78R1747 DAK-D
By: Wohlgemuth H.B. No. 197
A BILL TO BE ENTITLED
AN ACT
relating to health care liability claims.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes), is amended by adding Section 1.04 to read as follows:
Sec. 1.04. CONFLICT WITH OTHER LAW AND RULES OF CIVIL
PROCEDURE. (a) In the event of a conflict between this part and
another law, including a rule of procedure or court rule, this part
controls to the extent of the conflict.
(b) Notwithstanding Section 22.004, Government Code, and
except as otherwise provided by this part, the supreme court may not
amend or adopt rules in conflict with this part.
(c) The district courts and statutory county courts in a
county may not adopt local rules in conflict with this part.
SECTION 2. The Medical Liability and Insurance Improvement
Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is
amended by adding Subchapter C to read as follows:
SUBCHAPTER C. SETTLEMENT OFFERS
Sec. 3.01. SETTLEMENT OFFERS; ACCEPTANCE. (a) At any time
earlier than the 30th day before the start of a trial of a health
care liability claim, a defendant may serve on a claimant a
settlement offer for a stated amount of money to be paid on the
unqualified execution of a release and settlement agreement by the
claimant.
(b) The defendant shall prepare and serve the release and
settlement agreement with the offer of settlement.
(c) A claimant who receives an offer of settlement from a
defendant may accept the offer only if the claimant serves written
notice on the defendant that the offer is accepted not later than
the 10th day after the date the offer is received.
(d) If the claimant accepts the settlement offer, the
defendant shall pay the full amount of the settlement offer to the
claimant in exchange for the claimant's executed release not later
than the 10th day after the date the claimant served notice on the
defendant accepting the offer, unless the parties agree otherwise.
(e) The claimant accepting the settlement offer shall, not
later than the seventh day after the date the claimant received
payment and delivered the executed release, file a nonsuit with
prejudice, dismissing all claims asserted against the defendant.
Sec. 3.02. SETTLEMENT OFFERS; REJECTION. (a) A settlement
offer by a defendant that is not accepted by a claimant within the
time specified by Section 3.01 of this subchapter is considered
rejected by the claimant and withdrawn by the defendant.
(b) Evidence of the settlement offer is admissible only in a
hearing before the court to determine court costs, expenses, and
attorney's fees under this section.
(c) The court shall determine the amount of monetary damages
that were awarded against a defendant who has made a settlement
offer to a claimant who has rejected the offer. In determining the
amount, the court shall exclude:
(1) any prejudgment or postjudgment interest; and
(2) any legally proper and applicable credit, offset,
reduction, and apportionment.
(d) If the amount of monetary damages determined under
Subsection (c) of this section is equal to or less than the amount
of any rejected offer of settlement by the claimant, the court shall
assess against the claimant as part of a judgment entered against
the claimant or as an offset against a judgment entered against the
defendant:
(1) all court costs incurred after the date the offer
was rejected; and
(2) reasonable and necessary expenses and attorney's
fees incurred by the defendant after the date the defendant offered
the settlement that was rejected.
(e) The court shall conduct a hearing to determine the
amount to assess against the claimant under Subsection (d) of this
section.
Sec. 3.03. MULTIPLE SETTLEMENT OFFERS. The defendant may
make a settlement offer without regard to whether the claimant has
rejected a previous offer.
SECTION 3. The Medical Liability and Insurance Improvement
Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is
amended by adding Subchapter H to read as follows:
SUBCHAPTER H. CAUSE OF ACTION FOR BAD FAITH
Sec. 8.01. DEFINITIONS. In this subchapter:
(1) "Reasonable grounds" means a reasonable basis in
fact and law.
(2) "Reckless disregard" means:
(A) a state or quality on the part of the actor of
wanton disregard of the rights of others; or
(B) a conscious indifference on the part of the
actor to the result that may follow as a consequence of the actor's
acts.
Sec. 8.02. CAUSE OF ACTION FOR BAD FAITH. (a) A person may
bring a cause of action that a health care liability claim is
brought in bad faith.
(b) A health care liability claim is brought in bad faith if
it is maintained or filed with reckless disregard as to whether or
not reasonable grounds exist for asserting the claim.
Sec. 8.03. PERSONS LIABLE. A cause of action that a health
care liability claim is brought in bad faith may be brought against
any claimant or the attorney of any claimant if the person is
responsible for conduct constituting a reckless disregard as to
whether or not reasonable grounds exist for asserting the health
care liability claim. It is a defense for the claimant or the
attorney for the claimant that the person could not reasonably have
had knowledge of the absence of reasonable grounds to assert the
claim.
Sec. 8.04. BAD FAITH CLAIM BROUGHT IN BAD FAITH. A person
asserting a bad faith claim with reckless disregard as to whether or
not reasonable grounds exist for asserting the claim may be liable
to the defendant for reasonable expenses in defending the lawsuit,
including attorney's fees and court costs.
SECTION 4. Section 10.01, Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes), is amended to read as follows:
Sec. 10.01. LIMITATION ON HEALTH CARE LIABILITY CLAIMS.
(a) Notwithstanding any other law and except as provided by
Subsection (b) of this section, no health care liability claim may
be commenced unless the action is filed within two years from the
occurrence of the breach or tort.
(b) A minor six years of age or older and younger than 18
years of age at the time of the occurrence of the breach or tort must
bring the health care liability claim within three years from the
occurrence of the breach or tort. A minor younger than six years of
age at the time of the occurrence of the breach or tort must bring
the health care liability claim within three years from the
occurrence of the breach or tort or before the minor's eighth
birthday, whichever provides the longer period.
(c) This [or from the date the medical or health care
treatment that is the subject of the claim or the hospitalization
for which the claim is made is completed; provided that, minors
under the age of 12 years shall have until their 14th birthday in
which to file, or have filed on their behalf, the claim. Except as
herein provided, this] subchapter applies to all persons regardless
of minority or other legal disability.
SECTION 5. Section 11.01, Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes), is amended to read as follows:
Sec. 11.01. FINANCIAL RESPONSIBILITY. The limit on
liability in Section 11.02 of this subchapter does not apply to a
physician or hospital that cannot show financial responsibility for
a health care liability claim against the physician or hospital by:
(1) having liability insurance coverage in effect in
the amount of at least $200,000 for each claim; or
(2) demonstrating that the physician's or hospital's
financial reserves are sufficient to cover the amount of the claims
that, using historical data, have been brought against the
physician or hospital and are likely to be brought against the
physician or hospital during the calendar year or, if applicable,
the fiscal year used by the physician or hospital in the normal
course of business. [DEFINITION. In this subchapter, "consumer
price index" means the index published by the Bureau of Labor
Statistics of the United States Department of Labor that measures
the average change in prices of goods and services purchased by
urban wage earners and clerical workers' families and single
workers living alone.]
SECTION 6. Section 11.02(a), Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended to read as follows:
(a) In an action on a health care liability claim where
final judgment is rendered against a physician or health care
provider, the limit of civil liability for damages of the physician
or health care provider shall be limited to an amount not to exceed
$250,000 [$500,000].
SECTION 7. The heading of Section 13.01, Medical Liability
and Insurance Improvement Act of Texas (Article 4590i, Vernon's
Texas Civil Statutes), is amended to read as follows:
Sec. 13.01. [COST BOND, DEPOSIT, AND] EXPERT REPORT.
SECTION 8. Sections 13.01(a)-(c) and (i)-(m), Medical
Liability Insurance Improvement Act of Texas (Article 4590i,
Vernon's Texas Civil Statutes), are amended to read as follows:
(a) In a health care liability claim, a claimant shall, not
later than the 180th [90th] day after the date the claim is filed,
serve on each party or the party's attorney one or more expert
reports, with a curriculum vitae of each expert listed in the[:
[(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 against whom a liability claim is asserted
[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) of
this subsection].
(b) If, as to a defendant physician or health care provider,
an expert report[, cost bond, or cash in lieu of bond] has not been
served [filed or deposited] within the period specified by
Subsection (a) [or (h)] of this section, the court, on the motion of
the affected physician or health care provider, shall enter an
order that[:
[(1) requires the filing of a $7,500 cost bond with
respect to the physician or health care provider not later than the
21st day after the date of the order; and
[(2) provides that if the claimant fails to comply
with the order,] the action shall be dismissed 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) of this section.
(c) Before a claim that has been dismissed under Subsection
(b) [(b)(2)] of this section may be reinstated, the claimant must
pay the reasonable attorney's fees and costs of court incurred by
the defendant before the dismissal [and file a $7,500 cost bond for
each defendant physician or health care provider].
(i) Notwithstanding any other provision of this section, a
claimant may satisfy any requirement of this section for serving
[filing] an expert report by serving [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.
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 health care providers or with respect to both
liability and causation issues for a physician or health care
provider.
(j) Nothing in this section shall be construed to require
the serving [filing] of an expert report regarding any issue other
than an issue relating to liability or causation.
(k) Notwithstanding any other law, an expert report served
[filed] under this section:
(1) is not admissible in evidence by a defendant;
(2) shall not be used in a 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 court shall 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) of]
this section.
(m) A party may make an interlocutory appeal of the decision
of the trial court not to dismiss the suit because the claimant has
failed to serve on the party or the party's attorney an expert
report as required by this section. The appeal is under procedures
established for interlocutory appeals. [On the claimant's
compliance with the requirements of Subsection (d) of this section:
[(1) any cost bond filed or cash deposited in an escrow
account by the claimant under this section 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.]
SECTION 9. Subchapter M, Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes), is amended by adding Section 13.03 to read as follows:
Sec. 13.03. DEPOSITIONS PROHIBITED BEFORE FILING OF
SUIT. Notwithstanding Rule 202, Texas Rules of Civil Procedure, a
person may not take the deposition of a physician or health care
provider for the purpose of investigating a health care liability
claim before the suit based on the claim is filed.
SECTION 10. Sections 14.01(a) and (e), Medical Liability
and Insurance Improvement Act of Texas (Article 4590i, Vernon's
Texas Civil Statutes), are amended to read as follows:
(a) In a suit involving a health care liability claim
against a physician for injury to or death of a patient, a person
may qualify as an expert witness on the issue of whether the
physician departed from accepted standards of medical care only if
the person is a physician who:
(1) is practicing medicine in the same field as the
physician who is the subject of the testimony at the time such
testimony is given or was practicing medicine in the same field as
the physician who is the subject of the testimony at the time the
claim arose;
(2) has knowledge of accepted standards of medical
care for the diagnosis, care, or treatment of the illness, injury,
or condition involved in the claim; and
(3) is qualified on the basis of training or
experience to offer an expert opinion regarding those accepted
standards of medical care.
(e) A pretrial objection to the qualifications of a witness
under this section must 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.
[If 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 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.] The court shall 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. If the
objecting party is unable to object in time for the hearing to be
conducted before the trial, the hearing shall be conducted outside
the presence of the jury. This subsection does not prevent a party
from examining or cross-examining a witness at trial about the
witness's qualifications.
SECTION 11. Subchapter N, Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes), is amended by adding Section 14.02 to read as follows:
Sec. 14.02. QUALIFICATION OF EXPERT WITNESS IN SUIT AGAINST
HEALTH CARE PROVIDER. (a) In a suit involving a health care
liability claim against a health care provider, a person may
qualify as an expert witness on the issue of whether the health care
provider departed from accepted standards of care only if the
person:
(1) is practicing health care in the same field of
practice as the health care provider who is the subject of the
testimony at the time the testimony is given or was practicing
health care in the same field of practice as the health care
provider who is the subject of the testimony at the time the claim
arose;
(2) has knowledge of accepted standards of care for
health care providers for the diagnosis, care, or treatment of the
illness, injury, or condition involved in the claim; and
(3) is qualified on the basis of training or
experience to offer an expert opinion regarding those accepted
standards of care.
(b) For the purposes of this section, "practicing health
care" includes training health care providers in the same field as
the defendant health care provider at an accredited educational
institution or serving as a consulting health care provider and
being licensed, certified, or registered in the same field as the
defendant health care provider.
(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 the testimony is given,
the witness:
(1) is certified by a state or national certifying
agency or has other substantial training or experience in the area
of health care relevant to the claim; and
(2) is actively practicing health care in rendering
health care services relevant to the claim.
(d) The court shall apply the criteria specified in this
section in determining whether an expert is qualified to offer
expert testimony on the issue of whether a health care provider
departed from accepted standards of health care, but may depart
from those criteria if, under the circumstances, the court
determines that there is a good reason to admit the expert's
testimony. The court shall state on the record the reason for
admitting the testimony if the court departs from the criteria.
(e) A pretrial objection to the qualifications of a witness
under this section must 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.
The court shall 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. If the objecting party is unable to
object in time for the hearing to be conducted before the trial, the
hearing shall be conducted outside the presence of the jury. This
subsection does not prevent a party from examining or
cross-examining a witness at trial about the witness's
qualifications.
(f) This section does not prevent a health care provider who
is a defendant from qualifying as an expert.
SECTION 12. The Medical Liability and Insurance Improvement
Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is
amended by adding Subchapters Q, R, and S to read as follows:
SUBCHAPTER Q. COLLATERAL SOURCE BENEFITS
Sec. 17.01. DEFINITION. In this subchapter, "collateral
source benefit" means a benefit paid or payable to or on behalf of a
claimant under:
(1) the Social Security Act (42 U.S.C. Section 301 et
seq.);
(2) a state or federal income replacement, disability,
workers' compensation, or other law that provides partial or full
income replacement;
(3) any insurance policy, other than a life insurance
policy, including:
(A) an accident, health, or sickness insurance
policy;
(B) a disability insurance policy; and
(C) a property or casualty insurance policy,
including a motor vehicle or homeowners' insurance policy;
(4) an agreement under which a person, including a
health maintenance organization operating under a certificate of
authority issued under Chapter 843, Insurance Code, is obligated to
provide or pay for medical, hospital, dental, or other health care
services or similar benefits; or
(5) a contractual or voluntary wage continuation plan,
provided by an employer or other person, or any other system
intended to provide wages during a period of disability.
Sec. 17.02. ADMISSIBILITY OF EVIDENCE OF COLLATERAL SOURCE
BENEFITS. Evidence of a collateral source benefit is admissible in
an action on a health care liability claim if the benefit:
(1) has been paid or is substantially certain to be
paid to the claimant; and
(2) compensates the claimant for at least some of the
damages sought in the action.
Sec. 17.03. CONSIDERATION OF COLLATERAL SOURCE
BENEFITS. (a) The trier of fact shall consider collateral source
benefits admissible under Section 17.02 of this subchapter in
determining the amount of a judgment.
(b) The court shall consider collateral source benefits
admissible under Section 17.02 of this subchapter in reviewing a
judgment for excessiveness.
Sec. 17.04. PREMIUMS PAID FOR COLLATERAL SOURCE
BENEFITS. In determining the amount of a judgment, the trier of
fact may consider premiums personally paid by a claimant to obtain
coverage that provides a collateral source benefit that has been
paid or that is payable.
Sec. 17.05. SUBROGATION. The payer of collateral benefits
introduced under this subchapter may recover an amount from the
claimant and is subrogated to any right or claim of the claimant
only:
(1) as authorized by federal law; or
(2) for expenses of necessary medical, hospital, and
custodial care associated with the claim actually paid to or on
behalf of the claimant.
SUBCHAPTER R. PAYMENT FOR FUTURE LOSSES
Sec. 18.01. SCOPE OF SUBCHAPTER. This subchapter applies
only if the total award of future damages in an action on a health
care liability claim against a physician or health care provider
exceeds $100,000.
Sec. 18.02. PERIODIC PAYMENT. (a) At the request of the
claimant or defendant, the court shall order future damages awarded
in a health care liability claim that exceed $100,000 to be paid in
periodic installments, in the amounts, and over the period of time
determined by the judge.
(b) The judgment must provide that future expenses of
necessary medical, hospital, and custodial care are to be paid as
incurred.
(c) The total amount paid may not exceed the amount of the
award for future damages specified in the findings of the trier of
fact.
(d) Payments for future damages for medical and other health
care costs, for economic loss other than the costs of medical or
other health care and loss of earning capacity, and for noneconomic
loss terminate on the death of the claimant.
(e) The total amount of payments for future damages for loss
of earning capacity owed but not yet paid to the claimant at the
time of the claimant's death shall be paid to the estate of the
claimant in a lump-sum amount based on the present discounted value
of the total as determined by a court.
(f) The court shall require a defendant required to pay
future damages to have adequate insurance or to post security in an
amount adequate to ensure full payment of the damages.
SUBCHAPTER S. ATTORNEY'S FEES
Sec. 19.01. LIMITATIONS ON CONTINGENCY FEES.
Notwithstanding a contract between a claimant and an attorney, an
attorney who represents a claimant in a health care liability claim
may not receive attorney's fees for the representation that exceed:
(1) 40 percent of the lesser of:
(A) the amount awarded to the claimant; or
(B) $50,000; plus
(2) 33 percent of the lesser of:
(A) the amount by which the award exceeds
$50,000; or
(B) $50,000; plus
(3) 25 percent of the lesser of:
(A) the amount by which the award exceeds
$100,000; or
(B) $500,000; plus
(4) 15 percent of the amount by which the award exceeds
$600,000.
Sec. 19.02. COMPUTATION OF ATTORNEY'S FEES. Attorney's
fees for the portion of a judgment that awards future damages are
computed on the present value of the future damages.
SECTION 13. The following sections of the Medical Liability
and Insurance Improvement Act of Texas (Article 4590i, Vernon's
Texas Civil Statutes) are repealed:
(1) Sections 9.03, 9.04, 11.01, 11.03, and 11.04; and
(2) Sections 13.01(d), (e), (f), (g), (h), (n), (o),
(p), and (q).
SECTION 14. (a) Except as provided by this section, the
changes in law made by this Act to the Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes) apply only to a cause of action that accrues on or
after the effective date of this Act. A cause of action that
accrues before the effective date of this Act is governed by the law
in effect immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
(b) Subchapter S, Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes), as added by this Act, applies only to attorney's fees for
representing a claimant in an action filed on or after the effective
date of this Act. Attorney's fees in an action filed before the
effective date of this Act are governed by the law in effect
immediately before that date, and that law is continued in effect
for that purpose.
SECTION 15. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas
Constitution. If this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2003.