By McDonald H.B. No. 1362
74R5742 DLF-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain health care liability claims for which the
1-3 state provides indemnification.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 110.005 and 110.006, Civil Practice and
1-6 Remedies Code, are amended to read as follows:
1-7 Sec. 110.005. INSURANCE COVERAGE <TIMELY NOTICE TO ATTORNEY
1-8 GENERAL> REQUIRED. The state is not liable for indemnification for
1-9 damages under this chapter unless the health care professional,
1-10 health center, or health clinic against whom the cause of action is
1-11 asserted<:>
1-12 <(1)> is covered under a valid professional health
1-13 care liability or medical liability insurance policy that is issued
1-14 by an insurer and that provides coverage for the health care
1-15 liability claim that is the subject of the claim or action with a
1-16 policy limit of not less than $100,000 per occurrence and $300,000
1-17 aggregate for the policy period<; and>
1-18 <(2) delivers or causes to be delivered to the
1-19 attorney general a true copy of any summons or citation in a health
1-20 care liability claim served on the health care professional, health
1-21 center, or health clinic, which summons or citation shall be
1-22 delivered to the attorney general not later than the 60th day after
1-23 the receipt thereof by the health care professional, health center,
1-24 or health clinic. However, subsequent notification of such summons
2-1 or citation shall not be a basis for denial of a claim for
2-2 indemnification unless the attorney general proves by clear and
2-3 convincing evidence that such delay would unduly prejudice the
2-4 state's ability to evaluate the reasonableness of the settlement
2-5 offer or agreement. No such claim may be asserted by the state
2-6 unless, within 10 days of the receipt of such late notification by
2-7 the attorney general (or such greater or lesser period of time as
2-8 the court in which the action is filed may allow), the attorney
2-9 general files in said court (or, if no action is pending in any
2-10 court, in a district court in Travis County, Texas) a pleading
2-11 setting forth the reasons why the state's ability to evaluate the
2-12 reasonableness of the settlement offer or agreement has been
2-13 prejudiced>.
2-14 Sec. 110.006. FINAL DISPOSITION; PAYMENT <INFORMATION
2-15 PROVIDED TO ATTORNEY GENERAL; SETTLEMENTS>. <(a) The insurer for
2-16 a health care professional, health center, or health clinic that is
2-17 the subject of an eligible health care liability claim shall
2-18 designate an attorney or other representative assigned to the claim
2-19 who shall keep the attorney general or his designee reasonably
2-20 informed of significant developments in the claim or action,
2-21 including all settings for trials or dispositive motions, all
2-22 settlement offers and demands, all pleadings by or against the
2-23 health care professional, health center, or health clinic, all
2-24 judgments or other dispositive orders, and all written
2-25 recommendations of counsel for the health care professional, health
2-26 center, or health clinic regarding settlement.>
2-27 <(b) If a settlement agreement is reached between the health
3-1 care professional, health center, or health clinic and a claimant,
3-2 the insurer for the health care professional, health center, or
3-3 health clinic shall promptly notify the attorney general of same.
3-4 The settlement shall become final and binding upon the state
3-5 unless, within 10 days of the receipt of said notice by the
3-6 attorney general (or such greater or lesser period of time as the
3-7 court in which the action is filed may allow), the attorney general
3-8 files in said court (or, if no action is pending in any court, in a
3-9 district court of Travis County, Texas) a written objection to the
3-10 settlement setting forth in detail why the reasonable settlement
3-11 value of the total claim being settled is significantly less than
3-12 the amount for which the state would be liable for indemnification
3-13 if the settlement were to be consummated and any other reason why
3-14 the state should not be liable for indemnification under this
3-15 chapter based upon all the facts and circumstances of the case. A
3-16 hearing shall promptly be held upon any such objection, either
3-17 before the court or a special master appointed by the court for
3-18 that purpose. At any such hearing, the burden shall be upon the
3-19 attorney general to prove by clear and convincing evidence that the
3-20 reasonable settlement value of the total claim being settled is
3-21 significantly less than the amount for which the state would be
3-22 liable for indemnification if the settlement were to be consummated
3-23 or any other reason why the state should not be liable for
3-24 indemnification under this chapter based upon all the facts and
3-25 circumstances of the case. Unless the court finds that the
3-26 reasonable settlement value of the total claim being settled is
3-27 significantly less than the amount for which the state would be
4-1 liable for indemnification if the settlement were to be consummated
4-2 or that there are other reasons why the state should not be liable
4-3 for indemnification under this chapter based upon all the facts and
4-4 circumstances of the case, the court shall enter an order approving
4-5 the settlement and directing the state to make the required
4-6 indemnity payment thereunder. Such an order shall be reviewable by
4-7 an appellate court only upon the filing of an application for writ
4-8 of mandamus within 15 days of the date said order is signed, and
4-9 only for an abuse of discretion by the trial court. Any such
4-10 application for writ of mandamus shall be given priority in the
4-11 appellate court in which it is filed above all other applications
4-12 for writ of mandamus docketed in said court.>
4-13 <(c) If the attorney general files an objection under
4-14 Subsection (b), the court may, with the agreement of the parties to
4-15 the settlement agreement, permit the payment of any other sums due
4-16 to be paid under said agreement by parties other than the state
4-17 while the objection of the attorney general is pending
4-18 adjudication.>
4-19 <(d) If a suit involving an eligible health care liability
4-20 claim is imminently scheduled for jury trial or alternative dispute
4-21 resolution, or if the defendant seeking indemnity is subject to a
4-22 time limit under the Stowers Doctrine or other applicable law to
4-23 respond to a settlement proposal, or is being tried before a jury,
4-24 and settlement negotiations are ongoing between the health care
4-25 professional, health center, or health clinic and any claimant,
4-26 either of those parties may request the court to require the
4-27 attorney general or his designee to assign an attorney to monitor
5-1 such negotiations so that if a settlement agreement is reached
5-2 between the parties, the attorney so assigned by the attorney
5-3 general can immediately advise the court of any objection, in which
5-4 event the hearing described in Subsection (b) shall be held
5-5 immediately after the settlement agreement is reduced to writing or
5-6 announced on the record in open court, so that the trial court may
5-7 render its determination before the petit jury or jury panel is
5-8 discharged.>
5-9 <(e) Except to the extent that the attorney general is
5-10 authorized under this section to object to the reasonableness of a
5-11 settlement, the attorney general shall not be authorized to
5-12 intervene in any court proceeding involving an eligible health care
5-13 liability claim. The insurer for the health care professional,
5-14 health center, or health clinic shall be in charge of the defense
5-15 of any such claim.>
5-16 <(f)> Upon final disposition of an eligible health care
5-17 liability claim by settlement or judgment, funds shall be paid by
5-18 the comptroller on receipt of:
5-19 (1) a certified copy of the judgment on the claim; or
5-20 (2) a copy of the settlement agreement that is signed
5-21 and verified by the parties to the settlement <on vouchers that
5-22 shall be promptly prepared, verified, and signed by the attorney
5-23 general>.
5-24 SECTION 2. This Act applies to an action on a health care
5-25 liability claim filed before, on, or after the effective date of
5-26 this Act, except that this Act does not apply to an action on a
5-27 health care liability claim for which the comptroller paid
6-1 indemnification before the effective date of this Act.
6-2 SECTION 3. The importance of this legislation and the
6-3 crowded condition of the calendars in both houses create an
6-4 emergency and an imperative public necessity that the
6-5 constitutional rule requiring bills to be read on three several
6-6 days in each house be suspended, and this rule is hereby suspended,
6-7 and that this Act take effect and be in force from and after its
6-8 passage, and it is so enacted.