Section 760 IAC 1-21-5 - Financial responsibility of hospital or psychiatric hospitalAuthority: IC 34-18-5-4
Affected: IC 12-25; IC 16-21-2; IC 34-18-4-1; IC 34-18-5-3
Sec. 5.
A hospital or psychiatric hospital may establish financial responsibility for itself and its officers, agents, and employees by submitting, to the commissioner, all of the following at least sixty (60) days before the requested effective date of coverage with the PCF:
(1) An agreement in writing, in a form and manner prescribed by the commissioner, to pay any final judgment or agreed settlement arising from claims of malpractice subject to the limits on liability set forth in IC 34-18-4-1(1)(A)(i) and IC 34-18-4-1(1)(A)(ii).(2) An agreement in writing that the hospital or psychiatric hospital will establish and maintain a claims management and risk management program. The program shall include, at a minimum, the following:(A) Procedures satisfactory to the commissioner for the prompt investigation of each malpractice claim reported to the hospital or psychiatric hospital to determine the following: (i) Whether malpractice liability exists.(B) Procedures for the following: (i) The efficient processing, adjustment, and reasonable settlement of claims.(ii) The defense by legal counsel of claims that cannot be adjusted or settled.(iii) Examining the cause of losses and taking action to reduce their frequency and severity, including a safety program and employee and professional training program. The hospital or psychiatric hospital may undertake such a claims management and risk management program through its own qualified personnel, or it may undertake part or all of the program through the services of qualified independent contractors.
(3) A verified financial statement that demonstrates the financial resources of the hospital or psychiatric hospital are sufficient to satisfy all malpractice claims incurred by it up to the limits on liability set forth in IC 34-18-4-1(3). Notwithstanding, if the hospital or psychiatric hospital: (A) is an agency of any governmental unit; and(B) desires to use the taxing power of that governmental unit to establish its financial security; it may establish financial responsibility by filing with the commissioner a copy of an ordinance or resolution of the taxing governing body of the governmental unit, authorizing the hospital or psychiatric hospital to do so, and acknowledging the responsibility of the governmental unit for any judgment or settlement arising from claims of malpractice.
(4) An agreement in writing that if the hospital or psychiatric hospital:(A) discontinues operation; or(B) decides to purchase insurance to establish financial responsibility under IC 34-18 et seq.; the hospital or psychiatric hospital will continue to be liable in the amounts set forth in subdivision (1) until liability ceases to exist. (5) For each year in which the hospital or psychiatric hospital establishes proof of financial responsibility under this section, the hospital or psychiatric hospital shall obtain the quotation from IRMIA for the surcharge amount to be paid to the PCF. In support of this calculation, the hospital or psychiatric hospital shall submit to IRMIA the following: (A) The hospital's or psychiatric hospital's most recent application for licensure to operate a hospital under IC 16-21-2, or IC 12-25 for psychiatric hospitals, on file with the state department of health or family and social services administration, as applicable.(B) Any other information reasonably requested by IRMIA to accurately determine the surcharge amount. This information shall be submitted to IRMIA at least sixty (60) days before the requested effective date of coverage with the PCF. IRMIA shall retain this information for a period of ten (10) years.
(6) A hospital or psychiatric hospital that establishes proof of financial responsibility under this section may obtain only occurrence coverage. Claims made coverage is not available.(7) The department can reject or refuse to renew a hospital's or psychiatric hospital's request to establish financial responsibility under this section if the department determines, after notice and an opportunity to be heard, that the hospital's or psychiatric hospital's financial condition is not sufficient or poses a financial risk to the PCF.(8) The department may require a hospital or psychiatric hospital to: (A) submit to an independent audit; or(B) provide a certification by an independent person acceptable to the commissioner; of the surcharge calculations. Any costs related thereto shall be borne by the hospital or psychiatric hospital. Department of Insurance; Reg 22, Sec V; filed Jan 27, 1977, 2:35 p.m.: Rules and Regs. 1978, p. 515; filed Apr 29, 1999, 2:22 p.m.: 22 IR 2875; readopted filed Sep 14, 2001, 12:22 p.m.: 25 IR 531; filed Mar 18, 2005, 10:45 a.m.: 28 IR 2375; filed Feb 2, 2007, 3:08 p.m.: 20070228-IR-760060032FRA; filed Apr 18, 2011, 11:34 a.m.: 20110518-IR-760100245FRA; readopted filed November 26, 2013, 3:43 p.m.: 20131225-IR-760130479RFAReadopted filed 11/19/2019, 9:18 a.m.: 20191218-IR-760190497RFA