HARRISBURG -- The Senate this week approved the Medical Care and Reduction of Error Act, designed to enhance patient safety, reduce medical errors and reduce medical malpractice insurance premiums paid by physicians.

The legislation, an amended version of House Bill 1802, passed by a vote of 42-6. Highlights of the bill include:

Patient Safety

A statewide Patient Safety Authority would collect and evaluate data submitted by health care facilities regarding serious events, incidents, and infrastructure failure. The Authority will advise the facilities on improving patient safety, and make recommendations to the General Assembly. As a result of fewer malpractice claims, the cost to obtain malpractice insurance is expected to drop.

Tort Reform

• The Collateral Source Rule would prohibit claimants from recovering damages for past medical expenses or past lost earnings that were paid or reimbursed by another source prior to trial.

• Periodic Payments would be authorized for future medical and related expenses in excess of $100,000. The payments would be made through an annuity, which would cease if the claimant dies. Periodic payments would be authorized only in cases involving a verdict, not a settlement.

• Reduction to Present Value would require all other expenses, including past medical and related expenses, past and future loss of earnings and non-economic losses to be paid in a lump sum after being reduced to present value. For example, if a claimant’s future earnings total $1 million, the jury would reduce the future earnings award to a current amount that should equal $1 million if invested in a reasonably secure fixed income investment.

• The MedCAT fund would be transferred to the Department of Insurance and renamed the Medical Care Availability and Reduction of Error Fund (MCARE Fund). A Third Party Administrator would administer the fund until it is phased out in 2009.

• Mandatory reductions would lower MCARE premiums 5 percent the first year. Premiums would drop an additional 10 percent in 2003-2004.

Beginning in January 2003, the minimum coverage limit would be reduced from $1.2 million to $1 million.

The unfunded liability in the MCARE fund, estimated at more than $2 billion, would be reduced in part by money from the Auto CAT fund. Beginning January 1, 2004, collections for the Auto CAT fund would be sent to the MCARE fund. Those collections are expected to total approximately $400 million. The unfunded liability would also be reduced by surcharges paid by doctors and health care facilities. Also, 25 percent of any punitive damage awards would go to the MCARE Fund.

The bill was referred to the House Rules Committee, where it was amended to require juries to assign "proportionate liability" to defendants when awards for pain and suffering exceed $1 million, requiring defendants to pay damages in an amount that reflects their share of responsibility for the medical error. The House version also would provide for Periodic Payments for expenses other than medical. The amended bill passed the House 148-51 and was returned to the Senate.

--The Senate concurred unanimously in House amendments to Senate Bill 400, which expands the State Board of Physical Therapists from nine to eleven members and adds the Physician General, or his designee, to the board. The bill permits licensees to apply to the board for a certificate of authorization to practice physical therapy without a physician referral. House amendments give insurers the option to require physical therapists obtain a referral or file an evaluation and treatment plan with the insurer as a precondition of reimbursement. The bill was sent to the Governor.

--The Senate unanimously passed House Bill 1157, which allows tax districts to enter into agreements with adjoining or nearby tax districts for joint collection of taxes. The bill was returned to the House, which voted 199-0 to concur in the Senate’s technical amendments. It awaits the governor’s signature.

--Senate Bill 391, which passed unanimously, repeals the current Pennsylvania Interstate Parole Compact and authorizes the Governor to enter into interstate compacts that contain substantially the same provisions for the interstate supervision of probationers and parolees. The bill will be sent to the House.

--The Senate unanimously approved Senate Bill 1075, which would regulate, license, and require registration for bail bond enforcement agents. The bill is now in the House Judiciary Committee.

--The Senate voted 48-0 to approve House Bill 1948, which would amend the Second Class Township Code to waive existing formal requirements for the sale of township-owned real property to non-profit corporations engaged in community commercial or affordable housing development. The bill has been sent to the governor for his signature.

--Senate Resolution 165, urging the President of the United States to act quickly on the recommendations of the International Trade Commission regarding the domestic steel industry, was unanimously adopted.