The 2024-2025 annual surcharge rates that physicians and hospitals must pay into the Indiana Patient’s Compensation Fund (PCF) to be qualified under Indiana’s Medical Malpractice Act (MMA) will increase from the current rates, the Indiana Department of Insurance (IDOI) announced Feb. 13. 

For medical malpractice policies written or renewed on or after July 1, 2024, the following will apply:

• For physicians, the overall surcharge will increase by 4.2% from the current rates.
• For hospitals, the overall surcharge will increase by 2% from the current rates.

The PCF is a dedicated fund administered by the IDOI and was created in 1975 by the Indiana General Assembly as a component of the Indiana MMA. If a patient is determined or agreed to be entitled to a recovery for medical malpractice, they recover first from the defendant health care provider(s) up to their liability limits, and then any additional recovery comes from the PCF, up to the total recovery limit.  

The PCF is funded exclusively by surcharges paid by participating health care providers. The surcharge each physician pays is based on the risk associated with that physician’s specialty. Physicians employed by hospitals pay 100% of the appropriate surcharge for the physician’s specialty class.  Nonphysician providers who are eligible for coverage under the MMA pay a percentage of physician surcharges.  All rates are determined through an annual actuarial analysis conducted for the IDOI by an outside firm. 

In 2016, the Indiana Legislature enacted significant phased changes to the MMA, including increasing the total amounts recoverable by patients and the portions of that capped total that come from the health care provider and from the PCF. Those changes were as follows:


This is the first increase to surcharges since 2018.  Physician surcharges increased by 1.8% in 2018 before decreasing 10.9% in 2019. The rate didn’t change in 2020, decreased by 1.65% in 2021, and then remained unchanged in 2022 and 2023.  Hospital surcharges increased by 9.9% in 2018, decreased 12.3%, 2.5% and 2.1% in 2019, 2020 and 2021 respectively, then remained unchanged in 2022 and 2023. 

The IDOI has reported that nearly all cases that are now reaching the PCF are at the new, higher cap levels, which is actuarially driving the need for the surcharge increase. Despite the 4.2% increase for 2024-2025, the rates are still lower than those of 2017.

Read IDOI Bulletin 273 announcing the new rates (PDF).