Wisconsin doctors sue to stop "raid" on state's medical liability fund

The medical society says the move amounts to an unlawful tax on doctors. The governor says it's legal.

By Amy Lynn Sorrel, AMNews staff. Nov. 19, 2007.

Wisconsin physicians are challenging what they call an illegal $200 million plunder of the state's medical liability compensation fund to balance the state budget and pay for health care initiatives.

The Wisconsin Medical Society sued the state on Oct. 29, just days after Gov. Jim Doyle signed a two-year budget that transfers money from the Injured Patients and Families Compensation Fund to finance Medicaid programs and expand assistance to uninsured families. The state is set to withdraw $71.5 million from the fund in 2007-08 and $128.5 million in 2008-09.

Most doctors, hospitals and other health care professionals are required to pay into the pool, which covers medical liability claims above their minimum $1 million policy coverage. The compensation fund was established in 1975 to help make medical liability insurance affordable, and physicians credit it with stabilizing Wisconsin's medical liability climate.

Dipping into the fund amounts to an unlawful tax on doctors and a breach of fiduciary duty to the physicians and patients it was created to protect, the medical society said in its lawsuit. Doctors want the governor to put the money back where it belongs and are asking the court to permanently block the transfer, which siphons off nearly a quarter of the fund's assets -- which were $737 million as of June 30, 2006, according to a March 2007 state audit.

"This fund is to compensate patients and their families who've suffered from medical negligence -- not to put a Band-Aid on the state's fiscal problems," said WMS CEO and Executive Vice President Susan L. Turney, MD.