78R4701 T

By:  Nixon                                                        H.B. No. 709


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. Section 1.03, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is amended to read as follows: Sec. 1.03. DEFINITIONS. (a) In this part: (1) "Claimant" means a person seeking or who has sought recovery of damages in a health care liability claim. All persons claiming to have sustained damages as the result of the bodily injury or death of a single person are considered to be a single claimant. (2) [(1)] "Court" means any federal or state court. (3) "Economic damages" means compensatory damages for pecuniary loss, including , loss of earnings, loss of earning capacity, loss of care, maintenance, support, services, advice, counsel and reasonable contributions of a pecuniary value, loss of inheritance, and medical, health care and custodial care expenses. Economic damages does not include exemplary damages or damages for physical pain and mental anguish, loss of consortium, disfigurement, physical impairment, or loss of companionship and society. (4) "Emergency medical care" means bona fide emergency services provided after the sudden onset of a medical or traumatic condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that the absence of immediate medical attention could reasonably be expected to result in: (A) placing the patient's health in serious jeopardy; (B) serious impairment to bodily functions; or (C) serious dysfunction of any bodily organ or part. (5) [(2)] "Health care" means any act or treatment performed or furnished, or which should have been performed or furnished, by any health care provider for, to, or on behalf of a patient during the patient's medical care, treatment, or confinement. (6) [(3)] "Health care provider" means any person, partnership, professional association, corporation, facility, or institution duly licensed, certified, registered, or chartered by the State of Texas to provide health care, including [as] a registered nurse, hospital, dentist, podiatrist, pharmacist, assisted living facility or nursing home. [, or] A health care provider also includes an officer, employee, independent contractor, or agent of a health care provider or physician [thereof] acting in the course and scope of his employment or contractual relationship. (7) [(4)] "Health care liability claim" means a cause of action against a health care provider or physician for treatment, lack of treatment, or other claimed departure from accepted standards of medical care or health care, [or] safety or administrative practice or procedure which proximately results in injury to or death of the patient, whether the patient's claim or cause of action sounds in tort or contract. (8) [(5)] "Hospital" means a duly licensed public or private institution as defined in Chapter 241, Health and Safety Code, or in Section 88, Chapter 243, Acts of the 55th Legislature, Regular Session, 1957 (Article 5547-88, Vernon's Texas Civil Statutes). (9) [(6)] "Medical care" means any act defined as practicing medicine in Article 4510, Revised Civil Statutes of Texas, 1925, as amended, performed or furnished, or which should have been performed, by one licensed to practice medicine in Texas for, to, or on behalf of a patient during the patient's care, treatment, or confinement. (10) "Nursing home" means a duly licensed public or private institution as defined in Chapter 242, Health and Safety Code. (11) [(7)] "Pharmacist" means one licensed under Chapter 107, Acts of the 41st Legislature, Regular Session, 1929, as amended (Article 4542a, Vernon's Texas Civil Statutes), who, for the purposes of this Act, performs those activities limited to the dispensing of prescription medicines which result in health care liability claims and does not include any other cause of action that may exist at common law against them, including but not limited to causes of action for the sale of mishandled or defective products. (12) [(8)] "Physician" means an [a] individual [person] licensed to practice medicine in this state, a professional association organized under the Texas Professional Association Act (Article 1528f, Vernon's Texas Civil Statutes) by an individual physician or group of physicians, a partnership or limited liability partnership formed by a group of physicians, or a nonprofit health corporation certified under Section 162.001, Occupations Code. (13) [(9)] "Representative" means the spouse, parent, guardian, trustee, authorized attorney, or other authorized legal agent of the patient or claimant. (b) Any legal term or word of art used in this part, not otherwise defined in this part, shall have such meaning as is consistent with the common law. 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 prior to the 30th day before the commencement of a trial of a health care liability claim, a defendant may serve on a plaintiff who is asserting or entitled to assert a claim, a settlement offer for a stated consideration to be performed in accordance with the terms of an unconditional full release and settlement agreement executed by or on behalf of the plaintiff to whom the offer is made. (b) The defendant shall prepare and serve the release and settlement agreement with the offer of settlement. (c) A plaintiff who receives an offer of settlement from a defendant may accept the offer only if the plaintiff 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 plaintiff accepts the settlement offer, the defendant shall pay the full amount of the settlement offer to the plaintiff in exchange for the plaintiff's executed release not later than the 10th day after the date the plaintiff served notice on the defendant accepting the offer, unless the parties agree otherwise. (e) The plaintiff accepting the settlement offer shall, not later than the seventh day after the date the plaintiff received payment and delivered the executed release, file a dismissal with prejudice. Sec. 3.02. SETTLEMENT OFFERS; REJECTION. (a) A settlement offer by a defendant that is not accepted by a plaintiff within the time specified by Section 3.01 of this subchapter is considered rejected by the plaintiff 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 plaintiff who has rejected the offer. In determining the amount, the court shall exclude any prejudgment or postjudgment interest. (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 plaintiff, the court shall order an offset against a judgment entered against the defendant up to the amount of the judgment: (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 plaintiff under Subsection (d) of this section. Sec. 3.03. MULTIPLE SETTLEMENT OFFERS. The defendant may make a settlement offer without regard to whether the plaintiff has rejected a previous offer. SECTION 3. Section 4.01, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is amended by adding Section 4.01(f) read as follows: (f) Notwithstanding the provisions of Rule 202, Texas Rules of Civil Procedure, no deposition may be taken of any physician or health care provider for the purpose of investigating a health care liability claim prior to the filing of a lawsuit. SECTION 4. Subchapter G, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes), is amended by adding Sections 7.03, 7.04 and 7.05 to read as follows: Sec. 7.03. JURY INSTRUCTIONS ON FEDERAL OR STATE INCOME TAXES. (a) In a health care liability claim, if any claimant seeks recovery for loss or earnings, loss of earning capacity, loss of contributions of a pecuniary value, or loss of inheritance, evidence of the past payment of federal or state income taxes by the injured party or decedent through which the alleged loss has occurred is admissible before the trier of fact for the purpose of determining the existence and amount, if any, of the alleged loss. (b) In a health care liability claim, if any claimant seeks recovery for loss or earnings, loss of earning capacity, loss of contributions of a pecuniary value, or loss of inheritance, the court shall instruct the jury whether any recovery for compensatory damages sought by the claimant are subject to federal or state income taxes. Sec. 7.04. JURY INSTRUCTIONS IN CASES INVOLVING EMERGENCY MEDICAL CARE. (a) In an action for damages that involves a claim of negligence arising from the provision of emergency medical care, the court shall instruct the jury to consider, together with all other relevant matters: (1) whether the person providing care did not have the patient's medical history or was unable to obtain a full medical history, including the knowledge of preexisting medical conditions, allergies, and medications; (2) the lack of a preexisting physician-patient relationship; (3) the circumstances constituting the emergency; and (4) the circumstances surrounding the delivery of the emergency medical care. (b) The provisions of Subsection (a) of this section do not apply to medical care or treatment: (1) that occurs after the patient is stabilized and is capable of receiving medical treatment as a nonemergency patient; or (2) that is unrelated to the original medical emergency. Sec. 7.05. CONFLICT WITH TEXAS RULES OF CIVIL EVIDENCE. (a) To the extent that this subchapter conflicts with the Texas Rules of Civil Evidence, this subchapter controls. (b) Notwithstanding Section 22.004, Government Code, the supreme court may not adopt or promulgate rules or amendments to rules in conflict with this subchapter. SECTION 5. Subchapter H, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is amended read as follows:
SUBCHAPTER H. PERIODIC PAYMENTS OF FUTURE DAMAGES.
Sec. 8.01. DEFINITIONS. In this subchapter: (1) "Future damages" means damages that are incurred after the date of the judgment for medical, health care or custodial care services; physical pain and mental anguish, disfigurement, or physical impairment; loss of consortium, companionship or society; or loss of earnings. (2) "Future loss of earnings" means loss of income, wages or earning capacity, other pecuniary losses and loss of inheritance that are incurred after the date of the judgment. (3) "Periodic payments" means the payment of money or its equivalent to the recipient of future damages at defined intervals. Sec. 8.02. COURT ORDER FOR PERIODIC PAYMENTS. (a) In an action on a health care liability claim where final judgment is rendered against a physician or health care provider, the court shall, at the request of a defendant physician or health care provider or claimant, enter an order that future damages of the claimant be paid in whole or in part by periodic payments rather than by a lump-sum payment if the present value of the award for future damages, as determined by the court, equals or exceeds $100,000. In entering a judgment ordering the payment of future damages by periodic payments, the court shall make a specific finding as to the dollar amount of periodic payments that will compensate the claimant for the future damages. The entry of an order for the payment of future damages by periodic payments constitutes a release of the health care liability claim filed by the claimant. (b) As a condition to authorizing periodic payments of future damages, the court shall require a defendant who is not adequately insured to provide evidence of financial responsibility in an amount adequate to assure full payment of such damages awarded by the judgment. A judgment for periodic payments shall provide for payments to be funded by: (1) an annuity contract issued by a company licensed to do business as an insurance company; (2) an obligation or obligations of the United States; (3) applicable and collectible liability insurance from one or more insurers; or (4) any other satisfactory form of funding approved by the court. (c) Upon termination of periodic payments of future damages, the court shall order the return of this security, or so much as remains, to the defendant. (d) The judgment ordering the payment of future damages by periodic payments shall specify the recipient or recipients of the payments, the dollar amount of the payments, the interval between payments, and the number of payments or the period of time over which payments shall be made. (e) Money damages awarded for loss of future earnings shall not be reduced or payments terminated by reason of the death of the recipient or recipients of the award, but shall be paid to the estate of the recipient or recipients of the award. Periodic payments of future damages, other than future loss of earnings, shall terminate upon the death of the recipient or recipients of those future damages. (f) In the event the recipient or recipients of periodic payments dies before all payments required by the judgment are paid, the court may modify the judgment to award and apportion the unpaid damages for future loss of earnings in an appropriate manner. (g) Following the satisfaction or termination of any obligations specified in the judgment for periodic payments, any obligation of the defendant physician or health care provider to make further payments shall cease and any security given shall revert to the defendant. Sec. 8.03. AWARD OF ATTORNEY FEES. When attorney fees are to be awarded in a final judgment, the fees shall be awarded proportional to the award of past and future damages. If the claimant has agreed to compensate the attorney on a contingency basis, the claimant shall be responsible for paying the agreed percentage calculated solely on the basis of that portion of the award not subject to periodic payments. The remaining unpaid portion of the attorney's fees shall be paid in periodic installments of the same duration and intervals as the periodic payments in accordance with an order entered by the court. SECTION 6. SUBCHAPTER I, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is amended to read as follows:
SUBCHAPTER I. PAYMENT OF MEDICAL OR HEALTH CARE EXPENSES
[ADVANCE PAYMENTS]
Sec. 9.01. RECOVERY OF MEDICAL OR HEALTH CARE EXPENSES. Recovery of medical or health care expenses in a health care liability claim shall be limited to the amount actually paid or incurred by or on behalf of the claimant. Sec. 9.02. COLLATERAL BENEFITS. (a) A defendant physician or health care provider may introduce evidence in a health care liability claim of any amount payable as a collateral benefit to the claimant pursuant to the Social Security Act (42 U.S.C. Section 301 et seq.), any state or federal income disability or worker's compensation act, any individual or group policy of accident or sickness insurance or any group health benefit plan offered by any person that provides coverage for medical or health care services or disability income protection. If a defendant physician or health care provider elects to introduce evidence of amounts payable as a benefit to the claimant, the claimant may introduce evidence of any amount the claimant has paid to secure the right to the benefit. (b) During the pendency of an action, if the claimant has a policy of insurance which provides health benefits or income disability coverage, and the claimant is unwilling or unable to pay the costs of renewing or continuing that policy of insurance in force, the defendant physician or health care provider may tender to the claimant the cost of maintaining the insurance coverage. Upon receipt of such tender, the claimant shall continue such policy or polices in force. (c) The payer of collateral benefits, introduced pursuant to Subsection (a), shall not recover any amount against the claimant nor shall the payer be subrogated to any rights or claims of the claimant, unless authorized by federal law. Sec. 9.03. ADJUSTMENTS FOR ADVANCE PAYMENTS. The advance payment shall inure to the exclusive benefit of the defendant or his or its carrier making the advance payment, and in the event the advance payment exceeds the pro rata liability of the defendant or the carrier making the payment, the trial judge shall order any adjustment necessary to equalize the amount which each defendant is obligated to pay under this subchapter, exclusive of costs. Sec. 9.04. CERTAIN ADVANCE PAYMENTS EXEMPT FROM REPAYMENT. In no case shall an advance payment in excess of an award be repayable by the person receiving it. SECTION 7. 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. Notwithstanding any other law, no health care liability claim may be commenced unless the action is filed within two years from the occurrence of the breach or tort 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. Notwithstanding any other law regarding the disability of persons under the age of eighteen years old to file and prosecute causes of action, this section shall be construed as removing any disability of minority that would otherwise prevent a minor from filing and prosecuting a cause of action for a health care liability claim to the extent that such other law is inconsistent with the provisions of this section. SECTION 8. 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. DEFINITIONS [DEFINITION]. In this subchapter: (1) "Consumer [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. (2) "Economic damages" means compensatory damages for any pecuniary loss or damage, but does not include any loss or damage, however characterized, for past, present, and future physical pain and suffering, mental anguish and suffering, loss of consortium, loss of companionship and society, disfigurement, or physical impairment. SECTION 9. Section 11.02, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is amended to read as follows: Sec. 11.02. LIMIT ON CIVIL LIABILITY. (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 all damages including punitive damages, of the physician or health care provider shall be limited to an amount not to exceed $500,000 per claimant. (b) Subsection (a) of this section does not apply to the amount of damages awarded on a health care liability claim for the expenses of necessary medical, hospital, and custodial care received before judgment or required in the future for treatment of the injury. [(c) This section shall not limit the liability of any insurer where facts exist that would enable a party to invoke the common law theory of recovery commonly known in Texas as the "Stowers Doctrine."] (c) [(d)] In any action on a health care liability claim that is tried by a jury in any court in this state, the following shall be included in the court's written instructions to the jurors: Do not consider, discuss, nor speculate whether or not liability, if any, on the part of any party is or is not subject to any limit under applicable law. SECTION 10. Section 11.02, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes), is amended by adding: (e) 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 all damages and losses, other than economic damages, of the physician or health care provider shall be limited to an amount not to exceed $250,000 per claimant. SECTION 11. Section 11.03, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes), is amended to read as follows: Sec. 11.03. ALTERNATIVE PARTIAL LIMIT ON CIVIL LIABILITY. In the event that Section 11.02 [(a)] (e) of this subchapter is stricken from this subchapter or is otherwise to any extent invalidated by a method other than through legislative means, the following shall become effective: (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 all damages and losses, other than economic damages, of the physician or health care provider [past and future noneconomic losses recoverable by or on behalf of any injured person and/or the estate of such person, including without limitations as applicable past and future physical pain and suffering, mental anguish and suffering, consortium, disfigurement, and any other nonpecuniary damage] shall be limited to an amount not to exceed [$150,000] $250,000 per claimant. (b) Subsection (a) applies to any physician or health care provider that provides evidence of financial responsibility in the following amounts in effect for any act or omission to which this subchapter applies: (1) at least $100,000 for each health care liability claim and at least $300,000 in aggregate for all health care liability claims occurring in an insurance policy year, calendar year, or fiscal year for a physician participating in an approved residency program; (2) at least $200,00 for each health care liability claim and at least $600,000 in aggregate for all health care liability claims occurring in an insurance policy year, calendar year, or fiscal year for a physician or health care provider, other than a hospital; and (3) at least $500,000 for each health care liability claim and at least $1,500,000 in aggregate for all health care liability claims occurring in an insurance policy year, calendar year, or fiscal year for a hospital. (c) Effective September 1, 2005, Subsection (a) applies to any physician or health care provider that provides evidence of financial responsibility in the following amounts in effect for any act or omission to which this subchapter applies: (1) at least $100,000 for each health care liability claim and at least $300,000 in aggregate for all health care liability claims occurring in an insurance policy year, calendar year, or fiscal year for a physician participating in an approved residency program; (2) at least $300,00 for each health care liability claim and at least $900,000 in aggregate for all health care liability claims occurring in an insurance policy year, calendar year, or fiscal year for a physician or health care provider, other than a hospital; and (3) at least $750,000 for each health care liability claim and at least $2,250,000 in aggregate for all health care liability claims occurring in an insurance policy year, calendar year, or fiscal year for a hospital. (d) Effective September 1, 2007, Subsection (a) applies to any physician or health care provider that provides evidence of financial responsibility in the following amounts in effect for any act or omission to which this subchapter applies: (1) at least $100,000 for each health care liability claim and at least $300,000 in aggregate for all health care liability claims occurring in an insurance policy year, calendar year, or fiscal year for a physician participating in an approved residency program; (2) at least $500,000 for each health care liability claim and at least $1,000,000 in aggregate for all health care liability claims occurring in an insurance policy year, calendar year, or fiscal year for a physician or health care provider, other than a hospital; and (3) at least $100,000,000 for each health care liability claim and at least $3,000,000 in aggregate for all health care liability claims occurring in an insurance policy year, calendar year, or fiscal year for a hospital. (e) Evidence of financial responsibility may be established at the time of judgment by either of the following methods: (1) providing proof of the purchase of a contract of insurance or other plan of insurance authorized by the state; or (2) providing proof of the maintenance of financial reserves in a financial institution in this state that is chartered by the United States or this state or an irrevocable letter of credit from a financial institution in this state that is chartered by the United States or this state. SECTION 12. Section 11.04, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes), is amended to read as follows: Sec. 11.04 ADJUSTMENT OF LIABILITY LIMITS. When there is an increase or decrease in the consumer price index with respect to the amount of that index on the effective date of this subchapter [each of] the liability limit[s] prescribed in Section 11.02(a) [or in Section 11.03] of this subchapter [as applicable] shall be increased or decreased, as applicable, by a sum equal to the amount of such limit multiplied by the percentage increase or decrease in the consumer price index between the effective date of this subchapter and the time at which damages subject to such limits are awarded by final judgment or settlement. SECTION 13. The Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes), is amended by adding Subchapter S to read as follows:
SUBCHAPTER S. ATTORNEY FEES.
Sec. 19.01. LIMITATION ON ATTORNEY CONTINGENCY FEES. (a) An attorney shall not contract for or collect a contingency fee for representing any claimant seeking damages in connection with a health care liability claim in excess of 33.3 percent of the amount recovered. (b) The limitations on attorney contingency fees shall apply regardless of whether the recovery is by settlement, arbitration, or judgment, or whether the person for whom the recovery is sought is an adult, a minor, or an incapacitated person. (c) If periodic payments are recovered by the claimant, the court shall place a total value on these payments based upon the claimant's projected life expectancy and then reduce this amount to present value for purposes of computing the award of attorney's fees. (d) For purposes of this section, "recovered" means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim. Costs of medical or health care services incurred by the claimant and the attorney's office overhead costs or charges are not deductible disbursements or costs for such purpose. Sec. 19.02. ALTERNATIVE LIMIT ON ATTORNEY CONTINGENCY FEES. In the event that Section 11.02(e) of this subchapter is stricken from this subchapter or is otherwise to any extent invalidated by a method other than through legislative means, the following shall become effective: (a) An attorney shall not contract for or collect a contingency fee for representing any person seeking damages in connection with a health care liability claim in excess of the following limits: (1) 40 percent of the first $50,000 recovered; (2) 33.3 percent of the next $50,000 recovered: (3) 25 percent of the next $500,000 recovered; and (4) 15 percent of any additional amount recovered. (b) The limitations on attorney contingency feed shall apply regardless of whether the recovery is by settlement, arbitration, or judgment, or whether the person for whom the recovery is sought is an adult, a minor, or an incapacitated person. (c) If periodic payments are recovered by the claimant, the court shall place a total value on these payments based upon the claimant's projected life expectancy and then reduce this amount to present value for purposes of computing the award of attorney's fees. (d) For purposes of this section, "recovered" means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim. Costs of medical or health care services incurred by the claimant and the attorney's office overhead costs or charges are not deductible disbursements or costs for such purpose. SECTION 14. Subchapter L, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes), is amended by adding Section 12.02 to read as follows: Sec. 12.02. STANDARD OF PROOF IN CASES INVOLVING EMERGENCY MEDICAL CARE. In a suit involving a health care liability claim against a physician or health care provider for injury to or death of a patient arising out of the provision of emergency medical care, the person bringing the suit may prove that the treatment or lack of treatment by the physician or health care provider departed from accepted standards of medical care or health care only if the person shows by clear and convincing evidence that the physician or health care provider did not use the degree of care and skill that is reasonably expected of an ordinarily prudent physician or health care provider in the same or similar circumstances. SECTION 15. 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. (a) In a health care liability claim, a claimant shall, not later than the 180th [90th] day after the date the claim is filed [: [(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)] serve on each party or their attorney [file] one or more [an] expert reports [report],with a curriculum vitae of each expert listed in the report, for each physician or health care provider against whom a health care 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) Until a claimant has served the expert report and curriculum vitae, as required by Subsection (a), all discovery in a health care liability claim is stayed except for the acquisition of the patient's medical records, medical or psychological studies, or tissue samples through: (1) written discovery as defined in Rule 192.7, Texas Rules of Civil Procedure; (2) depositions on written questions under Rule 200, Texas Rules of Civil Procedure; and (3) discovery from non-parties under Rule 205, Texas Rules of Civil Procedure. (c) [(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) awards to the affected physician or health care provider reasonable attorney fees and costs of court incurred by that defendant physician or health care provider [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) dismisses the claim [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, with prejudice [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)(2) of this section may be reinstated, the claimant must pay the 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. [(d) Not later than the later of the 180th day after the date on which a health care liability claim is filed or the last day of any extended period established under Subsection (f) or (h) of this section, the claimant shall, for each physician or health care provider against whom a claim is asserted: [(1) furnish to counsel for each physician or health care provider one or more expert reports, with a curriculum vitae of each expert listed in the report; or [(2) voluntarily nonsuit the action against the physician or health care provider. [(e) If a claimant has failed, for any defendant physician or health care provider, to comply with Subsection (d) of this section within the time required, the court shall, on the motion of the affected physician or health care provider, enter an order awarding as sanctions against the claimant or the claimant's attorney: [(1) the reasonable attorney's fees and costs of court incurred by that defendant; [(2) the forfeiture of any cost bond respecting the claimant's claim against that defendant to the extent necessary to pay the award; and [(3) the dismissal of the action of the claimant against that defendant with prejudice to the claim's refiling. [(f) The court may, for good cause shown after motion and hearing, extend any time period specified in Subsection (d) of this section for an additional 30 days. Only one extension may be granted under this subsection. [(g) Notwithstanding any other provision of this section, if a claimant has failed to comply with a deadline established by Subsection (d) of this section and after hearing the court finds that the failure of the claimant or the claimant's attorney was not intentional or the result of conscious indifference but was the result of an accident or mistake, the court shall grant a grace period of 30 days to permit the claimant to comply with that subsection. A motion by a claimant for relief under this subsection shall be considered timely if it is filed before any hearing on a motion by a defendant under Subsection (e) of this section. [(h) The affected parties may agree to extend any time period specified in Subsection (a) or (d) of this section. An agreement under this subsection is binding and shall be honored by the court if signed by the affected parties or their counsel and filed with the court.] (d) [(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. (e) [(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. (f) [(k) Notwithstanding any other law, an] An expert report served [filed] under this section: (1) is not admissible in evidence by any party [a defendant]; (2) shall not be used in a deposition, trial, or other proceeding; and (3) shall not be referred to by [a defendant] any party during the course of the action for any purpose. (g) If an expert report is used by the claimant in the course of the action for any purpose other than to meet the service requirement of Subsection (a), the restrictions imposed by Subsection (f) on use of the expert report by any party is waived. (h) [(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 an [a] objective good faith effort to comply with the definition of an expert report in Subsection (k) [(r)] (6) of this section. [(m) 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. [(n) If a claimant nonsuits a health care liability claim against a physician or health care provider before filing a cost bond and seeks to refile the same or a similar health care liability claim against the physician or health care provider, the claimant shall file a $7,500 cost bond for each previously nonsuited physician or health care provider at the time of the filing of the health care liability claim. If the claimant fails to file the $7,500 cost bond for each physician or health care provider, on motion and hearing the court shall order the filing of the cost bond and the claimant shall pay the movant reasonable attorney's fees incurred in obtaining relief under this subsection. [(o) Notwithstanding any other provision of this section, a claimant who is proceeding without an attorney and who is unable to afford a cost bond or cash deposit may, in lieu of a cost bond or cash deposit, file an affidavit in the same form required for an affidavit in lieu of security for costs under the Texas Rules of Civil Procedure.] (i) [(p)] In the event of a conflict between this section and another law, including a rule of procedure or court rule, this section controls to the extent of the conflict. (j) [(q)] Notwithstanding the provisions of Section 22.004, Government Code, the supreme court may not amend or adopt rules in conflict with this section. The district courts and statutory county courts in a county may not adopt local rules in conflict with this section. (k) [(r)] In this section: (1) "Affected parties" means the claimant and the physician or health care provider who are directly affected by an act or agreement required or permitted by this section and does not include other parties to an action who are not directly affected by that particular act or agreement. (2) "Claim" means a health care liability claim. [(3) "Claimant" means a party who files a pleading asserting a claim. All plaintiffs claiming to have sustained damages as the result of the bodily injury or death of a single person are considered to be a single claimant.] (3) [(4)] "Defendant" means a physician or health care provider against whom a health care liability claim is asserted. The term includes a third-party defendant, cross-defendant, or counterdefendant. (4) [(5)] "Expert" means: (A) with respect to a person giving opinion testimony regarding whether a physician departed from accepted standards of medical care, an expert qualified to testify under the requirements of Section 14.01(a) of this Act; or (B) with respect to a person giving opinion testimony regarding whether a health care provider departed from accepted standards of health care [about a nonphysician health care provider], an expert qualified to testify under the requirements of Section 14.02 of this Act [who has knowledge of accepted standards of care for the diagnosis, care, or treatment of the illness, injury, or condition involved in the claim]; or (C) with respect to giving opinion testimony about the causal relationship between the injury, harm or damages claimed and the alleged departure from the applicable standard of care in any health care liability claim, a physician who is otherwise qualified to render opinions on such causal relationship under the Texas Rules of Evidence; or (D) with respect to giving opinion testimony about the causal relationship between the injury, harm or damages claimed and the alleged departure from the applicable standard of care for a dentist, a dentist who is otherwise qualified to render opinions on such causal relationship under the Texas Rules of Evidence; or (E) with respect to giving opinion testimony about the causal relationship between the injury, harm or damages claimed and the alleged departure from the applicable standard of care for a podiatrist, a podiatrist who is otherwise qualified to render opinions on such causal relationship under the Texas Rules of Evidence. (5) [(6)] "Expert report" means a written report by an expert that provides a fair summary of the expert's opinions as of the date of the report regarding applicable standards of care, the manner in which the care rendered by the physician or health care provider failed to meet the standards, and the causal relationship between that failure and the injury, harm, or damages claimed. SECTION 16. Sections 14.01(e) and (g), Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) are amended to read as follows: (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 21st day after 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. (g) In this subchapter [section], "physician" means a person who is: (1) licensed to practice medicine in one or more states in the United States; or (2) a graduate of a medical school accredited by the Liaison Committee on Medical Education or the American Osteopathic Association if testifying as a defendant and that testimony relates to that defendant's standard of care, alleged departure from that standard of care, or the causal relationship between the alleged departure from that standard of care and the injury, harm or damages claimed. SECTION 17. Subchapter N, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is amended by adding Sections 14.02 and 14.03 to read as follows: Sec. 14.02. QUALIFICATIONS OF EXPERT WITNESS IN SUIT AGAINST A 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 defendant at the time such testimony is given or was practicing as such a health care provider 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 health care. (b) For the purpose of this section, "practicing health care" includes, but is not limited to, 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 Texas licensing agency or a national professional 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 subsections (a), (b), and (c) of this section in determining whether an expert is qualified to offer expert testimony on the issue of whether the 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 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) This section does not prevent a health care provider who is a defendant, or employees of the defendant health care provider, from qualifying as an expert. (f) 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 21st day after 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. Sec. 14.03. QUALIFICATIONS OF EXPERT WITNESS ON CAUSATION IN HEALTH CARE LIABILITY CLAIM. (a) Except as provided in Subsections (b) and (c) of this section, in a suit involving a health care liability claim against a physician or health care provider, a person may qualify as an expert witness on the issue of the causal relationship between the alleged departure from accepted standards of care and the injury, harm, or damages claimed only if the person is a physician and is otherwise qualified to render opinions on such causal relationship under the Texas Rules of Evidence. (b) In a suit involving a health care liability claim against a dentist, a person may qualify as an expert witness on the issue of the causal relationship between the alleged departure from accepted standards of care and the injury, harm, or damages claimed, if the person is a dentist and is otherwise qualified to render opinions on such causal relationship under the Texas Rules of Evidence. (c) In a suit involving a health care liability claim against a podiatrist, a person may qualify as an expert witness on the issue of the causal relationship between the alleged departure from accepted standards of care and the injury, harm, or damages claimed, if the person is a podiatrist and is otherwise qualified to render opinions on such casual relationship under the Texas Rules of Evidence. (d) 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 21st day after 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 18. Subchapter P, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is amended to read as follows:
SUBCHAPTER P. PREJUDGMENT INTEREST
Sec. 16.01. APPLICATION OF OTHER LAW. Notwithstanding Chapter 304, Texas Finance Code [Section 6(a)-(f), Article 1.05, Title 79, Revised Statutes (Article 5069-1.06, Vernon's Texas Civil Statutes)], prejudgment interest in a judgment on a health care liability claim shall be awarded in accordance with this subchapter. Sec. 16.02. COMPUTATION OF PREJUDGMENT INTEREST. [(a) In a health care liability claim, prejudgment interest may not be charged with respect to a defendant physician or health care provider who has settled the claim before the 181st day after the date notice of the claim was first mailed to the physician or health care provider.] (a) [(b)] Subject to Section 11.01 and 11.02 of this Act [In a health care liability claim that is not settled within the period specified by Subsection (a) of this section], the judgment must include prejudgment interest on past damages awarded in the judgment [found by the trier of fact], but shall not include prejudgment interest on future damages [found by the trier of fact] awarded in the judgment. (b) [(c)] Prejudgment interest allowed under this subchapter shall be computed in accordance with Sections 304.003(b)(1) of the Texas Finance Code [Article 1E.103, Title 79, Revised Statutes], for a period beginning on the date of injury and ending on the date before the date the judgment is signed. (c) [(d)] In this section: (1) "Past damages" means damages awarded to compensate the claimant for loss the claimant will incur for a period beginning on the date of injury and ending on the date before the date of judgment. (2) "Future damages" means damages awarded to compensate the claimant for loss the claimant will incur after the date of judgment. SECTION 19. Section 51.0014(a), Civil Practice and Remedies Code, is amended to read as follows: (a) A person may appeal from an interlocutory order of a district court, county court at law, or county court that: (1) appoints a receiver or trustee; (2) overrules a motion to vacate an order that appoints a receiver or trustee; (3) certifies or refuses to certify a class in a suit brought under Rule 42 of the Texas Rules of Civil Procedure; (4) grants or refuses a temporary injunction or grants or overrules a motion to dissolve a temporary injunction as provided by Chapter 65; (5) denies a motion for summary judgment that is based on an assertion of immunity by an individual who is an officer or employee of the state or a political subdivision of the state; (6) denies a motion for summary judgment that is based in whole or in part upon a claim against or defense by a member of the electronic or print media, acting in such capacity, or a person whose communication appears in or is published by the electronic or print media, arising under the free speech or free press clause of the First Amendment to the United States Constitution, or Article 1, Section 8, of the Texas Constitution, or Chapter 73; (7) grants or denies the special appearance of a defendant under Rule 120a, Texas Rules of Civil Procedure, except in a suit brought under the Family Code; [or] (8) grants or denies a plea to the jurisdiction by a governmental unit as that term is defined in Section 101.001; (9) denies all or part of the relief sought pursuant to a motion under Section 13.01(c), Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes); or (10) grants relief sought pursuant to a motion under Section 13.01(h), Medical Liability and Insurance Improvement Act of Texas (Article 4590i,Vernon's Texas Civil Statutes). SECTION 20. Sections 82.001 and 82.002, Civil Practice and Remedies Code, are amended to read as follows: Sec. 82.001. DEFINITIONS. In this chapter: (1) "Claimant" means a party seeking relief, including a plaintiff, counterclaimant, or cross-claimant. (2) "Products liability action" means any action against a manufacturer, [or] seller, or Medical Service Provider for recovery of damages arising out of personal injury, death, or property damage allegedly caused by a defective product whether the action is based in strict tort liability, strict products liability, negligence, misrepresentation, breach of express or implied warranty, or any other theory or combination of theories. (3) "Seller" means a person who is engaged in the business of distributing or otherwise placing, for any commercial purpose, in the stream of commerce for use or consumption a product or any component part thereof. (4) "Manufacturer" means a person who is a designer, formulator, constructor, rebuilder, fabricator, producer, compounder, processor, or assembler of any product or any component part thereof and who places the product or any component part thereof in the stream of commerce. (5) "Medical Service Provider" means a person, partnership, corporation or professional association composed of persons duly licensed or chartered by the State of Texas to practice medicine in the state or a duly licensed public or private institution as defined in Chapter 241, Health & Safety Code, or in Section 88, Chapter 243, Acts of the 55th Legislature, Regular Session, 1957 (Article 5549-88) or other health care provider as defined in Section 1.03(a)(3) of Article 4590i who prescribes or dispenses a drug or device, as those terms are defined in the Federal Food, Drug and Cosmetic Act (21 U.S.C. Section 321). Sec. 82.002. MANUFACTURER'S DUTY TO INDEMNIFY. (a) A manufacturer shall indemnify and hold harmless a seller or medical service provider against loss arising out of a products liability action, except for any loss caused by the seller's or medical service provider's negligence, intentional misconduct, or other act or omission, such as negligently modifying or altering the product, for which the seller is independently liable. A medical service provider shall not be considered negligent for prescribing or providing a drug or device according to the manufacturer's written or oral recommendations or according to any therapeutic manner generally accepted in the community. (b) For purposes of this section, "loss" includes court costs and other reasonable expenses, reasonable attorney fees, and any reasonable damages. (c) Damages awarded by the trier of fact shall, on final judgment, be deemed reasonable for purposes of this section. (d) For purposes of this section, a wholesale distributor or retail seller who completely or partially assembles a product in accordance with the manufacturer's instructions shall be considered a seller. (e) The duty to indemnify under this section: (1) applies without regard to the manner in which the action is concluded; and (2) is in addition to any duty to indemnify established by law, contract, or otherwise. (f) A seller or medical service provider eligible for indemnification under this section shall give reasonable notice to the manufacturer of a product claimed in a petition or complaint to be defective, unless the manufacturer has been served as a party or otherwise has actual notice of the action. (g) A seller or medical service provider is entitled to recover from the manufacturer court costs and other reasonable expenses, reasonable attorney fees, and any reasonable damages incurred by the seller or medical service provider to enforce the seller's or medical service provider's right to indemnification under this section. SECTION 21. Section 84.004(c), Civil Practice and Remedies Code, is amended to read as follows: (c) Except as provided by Subsection (d) and Section 84.007, a volunteer health care provider [who is serving as a direct service volunteer of a charitable organization]is immune from civil liability for any act or omission resulting in death, damage, or injury to a patient if: [(1) the volunteer was acting in good faith and in the course and scope of the volunteer's duties or functions within the organization;] [(2)] (1) the volunteer commits the act or omission in the course of providing health care services to the patient; [(3)] (2) the services provided are within the scope of the license of the volunteer; and [(4)] (3) before the volunteer provides health care services, the patient or, if the patient is a minor or is otherwise legally incompetent, the patient's parent, managing conservator, legal guardian, grandparent, adult brother or sister, another adult who has actual care, control and possession of the patient and has written authorization to consent for the patient from the parent, managing conservator or guardian, an educational institution in which the patient is enrolled and has written authorization to consent for the patient from the parent, managing conservator or guardian, or other person with legal responsibility for the care of the patient signs a written statement that acknowledges: (A) that the volunteer is providing care that is not administered for or in expectation of compensation; and (B) the limitations on the recovery of damages from the volunteer in exchange for receiving the health care services. SECTION 22. Chapter 84, Civil Practice and Remedies Code, is amended by adding Section 84.065 to read as follows: Sec. 84.0065. ORGANIZATION LIABILITY OF HOSPITALS. Except as provided by in Section 84.007 of this Act, in any civil action brought against a hospital or hospital system, or their respective employees, officers, directors, or volunteers for damages based on an act or omission by such hospital or hospital system, or their respective employees, officers, directors or volunteers, the liability of the hospital or hospital system, or their respective employees, officers, directors, or volunteers is limited to money damages in a maximum amount of $500,000 for any act or omission resulting in death, damage, or injury to a patient if the patient or, if the patient is a minor or is otherwise legally incompetent, the patient's parent, managing conservator, legal guardian, grandparent, adult brother or sister, another adult who has actual care, control and possession of the patient and has written authorization to consent for the patient from the parent, managing conservator or guardian, an educational institution in which the patient is enrolled and has written authorization to consent for the patient from the parent, managing conservator or guardian, or other person with legal responsibility for the care of the patient signs a written statement that acknowledges: (1) that the hospital or hospital system is providing care that is not administered for or in expectation of compensation; and (2) the limitations on the recovery of damages from the hospital or hospital system in exchange for receiving the health care services. SECTION 23. Section 88.002, Civil Practice and Remedies Code, is amended by adding Subsection (l) to read as follows: (l) This chapter does not create liability on the part of physicians or health care providers for medical care or health care services performed or furnished or which should have been performed or furnished for, to, or on behalf of a patient. SECTION 24. Article 5.15-1, Insurance Code, is amended by adding Section 11 to read as follows: Sec. 11. VENDOR'S ENDORSEMENT. No insurer shall exclude or otherwise limit coverage for physicians or health care providers under a vendor's endorsement issued to a manufacturer as that term is defined in Section 82.001(4), Civil Practice and Remedies Code. A physician or health care provider shall be considered a vendor for purposes of coverage under a vendor's endorsement or a manufacturer's general liability or products liability policy. SECTION 25. REPEALER. Section 242.0372, Health and Safety Code, is repealed. SECTION 26. (a) The commissioner of insurance, with the full cooperation of the Health Professions Council, the Texas Health and Human Services Commission, the Employees Retirement System and the Teachers Retirement System, shall conduct a series of studies regarding the effect of this legislation on the: (1) price and availability of insurance for health care liability claims; (2) number and cost of health liability claims; (3) price and availability of health insurance; (4) cost-savings, if any, to the state budget; and (5) willingness of healthcare providers to provide health care services. (b) The commissioner of insurance may, at the commissioner's discretion, require the state entities listed above to enter into Memorandums of Understanding in order to facilitate the preparation of the study. (c) The commissioner of insurance may contract with an outside consultant to assist with the study and to draft reports, as necessary. (d) Not later than January 1, 2004, the commissioner of insurance shall begin collecting information necessary to conduct the study required under this section. (e) Not later than December 1, 2006, the commissioner of insurance shall submit a report to the legislature regarding the results of the study conducted under this section. The commissioner of insurance shall submit subsequent reports to the legislature on an annual basis. SECTION 27. The Medical Liability and Insurance Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) is amended by adding Subchapter Q to read as follows:
SUBCHAPTER Q. DECLARATORY JUDGMENTS; INJUNCTIONS; APPEALS.
Sec. 17.01. APPLICABILITY. This subchapter applies to all amendments to the Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) enacted by the 78th Legislature, Regular Session, 2003, and during all subsequent regular or special sessions of the legislative. Sec. 17.02. DECLARATORY JUDGMENT; APPEALS. (a) The constitutionality and other validity under the state or federal constitution of all or any part of any amendment to the Medical Liability and Insurance Improvement Act of Texas may be determined in an action for declaratory judgment in a district court in Travis County pursuant to the Uniform Declaratory Judgments Act (Chapter 37, Civil Practice and Remedies Code) if it is alleged that the amendment or a part of the amendment affects the rights, status, or legal relation of a party in a civil action with respect to any other party in the civil action. (b) Any appeal of a declaratory judgment or order, however characterized, of a district court, including an appeal of the judgment of an appellate court, holding or otherwise determining, pursuant to subsection (a) of this section, that all or any part of any amendment to the Texas Liability and Insurance Improvement Act of Texas is constitutional or unconstitutional, or otherwise valid or invalid, under the state or federal constitution shall be an accelerated appeal. If that judgment or order is interlocutory, an interlocutory appeal may be taken from the judgment or order and shall be an accelerated appeal. (c) An association or alliance has standing to sue for and obtain a declaratory judgment pursuant to subsection (a) of this section in an action filed and maintained by the association or alliance, and to appeal or otherwise be a party to an appeal pursuant to subsection (b) of this section, if it is alleged that: (1) the association or alliance has more than one member who has standing to sue in the member's own right; (2) the interests the association or alliance seeks to protect are germane to a purpose of the association or alliance; and (3) the claim asserted and declaratory relief requested by the association or alliance relate to all or a specified part of the amendment involved in the action being facially constitutional or unconstitutional, or otherwise facially valid or invalid, under the state or federal constitution. Sec. 17.03. INJUNCTIONS; APPEALS. (a) A district court in Travis County may grant or deny a temporary or otherwise interlocutory injunction or a permanent injunction on a ground of the constitutionality or unconstitutionality, or other validity or invalidity, under the state or federal constitution of all or any part of any amendment to the Medical Liability and Insurance Improvement Act of Texas. (b) Pursuant to Section 3-b, Article V, Texas Constitution, the legislature hereby provides for an appeal direct to the Supreme Court of the State of Texas from an order, however characterized, of any trial court granting or denying a temporary or otherwise interlocutory injunction or a permanent injunction on a ground of the constitutionality or unconstitutionality, or other validity or invalidity, under the state or federal constitution of all or any part of any amendment to the Medical Liability and Insurance Improvement Act of Texas. (c) A direct appeal pursuant to subsection (b) of this section shall be an accelerated appeal. (d) An association or alliance has standing to sue for and obtain an order, pursuant to subsection (a) of this section, granting or denying a temporary or otherwise interlocutory injunction or a permanent injunction in an action filed and maintained by the association or alliance, and to appeal or otherwise be a party to an appeal pursuant to subsections (b) and (c) of this section, if it is alleged that: (1) the association or alliance has more than one member who has standing to sue in the member's own right; (2) the interests the association or alliance seeks to protect are germane to a purpose of the association or alliance; and (3) the claim asserted and injunctive relief requested by the association or alliance relate to all or a specified part of the amendment involved in the action being facially constitutional or unconstitutional, or otherwise facially valid or invalid, under the state or federal constitution. Sec. 17.04. RULES FOR APPEALS. An appeal to which any of the provisions of this subchapter apply, including an interlocutory, accelerated, or direct appeal, shall be governed, as applicable, by Texas Rules of Appellate Procedure, including Rules 25.1(d)(6), 26.1(b), 28.1, 28.3, 32.1(g), 37.3(a)(1), 38.6(a) and (b), 40.1(b), and 49.4 to the extent applicable. SECTION 28. (a) 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 on September 1, 2003. (b) 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 January 1, 2004. Except as provided by this section, a cause of action that accrues before January 1, 2004, 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. (c) 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 an attorney fee agreement or contract that is entered into on or after January 1, 2004. An attorney fee agreement or contract entered into before January 1, 2004, 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. (d) In the event that this Act takes effect on September 1, 2003, pursuant to subsection (a) of this section: (1) All changes in law made by this Act to the Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes), other than Subchapter S added by this Act, also apply to a health care liability claim that is included in an action or suit filed on or after September 1, 2003, and to that action or suit. (2) In the event that written notice of a health care liability claim is given by certified mail, return receipt requested, in compliance with Section 4.01(a) of the Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) on or after June 1, 2003, and before September 1, 2003, the giving of that notice shall constitute for purposes of this section the filing, as of the date of depositing that notice in the mail, of an action or suit which includes that claim as against each physician or health care provider to whom that notice is so given. (e) In the event that this Act takes effect immediately, pursuant to subsection (a) of this section: (1) All changes in law made by this Act to the Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes), other than Subchapter S added by this Act, also apply to a health care liability claim that is included in an action or suit filed on or after the ninetieth day after the effective date of this Act, and to that action or suit. (2) In the event that written notice of a health care liability claim is given by certified mail, return receipt requested, in compliance with Section 4.01(a) of the Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes) on or after the effective date of this Act, and before the ninetieth day after the effective date of this Act, the giving of that notice shall constitute for purposes of this section the filing, as of the date of depositing that notice in the mail, of an action or suit which includes that claim as against each physician or health care provider to whom that notice is so given. SECTION 29. (a) The Legislature of the State of Texas finds that: (1) the number of health care liability claims (frequency) has increased since 1995 inordinately; (2) the filing of legitimate health care liability claims in Texas is a contributing factor affecting medical professional liability rates; (3) the amounts being paid out by insurers in judgments and settlements (severity) have likewise increased inordinately in the same short period of time; (4) the effect of the above has caused a serious public problem in availability of and affordability of adequate medical professional liability insurance; (5) the situation has created a medical malpractice insurance crisis in the State of Texas; (6) this crisis has had a material adverse effect on the delivery of medical and health care in Texas, including significant reductions of availability of medical and health care services to the people of Texas and a likelihood of further reductions in the future; (7) the crisis has had a substantial impact on the physicians and hospitals of Texas and the cost to physicians and hospitals for adequate medical malpractice insurance has dramatically risen in price, with cost impact on patients and the public; (8) the direct cost of medical care to the patient and public of Texas has materially increased due to rising cost of malpractice insurance protection for physicians and hospitals in Texas; (9) the crisis has increased the cost of medical care both directly through fees and indirectly through additional services provided for protection against future suits or claims; and defensive medicine has resulted in increasing cost to patients, private insurers, and the state and has contributed to the general inflation that has marked health care in recent years; (10) satisfactory insurance coverage for adequate amounts of insurance in this area is often not available at any price; (11) the combined effect of the defects in the medical, insurance, and legal systems has caused a serious public problem both with respect to the availability of coverage and to the high rates being charged by insurers for medical professional liability insurance to some physicians, health care providers, and hospitals; (12) the adoption of certain modifications in the medical, insurance, and legal systems, the total effect of which is currently undetermined, may or may not have an effect on the rates charged by insurers for medical professional liability insurance; (13) these facts have been studied by the Nelson. (b) Because of the conditions stated in Subsection (a) of this section, it is the purpose of this Act to improve and modify the system by which health care liability claims are determined in order to: (1) reduce excessive frequency and severity of health care liability claims through reasonable improvements and modifications in the Texas insurance, tort, and medical practice systems; (2) decrease the cost of those claims and assure that awards are rationally related to actual damages; (3) do so in a manner that will not unduly restrict a claimant's rights any more than necessary to deal with the crisis; (4) make available to physicians, hospitals, and other health care providers protection against potential liability through the insurance mechanism at reasonably affordable rates; (5) make affordable medical and health care more accessible and available to the citizens of Texas; (6) make certain modifications in the medical, insurance, and legal systems in order to determine whether or not there will be an effect on rates charged by insurers for medical professional liability insurance; and (7) make certain modifications to the liability laws as they relate to health care liability claims only and with an intention of the legislature to not extend or apply such modifications of liability laws to any other area of the Texas legal system or tort law.