2005 Legislative Compendium: Professional Liability Reform


ERISA Plans Not Liable for Failure to Use Ordinary CareProof of Charity Care Provided by Nonprofit Hospitals  |  Settlement Credits in Professional Liability Actions: Dollar for Dollar  |  Prohibition of Discrimination by Liability Carriers   |  Coverage of Volunteer Health Care Providers  |  Regulation of Asbestos Litigation   |  Dissolution of Limited Liability Companies and Partnerships  

The passage of HB 4 and Proposition 12 in 2003 established an expectation that physician liability insurance rates would drop. When no other carriers followed Texas Medical Liability Trust's (TMLT's) decision to cut rates by 17 percent, tort reform supporters began calling for state-mandated rate rollbacks that would have undercut the market forces needed to sustain long-term rate relief.

Meanwhile, trial lawyers and other tort reform opponents began to clamor for changes in the new law before it could ever hope to slow the lawsuit abuse epidemic. And Texas physicians named as defendants in liability cases asked TMA to stop out-of-state, expert witnesses from giving false testimony.

Gov. Rick Perry, Insurance Commissioner José Montemayor, and TMA called for other liability carriers to follow TMLT's lead. By April 2005, all five of the state's largest carriers had reduced their rates - two announced the rate cuts in testimony before a House committee. Bills calling for mandated rollbacks made no progress.

ERISA Plans Not Liable for Failure to Use Ordinary Care

SB 554 by Sen. Robert Duncan (R-Lubbock) and Rep. Dan Gattis (R-Georgetown) eliminates the possibility of holding any ERISA-regulated employee benefit plan liable, under state law, for failure to exercise ordinary care when making health care treatment decisions.

Proof of Charity Care Provided by Nonprofit Hospitals

SB 1378 by Sen. Todd Staples (R-Palestine) and Rep. Beverly Woolley (R-Houston) tightens requirements for a nonprofit hospital to achieve limited liability. It must now submit audited data, including the amount of charity care it renders, to the Texas Health and Human Services Commission.

Settlement Credits in Professional Liability Actions: Dollar for Dollar

SB 890 by Sen. Tommy Williams (R-Beaumont) and Rep. Joe Nixon (R-Houston) took several twists and turns, some potentially harmful to health care providers. A committee substitute that passed the Senate would have caused non-settling defendant health care providers to pay an inappropriately higher amount in damages. The bill would have stripped the bargained election of settlement credits available to health care providers in HB 4. Ultimately, the bill was passed with language that did not harm health care providers.

Prohibition of Discrimination by Liability Carriers

HB 2678 Rep. John Smithee (R-Amarillo) and Sen. Kel Seliger (R-Amarillo) prohibits liability insurers for physicians and health care providers from discriminating in their underwriting and ratemaking against those who provide services to Medicaid recipients or children covered by CHIP. It further prohibits such insurers, in setting premiums or evaluating eligibility for a claims-free discount for a physician's liability insurance, from considering a lawsuit filed against the physician that was later dismissed or nonsuited without payment to the claimant under a settlement agreement.

Coverage of Volunteer Health Care Providers

HB 654 by Rep. Tony Goolsby (R-Dallas) and Sen. Bob Deuell (R-Greenville) allows professional liability carriers other than the Joint Underwriting Association (JUA) to offer coverage to volunteer health care providers; self-insurance trusts may also offer coverage to such volunteers.

HB 655 by Representative Goolsby and Senator Deuell requires JUA to offer professional liability insurance to volunteer health care providers. It also exempts retired physicians, whose only practice is voluntary medical care for a disaster relief organization, from the registration permit fee requirement.

Regulation of Asbestos Litigation

SB 15 by Sen. Kyle Janek (R-Houston) and Representative Nixon sets strict medical criteria for bringing asbestos- and silica-related actions and makes those actions subject to multidistrict litigation rules.

Dissolution of Limited Liability Companies and Partnerships

HB 1154 by Rep. Gary Elkins (R-Houston) and Sen. Kip Averitt (R-McGregor) clarifies how limited liability companies and partnerships may be dissolved, when dissolution is effective, and how to wrap up when there are no remaining members. It allows revocation of voluntary cancellation of a limited partnership within 120 days.

Liability Reform TMA Staff Contacts:  

  • Yvonne Barton, Legislative Affairs, (512) 370-1359
  • Rocky Wilcox, JD, Office of the General Counsel, (512) 370-1335
  • Susan Taylor, JD, Office of the General Counsel, (512) 370-1348 

Overview  | Tax Reform | Scope of Practice | Physician Ownership | Inadequate Health Plan Networks (Balanced Billing) | Managed Care/Insurance Reform | Texas State Board of Medical Examiners Sunset and Physician Licensure | Agency Sunset Review  | Corporate Practice of Medicine | Health Care Funding | Medicaid and CHIP | Indigent Care and the Uninsured | Workers' Compensation | Medical Education/Workforce | Child Health, Safety, and Nutrition/Fitness | Public Health | Border Health | Rural Health | Mental Health | Trauma/EMS | Prescription Drugs | Medical Science | Long-Term Care | Abortion | Transplantation/Organ Donation | Table of Contents  

Last Updated On

April 02, 2012

Originally Published On

March 23, 2010

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