40-3414. Qualification of health care provider or system as self-insurer; cancellation of certificate of self-insurance, grounds; payment of surcharge; Kansas soldiers' home, Kansas veterans'
40-3414
40-3414. Qualification of health care provider or system asself-insurer; cancellation of certificate of self-insurance, grounds; paymentof surcharge; Kansas soldiers' home, Kansas veterans' home and persons engagedin residency training andpersons engaged in a postgraduate training program as self-insurers; healthmaintenance organizations and related groups; private practice foundations andfaculty of university of Kansas medical center.(a) Any health care provider, or any health care system organized and existingunder the laws of this state which owns and operates two or more medical carefacilities licensed by the department of health and environment, whoseaggregate annual insurance premium is or would be $100,000 or more for basiccoverage calculated in accordance with rating procedures approved by thecommissioner pursuant to K.S.A. 40-3413 and amendments thereto, may qualify asa self-insurer by obtaining a certificate of self-insurance from the board ofgovernors. Upon application of any such healthcare provider orhealth caresystem, on a form prescribed by the board of governors,theboard of governors may issue acertificate of self-insurance if the board of governors issatisfied that theapplicant is possessed and will continue to be possessed of ability topay any judgment for which liability exists equal to the amount of basiccoverage required of a health care provider obtained against suchapplicant arising from the applicant's rendering of professionalservices as a health care provider. In making such determination the board ofgovernors shall consider (1) the financialcondition of theapplicant, (2) the procedures adopted and followed by the applicant toprocess and handle claims and potential claims, (3) the amount andliquidity of assets reserved for the settlement of claims or potentialclaims and (4) any other relevant factors. The certificate ofself-insurance may contain reasonable conditions prescribed by the board ofgovernors. Upon notice and a hearing inaccordance with theprovisions ofthe Kansas administrative procedure act, the board ofgovernors may cancel acertificate of self-insurance upon reasonable grounds therefor. Failure to payany judgment for which the self-insurer is liable arising from theself-insurer's rendering of professional services as a health careprovider, the failure to comply with any provision of this act or thefailure to comply with any conditions contained in the certificate ofself-insurance shall be reasonable grounds for the cancellation of suchcertificate of self-insurance. The provisions of this subsection shallnot apply to the Kansas soldiers' home, the Kansas veterans' home or to anyperson who is a self-insurerpursuant to subsection (d) or (e).
(b) Any such health care provider or health care system that holds acertificate of self-insurance shall pay the applicable surcharge set forth insubsection (c) of K.S.A. 40-3402 and amendments thereto.
(c) The Kansas soldiers' home and the Kansas veterans' home shall be self-insurers and shall paythe applicable surcharge set forth in subsection (c) of K.S.A. 40-3402 andamendments thereto.
(d) Persons engaged in residency training as provided in subsections (r)(1)and (2) of K.S.A. 40-3401, and amendments thereto, shall be self-insured by thestate of Kansas for occurrences arising during such training, and such personshall be deemed a self-insurer for the purposes of the health care providerinsurance availability act. Such self-insurance shall be applicable to aperson engaged in residency training only when such person is engaged inmedical activities which do not include extracurricular, extra-institutionalmedical service for which such person receives extra compensation and whichhave not been approved as provided in subsections (r)(1) and (2) of K.S.A.40-3401, and amendments thereto.
(e) (1) A person engaged in a postgraduate training program approved bythe state board of healing arts at a medical care facility or mental healthcenter in this state may be self-insured by such medical care facility ormental health center in accordance with this subsection (e) and inaccordance with such terms and conditions of eligibility therefor as may bespecified by the medical care facility or mental health center and approvedby the board of governors. A person self-insured underthissubsection (e) by a medical care facility or mental health center shall bedeemed a self-insurer for purposes of the health care provider insuranceavailability act. Upon application by a medical care facility or mentalhealth center, on a form prescribed by the board ofgovernors, the board of governors may authorize such medical carefacility or mental healthcenter toself-insure persons engaged in postgraduate training programs approved bythe state board of healing arts at such medical care facility or mentalhealth center if the board of governors issatisfied that the medical carefacility or mental health center is possessed and will continue to bepossessed of ability to pay any judgment for which liability exists equalto the amount of basic coverage required of a health care provider obtainedagainst a person engaged in such a postgraduate training program andarising from such person's rendering of or failure to render professionalservices as a health care provider.
(2) In making such determination the board of governorsshall consider (A)thefinancial condition of the medical care facility or mental health center,(B) the procedures adopted by the medical care facility or mental healthcenter to process and handle claims and potential claims, (C) the amountand liquidity of assets reserved for the settlement of claims or potentialclaims by the medical care facility or mental health center and (D) anyother factors the board of governors deemsrelevant. The board of governors mayspecify such conditions for the approval of an application as the board ofgovernors deems necessary. Upon approval of anapplication, the board of governors shall issue acertificate ofself-insurance to each personengaged in such postgraduate training program at the medical care facilityor mental health center who is self-insured by such medical care facilityor mental health center.
(3) Upon notice and a hearing in accordance with the provisions of theKansas administrative procedure act, the board ofgovernors may cancel, uponreasonable grounds therefor, a certificate of self-insurance issued pursuant tothis subsection (e) or the authority of a medical care facility or mentalhealth center to self-insure persons engaged in such postgraduatetraining programs at the medical care facility or mental health center.Failure of a person engaged in such postgraduate training program to complywith the terms and conditions of eligibility to be self-insured by themedical care facility or mental health center, the failure of a medicalcare facility or mental health center to pay any judgment for which suchmedical care facility or mental health center is liable as self-insurer ofsuch person, the failure to comply with any provisions of the health careprovider insurance availability act or the failure to comply with anyconditions for approval of the application or any conditions contained inthe certificate of self-insurance shall be reasonable grounds forcancellation of such certificate of self-insurance or the authority of amedical care facility or mental health center to self-insure such persons.
(4) A medical care facility or mental health center authorized toself-insure persons engaged in such postgraduate training programs shallpay the applicable surcharge set forth in subsection (c) of K.S.A. 40-3402and amendments thereto on behalf of such persons.
(5) As used in this subsection (e), "medical care facility" does notinclude the university of Kansas medical center or those communityhospitals or medical care facilities described in subsection (r)(2) of K.S.A.40-3401, and amendments thereto.
(f) For the purposes of subsection (a), "health care provider" mayinclude each health care provider in any group of health care providers whopractice as a group to provide physician services only for a healthmaintenance organization, any professional corporations, partnerships ornot-for-profit corporations formed by such group and the health maintenanceorganization itself. The premiums for each such provider, healthmaintenance organization and group corporation or partnership may beaggregated for the purpose of being eligible for and subject to thestatutory requirements for self-insurance as set forth in this section.
(g) The provisions of subsections (a) and (f), relating to healthcare systems, shall not affect the responsibility of individual health careproviders as defined in subsection (f) of K.S.A. 40-3401 and amendmentsthereto or organizations whose premiums are aggregated for purposes ofbeing eligible for self-insurance from individually meeting therequirements imposed by K.S.A. 40-3402 and amendments thereto withrespect to the ability to respond to injury or damages to the extentspecified therein and K.S.A. 40-3404 and amendments thereto with respectto the payment of the health care stabilization fund surcharge.
(h) Each private practice corporation or foundation and their full-timephysician faculty employed by the university of Kansas medical center andeach nonprofit corporation organized to administer the graduate medicaleducation programs of community hospitals or medical care facilities affiliatedwith the university of Kansas school of medicine shall bedeemed a self-insurer for the purposes of the health care provider insuranceavailability act. The private practice corporation or foundation of whichthe full-time physician faculty is a member and each nonprofit corporationorganized to administer the graduate medical education programs of communityhospitals or medical care facilities affiliated with the university of Kansasschool of medicine shall pay the applicablesurcharge set forth in subsection (a) of K.S.A. 40-3404, and amendmentsthereto, on behalf of the private practice corporation or foundation andtheir full-time physician faculty employed by the university of Kansas medicalcenter or on behalf of a nonprofit corporation organized to administer thegraduate medical education programs of community hospitals or medical carefacilities affiliated with the university of Kansas school of medicine.
(i) (1) Subject to the provisions of paragraph (4), for the purposes of thehealth care provider insurance availability act, each nonprofit corporationorganized to administer the graduate medical education programs of communityhospitals or medical care facilities affiliated with the university of Kansasschool of medicine shall be deemed to have been a health care provider asdefined in K.S.A. 40-3401, and amendments thereto, from and after July 1, 1997.
(2) Subject to the provisions of paragraph (4), for the purposes of thehealth care provider insurance availability act, each nonprofit corporationorganized to administer the graduate medical education programs of communityhospitals or medical care facilities affiliated with the university of Kansasschool of medicine shall be deemed to have been a self insurer within themeaning of subsection (h) of this section, and amendments thereto, from andafter July 1, 1997.
(3) Subject to the provisions of paragraph (4), for the purposes of thehealth care provider insurance availability act, the election of fund coveragelimits for each nonprofit corporation organized to administer the graduatemedical education programs of community hospitals or medical care facilitiesaffiliated with the university of Kansas school of medicine shall be deemed tohave been effective at the highest option, as provided in subsection (l) ofK.S.A. 40-3403, and amendments thereto, from and after July 1, 1997.
(4) No nonprofit corporation organized to administer the graduate medicaleducation programs of community hospitals or medical care facilities affiliatedwith the university of Kansas school of medicine shall be required to pay tothe fund any annual premium surcharge for any period prior to the effectivedate of this act. Any annual premium surcharge for the period commencing on theeffective date of this act and ending on June 30, 2001, shall be prorated.
History: L. 1976, ch. 231, § 14;L. 1981, ch. 199, § 2;L. 1982, ch. 209, § 1;L. 1984, ch. 177, § 2;L. 1985, ch. 166, § 4;L. 1986, ch. 184, § 5;L. 1988, ch. 155, § 9;L. 1988, ch. 356, § 125;L. 1989, ch. 143, § 4;L. 1990, ch. 175, § 5;L. 1995, ch. 145, § 6;L. 1997, ch. 118, § 10;L. 2001, ch. 204, § 3; May 31.