Fund Compliance Guidelines for Resident Health Care Providers

Health care providers who have an active license to practice in Kansas are required to maintain a minimum of $500,000/$1,500,000 in basic professional liability coverage. There are very few licensure categories that are exempt from the professional liability insurance requirements. Kansas licensed health care providers are also required to participate in the Health Care Stabilization Fund as a condition of licensure.

The primary insurer is responsible for calculating the provider’s surcharge based on the rating classification code of the provider. The primary insurance carrier collects the provider’s payment for the professional liability insurance coverage and remits the surcharge to the Fund without any reductions for commissions, collection or processing expenses.

Health care providers can obtain coverage through one of approximately 25 primary carriers authorized to write business in Kansas.  If coverage is not available through a primary carrier the provider can apply for coverage offered by the Health Care Provider Insurance Availability Plan.  Providers should contact their agent for information regarding the Plan.

Kansas residents practicing out of state

Health care providers who are legal residents of Kansas and have an active Kansas license, but practice solely in another state, are still required to comply with the Fund. Resident providers are eligible for Fund coverage for out-of-state practice even if they do not render services in Kansas. If you do not wish to maintain Fund compliance or pay the surcharge you should contact the appropriate licensing agency to discuss discontinuing your Kansas professional license. An active license can be easily converted to inactive status and then may be reinstated to active status if the licensee decides he or she wishes to resume practicing in Kansas.

For a number of reasons, Kansas resident health care providers who have an active license to practice in Missouri are required to pay a somewhat higher surcharge to the Fund. If a Kansas resident health care provider is licensed to practice in Missouri as well as Kansas, but is not actually practicing in Missouri, he or she may convert the license to inactive and avoid the additional surcharge requirement.

Non-Resident moving to Kansas

• The required primary coverage of $500,000/$1,500,000 must be obtained from an admitted Kansas carrier.
• Once the provider is a resident of Kansas, the primary carrier will be responsible for enrolling the provider in The Fund.
• Providers should consider obtaining tail coverage for their prior non-Kansas practice exposure.

Inactive resident wishing to reinstate his or her Kansas license

• The required primary coverage of $500,000/$1,500,000 must be obtained from an admitted Kansas carrier.
• The primary carrier will be responsible for enrolling the provider in The Fund.
• The Fund does not provide prior acts coverage for services rendered prior to Fund compliance.

Cancellations, Expirations & Non-renewals

Health care providers should contact their primary insurer if they plan to terminate their basic coverage. The insurer is required by Statute to notify the HCSF 30 days prior to the effective date of any termination initiated by the insurer or within 10 days after the date coverage is terminated at the request of the insured.  The statutory requirement is set forth below:
Pursuant to K.S.A. 40-3402(a)(2): “In the event of termination of basic coverage by cancellation, nonrenewal, expiration or otherwise by either the insurer or named insured, notice of such termination shall be furnished by the insurer to the board of governors, the state agency which licenses, registers or certifies the named insured and the named insured. Such notice shall be provided no less than 30 days prior to the effective date of any termination initiated by the insurer or within 10 days after the date coverage is terminated at the request of the named insured and shall include the name and address of the health care provider or providers for whom basic coverage is terminated and the date basic coverage will cease to be in effect. No basic coverage shall be terminated by cancellation or failure to renew by the insurer unless such insurer provides a notice of termination as required by this subsection.”  These are statutory requirements and cannot be modified nor can exceptions be made by Fund staff or the Board of Governors.

A sample notice of cancellation may be downloaded from the Forms page.

Refunds

Subsection (a)(2) of K.S.A. 40-3402 requires that insurers notify the Board of Governors of cancellation of basic coverage in a timely manner. In the event of late notice of cancellation of basic coverage by an insurer, the Board of Governors will consider the late notice to be beyond the health care provider’s control. In such instances of late notice of cancellation, the Board will calculate the unearned Health Care Stabilization Fund surcharge based on the date the notice of cancellation was received minus 10 days.

A “Request for Refund” form may be downloaded from the Forms page.