Wisconsin Settles with Medical Society over Raid of Med-Mal Fund

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The state of Wisconsin has reached an agreement with the Wisconsin Medical Society over the repayment of a fund set up to pay medical malpractice claims that was raided in 2007 to help balance the budget.

The agreement calls for the state to repay the $200 million taken from the fund and pay $34 million in lost earnings and interest by October. That also includes a $691,000 payment for attorneys’ fees to the Medical Society.

The patients’ compensation fund was raided under a bipartisan deal reached with then-Gov. Jim Doyle and the Legislature.

The Wisconsin Medical Society, which represents nearly 12,500 physicians across Wisconsin, sued the state for raiding the fund, calling the legislature’s action unconstitutional. The Wisconsin Supreme Court agreed, ruling in 2010 that taking the funds from the Wisconsin’s Injured Patients and Families Compensation Fund (IPFCF) to help balance the general budget was unconstitutional. The Court also said the state is prohibited from taking money out of the fund “for an improper purpose” in the future.

The state must repay $200 million taken from the fund plus $34 million in lost earnings and interest.

The fund, created in 1975, provides excess medical malpractice coverage for Wisconsin health care providers. Most health care professionals purchase medical liability policies from private insurance carriers that pay claims up to $1 million for each claim arising from an occurrence in a year or $3 million for claims arising from all occurrences in a year.

The fund covers claims in excess of those amounts; no taxpayer money contributes to the fund, according to the Wisconsin Medical Society. It is funded by fees paid by health care providers.

Money for the repayment was included in this year’s state budget.