BILL ANALYSIS C.S.H.B. 1362 By: McDonald May 2, 1995 Committee Report (Substituted) BACKGROUND The Seventy-First Legislature adopted H.B. 18 to address concerns about the availability of health care in rural areas of Texas, particularly for persons with low income and little or no health insurance. Provisions of the bill were intended to encourage physicians in both urban and rural areas to accept low-income patients whose services were paid by various public programs. A rider to the 1994-1995 State Budget directed a comprehensive study by the Health and Human Services Commission, the State Auditor and the Texas Department of Insurance, of the indemnification process by which the state accepts certain health care liability claims. Serious questions concerning the effectiveness of the programs and involvement of the attorney general were raised. Currently, the state is not liable for indemnification under the Rural Health Care Act (Chapter 110, Civil Practice and Remedies Code) unless a copy of the summons or citation is delivered to the attorney general. Excessive requirements for litigants under the Rural Health Care Act, including notification of the attorney general of all developments in the lawsuit, impede the efficiency of the process. Additionally, the litigant must keep the attorney general advised of all settings for trials, all settlement offers and demands, and all pleadings. PURPOSE To address problems the State of Texas has encountered in the implementation of the Medical Malpractice indemnity provisions of the Rural Health Care Act. 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. SECTION BY SECTION ANALYSIS SECTION 1. The following laws are repealed: (1) Chapter 110, Civil Practice and Remedies Code; and (2) Article 5.15-4, Insurance Code. SECTION 2. Emergency Clause-effective immediately COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute deletes the original bill language entirely. The original had only dealt with the timely notice and significant developments notice to the attorney general in Chapter 110, Civil Practices and Remedies Code. The substitute repeals entirely Chapter 110, Civil Practices and Remedies Code, and Article 5.15-4, Insurance Code, dealing with the state liability for indemnification of certain health care professionals. SUMMARY OF COMMITTEE ACTION H.B. 1362 was considered by the Civil Practices Committee in a public hearing on April 12, 1995. The following persons testified in support of the bill: Carol Taylor, representing the Texas Trial Lawyers Association; and Mike Slack, attorney, representing himself and the Texas Trial Lawyers Association. No one testified in opposition to the bill. The following persons testified neutrally on the bill: Mike McKinney, representing the Texas Health and Human Services Commission; Harold Freeman, representing the Texas Medical Association; David Durden, representing the Texas Department of Insurance; Nathan Anderson, representing the Office of the Attorney General; Delmar Cain, representing the Office of the Attorney General; Carol Peters, representing the Center for Rural Health Initiatives; Alicia D. Essary, representing the Health and Human Services Commission; Betty Ressel, representing the Comptroller of Public Accounts; Barbara Hawkins, representing the Texas State Auditor's Office; and Robert Norris, representing the Legislative Budget Board. The bill was left pending. The bill was considered by the committee in a formal meeting on April 27, 1995. The committee considered a complete committee 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 pnv and three absent.