74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 577
A-Engrossed
Senate Bill 183
Ordered by the Senate May 7
Including Senate Amendments dated May 7
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor Theodore R.
Kulongoski for Department of Consumer and Business Services)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Extends reinsurance program for medical professional liability
insurance policies administered by State Accident Insurance Fund
Corporation for four years. { + Extends program to nurse
practitioners. + } Requires proposed modifications to plan to be
submitted to Director of Department of Consumer and Business
Services and Office of Rural Health by September 30, 2007.
Reduces corporation's obligation for annual average amount of
cost of program. Reduces amount of annual credit corporation may
take against assessment by Department of Consumer and Business
Services. Requires Director of Department of Consumer and
Business Services to report on performance of program to
Seventy-fourth and Seventy-fifth Legislative Assemblies.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to reinsurance program for medical professional
liability insurance policies provided by State Accident
Insurance Fund Corporation; 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 Oregon:
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) 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 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 with the requirements of this
paragraph. The requirements of this paragraph do not apply to
nurse practitioners participating in the program. + }
(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,
Oregon Laws 2003 + }.
(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, Oregon Laws 2003 + }.
(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, Oregon Laws 2003, + } and is
otherwise fair and reasonable to the participating primary
insurers and their insureds.
(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 practice in a rural
area south of Medford, as defined by the Office of Rural Health
as of January 1, 2004, and who specializes in obstetrics, in
family practice and provides obstetrical services, or in general
practice and provides obstetrical services, is entitled to 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 { + any proposed modifications to + } the plan required
under this section to the director and the office not later than
September 30, { - 2003 - } { + 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, { - 2004 - }
{ + 2008 + }. The { + modified + } plan may be implemented
only after joint approval by the director and the office.
{ + (5) The plan as modified under subsection (4) of this
section must provide that a doctor or nurse practitioner whose
coverage is provided through a health care facility as defined by
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 if the Office of Rural Health 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 that
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 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, Oregon Laws 2003 + }.
(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, Oregon Laws 2003, + } are repealed January 2,
2014.
(3) The amendments to ORS 656.632 by section 13 { - of this
2003 Act - } { + , chapter 781, Oregon Laws 2003, + } become
operative January 2, 2014.
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. { + 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. + }
----------