Did a psychologist's Louisiana LLC need its own malpractice surcharge to join the patient compensation fund?

Plain-English summary

Counsel to Louisiana's Patient's Compensation Fund Oversight Board asked whether a psychologist's solely owned LLC could be a qualified health care provider under the Medical Malpractice Act and whether it had to pay a surcharge in addition to the psychologist's. In 2000, the attorney general's office said the LLC could qualify if the board found it fit the statutory definition and it furnished compliant malpractice insurance proof.

The office then applied R.S. 40:1299.45's concurrent qualification rule. If the owner was eligible and qualified under the Act and provided health care on behalf of the LLC, the LLC could be deemed concurrently qualified without an additional surcharge. The opinion was conditional; sole ownership by a psychologist did not by itself complete every qualification step.

Currency note

This opinion was issued in 2000. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Psychologists at the time

The opinion required the owner to be a qualified health care provider and to provide health care on behalf of the LLC for the no-extra-surcharge rule to apply.

Health care LLCs at the time

The office said the LLC had to fall within the Act's provider definition as determined by the oversight board and furnish proof of malpractice coverage meeting statutory requirements. It addressed the surcharge exception only after those conditions.

Fund oversight officials at the time

The opinion recognized the board's role in determining and reporting whether a provider met the Act's qualification requirements. Its answer identified the statutory routes by which the LLC could fit the provider definition.

Common questions

Q: Was the psychologist's LLC automatically qualified because the owner was qualified?
A: No. The opinion required an eligible LLC, compliant insurance proof, and qualifying care by the owner on the LLC's behalf.

Q: Could the LLC avoid paying a second surcharge?
A: Yes, if the psychologist was qualified and provided health care for the LLC under the conditions in R.S. 40:1299.45.

Q: Did the opinion say who assessed the LLC's provider status?
A: It identified the Patient's Compensation Fund Oversight Board as responsible for determining whether a provider met the Act's requirements.

Background and statutory framework

The requester described an LLC formed by a qualified psychologist for psycho-educational videos and a website. The office examined R.S. 40:1299.41's provider definition, R.S. 40:1299.42's insurance and surcharge requirements, and R.S. 40:1299.45's concurrent qualification rule. It framed eligibility and surcharge relief as conditional on the actual statutory facts.

Citations and references

• R.S. 40:1299.41(A)(1) (health care provider definition)
• R.S. 40:1299.42 (qualification requirements)
• R.S. 40:1299.45 (concurrent qualification without added surcharge)

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/00-0410

Original opinion text

December 5, 2000
OPINION NUMBER 00-410

54-A
Insurance-Medical Malpractice
87
Physicians and Surgeons

R.S. 40:1299.41, 1299.42 and 1299.45
Mr. David A. Woolridge, Jr.
If a limited liability company is owned by a psychologist who is a
Attorney at Law
qualified health care provider under the Louisiana Medical
8440 Jefferson Highway, Suite 301 Malpractice Act, and if the limited liability corporation provides proof of malpractice insurance, it also constitutes a qualified health care
Baton Rouge, LA 70809-7652
provider which, by statute, is exempt from paying an additional
surcharge.
Dear Mr. Woolridge:

You have requested an opinion of the Attorney General, in your capacity as legal advisor to the Louisiana Patient’s Compensation Fund Oversight Board (Board) which, under the Louisiana Medical Malpractice Act (Act), is responsible and has authority for the management, administration, operation and defense of the Patient’s Compensation Fund (Fund). The Board is further authorized to determine and report whether a health care provider has met the requirements enumerated in the Act to be deemed a qualified health care provider thereunder.

You first ask whether a Louisiana limited liability company (LLC), solely owned by a psychologist who is a qualified health care provider under the Act, is also eligible to be a qualified health care provider. If eligible, you next ask whether the LLC would be required to pay an additional surcharge (i.e., in addition to the surcharge paid by the owner/psychologist) before being deemed a qualified health care provider. You state that the purpose for the LLC is to produce self-help video tapes and a web site for psycho-educational purposes.

In answer to your question, we refer you to the definitional provisions of R.S. 40:1299.41(A)(1) and (9). They provide, in pertinent part, the following:

(1) “Health care provider” means, a person, partnership, limited liability partnership, limited liability company, corporation, facility, or institution licensed by this state to provide health care or professional services as a physician, hospital…psychologist…or any professional corporation a health care provider is authorized to form…or any partnership, limited liability partnership, limited liability company, or corporation who’s business is conducted principally by health care providers….

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Opinion No. 00-410
Mr. David Woolridge, Jr.
Page: -2-

(9) “Health care” means any act, or treatment performed of furnished, or which should have been performed or furnished, by any health care provider for, to or on behalf or a patient during the patient’s medical care, treatment or confinement.

Based on the above provisions, the LLC would appear to be eligible as a qualified health care provider should the Board determine that it falls within one or more of the following:

(1) a limited liability company licensed by this State to provide health care or professional services as one of the entities enumerated in Section 1299.41(A)(1) (e.g., psychologist);

(2) a professional corporation that a health care provider is authorized to form under Title 12; and/or;

(3) a limited liability company who’s business is conducted principally by health care providers.

However, it must also meet the requirements of R.S. 40:1299.42 which provides, in pertinent part, the following:

A. To be qualified under the provisions of this Part, a health care provider shall:

(1) Cause to be filed with the board, proof of financial responsibility as provided by Subsection E of this Section.

(2) Pay the surcharge assessed by this Part on all health care providers according to R.S. 40:1299.44.

The proof of financial responsibility referred to above constitutes filing with the Board proof that the health care provider is insured by a policy of malpractice liability insurance in the amount of at least one hundred thousand dollars per claim, with qualification under this Section taking effect and following the same form as the policy of malpractice liability insurance of the health care provider.

If the LLC is able to furnish a certificate of insurance that complies with law and provides malpractice coverage for the LLC, it would appear that it meets the first requirement for qualification under Section 1299.42(A)(1). The sole question remaining is whether the LLC is required to pay an additional surcharge to satisfy the requirements of Section 1299.42(A)(2).

We believe that Section 1299.45(A)(2) is also relevant to this issue. It provides the following:

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Opinion No. 00-410
Mr. David Woolridge, Jr.
Page: -3-

(A) (2) When, and during the period that each shareholder, partner, member, agent, officer, or employee of a corporation, partnership, limited liability partnership, or limited liability company, who is eligible for qualification as a health care provider under this Part, and who is providing health care on behalf of such corporation, partnership, or limited liability company, is qualified as a health care provider under the provisions of R.S. 40:1299.42(A), such corporation, partnership, limited liability partnership, or limited liability company shall, without the payment of an additional surcharge, be deemed concurrently, qualified and enrolled as a health care provider under this Part. (Emphasis added.)

Based on the facts presented in your request, as well as the statutory provisions discussed above and applicable thereto, we are of the opinion that, if the psychologist/owner is (1) eligible for qualification as a health care provider under the Act (2) providing health care on behalf of the LLC and (3) qualified as a health care provider under the provisions of Section 40:1299.42(A), then the LLC can be deemed concurrently qualified and enrolled as a health care provider without the payment of an additional surcharge.

Trusting this adequately responds to your inquiries, I am

Very truly yours,

RICHARD P. IEYOUB
Attorney General

By:
ROBERT E. HARROUN, III
Assistant Attorney General

RPI/REH,3/sfj

Page 4

SYLLABUS
OPINION NUMBER 00-410

54-A Insurance-Medical Malpractice
87 Physicians and Surgeons

R.S. 40:1299.41, 1299.42 and 1299.45

If a limited liability company is owned by a psychologist who is a qualified health care provider under the Louisiana Medical Malpractice Act, and if the limited liability corporation provides proof of malpractice insurance, it also constitutes a qualified health care provider which, by statute, is exempt from paying an additional surcharge.

Mr. David A. Woolridge, Jr.
Attorney at Law
8440 Jefferson Highway, Suite 301
Baton Rouge, LA 70809-7652

DATE RECEIVED:

DATE RELEASED: December 5, 2000

Robert E. Harroun, III
Assistant Attorney General