The final changes to the Indiana Medical Malpractice Act (Act) put into place by Senate Bill 28 (2016) recently took effect.

Starting July 1, in order to remain qualified under the Act, physicians must now have coverage of at least $500,000 per occurrence and $1.5 million in the annual aggregate. According to the Indiana Department of Insurance (IDOI), those limits must be in place even if it is not yet the policy renewal date. Physicians with questions about whether they have the proper amount of coverage should call their liability insurance agent.

The maximum amount of recoverable damages under the Act also increased on July 1, from $1.65 million to $1.8 million. This means that, for instances of alleged malpractice occurring on or after July 1, the maximum allowable recovery in a malpractice lawsuit is $1.8 million. This is the second phased-in cap increase from the 2016 legislation. The first increase was from $1.25 million to $1.65 million in 2017.

The difference between the underlying coverage limit ($500,000) and the cap limit ($1.8 million) is paid by the Patient’s Compensation Fund (PCF). As previously reported in ISMA Reports, IDOI announced last December that the overall effective surcharge rates for physicians participating in the PCF would decrease by 10.9% on July 1. Hospital surcharge rates also decreased by 12.3% starting July 1.

PCF surcharge rates are paid as part of a health care provider’s liability insurance premium, and the surcharge amount is determined based on the risk associated with a physician’s specialty. Information regarding the current surcharge rates for each specialty class can be found here.