Friday, June 26, 2009

Back To The Drawing Board

Even though the New Hampshire House and Senate narrowly passed the bloated $11.6 billion biennial state budget, the lawmakers may have to go back to square one because of a lawsuit that charges the state illegally appropritaed $110 million from an insurance fund used to provide malpractice insurance to physicians and medical facilities in the state of New Hampshire.

The law that created the fund states that surplus funds must be equitably distributed to the contributors. However lawmakers saw the surplus as a means to help fill a revenue gap for the upcoming fiscal year.


A group of current or past policy holders in the New Hampshire Medical Malpractice Joint Underwriting Association have filed a lawsuit claiming the state's attempts to siphon $110 million from the policyholders' funds to plug a budget shortfall is unconstitutional.

The plaintiffs are hospitals and physicians who have purchased malpractice insurance from the state-run fund. Over two decades, the fund, called the JUA, has built up a multimillion-dollar surplus. Policyholders have filed a request to freeze $110 million they say the state is trying to steal. The state maintains the law allows it to use the surplus anyway it wants. Attorney Kevin Peabody of Nixon Peabody of Manchester, who is among those representing the plaintiffs, disagrees.

A judge has already ruled that the Attorney General's office cannot represent the state in the lawsuit because the insurance fund is not a state agency.

Should the plaintiffs win the buit, lawmakers will have to go back to the beginning to fill the $110 million hole left by the return of the surplus money to the fund.

Of course this wouldn't have even been an issue if the legislature had done its job and presented a lean and balanced budget,

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