The Injured Patients and Families Compensation Fund net balance has increased to $361.3 million as of June 30, 2012, according to a recent report from the Legislative Audit Bureau (LAB). This balance reflects assets less potential liabilities. Just three years earlier, the Fund had a $109 million deficit, in large part due to the state’s $200 million raid on the Fund in 2007. The Wisconsin Medical Society’s successful lawsuit against the state helped restore the positive balance, as more than $233 million was returned to the Fund – the raid amount plus lost earnings.
Today the Fund has more than $1 billion in assets, which prompted the auditors to recommend exploration of keeping the asset balance within a certain range. “Because of the significant increase in the Fund’s net assets, we recommend that OCI (the Office of the Commissioner of Insurance) work with the Board of Governors to establish formal parameters for annually evaluating the appropriateness of the Fund’s net asset balance,” said State Auditor Joe Chrisman in a letter to State Sen. Robert Cowles and Rep. Samantha Kerkman, co-chairs of the Joint Legislative Audit Committee.
After reviewing a draft of the audit, State Commissioner of Insurance Theodore Nickel said in a letter to Chrisman that OCI’s focus “has now shifted to the management of this balance.” He recommended that OCI “reassess the Fund’s current financial reporting process and take steps to establish and document clear procedures for completing and verifying the accuracy of the Fund’s financial statements.”
The Fund is a trust created to pay medical liability claims that exceed physicians’ primary layer of medical liability insurance. For more than 30 years, the Fund has helped keep physicians’ insurance costs manageable and protect patients’ access to quality care. In December 2012, the Fund Board approved a 5 percent decerease in Fund fees for the 2013-2014 fiscal year. Details are in this Medigram article.
Wisconsin Medical Society Past President Robert Jaeger, MD, and Linda Syth, CEO of Wisconsin Medical Society Holdings Corp., serve on the Fund Board, which also includes legal, hospital, industry and public representatives.
Click here for a document with highlights from the LAB report.
Back to March 14, 2013 Medigram