CIVIL PROCEDURE; LEGISLATION; MEDICAL MALPRACTICE; MEDICAL MALPRACTICE INSURANCE;

INSURANCE - MALPRACTICE;

You asked for a summary of medical malpractice legislation recently adopted in Texas (HB 4), particularly with regard to the provisions capping liability for damages.

SUMMARY

HB 4 substantially amends Texas’ law regarding medical liability. It establishes a cap of $ 250,000 per claimant on non-economic damage awards in cases involving health care providers or an individual health. The limit applies regardless of the number of providers involved or the number of issues upon which the claim is based. If the claim involves several institutions, the cap is $ 500,000 per claimant. The mandated insurance coverage will increase in 2005 and 2007. The act caps awards against providers in wrongful death suits at $ 500,000 per claim. The award is adjusted annually for inflation and it does not apply to medical, hospital, or custodial costs.

These provisions supersede a $ 500,000 cap for providers and institutions imposed under prior law that was the state courts had found unconstitutional. The cap applied to all damages except medical, hospital, and custodial costs. The new caps were adopted in conjunction with a constitutional amendment that authorizes them.

The legislation also broadens the circumstances under which a provider is immune from liability in providing emergency care. It immunizes public sector health providers under certain circumstances. It makes many other changes in the laws governing liability for providers and institutions.

HB 4 also significantly amends the laws governing liability generally and has specific provisions for design professionals, volunteer fire services, and public employees.

PRIOR LAW AND CONSTITUTIONAL AMENDMENT

In 1977, Texas adopted the Medical Liability and Insurance Improvement Act (Tex. Civ. Stat. Art. 4590i). Among other things, this act established a $ 500,000 cap on the liability of a physician, other health care provider, or hospital. The limit did not apply to necessary past or future medical, hospital, or custodial costs. It also provided that if this provision was invalidated, there would be an alternative cap of $ 150,000 on past and future non-economic damages. These include things such as pain and suffering, mental anguish, and disfigurement.

The state courts subsequently found these provisions violated the state constitution. As a result, the legislature passed legislation in conjunction with HB 4 that authorized a referendum on a constitutional amendment that would allow the legislature to adopt caps on non-economic damages. The voters approved the referendum on September 13, 2003.

CAPS AND OTHER LIMITS ON LIABILITY

Non-economic Damages

HB 4 caps non-economic damages at $ 250,000 per claimant in a case involving a provider, regardless of the number of providers involved or the number of separate legal theories on which the claim is based. Providers include, among others, physicians, nurses, dentists, and pharmacists. Institutions include hospitals, ambulatory surgical centers, and emergency medical services providers. It also imposes this limit for a claim against a single health care institution, including all persons that may be subject to vicarious liability. For claims involving more than one institution, the $ 250,000 limit applies to any one institution, and each claimant is limited to $ 500,000 in total non-economic damages.

Charity and Non-compensated Care

The legislation caps at $ 500,000 the liability of a hospital and its officers and employees under certain circumstances. The cap applies in a suit for acts or omissions that result in the injury or death of a patient if the patient or his guardian signs a form that acknowledges:

1. the hospital is providing care without compensation and

2. the cap on liability is in exchange for the provision of services.

The cap applies to economic as well as non-economic damages. And it applies even if: (1) the patient is sick or injured and cannot sign the form or (2) the patient is a child or legally incompetent and the person responsible for him is reasonably available to sing the form (it is not clear how these provisions will be read together).

For non-profit hospitals that provide specific levels of charity care, as certified by the Department of Health, the caps on total damages are $ 100,000 for each person and $ 300,000 for each single occurrence of injury or death.

Wrongful Death Suits

HB 4 caps awards against providers in wrongful death suits to $ 500,000 per claimant. The cap includes exemplary (punitive) damages, and applies regardless of the number of providers or institutions involved or the number of causes of action. The cap must be adjusted annually to reflect changes in inflation as measured by the consumer price index. The cap does not apply to past or future necessary medical, hospital, or custodial costs. But it does apply to other economic damages as well as to all non-economic damages.

Punitive Damages

The act caps punitive damages in cases in which a child or elderly or disabled person was knowingly, intentionally, or recklessly injured by omission in the course of health care. The cap is the greater of:

1. $ 200,000; or

2. the award for non-economic damages (e. g. , for pain and suffering), up to $ 750,000 plus twice the award for economic damages (e. g. , lost earnings).

IMMUNITY

HB 4 also broadens the circumstances under which a provider is immune from liability for providing emergency medical care under the state’s Good Samaritan law. Previously, the immunity did not apply to:

1. a person who provided the care for or in expectation of remuneration, even if he ultimately did not charge for the service;

2. a person who normally worked in a hospital emergency room, unless he was off duty when he provided the care; or

3. a patient’s admitting or attending physician or a treating physician working with them.

The legislation eliminates the last two restrictions. It specifies that the fact a provider was legally entitled to charge for the service does not determine that he was working for remuneration.

The act immunizes public sector health care providers for damage awards above $ 100,000 in cases that resulted in injury or death if the provider was:

1. acting in the course and scope of his employment, and

2. covered for the first $ 100,000 in damages by a state or local government indemnification or by insurance.

OTHER PROVISIONS

In addition to the above provisions, the act:

1. requires that all medical liability claims be brought within ten years of the act or omission that is the basis of the claim (under another provision, unaffected by the act, the action must filed within two years of the date the person discovers or should have discovered the cause of action, except that cases involving children under 12 can be filed until they turn 14);

2. raises the standard of proof required in cases alleging malpractice in emergency medical care to willful and wanton negligence, rather than just ordinary negligence;

3. modifies discovery procedures and jury instructions in liability cases;

4. establishes additional provisions for qualifying a person as an expert witness in such cases;

5. requires all claimants to submit expert reports to involved parties as to the applicable standard of care in the case (under prior law, a claimant could alternatively voluntarily nonsuit the action against the party;

6. reduces the time in which the claimant must submit this report, from 180 to 120 days following the filing of the claim;

7. specifies procedures for payments of future damages (health care costs, pain and anguish, lost of earnings, etc. ) when the value of the damages, adjusted for inflation, exceed $ 100,000;

8. requires the court, at the request of a claimant or health care provider, to require that the award for medical, health care, or custodial care be paid periodically instead of in a lump sum;

9. allows the court, at the request of the claimant or provider, to award other future damages periodically; and

10. terminates future payment awards, other than for loss of earnings, on the death of the patient.

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