Health Care Stabilization Fund Presentation For LeadingAge Kansas Policy & Regulatory Conference October 1, Our Board of Governors

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1 Health Care Stabilization Fund Presentation For LeadingAge Kansas Policy & Regulatory Conference October 1, 2014 Our Board of Governors Jimmie A Gleason, MD, Chairman John W Mize, JD, Vice Chairman Scott D Booker, DO Chris L Burke, CRNA Harold M Chalker, DC John R Eplee, MD Kevin D McFarland Steven R Short, DO Travis W Stembridge, MD Wayne T Stratton, JD Brief History of the Health Care Provider Insurance Availability Act Enacted in 1976 because of a medical liability insurance crisis. Original Act contained three principal features: 1) Created the Health Care Stabilization Fund to provide supplemental coverage for all health care providers. 2) Purchase of basic coverage and participation in capitalizing the Health Care Stabilization Fund was required as a condition of rendering professional services in Kansas. 3) Created a joint underwriting association (the Availability Plan) to assure access to basic coverage for health care providers. Original Act has been amended numerous times subsequent to 1976, but the three principal features have always remained. 1

2 Public Policy Objectives in the Act Assures the availability of primary professional liability insurance for defined health care providers. Functions regardless of what cycles or limitations may occur in the commercial insurance markets. Creates favorable market conditions for commercial insurers. Assures health care providers that supplemental coverage via the Fund will be portable from one primary insurer to another. Specifies that primary liability insurance must provide the minimum basic coverage required by the Availability Act Assures tail coverage when a health care provider becomes inactive. Health Care Providers Defined by Statute Healing Arts Licensees: D.C.s, D.O.s, and M.D.s Persons engaged in medical residency training programs Podiatrists Registered Nurse Anesthetists (C.R.N.A.s) Hospitals Ambulatory Surgery Centers Mental Health Centers and Clinics Certain Psychiatric Hospitals Certain Kansas corporations and partnerships formed by health care providers Health Care Providers Defined by Statute Effective January 1, 2015 Physician Assistants* Nurse-Midwives* Nursing Facilities Assisted Living Facilities Residential Health Care Facilities *Exceptions are made for physician assistants and nurse-midwives who are employed solely by federal agencies. 2

3 Kansas Professional Liability Coverage Requirements $200,000 per claim/$600,000 annual aggregate minimum basic coverage from a duly authorized insurance company (admitted carrier) or the Availability Plan + Supplemental coverage from the Fund $100,000/$300,000 or $300,000/$900,000 or $800,000/$2,400,000 Kansas Professional Liability Coverage Requirements $200,000/$600,000 basic coverage from an insurance company or the Availability Plan: Must cover all professional services of the insured health care provider Must be a claims made policy approved by the Commissioner of Insurance Limits cannot be shared with any other insured Notice of basic coverage must be submitted to the HCSF within 30 days of effective date of the policy Coverage remains in effect until the policy is lawfully cancelled Stabilization Fund coverage levels Original notice of basic coverage must be signed or electronically acknowledged that health care provider is making an informed decision regarding the level of HCSF coverage selected. Any change from one coverage level to another must be requested by the health care provider in writing. An increase in coverage level must be approved by the HCSF Board of Governors to become effective. 3

4 Initial selection of one of the Fund coverage limits or subsequent selection of a lower Fund coverage limit requires the signature of the health care provider on the Notice of Basic Coverage form. Use of the electronic compliance form requires a legal acknowledgment that the health care provider has been properly informed of the options and has selected the indicated limits of coverage. A separate form is available for use in decreasing Fund coverage limits. Fund coverage limits may be increased only upon approval of the Fund s Board of Governors. An example of changed Fund coverage levels Coverage Period Basic Coverage Fund Coverage 7/1/14 to 6/30/15 $200,000 $800,000 7/1/13 to 6/30/14 $200,000 $800,000 7/1/12 to 6/30/13 $200,000 $300,000 7/1/11 to 6/30/12 $200,000 $100,000 7/1/10 to 6/30/11 $200,000 $100,000 Suit is filed/claim made 6/15/13 for an incident that occurred 2/1/12 An example of changed Fund coverage levels Coverage Period Basic Coverage Fund Coverage 7/1/14 to 6/30/15 $200,000 $800,000 7/1/13 to 6/30/14 $200,000 $800,000 7/1/12 to 6/30/13 $200,000 $300,000 7/1/11 to 6/30/12 $200,000 $100,000 7/1/10 to 6/30/11 $200,000 $100,000 Suit is filed/claim made 6/15/13 for an incident that occurred 2/1/12; the Fund has $100,000 coverage for total coverage of $300,000. 4

5 Other Topics Fund coverage does not apply to punitive damages, intentional torts (including sexual misconduct), or administrative proceedings (such as licensure issues). Vicarious liability exclusion [K.S.A (h)] Statutory limits in personal injury actions Kansas cap in wrongful death actions (K.S.A ) = $250,000 Senate Bill 311, 2014 Session Laws New caps on noneconomic damages: As of July 1, 2014 = $300,000 As of July 1, 2018 = $325,000 As of July 1, 2022 = $350,000 For causes of action accruing on or after the July 1 date The Kansas Health Care Stabilization Fund 300 S.W. 8 th Avenue, Second Floor Topeka, Kansas Phone: Fax: Web site: hcsf@hcsf.org 5