Civil Justice Reform: Medical Professional Liability

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Key Provisions of House Bill 4 of the 78 th Texas Legislature (2003)

Texas Limits Noneconomic Damages

  • $250,000 cap applies to all physicians and health care providers, other than health care institutions, on a per case/occurrence basis, and
  • $250,000 cap applies to each unrelated health care institution on a per case/occurrence basis, $500,000 cap in any single case
  • Cap on noneconomic damages not indexed for inflation

Death Cap Changes--Restores Limitation On All Damages In Wrongful Death, Which Had Eroded Over Time

  • $500,000 cap per claimant against all physicians and health care providers, indexed for inflation since 1977 (this cap is approximately $1.4 million today)
  • Cap includes punitive damages
  • Bars Stowers exposure of insurer (for insurer's failure to make a good faith effort to settle within policy limits) above insured's exposure

Mandates Future Medical Expenses Be Paid Only As They Accrue  

  • Mandatory periodic payment of future medical, health care, and custodial care when award equals or exceeds $100,000, when requested by defendant
  • Discretionary periodic payment of other future damages
  • Periodic payments of future health care terminate upon death of recipient; period payments of future earnings do not
  • Defendant must be adequately insured or post security to assure full payment of periodic payments Attorney's fees calculated by placing present day value on periodic payments

Proportionate Responsibility Brought Into Focus

  • Ensures that named defendants are held responsible only for the portion of fault attributable to them

Settlement Credits

  • Defendants may elect dollar-for-dollar or full percentage credit when other defendants have settled. If defendants cannot agree, dollar-for-dollar credit applies. This has the effect of allowing proportionate responsibility to reduce the actual amount paid by a defendant in a case where the "settling defendant" has already paid a portion of the damages.

Pre and Post Judgment Interest Reined In

  • Modifies interest rate calculation for both prejudgment and postjudgment interest from 10 percent to the prime rate, with a 5-percent floor and 15-percent ceiling (currently 5 percent)

Absolute Deadline Imposed For Bringing Suit

  • Statute of limitations rules apply (in medical liability, typically 2 years) unless the statute is tolled, which means that the statute did not begin until, for example, the negligent act was discovered, or the patient reached the age of majority. Any health care claim not brought within 10 years is time-barred. This is a cap on the tolling of the statute of limitations.

Emergency Care Taken Off Life Support

  • Required jury instructions in cases involving emergency care to assure that the jury takes into account the emergency situation in assessing the claim (i.e. no medical records available, limits on time for diagnosis and treatment, etc.).
  • Limitation of liability for emergency care: Definition of "Good Samaritan" clarified to protect persons providing emergency care; provides that being legally entitled to receive remuneration for emergency care does not remove Good Samaritan protection.
  • Persons not licensed or certified in the healing arts who act as emergency medical personnel are not liable unless they are willfully or wantonly negligent, regardless of remuneration.

Verdict On Expert Reports

  • Cost bond eliminated; expert report mandatory. Plaintiffs cannot post a cost bond in lieu of an expert report.
  • Plaintiff must file expert report within 120 days; only one 30-day extension allowed If plaintiff fails to timely file an adequate expert report, upon motion of the defendant, the court shall award court costs and attorney's fees and dismiss the case with prejudice
  • Interlocutory appeal allowed (do not have to wait until after the judgement) if judge fails to dismiss case due to failure to meet expert report requirements

Pretrial Discovery Limited

  • Until expert report is served on defendant, plaintiff is allowed only two depositions plus written discovery

New Order - Expert Qualifications

  • Clarifies qualifications for experts

HIPAA - Plaintiffs' Attorneys Required To Comply With HIPAA When Requesting Medical Records  

  • Plaintiff's attorney must submit standard HIPAA authorization for release of medical information with statutory notice of claim letter

Other Provisions of House Bill 4 Affecting Health Care Liability Claims

Unanimous Verdict Needed To Award Exemplary Damages

Jury May Consider Plaintiff's Income Taxes When Awarding Lost Future Income

Products Liability Reform(ed)  

  • Rebuttable presumption exists that adequate warnings and information were given for medicines approved by the FDA, when FDA approved information is provided to the patient. Similar presumptions are available to products 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.

New Acceptance For Settlement Offers

  • Shifts litigation costs when a plaintiff refuses a pre-trial settlement offer if the plaintiff's award judgment is less than 80% of the defendant's settlement offer. The defendant must specify in the settlement offer that he/she is invoking this provision. Litigation costs are calculated from the date of the settlement offer forward, and are taken from the plaintiff's judgment.
  • This provision can also be used by the plaintiff, but must be brought into play by the defendant. This means that in order for the plaintiff to take advantage of this provision, the defendant must first make a settlement offer invoking this provision. Once the provision has been invoked by the defendant, if the plaintiff responds with a counteroffer that is rejected by the defendant and the plaintiff's judgement is 120% of the plaintiff's settlement offer, then the defendant is responsible for litigation costs from the date of the counteroffer forward.

Doctors Gain Access To Governmental Immunity

  • Physicians 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 post emergency stabilization services to patients in a hospital owned or operated by a unit of local government."

Charity Does Have Limits

  • Cap on liability for charity care: $500,000 on all damages in suits against 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% charity care and at least 40% of the charity care in the county, set at the $100,000/$300,000 damage limits applicable to governmental entities.

 House Joint Resolution 3 (Proposition 12) - Constitutional Amendment Validates Caps 

  • Proposes a constitutional amendment to allow the legislature, by statute, to set the limit of liability for all damages and losses other than economic damages in health care claims (effective election day- September 13, 2003) and, after January 1, 2005, to set liability limits (other than economic) in all other claims.

Prepared by the Office of the General Counsel
Texas Medical Association
July 17, 2003

 

 


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