Judge stops state plan to take $200M out of mal­prac­tice fund

The Republican Herald - - STATE - BY MARK SCOL­FORO

HAR­RIS­BURG — A fed­eral judge on Thurs­day blew a $200 mil­lion hole in Penn­syl­va­nia’s state bud­get by throw­ing out a law that ap­pro­pri­ated the sur­plus from a state­cre­ated med­i­cal mal­prac­tice in­surer of last re­sort.

U.S. Dis­trict Judge Christo­pher Con­ner sided with the Penn­syl­va­nia Pro­fes­sional Li­a­bil­ity Joint Un­der­writ­ing As­so­ci­a­tion and de­clared the 2017 law vi­o­lated the U.S. Con­sti­tu­tion.

Con­ner said the fund is pri­vate prop­erty that may not be seized by the gov­ern­ment with­out fair com­pen­sa­tion.

The fund, he wrote, “has a per­cep­ti­ble ben­e­fit: it as­sures avail­abil­ity of med­i­cal pro­fes­sional li­a­bil­ity cov­er­age through­out the com­mon­wealth at no pub­lic cost. By the same to­ken, it also has a con­se­quence: the Gen­eral Assem­bly can­not claim carte blanche ac­cess to the as­so­ci­a­tion’s as­sets.”

The law that au­tho­rized the trans­fer was the an­nual amend­ments to the Fis­cal Code, a crit­i­cal part of the $32 bil­lion bud­get. The wider im­pli­ca­tions of the Fis­cal Code’s fate were not im­me­di­ately clear.

House Re­pub­li­can spokesman Steve Miskin said they are re­view­ing their op­tions, “es­pe­cially in light of what ap­pears to be an ab­so­lutely overly broad or­der — that goes way beyond the le­gal of the case.”

The fund con­sists of money from pol­i­cy­holder pre­mi­ums and in­vest­ment in­come and is man­aged by a board of di­rec­tors. A lawyer for the as­so­ci­a­tion de­clined to com­ment.

The $200 mil­lion trans­fer law passed by state law­mak­ers and signed Demo­cratic Gov. Tom Wolf on Oct. 30 cited a de­cline in the “na­ture and amounts” of paid claims as jus­ti­fi­ca­tion for draw­ing down the fund.

The trans­fer into the state’s gen­eral fund has never taken place, as the as­so­ci­a­tion ob­tained an in­junc­tion from Con­ner in Novem­ber.

Wolf spokesman J.J. Ab­bott called the trans­fer “one of the many mech­a­nisms passed by the Gen­eral Assem­bly and signed into law to elim­i­nate the deficit.” He said the ad­min­is­tra­tion was re­view­ing the de­ci­sion.

Con­ner said the as­so­ci­a­tion’s func­tion is essen­tially pri­vate, an in­sur­ance com­pany at its core.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.