Current through Register Vol. 50, No. 9, September 20, 2024
A. A health care provider shall be deemed to
have demonstrated the financial responsibility requisite to enrollment with the
fund by depositing with the board $125,000, in money or represented by
irrevocable letters of credit, federally insured certificates of deposit, or in
bonds, securities cash values of insurance, or other securities approved by the
executive director of the principal value of not less than $125,000. All money,
certificates of deposit, bonds or securities deposited pursuant to
§507 shall be conditioned only for, dedicated
exclusively to, and held in trust for the benefit and protection of and as
security for the prompt payment of all malpractice claims arising or asserted
against the health care provider.
B. For purposes of §507, upon approval by the
board of an application filed by the group, any group of health care providers
organized to and actually practicing together or otherwise related by
ownership, whether as a corporation, partnership, limited liability partnership
or limited liability company, shall be deemed a single health care provider and
shall not be required to post more than one deposit. Proof of such status may
include a notarized copy of the articles of incorporation, partnership
agreement, articles of organization, joint or consolidated entity tax returns,
or other documents demonstrating the ownership relation among or between the
members of the group, or other evidence which indicates that the members of the
group actually practice together for the purpose of health care delivery.
1. This proof of group status shall be
submitted to the board:
a. with the group's
original application;
b. within 30
days of any change in the group's status, organization, or membership;
and
c. within 10 calendar days of
receipt of a written demand therefor from the board.
2. It shall be insufficient for qualification
under this rule if a group is organized solely or primarily for the purpose of
qualifying for enrollment with the fund.
C.
1 The
following bonds and securities shall be deemed approved by the board for
purposes of the deposit required by §507:
a.
bonds or securities not in default as to principal or interest which are the
direct obligations of, or which are secured or guaranteed as to principal and
interest by full faith and credit of the United States, any state or territory
of the United States, or the District of Columbia;
b. government sponsored AAA rated securities
which carry an implied guarantee from the United States Government;
c. bonds or evidence of indebtedness not in
default as to principal or interest which are the direct obligations of, or
which are secured or guaranteed as to principal and interest by the issuing
body, the state, or political subdivision of this state, or any other state or
territory of the United States or the District of Columbia;
d. the bond of an authorized surety company
engaged in business in the state of Louisiana which has an A.M. Best rating of
A+ VIII or better. In addition, the company should meet the stated minimum
rating criteria for two of the following rating services:
i. Standard and Poor AA;
ii. Duff and Phelps AA;
iii. Moody's Aa2;
e. an unconditional letter of credit with an
automatic renewal provision where the issuing bank carries a commercial paper
rating of P-1 by Moody's and/or an A-1 by Standard and Poor;
f. an escrow account in the name of Patients'
Compensation Fund where the issuing bank carries a commercial paper rating of
P-1 by Moody's and/or an A-1 by Standard and Poor.
2. In addition to the above, a health care
provider may apply to the board for approval of any other security which, if
approved by the board, shall constitute proof of financial
responsibility.
3. In addition to
depositing the money or original instrument evidencing the approved security
with the board, a self-insured health care provider shall be required to
execute a pledge agreement prescribed and supplied by the executive director
and to provide evidence that written notice, stating that the approved security
will be pledged to the board pursuant to the terms of the pledge agreement, has
been given to the issuing body.
D. Money, accounts, certificates of deposit,
or other approved insurance or securities deposited, pledged or assigned to the
board pursuant to
§507 shall not be assigned, transferred,
sold, mortgaged, pledged, hypothecated or otherwise encumbered by the health
care provider nor shall any such deposit, account, or certificate of deposit be
subject to writ of attachment, sequestration, or execution except pursuant to a
final judgment or court-approved settlement issued or made in connection with
and arising out of a malpractice claim against the health care
provider.
E.
1. To maintain financial responsibility for
continuing enrollment or qualification with the fund, a self-insured health
care provider shall at all times maintain the unimpaired principal value of the
deposit provided for by
§507 at not less than $125,000. The value
of the health care provider's deposit shall be deemed impaired when any portion
is seized or released pursuant to judicial process.
2. In the event that a self-insured health
care provider's deposit provided for by
§507 becomes impaired, the executive
director shall give written notice of such impairment to the self-insured
health care provider, and the self-insured health care provider shall, unless a
longer period is provided for by the board, have five days from receipt of such
notice to make such additional deposit as will restore the minimum deposit
value prescribed by
§507. A self-insured
health care provider's enrollment with the fund shall terminate on and as of
the later of the last day set by these rules or, if applicable, by the board,
if the self-insured health care provider has not on or prior to such date
restored the minimum deposit value prescribed by
§507 In the case of multiple self-insured
health care providers approved by the board to post one deposit, as set forth
in §507 B, the
enrollment with the fund of each member of the group or each related entity
shall terminate on and as of the last day set by these rules or, if applicable,
by the board, if the self-insured health care provider has not on or prior to
such date restored the minimum deposit value prescribed by
§507
F. A self-insured health care provider shall,
within 120 days of receiving notice of a request for review of a malpractice
claim, submit a report to the executive director of the anticipated exposure to
the fund and the self-insured health care provider and containing sufficient
details supporting the anticipated exposure. In addition, said self-insured
heath care provider shall provide updates to the executive director when
significant changes in anticipated exposure occur.
G. A self-insured health care provider who
evidences financial responsibility pursuant to
§507 may, upon 45 days prior written
notice to the executive director, withdraw any portion of the deposit
prescribed by
§507 provided that, following such
withdrawal, the value of the deposit shall not be impaired.
H.
1. A
self-insured health care provider who has evidenced financial responsibility
pursuant to
§507 may withdraw the deposit prescribed
by §507 upon
authorization of the executive director. The security furnished as proof of
financial responsibility, or a substitution which has been approved by the
board, shall remain on deposit and pledged to the board during the term of the
health care provider's enrollment as a self-insured health care provider with
the fund and for the longer of a three-year period following termination of
such enrollment or as long as any medical malpractice claim is pending, whether
with the board or in a court of competent jurisdiction. After this time period,
authorization may be given when the health care provider files with the
executive director, not less than 30 days prior to the date such withdrawal is
to be effected, a certificate signed by the health care provider, certifying:
a. the date the health care provider
terminated enrollment with the fund as a self-insured health care
provider;
b. that there are no
medical malpractice claims pending with the board or in a court of competent
jurisdiction;
c. that there are no
unpaid final judgments or settlements against or made by the health care
provider in connection with or arising out of a malpractice claim;
and
d. that there are no unasserted
medical malpractice claims which are probable of assertion against the health
care provider.
2.
Effective as of the date on which a self-insured health care provider's deposit
is withdrawn pursuant to §507, the health care provider's enrollment and
qualification with the fund shall be terminated.
I. In the event that a health care provider's
deposit becomes impaired, he shall have 30 days to make such additional deposit
as will restore the minimum deposit value prescribed by
§507. A health care
provider's enrollment and qualification with the fund for all claims filed
against the healthcare provider shall terminate on and as of the last day set
by these Rules if the health care provider has not on, or prior to such date,
restored the minimum deposit value prescribed by
§507 In the case of multiple health care
providers, as set forth in
§507 B, the enrollment and qualification
with the fund of each member of the group or each related entity for all claims
filed against any or all of the members of the group or related entity shall
terminate on and as of the last day set by these rules if the minimum deposit
value prescribed by
§507 has not been restored on or prior to
such date.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
40:1299.44(D)(3).
