Patient’s Compensation Fund

Act 817 of the 1975 legislature created the Patient’s Compensation Fund (PCF). This Act, moeled after legislation enacted in the state of Indiana, was pushed through the legislature by Dr. John Cooksey of Monroe, Louisiana. Dr. Cooksey, who practices ophthalmology, is often referred to as the father of the Louisiana Medical Malpractice Act of 1975. Healthcare providers who participate in the Fund limit their malpractice liability to the first $500,000 of a malpractice claim. Physicians are responsible for the first $100,000 of the cap and the insurer pays the cost of the claim beyond the first $100,000. There is no limitation, however, on future medical payments.

Patients Compensation Fund (PCF) Announces Rate Reduction

On Thursday, September 2, the Patients Compensation (PCF) Oversight Board approved a 15.8 percent rate reduction for 2011 surcharges paid by physicians. This decrease in rates is the direct result of a comprehensive plan adopted four years ago by the PCF Board to put the fund on much stronger financial footing. The plan included an aggressive effort to reduce the number of pending claims as well as increases in surcharges more in line with sound actuarial recommendations. The objective of this plan was to close the gap on the value estimate of pending claims and the amount of reserves on hand. Fund reserves are now over $600 million, which is the highest level of reserves in 35 year history of the fund. The range for annual savings by physicians can vary from approximately $1,000 to more than $8,000, depending on individual specialty. The PCF also approved a decrease in hospital premium rates by 11.2 percent for 2011.

“For the past three years, the highest legislative priority of the LSMS has been preservation of the caps and the financial integrity of the PCF,” said Dr. Vincent Culotta, vice chairman of the PCF Oversight Board and chair for the LSMS Council on Legislation. “This decision by the Board to reduce the rates is not only the result of a sound strategic plan, but also the tireless efforts of the LSMS and physicians who volunteer to serve on the Board and advocate on behalf of all physicians.” The LSMS is the only organization that nominates candidates for the four physician positions on the PCF Board.

This past legislative session, the LSMS sponsored a bill, that was adopted, that placed the rate-making authority and maintaining of actuarially sound reserves for the fund under the fiduciary responsibility of the PCF Board. The legislation precludes the commissioner of insurance from establishing arbitrary levels of reserves and determining the appropriate level of surcharge rates for the fund. This strengthens the solidarity of the Board in its oversight responsibility for the financial health and security of the fund.

“When your colleagues are elated at the reduced rates, remind them that organized medicine provided instrumental leadership in getting this reduction for all physicians,” said Dr. Culotta. “If they are not LSMS members, please encourage them to support the Society. Your annual LSMS membership dues are the best way to ensure continued success of our legislative advocacy efforts.”

Members of the PCF Board include Mr. Clark Cosse, Chairman; Dr. Vincent Culotta, Vice Chairman; Mr. Kent Guidry, Secretary; Mr. Joseph Donchess; Dr. Melanie Firmin; Dr. William St. John LaCorte; Dr. Katharine C. Rathbun; Mr. Manuel DePascual; and Mr. James E. Hritz.