The measure brought on by soaring premium costs, "should go a long way toward improving the environment for writing medical malpractice insurance in Pennsylvania," according to a statement from the Alliance of American Insurers, based in Downers Grove, Ill.

The bill that Gov. Schweiker intends to sign shortens the statute of limitations for bringing lawsuits, provides tort reform and implements patient safety requirements.

In enacting the reform measure, legislators agreed to take $370 million over 10 years from a surplus in an automobile insurance fund and use it to offset premiums paid by doctors and hospitals to the Medical Professional Liability Catastrophe Loss Fund.

The CAT fund serves as a source of coverage for health care professionals beyond that provided by their primary insurance carrier allowing them to buy a second layer of protection. The legislation will move the CAT fund to the department of insurance where it will become the MedCARE fund, which will be handled by a third party administrator.

Neil Malady, Alliance Mid-Atlantic regional manager, said the measure is "a good step toward alleviating the medical malpractice crisis in Pennsylvania."

He said while it does not include the tort reform provisions in the original House version, it does "give some relief by shortening the statute of repose [the absolute deadline for bringing suit] and requiring periodic payment of future medical costs."

The new law would establish a seven-year statute of repose, meaning that after seven years no suit could be brought, and would "require periodic payment of future medical damages over $100,000 through annuities, thereby reducing liabilities," noted Sarah White, commercial lines policy manager for the Alliance.

Ms. White said parts of the bill that strengthen the state's ability to investigate allegations of doctor misconduct or negligence will help improve future risks and "improve patient safety by helping to weed out inferior health care providers."

One provision would create a Patient Safety Authority funded by a Patient Safety Trust Fund. The authority would be involved with monitoring healthcare quality and taking reports of irregularities from doctors and nurses. The measure would also require all hospitals to maintain patient safety officers who would report to the authority.

She said other states that are experiencing problems with their medical malpractice markets, such as Arizona, Mississippi, Nevada, New Jersey and West Virginia, "might want to consider the original version of the Pennsylvania bill as a guide."

The Alliance represents 326 property-casualty insurance companies.