatory health care liability risk-sharing plan established under
s. 619.04 and a private health care liability insurer shall be assessed, as appropriate, fees sufficient to cover the costs of the patients compensation fund peer review council, including costs of administration, for reviewing claims paid by the fund, plan and insurer, respectively, under
s. 655.275 (5). The fees shall be set by the commissioner by rule, after approval by the board of governors, and shall be collected by the commissioner for deposit in the fund. The costs of the patients compensation fund peer review council shall be funded from the appropriation under
s. 20.145 (2) (um).
655.27(3)(b)1.1. The commissioner, after approval by the board of governors, shall by rule set the fees under
par. (a). The rule shall provide that fees may be paid annually or in semiannual or quarterly instalments. In addition to the prorated portion of the annual fee, semiannual and quarterly instalments shall include an amount sufficient to cover interest not earned and administrative costs incurred because the fees were not paid on an annual basis. This paragraph does not impose liability on the board of governors for payment of any part of a fund deficit.
655.27(3)(b)2.
2. With respect to fees paid by physicians, the rule shall provide for not more than 4 payment classifications, based upon the amount of surgery performed and the risk of diagnostic and therapeutic services provided or procedures performed.
655.27(3)(b)2m.
2m. In addition to the fees and payment classifications described under
subds. 1. and
2., the commissioner, after approval by the board of governors, may by rule establish a separate payment classification for physicians satisfying
s. 655.002 (1) (b) and a separate fee for nurse anesthetists satisfying
s. 655.002 (1) (b) which take into account the loss experience of health care providers for whom Michigan is a principal place of practice.
655.27(3)(bg)1.1. Every rule under
par. (b) shall provide for an automatic increase in a health care provider's fees, except as provided in
subd. 2., if the loss and expense experience of the fund and other sources with respect to the health care provider or an employe of the health care provider exceeds either a number of claims paid threshold or a dollar volume of claims paid threshold, both as established in the rule. The rule shall specify applicable amounts of increase corresponding to the number of claims paid and the dollar volume of awards in excess of the respective thresholds.
655.27(3)(bg)2.
2. The rule shall provide that the automatic increase does not apply if the board of governors determines that the performance of the patients compensation fund peer review council in making recommendations under
s. 655.275 (5) (a) adequately addresses the consideration set forth in
par. (a) 2m.
655.27(3)(br)
(br)
Limit on fees. Every rule setting fees for a particular fiscal year under
par. (b) shall ensure that the fees assessed do not exceed the greatest of the following:
655.27(3)(br)1.
1. The estimated total dollar amount of claims to be paid during that particular fiscal year.
655.27(3)(br)2.
2. The fees assessed for the fiscal year preceding that particular fiscal year, adjusted by the commissioner of insurance to reflect changes in the consumer price index for all urban consumers, U.S. city average, for the medical care group, as determined by the U.S. department of labor.
655.27(3)(br)3.
3. Two hundred percent of the total dollar amount disbursed for claims during the calendar year preceding that particular fiscal year.
655.27(3)(c)
(c)
Collection and deposit of fees. Fees under
pars. (a) and
(b) and future medical expense payments specified for the fund under
s. 655.015 shall be collected by the commissioner for deposit into the fund in a manner prescribed by the commissioner by rule.
655.27(3)(d)
(d)
Rule not effective; fees. If the rule establishing fees under
par. (b) does not take effect prior to June 2 of any fiscal year, the commissioner may elect to collect fees as established for the previous fiscal year. If the commissioner so elects and the rule subsequently takes effect, the balance for the fiscal year shall be collected or refunded or the remaining semiannual or quarterly instalment payments shall be adjusted except the commissioner may elect not to collect, refund or adjust for minimal amounts.
655.27(3)(e)
(e)
Podiatrist fees. The commissioner, after approval by the board of governors, may by rule assess fees against podiatrists for the purpose of paying the fund's portion of medical malpractice claims and expenses resulting from claims against podiatrists based on occurrences before July 1, 1986.
655.27(4)(a)(a) Moneys shall be withdrawn from the fund by the commissioner only upon vouchers approved and authorized by the board of governors.
655.27(4)(b)
(b) All books, records and audits of the fund shall be open to the general public for reasonable inspection, with the exception of confidential claims information.
655.27(4)(c)
(c) Persons authorized to receive deposits, withdraw, issue vouchers or otherwise disburse any fund moneys shall post a blanket fidelity bond in an amount reasonably sufficient to protect fund assets. The cost of such bond shall be paid from the fund.
655.27(4)(d)
(d) Annually after the close of a fiscal year, the board of governors shall furnish a financial report to the commissioner. The report shall be prepared in accordance with accepted accounting procedures and shall include the present value of all claims reserves, including those for incurred but not reported claims as determined by accepted actuarial principles, and such other information as may be required by the commissioner. The board of governors shall furnish an appropriate summary of this report to all fund participants.
655.27(4)(e)
(e) The board of governors shall submit a quarterly report to the state investment board and the department of administration projecting the future cash flow needs of the fund. The state investment board shall invest moneys held in the fund in investments with maturities and liquidity that are appropriate for the needs of the fund as reported by the board of governors in its quarterly reports under this paragraph. All income derived from such investments shall be credited to the fund.
655.27(4)(f)
(f) The board of governors shall submit a functional and progress report to the chief clerk of each house of the legislature, for distribution to the appropriate standing committees under
s. 13.172 (3), on or before March 1 of each year.
655.27(4)(g)
(g) The board of governors may cede reinsurance to an insurer authorized to do business in this state under
ch. 611,
613,
614 or
618 or pursue other loss funding management to preserve the solvency and integrity of the fund, subject to approval by the commissioner. The commissioner may prescribe controls over or other conditions on such use of reinsurance or other loss-funding management mechanisms.
655.27(5)(a)1.1. Any person may file a claim for damages arising out of the rendering of medical care or services or participation in peer review activities under
s. 146.37 within this state against a health care provider or an employe of a health care provider. A person filing a claim may recover from the fund only if the health care provider or the employe of the health care provider has coverage under the fund and the fund is named as a party in the action.
655.27(5)(a)2.
2. Any person may file an action for damages arising out of the rendering of medical care or services or participation in peer review activities under
s. 146.37 outside this state against a health care provider or an employe of a health care provider. A person filing an action may recover from the fund only if the health care provider or the employe of the health care provider has coverage under the fund and the fund is named as a party in the action. If the rules of procedure of the jurisdiction in which the action is brought do not permit naming the fund as a party, the person filing the action may recover from the fund only if the health care provider or the employe of the health care provider has coverage under the fund and the fund is notified of the action within 60 days of service of process on the health care provider or the employe of the health care provider. The board of governors may extend this time limit if it finds that enforcement of the time limit would be prejudicial to the purposes of the fund and would benefit neither insureds nor claimants.
655.27(5)(a)3.
3. If, after reviewing the facts upon which the claim or action is based, it appears reasonably probable that damages paid will exceed the limits in
s. 655.23 (4), the fund may appear and actively defend itself when named as a party in an action against a health care provider, or an employe of a health care provider, that has coverage under the fund. In such action, the fund may retain counsel and pay out of the fund attorney fees and expenses including court costs incurred in defending the fund. The attorney or law firm retained to defend the fund shall not be retained or employed by the board of governors to perform legal services for the board of governors other than those directly connected with the fund. Any judgment affecting the fund may be appealed as provided by law. The fund may not be required to file any undertaking in any judicial action, proceeding or appeal.
655.27(5)(b)
(b) It shall be the responsibility of the insurer or self-insurer providing insurance or self-insurance for a health care provider who is also covered by the fund to provide an adequate defense of the fund on any claim filed that may potentially affect the fund with respect to such insurance contract or self-insurance contract. The insurer or self-insurer shall act in good faith and in a fiduciary relationship with respect to any claim affecting the fund. No settlement exceeding an amount which could require payment by the fund may be agreed to unless approved by the board of governors.
655.27(5)(c)
(c) It shall be the responsibility of any health care provider with a cash or surety bond in effect under
s. 655.23 (3) (d) to provide an adequate defense of the fund on any malpractice claim filed or any claim filed under
sub. (1m) that may potentially affect the fund. The health care provider shall act in good faith and in a fiduciary relationship with respect to any claim affecting the fund. No settlement exceeding an amount which could require payment by the fund may be agreed to unless approved by the board of governors.
655.27(5)(d)
(d) A person who has recovered a final judgment or a settlement approved by the board of governors against a health care provider, or an employe of a health care provider, that has coverage under the fund may file a claim with the board of governors to recover that portion of such judgment or settlement which is in excess of the limits in
s. 655.23 (4) or the maximum liability limit for which the health care provider is insured, whichever limit is greater. In the event the fund incurs liability for future payments exceeding $1,000,000 to any person under a single claim as the result of a settlement or judgment that is entered into or rendered under this chapter for an act or omission that occurred on or after May 25, 1995, the fund shall pay, after deducting the reasonable costs of collection attributable to the remaining liability, including attorney fees reduced to present value, the full medical expenses each year, plus an amount not to exceed $500,000 per year that will pay the remaining liability over the person's anticipated lifetime, or until the liability is paid in full. If the remaining liability is not paid before the person dies, the fund may pay the remaining liability in a lump sum. Payments shall be made from money collected and paid into the fund under
sub. (3) and from interest earned thereon. For claims subject to a periodic payment made under this paragraph, payments shall be made until the claim has been paid in full, except as provided in
s. 655.015. Periodic payments made under this paragraph include direct or indirect payment or commitment of moneys to or on behalf of any person under a single claim by any funding mechanism. No interest may be paid by the fund on the unpaid portion of any claim filed under this paragraph, except as provided under
s. 807.01 (4),
814.04 (4) or
815.05 (8).
