Chapter 574
AN ACT
SB 183
Relating to reinsurance program for medical professional liability
insurance policies provided by State Accident Insurance Fund Corporation;
creating new provisions; amending sections 1, 2, 6, 7, 14 and 15, chapter 781,
Oregon Laws 2003; and declaring an emergency.
Be It Enacted by the People of
the State of
SECTION 1.
Section 1, chapter 781, Oregon Laws 2003, is amended to read:
Sec. 1. (1) The
State Accident Insurance Fund Corporation shall establish a reinsurance program
for medical professional liability insurance policies issued by authorized
insurers in the calendar years 2004, 2005, 2006, [and] 2007, 2008, 2009, 2010 and 2011 to doctors of medicine
and doctors of osteopathy licensed under ORS chapter 677 and nurse
practitioners certified by the Oregon State Board of Nursing who:
(a) Have a rural
practice [according to] that meets
the criteria established by the Office of [Rural
Health for purposes of ORS 315.613;] Rural Health that applied as of
January 1, 2004, for purposes of ORS 315.613, excluding urbanized areas, as
defined by the United States Census Bureau according to the most recent federal
decennial census, pursuant to the authority of the United States Department of
Commerce under 13 U.S.C. 141;
(b) Hold an active,
unrestricted license to practice medicine or are currently certified as a
nurse practitioner; [and]
(c) Have an in-force
policy of medical professional liability insurance with an authorized insurer
with minimum limits of coverage of $1 million per occurrence and $1 million
aggregate[.]; and
(d) Are willing to serve
patients with Medicare coverage and patients receiving medical assistance
provided under Medicaid in at least the same proportion to their total number
of patients as the Medicare and Medicaid populations represent to the total
number of patients in need of care in the rural areas of the counties in which
the doctors or nurse practitioners practice, as determined by the Office of
Rural Health. The Office of Rural Health shall establish by rule criteria for
and procedures for the annual attestation of compliance by participating
doctors and nurse practitioners with the requirements of this paragraph. The
requirements of this paragraph do not apply to nurse practitioners
participating in the program who are employed by licensed physicians.
(2) The reinsurance
program established in accordance with this section must be carried out in
accordance with the plan approved under section 2 [of this 2003 Act], chapter 781,
(3) The coverage
provided under the reinsurance program shall be priced by the State Accident
Insurance Fund Corporation, in accordance with rate standards or percentage
reductions determined by the Director of the Department of Consumer and
Business Services after consultation with the Office of Rural Health, at rates
that will significantly reduce premiums for doctors and nurse practitioners
to whom this section applies so as to make the medical professional liability
insurance reasonably affordable.
(4)(a) The State
Accident Insurance Fund Corporation may provide coverage as authorized in this
section on such terms and conditions as the State Accident Insurance Fund
Corporation determines to be reasonable, subject to the requirements and other
terms of the plan approved under section 2 [of
this 2003 Act], chapter 781, Oregon Laws 2003.
(b) Notwithstanding
paragraph (a) of this subsection, the State Accident Insurance Fund Corporation
must make all reasonable efforts consistent with the goals of sections 1 to 7,
10 to 12 and 14 [of this 2003 Act],
chapter 781, Oregon Laws 2003, to transfer any assumed reinsurance
liability.
(5) The State Accident
Insurance Fund Corporation is not required to provide coverage for risks under
this section that [exceed] exceeds
the amount the director is authorized to credit against assessments in section
7 [of this 2003 Act], chapter 781,
Oregon Laws 2003, but the State Accident Insurance Fund Corporation is
liable for all risks that it covers under this section.
(6) As used in this
section:
(a) “Medicaid” means
medical assistance provided under 42 U.S.C. 1396a, section 1902 of the Social
Security Act.
(b) “Medicare” means the
“Health Insurance for the Aged Act,” Title XVIII of the Social Security Amendments
of 1965.
SECTION 2.
Section 2, chapter 781, Oregon Laws 2003, is amended to read:
Sec. 2. (1) The
State Accident Insurance Fund Corporation shall submit to the Director of the
Department of Consumer and Business Services and to the Office of Rural Health
a plan for carrying out the provisions of section 1 [of this 2003 Act], chapter 781, Oregon Laws 2003. The
director and the office shall approve the plan following a determination that
the plan:
(a) Satisfies the
purposes of sections 1 to 7 [of this 2003
Act], chapter 781,
(b) Obligates the State
Accident Insurance Fund Corporation to carry out the reinsurance program
established under section 1 [of this 2003
Act], chapter 781, Oregon Laws 2003, by any appropriate coverage,
which may consist of financial reinsurance, on an insurer-to-insurer basis.
(c) Provides
administrative management for the reinsurance program.
(d) Is financially
sound.
(e) Facilitates payments
from the Rural Medical Liability Reinsurance Fund established by section 5 [of this 2003 Act], chapter 781,
(f) Establishes
appropriate underwriting and rating standards.
(g) Minimizes
transactional and claim costs for the State Accident Insurance Fund Corporation
and for primary users.
(h) Is appropriate in
relation to the insurance market in this state.
(i) Effectively reduces
premiums for medical professional liability insurance for doctors and nurse
practitioners eligible for coverage under the plan.
(2)(a) The plan approved
under this section must provide, to the extent funds are available from the
credit provided in section 7 [of this
2003 Act], chapter 781, Oregon Laws 2003, for the annual assessment
owed by the State Accident Insurance Fund Corporation under ORS 656.612, for a
reduction in premiums as provided in this subsection for medical professional
liability insurance for eligible doctors [of
medicine and doctors of osteopathy] and nurse practitioners. The
reduction of premium shall be:
(A) [Up to] 80 percent for doctors
specializing in obstetrics and nurse practitioners certified for obstetric
care;
(B) [Up to] 60 percent for doctors
specializing in family or general practice who provide obstetrical services; [and]
[(C) Up to 40 percent for all other eligible doctors.]
(C) Up to 40 percent
for doctors and nurse practitioners engaging in one or more of the following
practices:
(i) Family practice
without obstetrics.
(ii) General practice.
(iii) Internal medicine.
(iv) Geriatrics.
(v) Pulmonary medicine.
(vi) Pediatrics.
(vii) General surgery.
(viii) Anesthesiology;
and
(D) Up to the following
percentages for doctors and nurse practitioners other than those included in
subparagraph (A), (B) or (C) of this paragraph:
(i) 35 percent, for
calendar year 2008.
(ii) 25 percent, for
calendar year 2009.
(iii) 15 percent, for
calendar year 2010.
(iv) 15 percent, for
calendar year 2011.
(b) Notwithstanding
section 1 (1)(a), chapter 781, Oregon Laws 2003, a doctor who meets all the
criteria for eligibility for a reduction in premiums established in section 1
(1)(b), (c) and (d), chapter 781, Oregon Laws 2003, who has a rural practice
that meets the criteria established by the Office of Rural Health that applied
as of January 1, 2004, for the purposes of ORS 315.613, and is located in an
urbanized area of Jackson County, as defined by the United States Census Bureau
according to the most recent federal decennial census taken pursuant to the authority
of the United States Department of Commerce under 13 U.S.C. 141(a), and who
specializes in obstetrics is eligible for a reduction in premiums as provided
in paragraph (a)(A) of this subsection, and a doctor who specializes in family
practice and provides obstetrical services, or in general practice and provides
obstetrical services, or a nurse practitioner who is certified in obstetrical
care, is eligible for a reduction in premiums as provided in paragraph (a)(B)
of this subsection.
[(b)] (c) If the funds available to provide premium
reductions are insufficient to provide the maximum reduction, the plan shall
provide for [proportional reductions to
all eligible doctors.] lowering or eliminating the amount provided for
premium reductions for the doctors and nurse practitioners eligible for a
reduction in premiums under paragraph (a)(D) of this subsection. If, after
eliminating all premium reductions for the doctors and nurse practitioners
eligible for a reduction in premiums under paragraph (a)(D) of this subsection,
the remaining funds are insufficient to provide the maximum reductions provided
under the plan, the amounts provided for a reduction in premiums for doctors
and nurse practitioners eligible under paragraph (a)(C) of this subsection
shall be lowered or eliminated.
[(c)] (d) Premium reductions shall be a percentage of the
actual premium charged for medical professional liability insurance in the
market of authorized insurers for limits purchased of up to $1 million per
occurrence and $3 million annual aggregate. However, the premium reduction
for a doctor or nurse practitioner referred to in paragraph (a)(C) or (D) of
this subsection shall be the lesser of the percentage of the actual premium or
the premium paid by the doctor or nurse practitioner for calendar year 2007.
For a doctor or nurse practitioner who first becomes eligible for the program
on or after January 1, 2008, the premium reduction shall be the lesser of the
percentage of either the actual premium or the premium for the first eligibility
year determined according to 2007-based rates. When determining the lesser
amount under this paragraph, any step increases in the premium owing to the
claims-made nature of the policy may not be considered.
[(d)] (e) Premium reductions shall be effective beginning
with the first premium payment in each calendar year under the reinsurance
program.
(3) The plan adopted
under this section may not obligate the State Accident Insurance Fund
Corporation to provide coverage under section 1 [of this 2003 Act], chapter 781, Oregon Laws 2003, at a cost
to the State Accident Insurance Fund Corporation that exceeds an average of [$10] $5 million for each policy
year for [the four years for] which
the coverage is provided. The cost to the State Accident Insurance Fund
Corporation shall be the actuarially determined costs of the reinsurance
program.
[(4)(a) The State Accident Insurance Fund Corporation shall submit the
plan required under this section to the director and the office not later than
September 30, 2003.]
[(b) The director and the office shall approve, disapprove or require
changes to the plan as promptly as reasonably possible in order to enable the
State Accident Insurance Fund Corporation to have the plan operational by
January 1, 2004. The plan may be implemented only after joint approval by the
director and the office.]
SECTION 2a.
Section 6, chapter 781, Oregon Laws 2003, is amended to read:
Sec. 6. (1) If an
insurer obtains coverage with the State Accident Insurance Fund Corporation for
medical professional liability insurance issued by the insurer to a doctor or
nurse practitioner to whom section 1, chapter 781, Oregon Laws 2003,
[of this 2003 Act] applies, the
insurer shall reduce the premium charged to the doctor or nurse practitioner
in a manner that fully recognizes savings made available by coverage offered
under section 1, chapter 781, Oregon Laws 2003 [of this 2003 Act].
(2) An insurer to which
subsection (1) of this section applies shall demonstrate the difference in its
rates for medical professional liability insurance for purposes of subsection
(1) of this section in its filing of rates with the Director of the Department
of Consumer and Business Services.
SECTION 3.
Section 7, chapter 781, Oregon Laws 2003, is amended to read:
Sec. 7. (1) When
the State Accident Insurance Fund Corporation provides coverage through the
reinsurance program established under section 1 [of this 2003 Act], chapter 781, Oregon Laws 2003, the
Director of the Department of Consumer and Business Services shall credit the
purchase price or the amount of the payment, net of any income, to the annual
assessment owing by the State Accident Insurance Fund Corporation to the
Department of Consumer and Business Services under ORS 656.612. The amount the
director credits under this subsection may not exceed an average of [$10] $5 million for each policy
year for [the four years that] which
coverage is provided under section 1 [of
this 2003 Act], chapter 781,
(2) The director shall
establish by rule the accounting procedures and requirements by which the
credit is determined for the assessment under ORS 656.612.
SECTION 4.
Section 14, chapter 781, Oregon Laws 2003, is amended to read:
Sec. 14. (1) The
State Accident Insurance Fund Corporation shall continue paying reinsurance
claims incurred or made prior to January 1, [2008,] 2012, from the Rural Medical Liability Reinsurance
Fund until the State Accident Insurance Fund Corporation has extinguished its
liabilities for reinsurance issued under section 1 [of this 2003 Act], chapter 781, Oregon Laws 2003, by payment
of claims or by purchase of reinsurance. Purchase of reinsurance under this
subsection shall be subject to approval by the Director of the Department of
Consumer and Business Services.
(2) Sections 1 to 8 and
10 to 12 [of this 2003 Act],
chapter 781,
(3) The amendments to
ORS 656.632 by section 13 [of this 2003
Act], chapter 781,
SECTION 5.
Section 15, chapter 781, Oregon Laws 2003, is amended to read:
Sec. 15. (1) The
Director of the Department of Consumer and Business Services shall report in
the manner provided by ORS 192.245 to the [Seventy-third
and] Seventy-fourth and Seventy-fifth Legislative Assemblies on the
performance of the program established under section 1 [of this 2003 Act], chapter 781, Oregon Laws 2003.
(2) The State Accident
Insurance Fund Corporation shall provide all data and other information
required by the director to prepare the reports required under this section.
SECTION 6. (1)(a)
The State Accident Insurance Fund Corporation shall submit any proposed
modifications to the plan required under section 2, chapter 781, Oregon Laws
2003, to the Director of the Department of Consumer and Business Services and
to the Office of Rural Health not later than September 30, 2007.
(b) The director and the
office shall approve, disapprove or require changes to the plan or to the
proposed modifications to the plan as promptly as reasonably possible in order
to enable the State Accident Insurance Fund Corporation to have the modified
plan operational by January 1, 2008. The modified plan may be implemented only
after the joint approval by the director and the office.
(2) The plan modified
under subsection (1) of this section must provide that a doctor or nurse
practitioner whose coverage is provided through a health care facility as
defined in ORS 442.400, and who otherwise meets the requirements of section 1
(1), chapter 781, Oregon Laws 2003, is eligible to participate in the program
beginning January 1, 2008, if the office determines that the doctor or nurse
practitioner, as of the later of January 1, 2007, or the date on which the
doctor or nurse practitioner first commences a rural practice:
(a) Is not an employee
of the health care facility;
(b) Is covered by a
medical professional liability insurance policy that names the doctor or nurse
practitioner and separately calculates the premium for the doctor or nurse
practitioner; and
(c) Fully reimburses the
health care facility for the premium calculated for the doctor or nurse
practitioner.
SECTION 7. Notwithstanding
section 1 (1)(a), chapter 781, Oregon Laws 2003, for the purpose of
establishing eligibility of doctors of medicine and doctors of osteopathy for
participation in the reinsurance program for medical professional liability
insurance policies established by section 1, chapter 781, Oregon Laws 2003, for
calendar year 2007, a rural practice is defined as a practice that meets the
criteria established by the Office of Rural Health that applied as of January
1, 2004.
SECTION 8. The
amendments to sections 1, 2, 6, 7, 14 and 15, chapter 781, Oregon Laws 2003, by
sections 1 to 5 of this 2007 Act become operative on January 1, 2008.
SECTION 9. This
2007 Act being necessary for the immediate preservation of the public peace,
health and safety, an emergency is declared to exist, and this 2007 Act takes
effect on its passage.
Approved by the Governor June 25, 2007
Filed in the office of Secretary of State June 27, 2007
Effective date June 25, 2007
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