Wisconsin, like some other states, has a medical malpractice fund (the Injured Patients and Families Compensation Fund) to pay for medical malpractice claims that exceed the $1 million paid by private malpractice insurance. Under state law, physicians and hospitals are required to contribute to the fund. Clinicians pay between $1,240 and $7,438 each year, based on risk factors (e.g., surgeons pay more than general practitioners). Rates had been declining in the early 2000’s, until 2005, when the state Supreme Court decided that a cap on non-economic damages in medical malpractice cases was unconstitutional. The following year, rates increased 25%.

In the past two fiscal years, the fund made its largest claim payments ($65.7 million last fiscal year, and $50.5 million the previous year).

The cause of the fund’s negative net assets was a joint decision by Governor Jim Doyle and the state legislature in 2007 to pull $200 million from the fund to help balance the state budget. Doyle defended his decision, saying “When you consider what the options were — major cuts to medical providers in the state, cuts to doctors and cuts to hospitals—I think the Legislature made the right decision.” However, an audit found that the fund had an estimated $109 million less in assets than its projected liabilities. In April, the state Supreme Court was expected to hear arguments in a lawsuit filed by the Wisconsin Medical Society claiming that the raid on the malpractice fund was improper. “The fact that the fund no longer has enough money to pay projected claims is in part due to a breach of the public trust, erodes confidence in a system designed to protect the interests of injured patients and their families and undermines the integrity of Wisconsin’s medical liability climate,” said George Lange, MD, FACP, Chair of the Wisconsin Medical Society’s Board of Directors.