BILL ANALYSIS
C.S.H.B. 971
By: T. Hunter
4-4-95
Committee Report (Substituted)
BACKGROUND
The high costs associated with defending medical liability claims
have led to an increase in malpractice insurance premiums,
difficult physician recruitment in medically underserved areas and
an incentive for defendants to settle suits early. These costs can
be attributed to a rise in non-meritorious claims and a lack of
controls in the Medical Liability and Insurance Improvement Act.
Medical liability lawsuits are often frivolous because proof of
medical corroborations by expert witnesses is not required until 90
days after a claim is filed, though defendants do not have access
to this information under the discovery process. Standards
regarding expert testimony are broad and vague, often resulting in
unqualified medical experts. while claims for medical negligence
cannot be brought under the Deceptive Trade Practices Act (DTPA),
medical claims can be brought under DTPA for a violation or
representation of express or implied warranties, thereby increasing
defense costs. The collection of governmental benefits does not
have to be considered when awarding damages, and damages are
sometimes awarded against defendants and against third parties such
as insurance companies. Prejudgment interest on costs accruing
after the date of judgement is also allowed.
PURPOSE
As proposed, H.B. 971 reforms limits on health care liability
claims against physicians and provides penalties for claims in bad
faith.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Sect. 13.01, Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes), as follows:
Sect. 13.01. COST BOND, DEPOSIT, AND EXPERT REPORT.
(a) In a health care liability claim, the claimant must,
within 90 days, file:
(1) a separate $5,000 cost bond for each physician or health
care provider named in the suit;
(2) $5,000 in a cash escrow account for each physician or
provider named; or
(3) an expert report for each physician or provider if no cost
bond or cash in lieu of bond has been deposited under (1) and
(2).
Deletes existing language in (a) dealing with affidavits from
experts.
(b) If, for each defendant, no expert report, cost bond or
cash in lieu of bond has been filed as specified by (a) or (h),
then the court, on motion of the named defendant, shall enter an
order that:
(1) requires the filing of a $7,500 cost bond for each
physician or provider within 21 days after the date of the
order; and
(2) provides that if the claimant fails to comply with the
order, the suit shall be dismissed for want of prosecution
with respect to the named defendant, subject to reinstatement
in accordance with the rules of civil procedure and Subsection
(c). of this section.
Deletes existing language in (b) dealing with posting a bond
with surety or another type of security.
(c) Before the action dismissed under (b)(2) may be
reinstated, the claimant must pay the defendant's court costs prior
to dismissal and file a $7,500 cost bond for each defendant.
Deletes existing language in (c) dealing with a claimant who
has not posted security.
(d) Not later than 180 days after filing the action or within
any extended period established under Subsection (f) or (h) of this
section, the claimant shall, for each physician or provider against
whom a claim is asserted:
(1) furnish to counsel for each physician or provider one or
more expert reports, with a curriculum vitae of each expert;
or
(2) voluntarily nonsuit the action against the physician or
provider.
Deletes existing language in (d) dealing with an extension to
comply filing deadlines.
(e) If a claimant has failed, for any defendant physician or
provider, to comply with (d) of this section, within the time
required, the court shall, on the motion of the affected physician
or provider, enter an order as sanctions against the claimant or
the claimant's attorney:
(1) the reasonably attorney's fees and costs of court incurred
by the defendant;
(2) the forfeiting of any cost bond on such claim (to the
extent necessary to pay the award); and
(3) the dismissal of the suit against the defendant with
prejudice to the claim's refiling.
Deletes existing language in (e) dealing with discovery
concerning the affidavit.
(f) The court may, for good cause shown after motion and
hearing, extend any time period specified in subsection (d) for any
additional 30 days. Only one extension may be granted.
(g) If a claimant has failed to comply with a deadline in
Subsection (d) and after hearing, the court finds that the failure
of the claimant or the claimant's attorney was an accident or
mistake, but not intentional or the result of conscious
indifference, the court shall grant a grace period of 30 days to
permit the claimant to comply with (d). A motion by a claimant for
relief under this subsection shall be deemed timely if filed prior
to any hearing on a motion by a defendant under (e).
(h) The affected parties may agree to extend any time period
specified in Subsections (a) or (d) and any such agreement is
binding and shall be honored by the court if signed by the affected
parties or their counsel and filed with the court.
(i) A claimant may satisfy any requirement for filing an
expert report by filing reports of separate experts regarding
different physicians or providers or regarding different issues
arising from the conduct of a physician or provider, such as issues
of liability and causation. Nothing in this section shall be
construed to mean that a single expert must address all liability
and causation issues with respect to all physicians or providers or
with respect to both liability and causation issues for a physician
or provider.
(j) An expert report is not required to be filed on any issues
other than liability or causation issues.
(k) An expert report under this section:
(1) is not admissible in evidence by a defendant;
(2) shall not be used in any deposition, trial or other
proceeding; and
(3) shall not be referred to by a defendant during the course
of the action for any purpose.
(l) A motion challenging the adequacy of an expert report
shall be granted only if it appears to the court, after hearing,
that the report does not represent a good faith effort to comply
with the definition of an expert report in Subsection (r)(6) of
this section.
(m) Once the claimant complies with Subsection (d):
(1) any cost bond filed or cash deposited in an escrow account
by the claimant shall be released;
(2) the claimant, the claimant's counsel, and any surety have
no liability on the cost bond or cash deposit; and
(3) an execution shall not be issued on the cost bond or cash
deposit.
(n) If a claimant nonsuits a health care liability claim
against a physician or health care provider before filing a cost
bond, and then seeks to refile the same or similar claims against
the physician or provider within 30 days, then the claimant must
file a $7,500 cost bond for each previous nonsuited physician or
provider contemporaneous with the filing of the claim. If the
claimant fails to file the $7,500 cost bond for each physician or
provider, upon motion and hearing, the court shall order the filing
of the cost bond and the claimant shall pay the movant reasonable
attorneys' fees for obtaining the relief.
(o) A claimant who is proceeding pro se and who is unable to
afford a cost bond or cash deposit may file an affidavit in the
same form required by the Rules of Civil Procedure for an affidavit
in lieu of security for costs.
(p) In the event of conflict between this section and another
law, including a rule of procedure or court rule, this section
controls to the extent of the conflict.
(q) Prohibits the Texas Supreme Court from amending or
adopting rules in conflict with this section, notwithstanding Sect.
22.004, Government Code. Prohibits district courts and statutory
county courts in a county from adopting local rules that conflict
with this section.
(r) In this section:
(1) "Affected parties" means the claimant and the physician or
health care provider who are directly affected by an act or
agreement required or permitted by this section and does not
include other parties to an action who are not directly
affected by the particular act or agreement in question.
(2) "Claim" means a health care liability claim against a
physician or health care provider.
(3) "Claimant" means a party who files a pleading asserting a
claim, providing that all plaintiffs claiming to have
sustained damages as the result of the bodily injury or death
of a single patient shall be deemed to be one "claimant".
(4) "Defendant" means a physician or health care provider
against whom a health care liability claim is asserted an
includes a third-party defendant, cross-defendant, or counter-defendant.
(5) "Expert" means:
(A) in the case of one giving opinion testimony
regarding whether or not a physician departed from
accepted standards of medical care, means an expert
qualified to testify under the requirements of Sect.
14.01(a), or
(B) in the case of one giving opinion testimony about
a non-physician health care provider, means an expert
who has knowledge of accepted standards of care for the
diagnosis, care or treatment of the illness, injury or
condition involved in the claim.
(6) "Expert Report" means a written report by an expert which
provides a fair summary of the expert's opinions as of the
date of the report regarding applicable standards of care, the
manner in which the rendered by the physician or health care
provider in question failed to meet such standards, and the
causal relationship between such failure and the injury, harm
or damages claimed.
SECTION 2. Amends Sect. 14.01 (a), Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes), as follows:
SECTION 14.01. QUALIFICATION OF EXPERT WITNESS IN SUIT AGAINST
PHYSICIAN.
(a) In a health care liability claim against a physician for
injury or death of a patient, an expert witness must be a physician
who:
(1) is practicing medicine at the time such testimony is given
or was practicing medicine at the time the claim arose;
(3) is qualified on the basis of training or experience to
offer an expert opinion regarding those accepted standards of
medical care.
(b) Expands the definition of an expert witness to ensure that
the witness is "practicing medicine" or has had a "medical
practice".
(c) In determining whether a witness is qualified on the basis
of training or experience, the court shall consider whether, at the
time the claim arose or at the time such testimony is given, the
witness:
(1) is board certified or has other substantial training or
experience in an area of medical practice and procedure
relevant to the claim; and
(2) is actively practicing medicine in rendering medical care
services relevant to the claim.
(d) The court is required to apply the criteria in Subsection
(c) of this section in determining whether an expert is qualified
to offer expert testimony on the issue of whether or not the
physician departed from such criteria if, under the circumstances,
the court determines that there is a good reason to admit the
expert's testimony, which shall be stated on the record by the
court.
(e) A pre-trial objection to the qualifications of a witness
shall be made within 21 days after the date the objecting party
receives a copy of the witness' curriculum vitae or the witness'
deposition, whichever occurs later. Nothing in this subsection
shall prevent said party's making an objection as soon as
practicable if circumstances arise thereafter which could not have
been reasonably anticipated by a party within the 21 days and which
said party believes in good faith provides a basis for an objection
to an expert's qualifications where no objection was made
previously. The court shall then conduct a hearing as soon as
practicable (if possible, prior to trial) after the filing of an
objection to determine whether or not the witness is qualified.
If the objection party is unable to object in time for the
hearing to occur before the trial, the hearing shall be conducted
outside the presence of the jury. Further states that nothing shall
prevent the examination or cross-examination of a witness at trial
about the witness' qualifications.
(f) Nothing prevents a physician, who is a defendant, from
qualifying as an expert.
SECTION 3. Amends the Medical Liability and Insurance Improvement
Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) by
adding new Subchapter P.
SUBCHAPTER P. PREJUDGMENT INTEREST
Sect. 16.01 APPLICATION OF OTHER LAW. Notwithstanding Sects.
6(a)-(f), Art. 1.05, Title 79, Revised Statutes (Article 5069-1.05,
Vernon's Texas Civil Statutes), prejudgment interest in a health
care liability claim shall be awarded in accordance with this
subchapter.
Sect. 16.02. COMPUTATION OF PREJUDGMENT INTEREST. (a) In a
health care liability claim, no prejudgment interest shall be
charged with respect to a defendant physician or provider who has
settled the claim within 180 days after the date notice was first
mailed to the physician or provider.
(b) In a health care liability claim where no settlement has
been reached within the time specified in Subsection (a) of this
section, the judgement shall include a prejudgment interest on past
damages found by the trier of fact, but shall not include
prejudgment interest on future damages found by the trier of fact.
(c) Prejudgment interest allowed under this subchapter shall
be computed in accordance with Sect. 6(g), Art. 1.05, Title 79,
Revised Statutes (Article 5069-1.05, Vernon's Texas Civil
Statutes), for a period beginning on the date of injury and ending
on the date before the date the judgement is singed.
(d) In this section:
(1) "Past damages" means damages awarded to compensate the
claimant for loss the claimant will incur for a period
beginning on the date of injury and ending on the date before
the date of judgement.
(2) "Future damages" means damages awarded to compensate the
claimant for loss the claimant will incur after the date of
judgement.
SECTION 4. Amends Sect. 10.02, Medical Liability and Insurance
Improvement Act of Texas (Art. 4590i, Vernon's Texas Civil
Statutes) as follows.
Sect. 10.02. EFFECT OF FILING SUIT ON BEHALF OF MINORS. (a)
The limitation period for a minor on a healthcare liability claim
shall begin to run not later than the date on which the first
action on such claim is commenced in a court of competent
jurisdiction suit where such minor is represented by a licensed
attorney.
(b) When an action is filed and causes the statute of
limitation to begin to run, no non-suit, dismissal with prejudice,
dismissal without prejudice, or dismissal for want of prosecution
of the minor's action as to all parties will be permitted until the
court has appointed an attorney ad litem who is experienced in
trying medical malpractice cases or personal injury cases to
represent the interests of the minor child and to advise the court.
Deletes existing language in Sect. 10.02 on causes of action
covered by other law.
SECTION 5. Effective Date - September 1, 1995.
SECTION 6. Except for Section 7, this Act applies only to a cause
of action that accrues on or after the effective date of this Act.
SECTION 7. Sects. 13.01 and 14.01, Medical Liability and Insurance
Improvement Act of Texas (Art. 4590i, Vernon's Texas Civil
Statute), as amended by this Act, applies only to a health care
liability claim filed on or after the effective date of this Act.
SECTION 8. Emergency Clause.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.
COMPARISON OF ORIGINAL TO SUBSTITUTE
Deletes Sections 1, 2, 3, 6, 8, 11 and 12 of the original.
Deletes Section 4 of the original and adds new language on an
attorney affidavit or cost bonds to become Section 1 of the
substitute. The substitute is designed to ensure that a reputable
expert examines the case early in the litigation to determine
whether the physician or health care provider deviated from the
applicable standard of care. The bill also strengthens the cost
bond requirement to encourage early review of cases and also
increases the range of available options when the claimant file
neither a report nor security for costs and expenses.
Deletes Subsections (2), (4) and (5) of Section 5 of the original.
The substitute further clarifies that an expert witness is a
physician who is practicing medicine. The substitute develops
standards for experts to ensure they are qualified and
knowledgeable in the area in which they are testifying. The
substitute also allows the court to consider whether the witness is
qualified on the basis of training or experience and the procedure
for objecting to the person as an expert witness.
Substitutes Section 7 of the original with Section 3 of the
substitute on pre-judgement interest. Prejudgment interest on
future damages are eliminated. The substitute will bar the award of
prejudgment interest on damages which have not occurred at the time
of judgement. It will also allow prejudgment interest on past
damages to accrue from the date of injury.
The substitute has a new Section 4 dealing with the statute of
limitations on minors. This is designed to eliminate the practice
of filing a claim and dismissing it, and then repeating the
process, on multiple occasions before a minor reaches majority. The
substitute protects minors by requiring the court to appoint an
experienced trial attorney to serve as ad litem for the child if an
effort is made to obtain a "not on the merits" disposition of the
entire case.
SUMMARY OF COMMITTEE ACTION
H.B. 971 was considered by the Civil Practices Committee in a
public hearing on March 22-23, 1995. The following people testified
in support of the bill: Bob Glasgow, representing the Texas Medical
Association (T.M.A.); Mike Hull, representing the T.M.A.; Michael
Wallach, representing himself and the T.M.A.; Harold Freeman,
representing the T.M.A.; Greg Hooser, representing the Texas
College of Emergency Physicians; Dave Kittrell, M.D., representing
himself, the T.M.A. and the Texas Association of Obstetricians and
Gynecologists; Charles Neblett, M.D., representing himself and the
T.M.A.; Gustavo Ramos, M.D., representing himself, the T.M.A. and
the Texas Association of Neurological Surgeons; Michael Bullen,
M.D., representing himself and the T.M.A.; H. David Cook, M.D.,
representing himself and the T.M.A.; James Anderson Allums,
representing himself and the T.M.A.; Charles Bailey, representing
the Texas Hospital Association; and C. Dean Davis, representing the
Texas Hospital Association. The following individuals testified in
opposition to the bill: Tommy Jacks, attorney, representing
himself; and Bill Whitehurst, attorney, representing himself and
the Texas Trial Lawyers Association. The following people testified
neutrally on the bill: David C. Warner, representing himself and
the Texas Hospital Association; and Larry L. Tonn, representing
himself. The bill was left pending. H.B. 971 was considered by the
Civil Practices Committee in a public hearing on March 29, 1995.
The committee considered a complete substitute for the bill. The
substitute was adopted without objection. The bill was reported
favorably as substituted with the recommendation that it do pass
and be printed, by a record vote of six ayes, zero nays, zero
present not voting, and three absent.