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.