BILL ANALYSIS


                                                     C.S.H.B. 971
                                              By: Hunter (Sibley)
                                             Economic Development
                                                         04-28-95
                            Senate 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 corroboration 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
misrepresentation 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 again against third
parties such as insurance companies.  Prejudgment interest on costs
accruing after the date of judgment is also allowed.

PURPOSE

As proposed, C.S.H.B. 971 amends the responsibilities of the
claimant and the defendant in health care liability claims;
requires prejudgment interest in health care liability claims to be
awarded in a certain manner; establishes the time at which a period
of limitations begins in a suit filed on behalf of a minor.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 13.01, Article 4590i, V.T.C.S. (Medical
Liability and Insurance Improvement Act of Texas), as follows:

     Sec.  13.01.  New heading: COST BOND, DEPOSIT, AND EXPERT
     REPORT.  (a) Requires a claimant in a health care liability
     claim not later than the 90th day after the date the claim is
     filed, to:
     
     (1) file a separate cost bond in the amount of $5,000 for
         each physician or health care provider named by the
         claimant in the action;
         
         (2) place cash in an escrow account in the amount of
         $5,000 for each physician or health care provider named in
         the action; or 
         
         (3) file an expert report for each physician or health
         care provider with respect to whom a cost bond has not
         been filed and cash in lieu of the bond has not been
         deposited under Subdivision (1) or (2).  Deletes language
         requiring the plaintiff or plaintiff's attorney to file,
         within 90 days of when the action commenced, an affidavit
         attesting to negligence on the part of the physician or
         health care provider.
         
         (b) Requires the court, if as to a defendant physician or
       health care provider, an expert report, cost bond, or cash
       in lieu of the bond has not been filed or deposited within
       the period specified by Subsection (a) or (h) of this
       section, to enter an order that requires the filing of a
       $7,500 cost bond with respect to the physician or health
       care provider not later than 21st day after the date of the
       order; and to dismiss the action for want of prosecution
       with respect to the physician or health care provider
       subject to reinstatement in accordance with the applicable
       rules of civil procedure and Subsection (c) if the claimant
       does not comply with the order.  Deletes existing Subsection
       (b) requiring the plaintiff or the plaintiff's attorney to
       be deemed in compliance  if the plaintiff posts bond with a
       surety or other equivalent security.
       
       (c) Requires the claimant to pay court costs incurred by the
       defendant before the dismissal and file a $7,500 cost bond
       for each defendant physician or health care provider before
       a claim that has been dismissed under Subsection (b)(2) of
       the section may be reinstated.  Deletes existing Subsection
       (c) requiring the amount of the required security to be
       increased by the court if the plaintiff fails to meet
       certain requirements.
       
       (d) Requires the claimant, by the 180th day after the date
       on which a health care liability is filed or the last day of
       any extended period, to furnish to counsel for each
       physician or health care provider one or more expert
       reports, with a curriculum vitae of each expert listed in
       the report; or voluntarily nonsuit the action against the
       physician or health care provider.  Deletes existing
       Subsection (d) authorizing the court to extend the amount of
       time a plaintiff has to comply with Subsection (a) or (b).
       
       (e) Requires the court, on the motion of the affected
       physician or health care provider if a claimant has failed,
       for any defendant physician or health care provider, to
       comply with Subsection (d) within the required time, to
       enter an order awarding as sanctions against the claimant or
       claimant's attorney including: the attorney's fees and court
       costs incurred by the defendant; the forfeiture of any cost
       bond respecting the claimant's claim against the defendant
       to the extent necessary to pay the award; and the dismissal
       of the action of the claimant against the defendant with
       prejudice to the claim's refiling.  Deletes existing
       Subsection (e) prohibiting the allowance of the affidavit
       unless the expert who supplied the opinion is designated as
       an expert witness by the plaintiff.
       
       (f) Authorizes the court, for good cause shown after motion
       and hearing, to extend any time period specified in
       Subsection (d) for an additional 30 days.  Authorizes only
       one extension to be granted.
       
       (g) Requires the court to grant a grace period of 30 days to
       permit the claimant to comply with that subsection if a
       claimant has failed to comply with a deadline established by
       Subsection (d) and after a hearing the court finds that the
       failure was not intentional or a result of conscious
       indifference but was the result of an accident or mistake. 
       Requires a motion by a claimant for relief under this
       subsection to be considered timely if it is filed before any
       hearing on a motion by a defendant under Subsection (e).
       
       (h) Authorizes the affected parties to agree to extend any
       time period specified in Subsection (a) or (d).  Provides
       that an agreement under this subsection is binding. 
       Requires the agreement to be honored by the court if signed
       by the affected parties or their counsel and filed with the
       court.
       
       (i) Authorizes a claimant to satisfy any requirement of this
       section for filing an expert report by filing reports of
       separate experts regarding different physicians or health
       care providers or regarding different issues arising from
       the conduct of a physician or health care provider, such as
       issues of liability and causation.  Prohibits anything in
       this section from being construed to mean that a single
       expert must address all liability and causation issues with
       respect to all physicians or health care providers or with
       respect to both liability and causation issues for a
       physician or health care provider.
       
       (j) Prohibits anything in this section from being construed
       to require the filing of an expert report regarding any
       issue other than an issue relating to liability or
       causation.
       
       (k) Provides that an expert report filed under this section
       is not admissible in evidence by a defendant; shall not be
       used in a deposition, trial, or other proceeding; and shall
       not be referred to a defendant during the course of action
       for any purpose.
       
       (l) Requires the court to grant a motion challenging the
       adequacy of an expert report 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).
       
       (m) Sets forth provisions contingent on the claimant's
       compliance with the requirements of Subsection (d).
       
       (1) Requires any cost bond filed or cash deposited in an
         escrow account by the claimant under this section to be
         released.
       (2) Provides that the claimant, the claimant's counsel,
         and any surety have no liability on the cost bond or cash
         deposit.
       (3) Prohibits an execution from being issued on the cost
         bond or cash deposit.
       (n) Requires the claimant to file a $7,500 cost bond for
       each previously nonsuited physician or health care provider
       at the time of the filing of the health care liability claim
       if a claimant nonsuits a health care liability claim against
       a physician or health care provider before filing a cost
       bond and seeks to refile the same or a similar health care
       liability claim against the physician or health care
       provider.  Requires the court to order the filing of the
       cost bond if the claimant fails to file the $7,500 cost bond
       for each physician or health care provider.  Requires the
       claimant to pay the movant reasonable attorney's fees
       incurred in obtaining the relief.
       
       (o) Authorizes a claimant who is proceeding without an
       attorney and who is unable to afford a cost bond or cash
       deposit to file an affidavit in the same form required for
       an affidavit in lieu of security for costs under the Texas
       Rules for Civil Procedure.
       
       (p) Provides that in the event of a 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 supreme court from adopting or amending
       rules in conflict with this section.  Prohibits the district
       courts and statutory courts in a county from adopting local
       rules in conflict with this section.
       
       (r) Defines "affected parties," "claim," "claimant,"
       "defendant," "expert," and "expert report."
       
       SECTION 2.   Amends Section 14.01, Article 4590i, V.T.C.S., as
follows:

     Sec.  14.01.  QUALIFICATION OF EXPERT WITNESS IN SUIT AGAINST
     PHYSICIAN.  (a) Authorizes a person to qualify as an expert
     witness on the issue of whether the physician departed from
     accepted medical standards of medical care only if the person
     is a physician who is practicing medicine at the time of
     testimony or was practicing medicine at the time the claim
     arose and is qualified on the basis of training or experience
     to offer an expert opinion regarding those accepted standards
     of medical care, among other requirements.  Makes
     nonsubstantive changes.  Deletes existing Subsection (2)
     requiring the court to determine if a person qualifies as an
     expert witness.
     
     (b) Defines "practicing medicine" and "medical practice."
       
       (c) Requires the court, in determining whether a witness is
       qualified on the basis of training or experience, to
       consider whether, at the time the claim arose or at the time
       the testimony was given, the witness is board certified or
       has other substantial training or experience in an area of
       medical practice relevant to the claim; and is actively
       practicing medicine or rendering medical care services
       relevant to the claim.
       
       (d) Requires the court to apply the criteria in Subsections
       (a), (b), and (c) in determining whether an expert is
       qualified to enter expert testimony on the issue of whether
       the physician departed from accepted medical standards of
       medical care.  Authorizes the court to depart from those
       criteria if, under the circumstances, the court determines
       that there is good reason to admit the expert's testimony. 
       Requires the court to state on the record the reason for
       admitting the testimony if the court departs from the
       criteria.
       
       (e) Requires a pretrial objection to the qualifications of
       a witness to be made not later than the later of the 21st
       day after the date the objecting party receives a copy of
       the witness's curriculum vitae or the date of the witness's
       deposition.  Provides that if the circumstances arise after
       the date on which the objection must be made that could not
       have been reasonably anticipated by a party before that date
       and that date the party believes in good faith provide a
       basis for an objection to a witness's qualifications, and if
       an objection was not made previously, this subsection does
       not prevent the party from making an objection as soon as
       practicable under the circumstances.  Requires the court to
       conduct a hearing to determine whether the witness is
       qualified as soon as practicable after the filing of an
       objection and, if possible, before trial.  Requires the
       hearing to be conducted outside the presence of the jury if
       the objecting party is unable to object in time for the
       hearing to be conducted before the trial.  Provides that
       this subsection does not prevent a party from examining or
       cross-examining a witness at trial about the witness's
       qualifications.
       
       (f) Provides that this section does not prevent a physician
       who is a defendant from qualifying as an expert.
       
       SECTION 3.   Amends Article 4590i, V.T.C.S., by adding Subchapter P,
as follows:

               SUBCHAPTER P.  PREJUDGMENT INTEREST

     Sec.  16.01.  APPLICATION OF OTHER LAW.  Requires prejudgment
     interest in a health care liability claim to be awarded in
     accordance with this subchapter.
     
     Sec.  16.02.  COMPUTATION OF PREJUDGMENT INTERESTS.  (a)
     Prohibits prejudgment interests from being charged with
     respect to a defendant physician or health care provider who
     has settled a claim before the 181st day after the date notice
     of the claim was first mailed to the physician or health care
     provider.
     
     (b) Requires the judgment in a health care liability claim
       that is not settled within the period specified in
       Subsection (a) to include prejudgment interest on past
       damages found by the trier of fact.  Prohibits the judgment
       from including prejudgment interest on future damages found
       by the trier of fact.
       
       (c) Requires prejudgment interest allowed under this
       subchapter to be computed in accordance with Section 6(g),
       Article 5069-1.05, V.T.C.S., for a period beginning on the
       date of the injury and ending on the date before the date
       the judgment is signed.
       
       (d) Defines "past damages" and "future damages."
       
                   SECTION 4. Effective date: September 1, 1995.

SECTION 5. Makes application of this Act prospective except as
provided by Section 6 of this Act.

SECTION 6. Makes application of Sections 13.01 and 14.01, Article
4590i, V.T.C.S., prospective.

SECTION 7. Emergency clause.