Bill 3744

                    Current Status

Bill Number:               3744
Ratification Number:       493
Act Number:                443
Introducing Body:          House
Subject:                   Relating to Patients' Compensation Fund
                           for the benefit of licensed health care
                           providers

(A443, R493, H3744)

AN ACT TO AMEND SECTIONS 38-59-140 THROUGH 38-59-190, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PATIENTS' COMPENSATION FUND FOR THE BENEFIT OF LICENSED HEALTH CARE PROVIDERS, SO AS TO CHANGE THE METHOD BY WHICH PROVIDERS MAY PARTICIPATE IN THE FUND; REQUIRE THAT IN ADDITION TO ANNUAL MEMBERSHIP FEES, THE BOARD MAY MAKE DEFICIT ASSESSMENTS WHEN INSUFFICIENT FUNDS ARE AVAILABLE TO MEET THE FUND'S LIABILITY, TO PROVIDE THAT MEMBERSHIP IN THE FUND IS CONTINGENT UPON THE FUND MEMBER MAKING TIMELY PAYMENTS OF ALL MEMBER FEES AND DEFICIT ASSESSMENTS; DELETE THE REQUIREMENT THAT THE STATE TREASURER MUST INVEST AND REINVEST THE FUND IN SHORT-TERM INTEREST BEARING INVESTMENTS; DELETE THE REQUIREMENT THAT REPORTS OF AUDITS OF THE FUND BE PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, TO PROVIDE A PROCEDURE BY WHICH HEALTH CARE PROVIDERS MAY WITHDRAW FROM PARTICIPATION IN THE FUND; DELETE THE PROVISION THAT A PROVIDER PARTICIPATING IN THE FUND IS LIABLE FOR LOSSES UP TO THE AMOUNT OF ITS COVERAGE AND TO AUTHORIZE THE PROVIDER TO RECEIVE AN APPROPRIATE REDUCTION OF ITS ASSESSMENT OF THE FUND; AND DELETE THE REQUIREMENT THAT ANY PERSON AFFECTED BY ANY RULING, ACTION, OR DECISION BY OR ON BEHALF OF THE FUND MAY APPEAL TO THE COMMISSION WITHIN THIRTY DAYS AND TO ADD THE PROVISION THAT ANY RULING, ACTION, OR DECISION BY OR ON BEHALF OF THE FUND IS SUBJECT TO REVIEW AS PROVIDED IN SECTION 1-23-380 OF THE 1976 CODE.

Be it enacted by the General Assembly of the State of South Carolina:

Fees and assessments

SECTION 1. Section 38-59-140 of the 1976 Code is amended to read:

"Section 38-59-140. All South Carolina licensed health care providers may participate in the fund and maintain participation by remitting to the Board the appropriate membership fees and deficit assessments as are required by the Board on or before the providers' membership anniversary date."

Fees

SECTION 2. Section 38-59-150 of the 1976 Code is amended to read:

"Section 38-59-150. All fund members shall pay annual membership fees set by the board. In addition to the annual membership fees, the board may make deficit assessments upon the determination by the board that insufficient money is available to meet the fund's liabilities.

Membership in the fund is contingent upon the fund member making timely payment of all membership fees and deficit assessments.

Self-insureds are eligible for membership in the fund upon compliance with the requirements of the board of governors and shall pay the same membership fees and deficit assessments as the members."

Fund held in trust

SECTION 3. Section 38-59-160 of the 1976 Code is amended to read:

"Section 38-59-160. The fund, and any income from it, must be held in trust, deposited in the office of the State Treasurer, and kept in a segregated account entitled 'Patients' Compensation Fund', invested and reinvested by the State Treasurer in the same manner as provided by law for the investment of other state funds in interest-bearing investments and shall not become a part of the general fund of the State. All expenses of collecting, protecting, and administering the fund must be paid from the fund."

Records to be audited

SECTION 4. Subsections (3) and (4) of Section 38-59-170 of the 1976 Code are amended to read:

"(3) On or before December thirty-first of each year the State Auditor shall audit the records of the fund and shall furnish an audited financial report to all fund participants, the Department of Insurance, the Legislative Audit Council, and the Budget and Control Board.

(4) All health care providers participating in the fund may withdraw from participation upon written notice of thirty days prior to the date of withdrawal. However, the providers remain subject to any assessment pertaining to any year in which such provider participated in the fund. A member who withdraws during any year is entitled to a pro rata return of the annual membership fee."

Defense of claim

SECTION 5. Subsection (2) of Section 38-59-180 of the 1976 Code is amended to read:

"(2) It is the responsibility of the insurer providing insurance for a provider who is also covered by the fund or for the self-insured provider covered by the fund to provide an adequate defense on any claim filed that potentially affects the fund with respect to such insurance contracts or self-insured's liability. The insurers or self-insured providers shall act in a fiduciary relationship with respect to any claim affecting the fund. No settlement exceeding one hundred thousand dollars per incident, or three hundred thousand dollars in the aggregate for one year, may be agreed to unless approved by the Board."

Subsection deleted

SECTION 6. Subsection (5) of Section 38-59-180 of the 1976 Code is amended by deleting it in its entirety.

Judicial review

SECTION 7. Section 38-59-190 of the 1976 Code is amended to read:

"Section 38-59-190. Any ruling, action, or decision by or on behalf of the fund is subject to judicial review as provided in Section 1-23-380 of the 1976 Code."

Time effective

SECTION 8. This act shall take effect upon approval by the Governor.