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).
655.27(5)(e)
(e) Claims filed against the fund shall be paid in the order received within 90 days after filing unless appealed by the fund. If the amounts in the fund are not sufficient to pay all of the claims, claims received after the funds are exhausted shall be immediately payable the following year in the order in which they were received.
655.27(6)
(6) Integrity of fund. The fund shall be held in trust for the purposes of this chapter and may not be used for purposes other than those of this chapter.
655.27(7)
(7) Actions against insurers, self-insurers or providers. The board of governors may bring an action against an insurer, self-insurer or health care provider for failure to act in good faith or breach of fiduciary responsibility under
sub. (5) (b) or
(c).
655.27 History
History: 1975 c. 37,
79,
199;
1977 c. 29,
131;
1979 c. 34,
194;
1981 c. 20;
1983 a. 27,
158;
1985 a. 340;
1987 a. 27,
186,
247,
399;
1989 a. 102,
187,
332;
1991 a. 214,
315;
1993 a. 473;
1995 a. 10.
655.27 Annotation
The patients compensation fund has the authority to sue an insurer that refuses to contribute to the settlement of a claim against its insured. Wis. Patients Compensation Fund v. WHCLIP, 200 W (2d) 599, 547 NW (2d) 578 (1996).
655.27 Annotation
The denial of a postverdict motion to add the Fund to an action where an excess verdict was returned was appropriate. Granting the motion would have denied the fund's right under sub. (5) to appear and actively defend itself in the action. Goff v. Seldera, 202 W (2d) 601, 550 NW (2d) 144 (Ct. App. 1996).
655.27 Annotation
Sub. (4) (b) does not provide an "explicit and unequivocal" exemption to the open records law. Any denial of an open records request under this section must state with "sufficient specificity" a public policy reason for refusing to release the requested records. Chavala v. Bubolz, 204 W (2d) 82, 552 NW (2d) 892 (Ct. App. 1996).
655.275
655.275
Patients compensation fund peer review council. 655.275(1)(1)
Definition. In this section, "council" means the patients compensation fund peer review council.
655.275(2)
(2) Appointment. The board of governors shall appoint the members of the council.
Section 15.09, except
s. 15.09 (4) and
(8), does not apply to the council. The board of governors shall designate the chairperson, vice chairperson and secretary of the council and the terms to be served by council members. The council shall consist of 5 persons, not more than 3 of whom are physicians who are actively engaged in the practice of medicine in this state. The chairperson shall be a physician and shall serve as an ex officio nonvoting member of the medical examining board.
655.275(3)
(3) Meetings. The council shall meet at the call of the chairperson of the board of governors or the chairperson of the council. The council shall meet at the location determined by the person calling the meeting.
655.275(4)
(4) Reports. The council shall submit to the chairperson of the board of governors, upon request of the chairperson but not more often than annually, a report on the operation of the council.
655.275(5)(a)(a) The council shall review, within one year of the date of first payment on the claim, each claim that is paid by the fund, a mandatory health care liability risk-sharing plan established under
s. 619.04, a private health care liability insurer or a self-insurer for damages arising out of the rendering of medical care by a health care provider or an employe of the health care provider and shall make recommendations to all of the following:
655.275(5)(a)1.
1. The commissioner and the board of governors regarding any adjustments to be made, under
s. 655.27 (3) (a) 2m., to fund fees assessed against the health care provider, based on the paid claim.
655.275(5)(a)2.
2. The commissioner and the board of governors regarding any adjustments to be made, under
s. 619.04 (5) (b), to premiums assessed against a physician under a mandatory health care liability risk-sharing plan established under
s. 619.04, based on the paid claim.
655.275(5)(a)3.
3. A private health care liability insurer regarding adjustments to premiums assessed against a physician covered by private insurance, based on the paid claim, if requested by the private insurer.
655.275(5)(b)
(b) In developing recommendations under
par. (a), the council may consult with any person and shall consult with the following:
655.275(5)(b)1.
1. If a claim was paid for damages arising out of the rendering of care by a physician, with at least one physician from the area of medical specialty of the physician who rendered the care and with at least one physician from the area of medical specialty of the medical procedure involved, if the specialty area of the procedure is different than the specialty area of the physician who rendered the care.
655.275(5)(b)2.
2. If a claim was paid for damages arising out of the rendering of care by a nurse anesthetist, with at least one nurse anesthetist.
655.275(6)
(6) Fees. Fees sufficient to cover the council's costs, including costs of administration, shall be collected under
s. 655.27 (3) (am).
655.275(7)
(7) Notice of recommendation. The council shall notify the affected health care provider, in writing, of its recommendations to the commissioner, the board of governors or a private insurer made under
sub. (5). The notice shall inform the health care provider that the health care provider may submit written comments on the council's recommendations to the commissioner, the board of governors or the private insurer within a reasonable period of time specified in the notice.
655.275(8)
(8) Patient records. The council may obtain any information relating to any claim it reviews under this section that is in the possession of the commissioner or the board of governors. The council shall keep patient health care information confidential as required by
s. 146.82 (2) (b).
655.275(9)
(9) Immunity. Members of the council and persons consulting with the council under
sub. (5) (b) are immune from civil liability for acts or omissions while performing their duties under this section.
655.275(10)
(10) Members' and consultants' expenses. Any person serving on the council and any person consulting with the council under
sub. (5) (b) shall be paid $50 for each day's actual attendance at council meetings, plus actual and necessary travel expenses.
MEDIATION SYSTEM
655.42
655.42
Establishment of mediation system. 655.42(1)
(1)
Legislative intent. The legislature intends that the mediation system provide the persons under
sub. (2) with an informal, inexpensive and expedient means for resolving disputes without litigation and intends that the director of state courts administer the mediation system accordingly.
655.42(2)
(2) Mediation system. The director of state courts shall establish a mediation system complying with this subchapter not later than September 1, 1986. The mediation system shall consist of mediation panels that assist in the resolution of disputes, regarding medical malpractice, between patients, their representatives, spouses, parents or children and health care providers.
655.42 History
History: 1985 a. 340;
1989 a. 187 s.
28.
655.43
655.43
Mediation requirement. The claimant and all respondents named in a request for mediation filed under
s. 655.44 or
655.445 shall participate in mediation under this subchapter.
655.43 History
History: 1985 a. 340.
655.44
655.44
Request for mediation prior to court action. 655.44(1)(1)
Request and fee. Beginning September 1, 1986, any person listed in
s. 655.007 having a claim or a derivative claim under this chapter for bodily injury or death because of a tort or breach of contract based on professional services rendered or that should have been rendered by a health care provider may file a request for mediation and shall pay the fee under
s. 655.54.
655.44(2)
(2) Content of request. The request for mediation shall be in writing and shall include all of the following information:
655.44(2)(a)
(a) The claimant's name and city, village or town, county and state of residence.
655.44(2)(c)
(c) The name and address of the health care provider alleged to have been negligent in treating the patient.
655.44(2)(d)
(d) The condition or disease for which the health care provider was treating the patient when the alleged negligence occurred and the dates of treatment.
655.44(2)(e)
(e) A brief description of the injury alleged to have been caused by the health care provider's negligence.
655.44(3)
(3) Delivery or registered mail. The request for mediation shall be delivered in person or sent by registered mail to the director of state courts.
655.44(4)
(4) Statute of limitations. Any applicable statute of limitations is tolled on the date the director of state courts receives the request for mediation if delivered in person or on the date of mailing if sent by registered mail. The statute remains tolled until 30 days after the last day of the mediation period under
s. 655.465 (7).
655.44(5)
(5) No court action commenced before mediation. Except as provided in
s. 655.445, no court action may be commenced unless a request for mediation has been filed under this section and until the expiration of the mediation period under
s. 655.465 (7).
655.44(6)
(6) Notice of court action to director of state courts. A claimant who files a request for mediation under this section and who commences a court action after the expiration of the mediation period under
s. 655.465 (7) shall send notice of the court action by 1st class mail to the director of state courts.
