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Patient Compensation Funds

Patient Compensation Funds

Definition

Also called "excess recovery funds," are state-operated programs that afford excess insurance coverage for healthcare providers, including doctors, hospitals, dentists, and some allied healthcare professionals. Such programs cap a defendant healthcare 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 healthcare providers are required to maintain liability limits in an amount no less than the threshold at which the excess coverage applies.

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