Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF2391 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to insurance; establishing the Minnesota patients' compensation fund to
3	3	1.3 recover certain damages from medical malpractice; creating a board to manage
4	4	1.4 and operate the Minnesota patients' compensation fund; requiring provider
5	5	1.5 participation in the fund; establishing procedures for fund governance and recovery
6	6	1.6 from the fund; requiring a report; authorizing rulemaking; proposing coding for
7	7	1.7 new law as Minnesota Statutes, chapter 62X.
8	8	1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
9	9	1.9 Section 1. [62X.01] DEFINITIONS.
10	10	1.10 Subdivision 1.Scope.As used in this chapter, the following terms have the meanings
11	11	1.11given.
12	12	1.12 Subd. 2.Board."Board" means the Patients' Compensation Board established under
13	13	1.13section 62X.03.
14	14	1.14 Subd. 3.Commissioner."Commissioner" means the commissioner of commerce.
15	15	1.15 Subd. 4.Fund."Fund" means the Minnesota patients' compensation fund established
16	16	1.16under section 62X.02.
17	17	1.17 Subd. 5.Health care provider."Health care provider" has the meaning given in section
18	18	1.18145B.02. Health care provider does not include a person, facility, organization, or corporation
19	19	1.19that relies on spiritual or divine intervention as the only means of care or treatment.
20	20	1.20 Subd. 6.Insurer."Insurer" means any insurance company, as defined in section 60A.02,
21	21	1.21that writes medical malpractice insurance in Minnesota.
22	22	1.22 Subd. 7.Medical malpractice insurance."Medical malpractice insurance" means
23	23	1.23insurance coverage against the insured's legal liability for loss, damage, or expense incident
24	24	1Section 1.
25	25	25-03648 as introduced02/27/25 REVISOR RSI/AC
26	26	SENATE
27	27	STATE OF MINNESOTA
28	28	S.F. No. 2391NINETY-FOURTH SESSION
29	29	(SENATE AUTHORS: MANN)
30	30	OFFICIAL STATUSD-PGDATE
31	31	Introduction and first reading03/10/2025
32	32	Referred to Commerce and Consumer Protection 2.1to a claim arising out of the death or injury of a person as a result of a health care provider's
33	33	2.2negligence or malpractice in rendering a professional health care service.
34	34	2.3 Sec. 2. [62X.02] MINNESOTA PATIENTS' COMPENSATION FUND.
35	35	2.4 Subdivision 1.Minnesota patients' compensation fund account established.The
36	36	2.5Minnesota patients' compensation fund account is created in the special revenue fund in the
37	37	2.6state treasury. Money in the account is appropriated to the commissioner for the purposes
38	38	2.7of this chapter and to administer the account. Membership fees and premium surcharges
39	39	2.8collected under section 62X.05 are credited to the account. Earnings, including interest,
40	40	2.9dividends, and any other earnings arising from assets of the account, are credited to the
41	41	2.10account. Money remaining in the account at the end of a fiscal year does not cancel to the
42	42	2.11general fund, but remains in the account until expended.
43	43	2.12 Subd. 2.Fund obligations.(a) Money in the fund must be used to pay the portion of a
44	44	2.13medical malpractice claim, settlement, or judgment that exceeds the greater of: (1) the
45	45	2.14minimum liability limits set forth under section 62X.07; or (2) the maximum amount for
46	46	2.15which the health care provider is insured with respect to a claim, settlement, or judgment.
47	47	2.16 (b) The fund is liable only to pay claims against a licensed health care provider, and
48	48	2.17against an employee of a licensed health care provider, in compliance with this chapter.
49	49	2.18 (c) The fund is liable for reasonable and necessary expenses incurred to pay claims and
50	50	2.19the fund's administrative expenses.
51	51	2.20 (d) The fund is not liable for damages for injury or death caused by an intentional crime
52	52	2.21committed by a health care provider or an employee of a health care provider, regardless
53	53	2.22of whether the criminal conduct is the basis for a medical malpractice claim.
54	54	2.23 (e) The fund is not liable for punitive damages rendered in a judgment.
55	55	2.24 (f) Except as otherwise provided in this subdivision, the state is not liable for costs,
56	56	2.25expenses, liabilities, judgments, or other obligations of the fund.
57	57	2.26 Subd. 3.Rulemaking authorized.The commissioner may adopt rules necessary to carry
58	58	2.27out the provisions of this chapter.
59	59	2.28 Sec. 3. [62X.03] PATIENTS' COMPENSATION BOARD.
60	60	2.29 Subdivision 1.Patients' Compensation Board established.A Patients' Compensation
61	61	2.30Board is established within the Department of Commerce. The Patients' Compensation
62	62	2Sec. 3.
63	63	25-03648 as introduced02/27/25 REVISOR RSI/AC 3.1Board is composed of the commissioner and nine members appointed by the commissioner.
64	64	3.2The board members appointed by the commissioner must include:
65	65	3.3 (1) one member who is licensed to practice medicine and surgery in Minnesota who is
66	66	3.4a doctor of medicine and who is on a list of nominees submitted to the commissioner by an
67	67	3.5organization representing Minnesota physicians and surgeons;
68	68	3.6 (2) one member who is a doctor of osteopathic medicine and who is on a list of nominees
69	69	3.7submitted to the commissioner by an organization representing Minnesota doctors of
70	70	3.8osteopathic medicine;
71	71	3.9 (3) one member who is a licensed nurse in Minnesota and who is on a list submitted to
72	72	3.10the commissioner by an organization representing Minnesota nurses;
73	73	3.11 (4) one member who is a representative of Minnesota hospitals and who is on a list of
74	74	3.12nominees submitted to the commissioner by an organization representing Minnesota hospitals;
75	75	3.13 (5) two members who are insurance representatives and who are on a list of nominees
76	76	3.14submitted to the commissioner by the insurance industry;
77	77	3.15 (6) two members who are attorneys with expertise in medical malpractice and who are
78	78	3.16on a list of nominees submitted to the commissioner by an organization representing
79	79	3.17Minnesota attorneys; and
80	80	3.18 (7) one member of the general public who is unaffiliated with the insurance or health
81	81	3.19care industries or the medical or legal professions.
82	82	3.20 Subd. 2.Board meetings.The board is created to manage and operate the fund. The
83	83	3.21appointed members serve for a term of six years and until a successor is duly appointed and
84	84	3.22qualified. The board must meet at the call of the commissioner or a majority of the members,
85	85	3.23and must meet at least once a year. A majority of the board members constitutes a quorum
86	86	3.24for the board to conduct business. The affirmative vote by a majority of the members present
87	87	3.25at a duly called meeting, for which reasonable notice was provided and that has achieved
88	88	3.26a quorum, is required to exercise a board function.
89	89	3.27 Subd. 3.Board vacancies.(a) Except as provided under paragraph (b), upon a vacancy
90	90	3.28in the membership of the board, the commissioner must:
91	91	3.29 (1) notify the applicable organization or industry under subdivision 1 that a vacancy
92	92	3.30exists and request a list of three nominations from which to make a replacement appointment;
93	93	3.31and
94	94	3.32 (2) appoint a qualified successor from the provided list.
95	95	3Sec. 3.
96	96	25-03648 as introduced02/27/25 REVISOR RSI/AC 4.1 (b) Upon a vacancy of a member appointed pursuant to subdivision 1, clause (7), the
97	97	4.2commissioner must appoint a qualified successor.
98	98	4.3 Subd. 4.Operation plan required.(a) The board must develop an operation plan to
99	99	4.4efficiently administer the fund in a manner consistent with this chapter. The fund must
100	100	4.5operate pursuant to the operation plan, which must provide for: (1) the economic, fair, and
101	101	4.6nondiscriminatory administration of excess medical malpractice insurance; and (2) the
102	102	4.7prompt and efficient provision of excess medical malpractice insurance.
103	103	4.8 (b) The plan of operations may contain other provisions, including but not limited to:
104	104	4.9(1) assessment of all members for expenses, deficits, losses, commissions, arrangements,
105	105	4.10reasonable underwriting standards, acceptance and cession of reinsurance, and appointment
106	106	4.11of servicing carriers; and (2) procedures to determine the amounts of insurance provided
107	107	4.12by the fund. The operation plan and an amendment to the plan are subject to the
108	108	4.13commissioner's approval. If the board fails to develop an operation plan within a reasonable
109	109	4.14time frame established by the commissioner, the commissioner or the commissioner's
110	110	4.15designee must develop the plan of operation for the fund.
111	111	4.16 Subd. 5.Necessary expenses authorized.The board may appoint employees and provide
112	112	4.17all office space, services, equipment, materials, and supplies, and provide all budgeting,
113	113	4.18personnel, purchasing, and related management functions necessary for the board to exercise
114	114	4.19the powers, duties, and functions imposed or authorized by this chapter.
115	115	4.20 Subd. 6.Technical assistance.The commissioner must:
116	116	4.21 (1) provide technical and administrative assistance to the board with respect to
117	117	4.22administering the fund, upon the board's request; and
118	118	4.23 (2) provide expertise the board may reasonably request with respect to evaluating claims
119	119	4.24or potential claims.
120	120	4.25 Sec. 4. [62X.04] PROVIDER DUTIES.
121	121	4.26 Subdivision 1.Membership required.A health care provider must actively pursue
122	122	4.27membership in the fund.
123	123	4.28 Subd. 2.Payment required.Membership in the fund is contingent upon the participating
124	124	4.29member making timely payment of all membership fees and premium surcharges under
125	125	4.30section 62X.05.
126	126	4Sec. 4.
127	127	25-03648 as introduced02/27/25 REVISOR RSI/AC 5.1 Sec. 5. [62X.05] PAYMENT OBLIGATIONS.
128	128	5.2 Subdivision 1.Membership fees.A health care provider must pay annual membership
129	129	5.3fees on or before the anniversary date of the provider's membership in the fund. The board
130	130	5.4must set the membership fees subject to the commissioner's approval. Membership fees
131	131	5.5may be paid annually or in semiannual or quarterly installments.
132	132	5.6 Subd. 2.Premium surcharge.(a) In addition to the membership fees under subdivision
133	133	5.71, the commissioner must levy an annual premium surcharge on (1) each participating health
134	134	5.8care provider who has obtained a policy that meets the requirements of section 62X.06, and
135	135	5.9(2) each self-insurer.
136	136	5.10 (b) The commissioner must determine the surcharge based upon sound actuarial
137	137	5.11principles, using data obtained from Minnesota experience, if available. The amount of the
138	138	5.12surcharge must be sufficient to pay claims and expenses from the fund. The surcharge may
139	139	5.13differ between individual health care providers.
140	140	5.14 (c) The insurer must collect the surcharge on the same basis as the insurer collects
141	141	5.15premiums from the health care provider. The surcharge with accrued interest must be remitted
142	142	5.16to the fund within 30 days after the date the premiums for medical malpractice insurance
143	143	5.17have been received by the insurer from the health care provider.
144	144	5.18 (d) If the insurer collects the annual premium surcharge but does not remit the annual
145	145	5.19premium surcharge within the time limit specified in paragraph (c), the insurer's certificate
146	146	5.20of authority must be suspended until the annual premium surcharge is paid.
147	147	5.21 Subd. 3.Self-insureds.(a) A self-insured is eligible for membership in the fund upon
148	148	5.22(1) payment of membership fees and premium surcharges, and (2) compliance with other
149	149	5.23board requirements.
150	150	5.24 (b) The commissioner must determine the (1) surcharge for self-insureds, and (2) process
151	151	5.25for self-insureds to remit the surcharge. The amount of the surcharge imposed on self-insureds
152	152	5.26must be in an amount comparable to what a health care provider would be required to pay
153	153	5.27if the provider's surcharge was based upon a medical malpractice insurance policy issued
154	154	5.28by an insurer.
155	155	5.29 Sec. 6. [62X.06] FINANCIAL TRANSPARENCY.
156	156	5.30 Subdivision 1.Books and records.All books, records, and audits of the fund are open
157	157	5.31to the general public for reasonable inspection. This subdivision does not apply to confidential
158	158	5.32claim information.
159	159	5Sec. 6.
160	160	25-03648 as introduced02/27/25 REVISOR RSI/AC 6.1 Subd. 2.Annual state audit.On or before December 31 of each year, the state auditor
161	161	6.2must audit the records of the fund and furnish an audited financial report to all fund members
162	162	6.3and the Department of Commerce.
163	163	6.4 Sec. 7. [62X.07] MEDICAL MALPRACTICE INSURANCE REQUIREMENTS.
164	164	6.5 Subdivision 1.Medical malpractice insurance required.A health care provider must
165	165	6.6maintain a medical malpractice insurance policy issued by an insurer or must qualify as a
166	166	6.7self-insurer. Qualification as a self-insurer is subject to conditions established by the
167	167	6.8commissioner. The commissioner may establish conditions that permit a self-insurer to
168	168	6.9self-insure for claims that are (1) against an employee who is a health care provider, and
169	169	6.10(2) not covered by the fund.
170	170	6.11 Subd. 2.Rulemaking.The commissioner must establish by rule the minimum liability
171	171	6.12limits for a medical malpractice insurance policy that must be maintained by a health care
172	172	6.13provider. The limits may differ between individual health care providers. When determining
173	173	6.14the minimum level of coverage for health care providers, the commissioner must consider
174	174	6.15the health care provider's area of practice, past and prospective risk experience, and any
175	175	6.16other factors the commissioner deems relevant. The commissioner must also consider the
176	176	6.17fund's financial solvency when establishing the minimum liability limits.
177	177	6.18 Subd. 3.Insurer certificate of insurance filing required.Each insurer must, at the
178	178	6.19time and in a form prescribed by the commissioner, file with the commissioner a certificate
179	179	6.20of insurance on behalf of the health care provider upon original issuance and each renewal
180	180	6.21of a medical malpractice insurance policy.
181	181	6.22 Subd. 4.Self-insured provider certificate of insurance filing required.Each
182	182	6.23self-insured health care provider furnishing medical malpractice insurance must, at the time
183	183	6.24and in a form prescribed by the commissioner, file with the commissioner a certificate of
184	184	6.25self-insurance and a separate certificate of insurance for each health care provider covered
185	185	6.26by the self-insured plan.
186	186	6.27 Sec. 8. [62X.08] FILED CLAIMS.
187	187	6.28 Subdivision 1.Recovery from the fund.A person filing a claim may recover from the
188	188	6.29fund only if:
189	189	6.30 (1) the health care provider or the health care provider's employee has coverage under
190	190	6.31the fund;
191	191	6.32 (2) the fund is named as a party in the action; and
192	192	6Sec. 8.
193	193	25-03648 as introduced02/27/25 REVISOR RSI/AC 7.1 (3) the action against the fund is commenced within the same time limitation as the
194	194	7.2action against the health care provider or the health care provider's employee.
195	195	7.3 Subd. 2.Fund's right to defense.If, after reviewing the facts upon which the claim is
196	196	7.4based, the fund determines that there is a reasonable probability that a damages payment
197	197	7.5exceeds the limits provided in section 62X.07, the fund may appear and actively defend the
198	198	7.6fund if the fund is named as a party in an action against a health care provider or a health
199	199	7.7care provider's employee that has coverage under the fund. In an action under this
200	200	7.8subdivision, the fund may retain counsel and pay out of the fund attorney fees and expenses,
201	201	7.9including court costs, incurred to defend the fund. The attorney or law firm retained to
202	202	7.10defend the fund must not be retained or employed by the board to perform legal services
203	203	7.11for the board other than legal services directly connected with the fund. The fund may appeal
204	204	7.12a judgment affecting the fund as provided by law.
205	205	7.13 Subd. 3.Insurer obligation to defend.The insurer or self-insurer providing insurance
206	206	7.14or self-insurance for a health care provider who is also covered by the fund is responsible
207	207	7.15for providing an adequate defense of the fund on a claim filed that may potentially affect
208	208	7.16the fund with respect to the insurance or self-insurance policy. The insurer or self-insurer
209	209	7.17must act in good faith and in a fiduciary relationship with respect to a claim affecting the
210	210	7.18fund. The board must approve a settlement exceeding an amount that may require payment
211	211	7.19by the fund.
212	212	7.20 Subd. 4.Right of recovery.(a) A person who has recovered a final judgment or a
213	213	7.21settlement approved by the board against a health care provider or a health care provider's
214	214	7.22employee that has coverage under the fund may file a claim with the board to recover the
215	215	7.23portion of the judgment or settlement that is in excess of the limits provided under section
216	216	7.2462X.07 or the maximum liability limit for which the health care provider is insured,
217	217	7.25whichever limit is greater.
218	218	7.26 (b) If the fund incurs liability for future payments exceeding $500,000 to a person under
219	219	7.27a single claim as the result of a settlement or judgment, the fund must pay the full medical
220	220	7.28expenses for which the fund is liable each year, plus an amount not to exceed $500,000 per
221	221	7.29year that pays the remaining liability over the person's anticipated lifetime until the liability
222	222	7.30is paid in full. The fund may deduct from payments made under this paragraph the reasonable
223	223	7.31costs incurred that are attributable to the remaining liability, including attorney fees reduced
224	224	7.32to present value. If the remaining liability is not paid before the person dies, the fund must
225	225	7.33pay the remaining liability in a lump sum.
226	226	7Sec. 8.
227	227	25-03648 as introduced02/27/25 REVISOR RSI/AC 8.1 Subd. 5.Fund payment requirements.(a) A payment under this section must be made
228	228	8.2from money collected and paid into the fund and from interest earned on the fund's assets.
229	229	8.3 (b) A claim duly filed against the fund must be paid in the order received and within 90
230	230	8.4days after the date the claim is filed, unless the payment is appealed by the fund or is subject
231	231	8.5to a periodic payment under this section. If the money in the fund is insufficient to pay all
232	232	8.6claims, a claim received after the money is exhausted must be immediately payable the
233	233	8.7following year, in the order in which the claim was received.
234	234	8.8 Subd. 6.Board right of action.The board may bring an action against an insurer,
235	235	8.9self-insurer, or health care provider for failure to act in good faith or a breach of fiduciary
236	236	8.10responsibility.
237	237	8.11 Sec. 9. [62X.09] NOTICE PERIOD FOR INSURANCE POLICY CHANGES.
238	238	8.12 An insurer must not (1) increase the premium upon any renewal or reissuance of a
239	239	8.13medical malpractice insurance policy, or (2) impose a change in deductible, coverage, or
240	240	8.14other policy term that materially alters the policy, unless the insurer mails or delivers to the
241	241	8.15named insured written notice of an increase or change at least 90 days before the policy's
242	242	8.16renewal or anniversary date.
243	243	8Sec. 9.
244	244	25-03648 as introduced02/27/25 REVISOR RSI/AC