Current through Register Vol. 50, No. 9, September 20, 2024
A. The shareholders of a professional
corporation, the partners of a professional partnership, a solo practitioner, a
health care provider institution, or a group of such institutions may
demonstrate the financial responsibility requisite to enrollment with the fund
by the establishment and maintenance of a financially and actuarially sound
self-insurance trust, approved by the executive director, and making and
maintaining, on behalf of such trust as an entity, a deposit of not less than
$125,000 in money or represented by irrevocable letters of credit,
federally-insured certificates of deposit, or in bonds or securities approved
by the executive director, of the principal value of not less than
$125,000.
B.
1. The following bonds and securities shall
be deemed approved by the board for purposes of the deposit required by §509:
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 Patient's
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 self-insurance
trust 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 trust 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.
C. Money, accounts, certificates of deposit,
or other approved insurance or securities deposited, pledged or assigned to the
board pursuant to
§509 shall not be assigned, transferred,
sold, mortgaged, pledged, hypothecated or otherwise encumbered by the
self-insurance trust 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 a member of the
self-insurance trust.
D.
1. To maintain financial responsibility for
continuing enrollment or qualification with the fund, a self-insurance trust
shall at all times maintain the unimpaired principal value of the deposit
provided for by
§509 at not less than $125,000. The value
of the self-insurance trust's deposit shall be deemed impaired when any portion
is seized or released pursuant to judicial process.
2. In the event that a self-insurance trust's
deposit provided for by
§509 becomes impaired, the executive
director shall give written notice of such impairment to the self-insurance
trust, and the self-insurance trust shall, unless a longer period is provided
by the board, have 30 days from receipt of such notice to make such additional
deposit as will restore the minimum deposit value prescribed by
§509 The enrollment of each member of a
self-insurance trust with the fund shall terminate on and as of the last day
set by these rules or, if applicable, by the board, if the self-insurance trust
has not on or prior to such date restored the minimum deposit value prescribed
by §509
E. A self-insurance trust shall,
within 120 days of one of its members receiving notice of a claim, submit a
report of the anticipated exposure to the fund and the self-insurance trust and
containing sufficient details supporting the anticipated exposure. In addition,
the self-insurance trust shall provide updates to the executive director when
significant changes in anticipated exposure occur.
F. A self-insurance trust approved by the
executive director as evidence of financial responsibility shall be treated the
same as insurance, and each health care provider covered by such a
self-insurance trust shall be considered to have evidenced financial
responsibility as provided in
§505
G. A self-insurance trust which evidences
financial responsibility pursuant to
§509 may, upon 45 days prior written
notice to the executive director, withdraw any portion of the deposit
prescribed by
§509 provided that following such
withdrawal, the value of the deposit shall not be impaired.
H.
1. A
self-insurance trust which has evidenced financial responsibility pursuant to
§509 may withdraw the deposit prescribed
by §509 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
trust's members' enrollments as self-insured health care providers 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 against the
trust or any of its members, whether with the board or in a court of competent
jurisdiction. After this time period, authorization may be given when the trust
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 trustee of the trust,
certifying:
a. the date that the last
remaining member(s) of the trust terminated enrollment with the fund as
self-insured health care provider(s);
b. that there are no medical malpractice
claims against the trust or any of its members 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
trust or any of its members 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 trust or any of its members.
2. Effective as of the date on which a
self-insurance trust's deposit is withdrawn pursuant to §509, the trust
members' enrollment and qualification with the fund shall be
terminated.
I.
Application to the executive director for approval of a self-insurance trust as
evidence of financial responsibility shall include:
1. identification of, by name, address, and
category of each practitioner or each shareholder of an applicant professional
corporation, each partner of an applicant professional partnership or each
health care institution participating in the self-insurance trust;
2. a certified copy of the self-insurance
trust instrument and any related organizational or operational
documents;
J. The
executive director shall approve of a self-insurance trust if such trust meets
the requirements of the Health Care Financing Administration's (HCFA)
Medicare Provider Reimbursement Manual, Part 1, §2162. 7,
related to self-insurance trusts. Those standards shall not, however, be
exclusive and the executive director may approve such other qualified
self-insurance trusts as appropriate, although they do not meet those
requirements.
K. Each
self-insurance trust approved by the executive director as evidence of
financial responsibility pursuant to
§509 shall be subject to audit or
examination upon reasonable prior notice to the trustees thereof. Upon request
by the executive director, each such trust shall, within 60 days of the
conclusion of its fiscal year, file with the executive director financial
statements setting forth the financial condition of the trust at the last day
of the preceding year and for the year then ended, audited or reviewed by an
independent certified public accountant.
L. Each self-insurance trust approved by the
executive director as evidence of financial responsibility pursuant to
§509 shall give written notice to the
executive director within 10 days of any date that:
1. the trust instrument or other
organizational or operational documents are amended; or
2. any participating member of the trust
ceases to be a member or any new member begins participation with the
trust
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
40:1299.44(D)(3).
