Wisconsin Medical Malpractice Fund Has Surplus of Nearly $800 Million

By Floyd Arthur

Wisconsin’s state-run medical malpractice fund has a surplus of $783 million, nearly double the $403 million recommended by the Office of the Commissioner of Insurance, the Wisconsin State Journal reports. The surplus was revealed after state regulators audited the fund last month.

The Injured Patients and Families Compensation Fund  is supported by payments from doctors and hospitals, and is responsible for pay-outs of large medical malpractice awards in the state. However, large awards are rare in Wisconsin, which ranked 49th among states in medical malpractice payouts per capita between 2007 and 2014.

Wisconsin’s medical malpractice laws are some of the most draconian in the United States. Injured patients treated by University of Wisconsin doctors, for example, are limited to total economic and noneconomic damages of $250,000. Pain and suffering awards against other doctors and hospitals are capped at $750,000. There is no cap on economic awards.

Additionally, Wisconsin is the only state in the United States that prohibits parents of adult children from suing a medical provider if their child dies as a result of a medical error. Adult children are similarly prohibited from suing on behalf of a parent who has died. In other cases, damages for wrongful death are capped at $500,000 for a child and $350,000 for an adult.

Attorneys claim these restrictions prevent patients and families from recovering damages for medical injuries and disincentivize providers from negotiating settlements in malpractice claims. “There are fewer and fewer people every year recovering compensation and getting into the fund money,” said Mike End, former president of the Wisconsin Association for Justice, a trial lawyers group.

End, who is a medical malpractice attorney in Milwaukee, points to the fact that the fund’s $1.2 billion in assets exceeds by $345 million the total malpractice awards paid from the fund since it was established in 1975. “That just blows me away,” he said.

However, Mark Grapentine, a Wisconsin Medical Society lobbyist, says the fund must be large enough to cover unexpected claims and future awards.

Payments Into Compensation Fund Too High, Auditors Say

In response to the audit, state regulators asked the Office of the Insurance Commissioner to take steps to bring the surplus down to between $86.4 million and $376.6 million, the recommended amount.

Payments into the fund were already reduced in 2014. However, most doctors still pay fees of between $1,311 to $8,653 per year. “There should be more decreases in the annual fees,” Grapentine said. “But you can’t make it up in one year, nor should you try to.”.

According to Wisconsin Insurance Commissioner Ted Nickel, the fees will be reduced by an additional 30 percent in 2016-2017.