Wis. SC orders $200M returned to injured patients fund

Jessica M. Karmasek Jul. 20, 2010, 4:10pm


MADISON, Wis. (Legal Newsline) - The Wisconsin Medical Society called Tuesday's decision by the Wisconsin Supreme Court overturning the raid on the state's Injured Patients and Families Compensation Fund "a victory."

The medical society represents nearly 12,500 physicians statewide. It filed suit in October 2007 following enactment of legislation that took $200 million from the fund to help balance the state's budget.

"We are extremely gratified with today's Supreme Court ruling because it is a great victory for patients, their families and health care professionals across Wisconsin," President Thomas Luetzow said.

"This ruling sends an important message that the fund is not a piggy bank. The raid was wrong, and justice has been served."

The society appealed a Dane County Circuit Court decision upholding the raid, and the Court of Appeals requested that the Supreme Court accept the case in January. Oral arguments were presented before the Court on April 15.

"The Court's decision reaffirms our position that the fund's assets are not general revenue. These dollars are held in a trust that may only be used for the benefit of injured patients, their families and contributing health care professionals," said Ruth Heitz, the medical society's General Counsel.

The state Supreme Court ruled the raid was unconstitutional and the state must now pay back $200 million plus interest, according to the Wisconsin Law Journal.

In its 5-2 decision, the court overturned the Dane County Circuit Court ruling.

Justice David Prosser wrote that, "health care providers have a constitutionally protected property interest in the fund."

The fund, set up in 1975, is designed to pay judgments above and beyond the state of Wisconsin's $1 million limit on the amount of malpractice insurance health providers must carry.

As recently as three years ago, the fund contained almost $95 million. But two raids of the fund by Michael L. Morgan, secretary of the Department of Administration, cleaned out $200 million from the fund. At the end of the 2009 fiscal year, the fund had a balance of negative-$109 million, according to the law journal.

Starting in 2007, Morgan made transfers of $71.5 million and $128.5 million to the newly created Medical Assistant Trust Fund, or MATF, to help cover costs of Medicaid, prescription drug care for seniors and health insurance for families and children through the Badger Care Plus program.

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