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 The following laws are repealed: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.