Patient's Compensation Funds

Also called "excess recovery funds," are state-operated programs that afford excess insurance coverage for health care providers, including doctors, hospitals, dentists, and some allied health care professionals. Such programs cap a defendant health care provider's per claim exposure at an amount specified in the state's statute. The fund pays any amount of a claim exceeding this threshold. Patient's compensation funds are paid for by an annual surcharge against healthcare providers, generally a percentage of the provider's annual liability premium. Participating health care providers are required to maintain liability limits in an amount no less than the threshold at which the excess coverage applies.