NH appeals ruling denying malpractice fund claim

 

Friday, Aug 07,2009, 1:14:13 PM   Click:

CONCORD, NH_New Hampshire has appealed a lower court's decision denying his request for $ 110 million surplus in a fund that guarantees insurance for malpractice.

But officials insisted Wednesday the legislative struggle for access to funds would not create a fiscal crisis. And they said they expected the court to rule on the appeal before deciding what might be needed to fill a gap that is about 1 percent of the budget for two years.

"There is no plan B," said House Finance Chair Marjorie Smith. "There is no reason to have a plan B at this stage."

Last week, Superior Court Judge Kathleen McGuire ruled that the state's claim to the malpractice money is unconstitutional. She said the fund's policyholders have a contractual right to the money.

The state set up the fund, the Medical Malpractice Joint Underwriting Association, in 1975 to fill a gap in the availability of malpractice insurance. The state says policyholders got what they paid for: coverage against malpractice claims.

Lakes Region General Hospital in Laconia and other policyholders said the money is theirs and the state has no right to it. About half the 900 policyholders are doctors. The rest are nurses, physicians' assistants, home care providers, nursing homes, a hospital group and other medical providers.


The state counted on $65 million of the money to help balance the budget in the fiscal year that just ended and used the other $45 million toward spending in the current two-year budget. The state appealed the decision to the state Supreme Court and asked the high court Tuesday to expedite its appeal.

Gov. John Lynch has repeatedly declined to say whether he has a plan to replace the revenue. He insists the state will ultimately prevail in court.

Lynch press secretary Colin Manning said Wednesday the governor continues to believe the fund was created "to provide a service, not a windfall, to doctors."

Lawmakers are continually reviewing state revenues and spending to determine if adjustments are needed in the two-year, $11.5 billion budget, said Smith, D-Durham.

"We're talking about $110 million. That's a lot of money to you or me. But when you look at it in the context of the overall budget, it's nothing," she said.

Her Senate counterpart, Finance Chairman Lou D'Allesandro, said he was confident the state would prevail.

Kevin Fitzgerald, the attorney for the group that sued, said he was studying the appeal to determine if he will file a response with the court.