Could South Carolina’s Patients’ Compensation Fund pay claims contractors and cap excess coverage?

Plain-English summary

The Patients' Compensation Fund asked two questions in March 2001: could it pay contractors from its restricted account, and could it limit liability coverage for providers willing to accept a cap? The informal AG opinion said a claims service appeared to qualify as an administrative expense payable from the Fund. Services unrelated to administration did not. It suggested getting input from the Insurance Department and State Treasurer on that expense question.

The letter then read the payment provisions as setting no maximum for excess claims against covered providers. It concluded that excess coverage for covered physicians had to be unlimited under the statute as written. If the Fund wanted to offer limited coverage, the AG said it should seek legislative authorization.

Currency note

This opinion was issued in 2001. 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.

Historical summary

Fund administrators

The opinion distinguished claims administration from other contracted services. It treated the first as a possible expense of administering the trust Fund and the second as outside that statutory payment authority.

Participating physicians and claimants

The AG read the Fund as paying the portion of a claim or judgment above the specified amounts without a maximum payment cap in the provisions cited. It did not treat a provider's willingness to accept less as statutory authorization for a limited product.

Common questions

Could the Fund pay a claims service from its restricted account?
A: The AG said a claims service appeared to be an administrative expense, which the statute allowed the Fund to pay.

Could it pay for any other service from that account?
A: No. The letter said services unrelated to administration would not be payable from the Fund.

Did the opinion find a statutory cap on excess claims?
A: No. It said the cited provisions set no maximum payment and indicated unlimited excess coverage for covered physicians.

Background and statutory framework

The opinion quoted § 38-79-460 on trust Fund administration and discussed §38-79-420 and Section 38-79-480 on excess claim payment. It noted that provider participation was voluntary but did not find a statutory option for capped coverage.

Citations and references

• The letter said a claims service “would appear to be an administrative expense.”
• It said “No cap is set by these provisions on the maximum payment that may be made.”

Official title

Addressing questions about the Patient’s Compensation Fund. Specifically, whether the Fund can contract for claims or services and use the funds in its restricted account, and whether the Fund must provide unlimited liability coverage to licensed health care providers who consent to limited coverage.

Requester

Ms. Mary Ann West, Interim Executive Director, Patients’ Compensation Fund

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/march-13-2001/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/11/01march-13-west.pdf

Original opinion text

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The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLIE CONDON
ATTORNEY GENERAL

March 13, 2001

I
Ms. Mary Ann West
Interim Executive Director
Patients' Compensation Fund
P.O. Box 210738
Columbia, SC 29221-0738
Dear Ms. West:

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On behalf of the Patients' Compensation Fund, you have requested the advice ohhis Office as to whether the PCF as two matters. They are addressed separately below. Your first question is whether the Fund can contract for claims or other services and use the funds in its "restricted account" for that purpose. Under S.C. Code Ann. § 38-79-460 (1989), the "Fund" is to be held in trust, but "expenses of ... administering the Fund must be paid from the Fund." A claims service would appear to be an administrative expense, but other services not related to administration would not be payable from the Fund. I also suggest that the PCF seek input as to this question from the Insurance Department and the State Treasurer, who holds the Fund (§38-79460). Your next question is whether the Fund must provide unlimited liability coverage to licensed health care providers who consent to limited coverage. The statutory purpose of the PCF is to pay the portion of a claim or judgment "which is in excess of' the specified amounts. §38-79-420 (Supp. 2000). Section 38-79-480 (Supp. 2000) provides that a person who has a judgment against a covered provider may file a claim with the PCF to recover the amount in excess of the specified sums under the terms of this statute. No cap is set by these provisions on the maximum payment that may be made. Although participation in the Fund is not mandatory for providers (§38-79-440

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REMBERT

c ;DENNIS BUIL11NG

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'K_11 a~/-•,</'- ~7h:.

POST OFFICE Box 11549

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COLUMBIA,

s c 29211-1549

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TELEPHONE: 803-734-3970

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FACSIMILE: 803-253-6283

Ms. Mary Ann West
March 13, 2001
Page 2
(1989)), these provisions indicate a legislative intent 1 that excess coverage must be unlimited for covered physicians in order to comply with the provisions for payment of claims. If the PCF wants the option of providing limited coverage, it may wish to seek legislative authorization to do so.

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This letter is an informal opinion. It has been written by the designated Assistant Deputy Attorney General and represents the opinion of the undersigned attorney as to the specific questions asked. It has not, however, been personally reviewed by the Attorney General nor officially published in the manner of a formal opinion. If you have further questions, please let me know.

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1

The "... primary function in interpreting a statute is to ascertain the intention of the legislature." South Carolina Department ofHighwys and Public Transportation v. Dickinson, 288 SC. 134, 341 SE. 2d 134 (1986).