Pennsylvania Medical Society v. Commonwealth

Argued: June 12, 2002 Before this Court are preliminary objections filed by the Medical Professional Liability Catastrophe Loss Fund (CAT Fund) to a two-count petition for review filed by the Pennsylvania Medical Society Liability Insurance Company (Insurance Company) requesting us to dismiss the petition because the Insurance Company failed to file its claim within the requisite 180 days and the petition does not make out a claim for bad faith. This case involves the CAT Fund which provides coverage in excess of a health care provider's basic liability insurance coverage. The Insurance Company is a corporation that issues professional liability insurance policies to physicians and other health care providers. The Insurance Company filed a petition for review in the nature of a two-count complaint against the CAT Fund seeking, inter alia, coverage for non-party health care providers under Section 605 of the Health Care Services Malpractice Act (Act) after the CAT Fund denied its request for Section 605 status on the grounds that it failed to file a claim within 180 days.1 In Count I of the complaint, the Insurance Company alleged that its request could not be denied unless the CAT Fund had been prejudiced by an untimely request. In Count II of the complaint, the Insurance Company alleged bad faith by the CAT Fund based upon its denial of the Section 605 status. The CAT Fund preliminarily objects in the nature of a demurrer to both counts of the petition for review, arguing that the Insurance Company did not provide it with notice within the 180-day requirement and, therefore, it was not required to make payment of the Insurance Company's claim, and it was not guilty of bad faith for refusing to make payment.