Dept. of Ins. v. Southeast Volusia Hosp. Dist.

438 So. 2d 815
CourtSupreme Court of Florida
DecidedSeptember 15, 1983
Docket63698, 63699 and 63751
StatusPublished
Cited by94 cases

This text of 438 So. 2d 815 (Dept. of Ins. v. Southeast Volusia Hosp. Dist.) is published on Counsel Stack Legal Research, covering Supreme Court of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dept. of Ins. v. Southeast Volusia Hosp. Dist., 438 So. 2d 815 (Fla. 1983).

Opinion

438 So.2d 815 (1983)

DEPARTMENT OF INSURANCE, State of Florida, et al., Appellants,
v.
SOUTHEAST VOLUSIA HOSPITAL DISTRICT, et al., Appellees.
FLORIDA PATIENT'S COMPENSATION FUND, et al., Appellants,
v.
SOUTHEAST VOLUSIA HOSPITAL DISTRICT, et al., Appellees.

Nos. 63698, 63699 and 63751.

Supreme Court of Florida.

September 15, 1983.
Rehearing Denied November 4, 1983.

*817 David A. Yon, Legal Division, Dept. of Ins., Tallahassee, and Talbot D'Alemberte and Jeffrey B. Crockett of Steel, Hector & Davis, Miami, and Richard B. Collins and Samuel R. Neel, III of Perkins & Collins, Tallahassee, for appellants.

Ben H. Wilkinson, Neil H. Butler and Cathi C. O'Halloran of Pennington, Wilkinson & Dunlap, Tallahassee, Adams, Hill & Fulford, Orlando, Peter J. Winders and Jacob D. Varn of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, Tampa, John D. Buchanan, Jr., of Henry, Buchanan, Mick & English, Tallahassee, Richard B. Adams, Jr. of Adams, Ward, Hunter, Angones & Adams, Miami, and Scott R. McMillen of Mateer, Harbert, Frey, Bechtel & Phalin, Orlando, for appellees.

Robyn Greene of Greene & Cooper, and Rosenblatt, Greene & Arnowitz, Miami, amicus curiae for Michael Rae.

Robert L. Shevin, Jeffrey M. Weissman, Ronald L. Book and Gary S. Phillips of Sparber, Shevin, Rosen, Shapo & Heilbronner, Miami, amicus curiae for Florida Physicians United For Health Cost Reform.

Larry Klein, West Palm Beach, amicus curiae for The Academy of Florida Trial Lawyers.

Bruce Culpepper and F. Townsend Hawkes of Culpepper, Beatty & Turner, Tallahassee, amicus curiae for Florida Medical Malpractice Joint Underwriting Association.

Charles H. Baumberger of Rossman & Baumberger, Miami, amicus curiae for Daisey Lopez.

Robert D. Peltz of Rossman & Baumberger, Miami, amicus curiae for Dade County Trial Lawyers.

ADKINS, Justice.

This cause is before this Court on a direct appeal from a decision of the First District Court of Appeal in Southeast Volusia Hospital District v. State of Florida, Department of Insurance, 432 So.2d 592 (Fla. 1st DCA 1983), which declared section 768.54(3)(c), Florida Statutes (1981), unconstitutional. We have jurisdiction. Art. V, § 3(b)(1), Fla. Const.

Appellants are the Florida Patient's Compensation Fund (Fund) and the Department of Insurance (Department). Appellees are fifty-seven Florida hospitals who were members of the Fund during either Fund year 1977-78, 1978-79, or both. Section 768.54 created the Florida Patient's Compensation Fund. Section 768.54(3)(c) specifies the terms of the Fund's contracts with its members. The Fund, which commenced operation in 1975, is a non-profit entity which provides medical malpractice protection to the physicians and hospitals who join it. The act creating the Fund permits all *818 health care providers, other than hospitals, to become members if they choose to, but hospitals are required to join unless they can demonstrate financial responsibility for malpractice claims. The Fund is financed through base fees paid by its members, additional fees, and assessments.

Section 768.54(3)(c) reads:

(c) Fees and assessments. — Annually, each health care provider, as set forth in subsection (2), electing to comply with paragraph (2)(b) shall pay the fees established under this act, for deposit into the fund, which shall be remitted for deposit in a manner prescribed by the Insurance Commissioner. The limitation of liability provided by the fund shall begin July 1, 1975, and run thereafter on a fiscal-year basis. For the first year of membership, each participating health care provider shall pay a base fee for deposit into the fund in the amount of $1,000 for any individual, or $300 per bed for any hospital. Those entering the fund after the fiscal year has begun shall pay a prorated share of the yearly fees for a prorated membership. The base fee charged after the first year of participation shall be $500 for any individual, or $300 per bed for any hospital. The base fees to be paid by those health care providers defined in subparagraphs (1)(b)5., 6., 7., and 8. shall be established by the fund on an actuarially sound basis. In addition, after the first year of operation, additional fees may be charged but shall be appropriately prorated for the portion of the year for which the health care provider participated in the fund, based on the following considerations:
1. Past and prospective loss and expense experience in different types of practice and in different geographical areas within the state;
2. The prior claims experience of the members covered under the fund; and
3. Risk factors for persons who are retired, semi-retired, or part-time professionals.
Such base fees may be adjusted downward for any fiscal year in which a lesser amount would be adequate and in which the additional fee would not be necessary to maintain the solvency of the fund. Such additional fee shall be based on not more than two geographical areas with three categories of practice and with categories which contemplate separate risk ratings for hospitals, for health maintenance organizations, for ambulatory surgical facilities, and for other medical facilities. Each fiscal year of the fund shall operate independently of preceding fiscal years. Participants shall only be liable for assessments for claims from years during which they were members of the fund; in cases in which a participant is a member of the fund for less than the total fiscal year, a member shall be subject to assessments for that year on a pro rata basis determined by the percentage of participation for the year. The fund shall be maintained at not more than $15,000,000 per fiscal year. Additional fees, assessments, or refunds shall be set by the Insurance Commissioner after consultation with the board of governors of the fund. Nothing contained herein shall be construed as imposing liability for payment of any part of a fund deficit on the Joint Underwriting Association authorized by s. 627.351(7) or its member insurers. If the fund determines that the amount of money in an account for a given fiscal year is in excess of or not sufficient to satisfy the claims made against the account, the fund shall certify the amount of the projected excess or insufficiency to the Insurance Commissioner and request the Insurance Commissioner to levy an assessment against or refund to all participants in the fund for that fiscal year, prorated, based on the number of days of participation during the year in question. The Insurance Commissioner shall order such refund to, or levy such assessment against, such participants in amounts that fairly reflect the classifications prescribed above and are sufficient to obtain the money necessary to meet all claims for said fiscal year. In no case shall any assessment for a particular year against any health care provider, other *819 than those health care providers defined in subparagraphs (1)(b)1., 5., 6., and 7., exceed an amount equal to the fees originally paid by such health care provider for participation in the fund for the year giving rise to such assessment. If any assessments are levied in accordance with this subsection as a result of claims in excess of the limitation of a provider's liability of $500,000 per occurrence as specified in paragraph (2)(b), and such assessments are a result of the liability of certain individuals and entities specified in paragraph (2)(e), only hospitals shall be subject to such assessments.

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