medical malpractice claims

Liabilities1

1. 450-954Health Care Entities450 Contingencies

   This subtopic applies Topic 450 loss-contingency principles to health care entities, principally medical malpractice claims, prepaid health care contract losses, and preferred provider "stop-loss" guarantees. Malpractice liabilities must be accrued when the incidents giving rise to the claims occur — including losses from incidents probable of having occurred but not yet reported — based on best estimates of ultimate claim costs, and may not be presented net of anticipated insurance recoveries. Losses on prepaid health care contracts are recognized when it is probable that expected future health care and maintenance costs on a group of existing contracts will exceed anticipated future premiums and stop-loss recoveries.