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Program A: Administrative

Program Authorization: R.S. 40:1299.44

PROGRAM DESCRIPTION

The mission of the Administrative Program of the Patients’ Compensation Fund Oversight Board is to administer, manage, operate and defend the Patient's Compensation Fund (PCF) in a manner that will timely and efficiently meet the needs and interests of those groups for whom the PCF was created to serve ---Louisiana health care providers, legitimate victims of medical malpractice and the citizens of the State of Louisiana.

The goal of the Administrative program of the Patient's Compensation Fund Oversight Board is to ensure the longevity of the Patient Compensation Fund by maintaining its financial stability. Ideally, such financial stability would balance the need for sufficient funds to adequately compensate victims of malpractice with surcharge rates that are kept at levels that are not excessive for healthcare providers.

The Administrative Program of the Patient's Compensation Fund Oversight Board consists of six activities: Rate Filing and Classification, Enrollment of Providers/Collection of Surcharges, Medical Review Panel, Claims, Defense, Administration/Accounting.

Rate Filing and Classification. Healthcare providers are classified based upon the malpractice risk associated with the particular specialty. The classifications are rated accordingly. In conjunction with a consulting actuary the Board annually evaluates the adequacy if surcharge rates and, when necessary, files for indicated rate increases with the Louisiana Rating Commission.

Enrollment of Providers/Collections of Surcharges. The Board is responsible for making sure that the effective date of a healthcare providers enrollment with the PCF coincides with payment of the applicable surcharge. Once it is determined that the healthcare provider qualifies and has paid the correct surcharge the Board prepares a Certificate of Enrollment to be kept on file. Additionally, for self-insured providers, the board must make sure the instrument establishing financial responsibility for $125,000 is acceptable. Physicians and hospitals are subject to "experience rating" meaning that their surcharges may be subject to a debit of up to 50% based on prior claims payments. The PCF now has approximately 12,000 health care providers who annually enroll in the Fund. The number of providers who self-insure for the initial $100,000 is continually increasing. Approximately 20% now self-insure. The Board employees must review all documentation to verify the correct surcharge has been submitted and then must post the information to the database. Thousands of surcharge adjustments are made throughout the year for employees of providers who are added or deleted, and for refunds when providers retire or decide to leave the Fund.

Medical Review Panel. Qualified healthcare providers are entitled to have a patient’s compliant considered by a Medical Review Panel prior to the commencement of civil litigation. The patient files a compliant with the Board. The board has the responsibility of advising the patient if the named healthcare providers are indeed qualified. The Board must also advise all named healthcare providers that a compliant has been filed and whether or not the provider is enrolled in the PCF. The Board must further monitor the progress of the Medical Review Panel process and the ultimate disposition of each case. The Board is responsible for maintaining all relevant data pertaining to healthcare providers named in complaints, the outcome of the medical review panel process, the number of complaints filed per month, per year, etc.

Claims. The Board is responsible for monitoring all claims filed with the PCF from the time the initial complaint is filed until the claim is abandoned, dismissed, settled or proceeds through the courts for final judgement. The day to day claims functions have been contractually delegated to the Office of Risk Management. All through the claims process a case will be periodically reviewed and re-evaluated to determine whether the potential damages will impact the PCF’s layer of coverage. When a determination is made that a case may exceed the $125,000 primary coverage, the PCF must set appropriate reserves so that subsequent actuarial studies will have an accurate view of the total potential liability of the PCF.

Defense. The Board is also responsible for securing the services of legal counsel to advise and represent the Board and the PCF in proceeding relative to various aspects of the Medical Malpractice Act. The responsibility of assigning defense counsel to represent the PCF on individual medical malpractice claims is, by statute, conferred upon the Office of Risk Management.

Administration/Accounting. All information and data collected by or reported to the PCF, related to the administration, management, operation and defense of the PCF, shall be recorded and maintained by the Board. The Board shall be responsible for maintaining accounts and records for the PCF as may be necessary and appropriate to accurately reflect the financial condition of the PCF on a continuing basis. Most importantly, annual budget and appropriation requests must be prepared and should accurately reflect all surcharges projected to be collected by the PCF during the fiscal year, together with projected expenses for the administration, management operation and defense of the PCF and satisfaction of its liabilities and obligation.

 

 

RESOURCE ALLOCATION FOR THE PROGRAM

SOURCE OF FUNDING

This program is funded with Statutory Dedications from the Patient's Compensation Fund. This revenue is derived from surcharges paid by private health care providers enrolled in this program. (Per R.S. 39:32B. (8), see table below for a listing of expenditures out of each Statutory Dedicated Fund.)

 

ANALYSIS OF RECOMMENDATION

GENERAL FUND

TOTAL

T.O.

DESCRIPTION

 

 

 

 

 

$0

$1,329,583

27

 

ACT 19 FISCAL YEAR 1998-1999

 

 

 

 

 

 

 

 

 

BA-7 TRANSACTIONS:

$0

$25,000

0

 

Carry Forward BA-7 for computer consulting services encumbered but not liquidated prior to 6/30/98

 

 

 

 

 

$0

$1,354,583

27

 

EXISTING OPERATING BUDGET – November 20, 1998

 

 

 

 

 

$0

$16,945

0

 

Annualization of FY 1998-1999 Classified State Employees Merit Increase

$0

$16,069

0

 

Classified State Employees Merit Increases for FY 1999 -2000

$0

($7,511)

0

 

Risk Management Adjustment

$0

$43,683

0

 

Acquisitions and Major Repairs

$0

($116,483)

0

 

Nonrecurring Acquisitions and Major Repairs

$0

($25,000)

0

 

Nonrecurring Carry Forwards for computer consulting services

$0

$4,159

0

 

Rent in State-owned Buildings

$0

$27,267

0

 

Maintenance of State-owned Buildings

$0

$235

0

 

UPS Fees

$0

$5,351

0

 

Salary Base Adjustment

$0

($70,424)

0

Attrition Adjustment

$0

$366

0

 

Civil Service Fees

$0

$12,384

0

Other Adjustments for Data Circuits due to an increase in monthly charges by OTM

$0

$7,000

0

 

 Other Adjustment for an increase in Other Compensation in wages for student workers

$0

$20,000

0

 

Other Adjustments due to an increase in General Counsel Contract Services

$0

$30,776

1

 

New and Expanded Adjustments for an Administrative Specialist 1 position to work on the self-insured provider activities

$0

$30,776

1

 

New and Expanded Adjustments for an Administrative Specialist 1 position to work on records management activities

         

$0

$1,350,176

29

 

TOTAL RECOMMENDED

 

 

 

 

 

$0

($4,407)

2

 

DIFFERENCE (TOTAL RECOMMENDED AND EXISTING OPERATING BUDGET)

The total means of financing for this program is recommended at 99.6% of the existing operating budget. It represents 90.9% of the total request ($1,484,418) for this program. The significant increases reflected in this recommendation include funding for two new positions and changes assessed by OTM on data circuit monthly charges.

PROFESSIONAL SERVICES

$69,900

 

Management Consulting for actuarial study done once a year to correctly generate a rate filing

$98,182

 

Legal Services for services rendered on non-claims related legal matters

 

 

 

$168,082

 

TOTAL PROFESSIONAL SERVICES

OTHER CHARGES

$519

 

Network Services

 

 

 

$519

 

TOTAL OTHER CHARGES

 

Interagency Transfers:

$2,793

 

Department of Civil Service and Office of Uniform Payroll System

$4,159

 

Rent in State-owned Buildings

$27,267

 

Maintenance in State-owned Buildings

$5,039

 

Secretary of State for microfilming and archiving of records

 

 

 

$39,258

 

TOTAL INTERAGENCY TRANSFERS

ACQUISITIONS AND MAJOR REPAIRS

$43,683

 

Replacement of office and computer equipment

 

 

 

$43,683

 

TOTAL ACQUISITIONS AND MAJOR REPAIRS


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