ON PETITION TO TRANSFER
This сase deals with a plaintiffs ability to access the Patient’s Compensation Fund under the Medical Malpractice Act where an agreement to settle and payment of the settlement amount were made by an insurance company that had not qualified its provider under the Act and was not authorized to write malpractice insurance in Indiana. We hold that the Fund cannot be accessed to cover excess liabilities of entities who have not paid into the Fund.
Factual and Procedural Background
From 1986 to 1990, Michael J. Wisniew-ski was treated by Dr. Kishan Chand at Southeastern Medical Centers for injuries to his leg resulting from an automobile accident. Throughout the period of trеatment, Chand and Southeastern were insured under separate policies by the Illinois State Medical Insurance Exchange (ISMIE), each with a one million dollar limit. Neither Chand nor Southeastern was a “qualified health care provider” as a result of this insurance because neither they nor ISMIE filed proof of financial responsibility with the Insurance Commissioner or paid the required surcharge. Chand carried no other relevant insurance, but in 1988, Southeastern also had a $100,-000 policy issued by the Physicians Insurance Company of Indiana (PICI). PICI paid the surcharge and qualified Southeastern for 1988 only.
In 1990, Wisniewski filed suit in the Lake Superior Court against Chand, Southeastern аnd several others alleging medical malpractice resulting in permanent damage to his leg. He also filed a proposed complaint with the Department of Insurance and initiated the Medical Review Panel proceedings required by the Medical Malpractice Act before a claim may be рursued against a qualified health care provider. The Medical Review Panel issued an opinion finding that Southeastern failed to meet the applicable standard of care and that its liability was based on the care provided by Chand as an employee or officer of Southeastern. The panel found that the other defendants did meet the standard of care. Because Chand was not a qualified provider, he was not required to be, and was not, named in the panel proceedings.
The lawsuit was then settled for $112,-500. Wisniewski executed separate releases of Chand and Southeastern. These two documents, which were not signed by anyone other than Wisniewski, recited that they reserved Wisniewski’s right to proceed against the Fund. ISMIE paid Wis-niewski with two checks, for $12,500 and $100,000, both through Chand’s policy. Wisniewski then filed a petition in the trial court to access the Fund for damages in excess of the settlement amount.
The Commissioner of the Department of Insurance, who administers the Fund, responded by a motion for summary judgment on the ground that Wisniewski had failed to satisfy the conditions precedent to petition the Fund. The trial court granted the Commissioner’s motion for summary judgment, but the Court of Appeals reversed and remanded, holding that (1) a genuine issue of material fact existed as to whether Southeastern agreed to settle Wisniewski’s claim; and (2) if Southeast
It is unclear from this record why Wis-niewski sought recovery from the Fund rather than pursuing a conventional claim against Chand or Southeastern in view of the million dollar policies ISMIE issued to Southeastern and Chand for the relevant period. Whatever the reason, we are left with the issue of whether this arrangement permits Wisniewski to access the Fund.
Standard of Review
Summary judgment is appropriate when the designated evidence shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C);
see Meridian Mut. Ins. Co. v. Auto-Owners Ins. Co.,
Access to the Patient’s Compensation Fund
Wisniewski argues that the trial court erred in granting summary judgment in favor of the Commissioner because his settlement with Southeastern meets the provisions of the Act and entitles him to access the Fund. The Commissioner contends that Wisniewski’s unilateral release of Southeastern and Chand does not amount to an “agreement” with a qualified provider as required by the statute to access the Fund. The Commissioner further argues that even if Southeastern had agreed to settle, payment by ISMIE, who is not an insurer of a qualified provider under the Act, does not meet the Act’s requirement that a “qualified provider or its insurer” have settled a liability “by payment.”
The Act is explicit that “[a] health care provider who fails to qualify under this article is not covered by this article and is subject to liability under the law without regard to this article. If a health care provider does not qualify, the patient’s remedy is not affected by this article.” Ind.Code § 34-18-3-1 (1998). 1 In addition, “[o]nly while malpractice liability insurance remains in force are the health care provider and the health care provider’s insurer liable to a patient or the pаtient’s representative for malpractice to the extent and in the manner specified in this article.” Id. § 34-18-13-1.
The Act permits a plaintiff to access the Fund for damages in excess of $100,000 up to $750,000 “[i]f a health care provider or its insurer has agreed to settle its liability on a claim by payment of its policy limits of one hundred thоusand dollars ($100,-000).”
Id.
§ 34-18-15-3. Section 34-18-3-1 makes clear that the health care provider must be qualified. Accordingly, access requires an “agreement to settle” in which payment of “its policy limits”
2
is made by a qualified health care provider
Wisniewski argues that his settlements meet the Act’s requirements because Southeastern was also insured by PICI for one year and was a qualified provider for that time. Wisniewski contends that all the Act requires is an agreement with a qualified health care provider, and his agreement with Southeastern, although not expressed in the written documents, is sufficient to access the Fund. In addition to the release documents, Wisniewski also designated the affidavit of his attorney, Marshall Whalley, as evidence of Southeastern’s agrеement to settle. Whalley’s affidavit states:
5. That I negotiated the instant settlement with qualified health care provider Southeastern and non qualified health care provider Kishan Chand, M.D., personally through my contacts with the attorney for both parties, William Sat-terlee.
6. That the settlement with qualified health care providеr Southeastern was entered into with the specific intent that said settlement would be done as a vehicle to allow access to the Patient’s Compensation Fund.
We have recently addressed the requirement of an agreement with a qualified health care provider.
See Smith v. Pancner,
Whalley’s affidavit and the release documents in concert with the payment of $112,500, are sufficient for the trier of fact to infer an agreement by Chand and Southeastern to settle their dispute with Wisniewski. In short, we agree with the Court of Appeals that a material issue of fact exists on the question of whether there was an agreement to settle. Accordingly, summary judgment on that ground was inappropriate. However, summary judgment was appropriate for another reason. Even if Southeastern agreed to settle, the Act аlso requires that a qualified provider or its insurer “settle its liability on a claim
by payment
of its policy limits.” Inb.Code § 34-18-15-3 (1998) (emphasis added). Assuming the facts are as Wis-
There are two reasons why ISMIE’s payment does not fit the statutory requirement. First, the evidenсe designated by the Commissioner demonstrates that IS-MIE is not an “insurer” as defined by the Act. “Insurer” means “an insurance eom-pany engaged on an admitted or nonadmit-ted basis in making in this state class 2(h) malpractice liability insurance” under section 27-1-5-1. Id. § 34-18-2-17. The insurer to which this refers is plainly the carrier whose policy is filed as proof of finаncial responsibility to establish the provider as a “qualified provider” under Indiana Code § 34-18-4-1. Indiana Code § 27-1-5-1 requires insurance companies to be “authorized” to write insurance by the Department of Insurance. The Commissioner designated the affidavit of Roger Webb, the Deputy Commissioner of the Securities/Financial Records division at the Department of Insurance, stating that after reviewing the Department’s records, he “could not find the Illinois State Medical Interinsurance Exchange as holding a certificate of authority as a domestic insurance company or as a foreign or alien insurance company.” Wisniewski provides nо evidence to contradict the Commissioner’s designation on this point. Because ISMIE is not authorized, it is not — indeed cannot be — an “insurer” of a qualified provider within the meaning of the Act. Consequently, its payment of Wisniewski’s claim does not amount to payment by a “provider or its insurer” and is insufficient to permit access to the Fund.
Thе payment by ISMIE fails to qualify Wisniewski to access the Fund for another reason. The basic theory of the Fund is that those providers who get the benefit of the Act also pay for the excess coverage provided by the Fund. ISMIE has made no contribution to the Fund on Southeast- . ern’s behalf, and indeed did not pay “its policy limits.” Under these circumstances it is not an “insurer” of a “qualified provider” as those terms are used in the Act. Rather it is merely an issuer of a policy to a qualified provider, but a policy that is as irrelevant to the malpractice act as the qualified provider’s automobile liability policy.
In
Smith
we held that the payment by the insurer of а non-qualified health care provider who agreed to settle was insufficient to access the Fund. However, we noted that if the trial court determined on remand that the qualified doctor had agreed to settle, payment by the doctor’s insurer would permit the patient to access the Fund because a qualified рrovider or its insurer would have agreed to settle by payment.
Smith,
Wisniewski argues that the fact that IS-MIE paid Wisniewski is not determinative and points to several sections of the Act to demonstrate that “payment” is not a linchpin of access to the Fund. One provision permits a patiеnt to access the Fund if the present payment from the provider plus the cost of the periodic payment agreement exceeds $75,000.
See
Ind.Code § 34-18-14-4 (1998). Another provision permits payment from the Fund of the first $100,000 if the provider does not pay the amount within ninety days.
See id.
§ 34-18-15-4 (1998). It is clear that the General Assembly intended patients who
Finally, the purposes of both the Act and the Fund would be frustrated by the result Wisniewski seeks. To preserve an acceptable standard of health care and an adequate number of providers in Indiana, the General Assembly established a state sponsored liability insurаnce program.
See Johnson v. St. Vincent Hospital, Inc.,
In sum, an agreement to settle by paymеnt with an entity who has not paid into the Fund and is not an insurer as defined by the Act does not meet the requirements for access to the Fund.
Conclusion
The trial court’s grant of summary judgment for the Commissioner is affirmed.
Notes
. The Medical Malpractice Act was previously codified at Indiana Code §§ 27-12-1-1 to 27-12-18-2. It was recodified at §§ 34-18-1-1 to 34-18-18-2 in 1998. The current statute is used throughout this opinion.
. The function of the term "of its policy limits” in this section is unclear. The entire statutory scheme assumes that a provider’s policy limit is $100,000. This section requires a payment of $100,000 even if the