Brief ⁽¹⁾

SB 366, as amended, concerns the Health Care Insurance Availability Act, professional liability statutes for health care providers. Retroactive to July 1, 1997, the bill:

• Adds nonprofit corporations organized to administer the graduate medical education programs of community hospitals or medical care facilities affiliated with the University of Kansas School of Medicine to the definition of "health care provider";
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• Specifies that such nonprofit corporations are deemed self-insurers for purposes of the Health Care Insurance Availability Act;
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• Provides liability coverage from the Health Care Stabilization Fund for the nonprofit corporations at the highest option available ($800,000/$2.4 million); and
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• Prohibits the collection of any surcharge for any period prior to the effective date of this act.
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Upon the effective date of the act, the nonprofit corporations:

• Will pay $40,000 into the Graduate Medical Education Administration Reserve Fund for the purpose of paying reasonable and necessary defense costs and judgments or settlements on behalf of the nonprofit corporations, and will maintain that balance as of July 1 of any year; and
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• Will pay the applicable surcharge levied annually by the Health Care Stabilization Fund Board of Governors based for nonprofit corporations on an assumed aggregate premium of $10,000. The surcharge will be apportioned among all such nonprofit corporations.
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Background

SB 366, as amended, was requested by the Wichita Center for Graduate Medical Education (WCGME), a nonprofit, tax-exempt corporation which was developed to provide centralized employment and administrative services for all resident physicians training in university-sponsored residency programs in Wichita. The spokespersons for the Center explained that the Center has been named in three medical malpractice cases. When the cases were filed, the Center believed it was covered under the Health Care Stabilization Fund and would be provided defense costs and coverage of any settlement or judgment. Recently, the Center has been notified that it is not covered by the Fund. The bill allows the Center access to professional liability coverage through the Fund. Commercial companies apparently will not cover the Center without also covering the employed residents.

The bill is supported by the Salina Health Education Foundation which administers the Smoky Hill Family Practice residency program and the Kansas Medical Education Foundation which administers a family practice residency program in Topeka sponsored by Stormont-Vail Regional Medical Center and St. Francis Medical Center. Both programs also are affiliated with the University of Kansas School of Medicine.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi