Pennsylvania’s MCARE Fund

Summary of Heim v. Medical Care Availability and Reduction of Error Fund (Sup. Ct. Pa., April 28, 2011) :

The Pennsylvania Supreme Court has ruled the Medical Care Availability and Reduction of Error Fund (“MCARE”) had to cover a shortfall in a plaintiff's award where there were multiple joint tortfeasors including two physicians and their practice group. The joint tortfeasors could have been held jointly and severally liable for each other's portion of the award. The underlying purpose of MCARE is to provide excess liability coverage above a physicians' primary malpractice insurance coverage.

In this medical malpractice case, the jury entered a verdict in favor of the plaintiff, which was molded to $707,000 from $1 million. The Court noted that the excess coverage responsibility to a health care provider was measured from the baseline of such providers' own primary coverage. The primary coverage was $200,000. However, that insurer was insolvent. MCARE, argued that it only had to cover payments in excess of the primary insurer's basic coverage. In addition, MCARE argued it should not have to pay for shortfalls arising from the insolvencies of primary insurers. Finally, MCARE argued that a ruling in its favor would be in the public's benefit because it would conserve its assets.

In light of the primary insurer’s insolvency, The Pennsylvania Property and Casualty Association (“PPCA”) took over and the claims were then subject to a limitation of $300,000 per claim. The primary insurer's obligation exceeded the statutory cap by $100,000. The insurer allocated $200,000 of its $300,000 payment on behalf of one of the tortfeasors and $100,000 on behalf of the other. Plaintiff attempted to execute against the assets of one of the defendant-physicians’ practice group for unpaid portion of the judgment.

Plaintiff argued Pennsylvania law does not set out how to calculate MCARE's obligations when liability is apportioned among multiple tortfeasors. The Court stated, "At the outset, the fund presents a strong argument that the [Health Care Services Malpractice Act mandating doctors carry malpractice insurance] ... did not, and does not, authorize it to compensate for a shortfall arising from an insurer insolvency undermining a health care provider's own line of primary coverage. ... We regard it as a separate matter, nonetheless, when the deficiency is in the primary coverage of another health care provider, chargeable to the physician-claimant only on the account of joint and several liability."

Impact: The state Supreme Court has ruled that the public insurance fund for medical malpractice payouts must cover a part of a doctor's primary coverage that the doctor's private-sector medical malpractice insurer did not pay.

For a copy of this decision, click here: