At the end of the 2003 legislative session, two bill numbers were seared into the memories of almost every Texas physician: House Bill 4 and House Joint Resolution 3. Together, these bills represent the tort reform package medicine pushed to attain meaningful medical liability reform. HB 4 provides the statutory basis for reforming the civil justice system, while HJR 3 authorizes a constitutional amendment allowing Texas to cap noneconomic damages, the lynchpin of effective premium relief.

A tumultuous, sometimes rancorous process preceded enactment of HB 4. Substantial differences between the House and Senate versions of the bill nearly pushed it to collapse. But the persistence of physicians and their tort reform allies resulted in the bill authors negotiating a package that is a national model.

TMA and specialty society advocacy also averted creation of a new cause of action for physicians in an abortion-related bill, Senate Bill 319. The bill defines a fetus as a "person," potentially impacting physicians' ability to treat mothers and their unborn babies. TMA collaborated with the Texas Association of Obstetricians and Gynecologists and other specialty physician groups to convince the bill authors to provide an exemption for physicians and health care providers "performing a lawful medical procedure with the requisite consent or assisted reproduction procedure, or one dispensing a drug in accordance with law." While the law undoubtedly will be challenged, the amendment also represents the importance of interspecialty collaboration and cooperation in protecting the practice of medicine for physicians.

On the horizon …

With HB 4 signed, the next step is enacting the constitutional amendment that accompanies it. On Sept. 13, Texans will vote on Proposition 12, the ballot initiative authorizing the constitutional limits on noneconomic damages. Turnout by tort reform supporters is critical. TMA, in collaboration with county medical and specialty societies, is mobilizing its base to assure a strong presence at the polls. Physician and patient education materials on Proposition 12 already have been disseminated, and a concerted campaign is underway to "get out the vote." In the event Proposition 12 fails, HB 4 does contain a fallback provision to assure the constitutionality of the limits on noneconomic damages. However, to withstand a court challenge, passage of Proposition 12 is vital.

Impact of tort reform legislation on physician practices : A fair civil justice system, stabilization or reduction in medical liability premiums, and improved patient access to medical care.

OMNIBUS TORT REFORM

HB 4 by Rep. Joe Nixon (R-Houston) and Sen. Bill Ratliff (R-Mt. Pleasant) enacts sweeping tort reform measures across many industries. Article 10 is the section primarily affecting physicians and other health care professionals. The following is a summary of Article 10. Other provisions that benefit physicians also are noted.

Limitations: No change (still two years) except to add a 10-year statute of repose, which means that whatever the statute of limitations and tolling of the statute (for discovery, minority), any health care claim not brought within 10 years is time-barred.

Expert report(s): Claimant must provide an expert report(s), along with the expert's curriculum vitae, within 120 days of filing suit. The court may grant one 30-day extension. The deadline may be extended by agreement. Objections to sufficiency of the report must be filed within 21 days. Failure to timely file the report will result in dismissal with prejudice, as well as payment of court costs and attorney's fees by the plaintiff, upon motion of a defendant.

Until expert report is served, discovery is limited to written discovery regarding the claimant's condition and two depositions.

Qualifications of expert witnesses are specified.

The requirement that nursing homes obtain liability insurance is delayed for two years, until Sept. 1, 2005.

The use of inspection survey documents in nursing home cases is restricted.

In a case with multiple defendants, one or more of whom have settled, the remaining health care defendant(s) may elect, posttrial, a settlement credit apportioned on a percentage or dollar-for-dollar basis.

The postjudgment interest rate will vary from 5 percent to 15 percent, depending on the prime interest rate. Prejudgment interest for future damages may no longer be awarded.

Periodic payment of future damages when they equal or exceed $100,000, upon motion of an insured defendant or one who establishes financial responsibility, is mandatory for medical damages and discretionary for everything else. Attorney's fees are calculated by placing a present-day value on the payments based on the plaintiff's life expectancy.

Caps on noneconomic damages: $250,000 per "claimant" (i.e., all persons, including a decedent's estate, claiming damages as the result of injury or death of a single person) against all physicians/health care providers other than health care institutions; $250,000 per claimant against a health care institution; another $250,000 per claimant against another, unrelated health care institution - $750,000 maximum recovery.

Cap on wrongful death and survival actions: $500,000 cap on all damages, adjusted by the consumer price index from Aug. 29, 1977 (now $1,485,00). The liability carrier's Stower's exposure (for failure to make a good faith effort to settle within policy limits) is limited to the insured's exposure.

Cap on liability for charity care: $500,000 on all damages in suits against a nonprofit hospital/hospital system, its employees, and volunteers (including physicians), if patient signs acknowledgment that care rendered is not for remuneration and liability is limited. Cap applies if patient is incapacitated or a minor and a representative is not reasonably available.

Cap on liability for nonprofit hospitals that provide at least 8 percent charity care and at least 40 percent of the charity care in the county (Article 21): $100,000/$300,000 damage limits applicable to governmental entities.

Limitation of liability for emergency care: Definition of a "Good Samaritan" was clarified to protect persons providing emergency care and provides that being legally entitled to receive remuneration for the emergency care does not remove Good Samaritan protection. Persons not licensed or certified in the healing arts who are acting as emergency medical personnel are not liable unless they are willfully or wantonly negligent, regardless of remuneration.

Limitation of liability for employees or volunteers of a governmental unit: (Article 11) Physicians are considered public servants when working for state and local agencies (hospital districts, county hospitals), and their liability is limited to $100,000, with the governmental entity responsible for any excess award. "A public servant includes a licensed physician who provides emergency or postemergency stabilization services to patients in a hospital owned or operated by a unit of local government."

Products liability: (Article 5) Rebuttable presumption exists that adequate warnings and information were given for medicines approved by the Food and Drug Administration. Similar presumptions are available to product manufacturers and distributors when the products meet federal safety regulations. Manufacturers must carry a "vendor's endorsement" on their general liability and products liability policies. For purposes of this section, vendors include physicians and health care providers.

CONSTITUTIONAL AMENDMENT

HJR 3, also by Representative Nixon and Sen. Jane Nelson (R-Flower Mound), authorizes a constitutional amendment to allow the legislature, by statute, to set liability limits in health care claims (thereby validating the limits imposed by HB 4), effective immediately, and, after Jan. 1, 2005, to set liability limits in all other claims. This proposed amendment will be submitted to the voters at an election to be held Sept. 13. The initiative will be shown on the ballot as "Proposition 12."

PERFORMING SURGERY WHILE INTOXICATED

HB 1592 by Representative Nixon and Sen. Kyle Janek, MD, (R-Houston) establishes that it is an offense for a person licensed or regulated under the Medical Practice Act to perform a procedure while intoxicated. The bill makes this offense a state jail felony, but TMA worked with the bill authors to provide an affirmative defense to prosecution when the individual performs the surgery in an emergency.

VIDEO TESTIMONY IN CHILD ABUSE CASES

Current law, with the exception of a pilot program in Harris County, does not allow courts to accept videoconference testimony from certain professionals in proceedings regarding alleged abuse or neglect of a child. HB 1869 by Rep. Todd Baxter (R-Austin) and Sen. Tommy Williams (R-The Woodlands) permits the court the discretion to order that the testimony of a professional be taken outside the courtroom and videotaped.

IMMUNITY OF GUARDIANS AD LITEM

HB 1985 by Rep. Carter Casteel (R-New Braunfels) and Sen. Jeff Wentworth (R-San Antonio) grants guardian ad litem immunity from liability for damages arising from a recommendation made or an opinion given about an incapacitated ward (for other than grossly negligent/malicious acts).

DEFINITION OF A HOSPITAL DISTRICT MANAGEMENT CONTRACTOR

HB 2453 by Rep. Louis Kolkhorst (R-Brenham) and Sen. Steve Ogden (R-Bryan) expands the definition of a "hospital district management contractor" to include a nonprofit corporation that operates an acute care hospital that provides indigent care in a facility leased from a hospital district. It allows contractors and their employees to be covered under the same liability as the hospital district - up to $100,000 per person, $300,000 per occurrence and $100,000 for property damage.

STUDENT MEDICAL SCREENINGS

HB 3439 by Rep. Patrick Rose (D-Dripping Springs) and Sen. John Carona (R-Dallas) exempts health care practitioners who conduct physicals, without compensation, for school-sponsored extracurricular and sporting activities from civil liability for any act or omission resulting in injury to a student patient. This immunity is contingent on a number of requirements - practitioner was acting in good faith; practitioner was providing service in the course and scope of his or her duty and license; patient or patient's guardian signs a written statement noting the screening is being conducted with no expectation of payment and the limitations of liability; and practitioner must carry liability insurance of $100,000 per person, $300,000 per occurrence, and $100,000 per occurrence for property damage. The last requirement was discussed at length during House committee debate. Members of the committee felt that physicians who volunteer for such an activity would carry such insurance limits anyway, despite the immunity, due to their good faith and standing in their communities.

CIVIL DAMAGES AWARDED AGAINST NONPROFIT NURSING INSTITUTIONS

SB 313 by Sen. Chris Harris (R-Arlington) and Rep. Phil King (R-Weatherford) provides that civil damages awarded against a nonprofit nursing institution may not be recovered from an endowment or fund that is tax-exempt and used to fund care. This is effective immediately (signed by the governor on May 28, 2003).

JUA ISSUANCE OF LIABILITY INSURANCE

SB 339 by Senator Nelson and Rep. John Smithee (R-Amarillo) permits the Joint Underwriting Association (JUA) to write policies for less than one year in addition to offering an installment payment system, including any payment to the Stabilization Reserve Fund. This provides JUA with the flexibility to offer policies to physicians on a short-term basis when necessary, for example, when a physician is attempting to secure insurance in the admitted voluntary market due to a large carrier leaving the state.

CHAMBERS OF COMMERCE LIABILITY PROTECTIONS

SB 360 by Sen. Robert Deuell, MD, (R-Greenville) and Representative Rose amends the definition of charitable organization by adding certain chambers of commerce and making members of such chambers of commerce exempt from certain civil actions. It also exempts a statewide trade association that represents local chambers of commerce and a cosponsor of an event or activity with a local chamber of commerce.

LIABILITY COVERAGE OF ASSISTED LIVING FACILITIES

SB 421 by Senator Carona and Rep. John Davis (R-Houston) provides for the eligibility of assisted living facilities for coverage under JUA. It excludes assisted living facilities from the stabilization reserve fund for physicians and certain health care providers, and removes the requirement to have the commissioner of insurance direct the initiation or continuation of the stabilization reserve fund charge for physicians or that category of health care provider, if certain losses and expenses result in a net underwriting loss and exceed 25 percent of the fund. The requirement that the commissioner adopt minimum rating standards, promoting high quality of care, for for-profit nursing homes that must be met before a for-profit nursing home may obtain coverage through the association is repealed. It authorizes the commissioner to designate that a health care provider or facility be eligible for coverage from JUA when the commissioner determines that appropriate liability insurance coverage is not available.

EMERGENCY MEDICAL SERVICES

Currently, a hospital is authorized to secure a lien on a cause of action or claim of an individual who receives hospital services for injuries caused by an accident that is attributed to the negligence of another person. When injuries are caused by an accident, emergency medical service providers frequently offer a significant amount of medical care and services but are not authorized to secure a lien on a cause of action or claim. SB 504 by Senator Ogden and Representative Kolkhorst authorizes an emergency medical services provider to secure a lien for care and services rendered in counties with a population of 275,000 or less.

LIABILITY FOR RESPONSE ACTIVITIES

SB 513 by Sen. Jon Lindsay (R-Houston) and Rep. Gene Seaman (R-Corpus Christi) extends immunity from civil liability for response activities relating to hazardous materials to response activities relating to both man-made or natural disasters when the assistance is requested by an authorized government official.

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