STAND. COM. REP. NO. 555

Honolulu, Hawaii

, 2005

RE: S.B. No. 757

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Health, to which was referred S.B. No. 757 entitled:

"A BILL FOR AN ACT RELATING TO TORTS,"

begs leave to report as follows:

The purpose of this measure is to implement medical malpractice tort reforms to address the adverse impact of medical malpractice lawsuits on patient access to health care services and the escalating costs of health care.

Specifically, the measure proposes the following with respect to medical tort actions:

(1) Imposes a cap on the award of noneconomic and punitive damages and attorneys' fees;

(2) Allocates damages in proportion to the degree of negligence;

(3) Changes the applicable statute of limitations;

(4) Prohibits joint liability; and

(5) Allows periodic payment of future damages.

The increasing cost of malpractice insurance and the escalating monetary awards for noneconomic damages recovered in medical malpractice lawsuits are major factors in the current physician shortage experienced by the State of Hawaii. As a result of the malpractice situation, many physicians are choosing to retire early, limit their practice, or refrain from practicing in Hawaii. Access to health care is of particular concern in the neighbor islands, where relatively few doctors and fewer specialists and sub-specialists continue to practice. The malpractice situation also contributes to the already high cost of health care.

Your Committee has amended this bill by replacing its contents as follows:

(1) Imposing a cap of $375,000 on noneconomic damages recoverable in medical tort claims against a health care provider; provided that the provider maintains a minimum of $1,000,000 of professional liability coverage;

(2) Prohibiting an insurer providing professional liability insurance coverage for a health care provider in the State from increasing premium rates between July 1, 2005 and December 31, 2005;

(3) Commencing January 1, 2006, requiring insurers providing professional liability insurance coverage to implement rates that are the lower of the following:

(A) Not greater than the rate effective on January 1, 2003, or

(B) Seventy-five per cent of the lowest rate in effect between January 1, 2003 and December 31, 2005;

(4) Commencing January 1, 2007, prohibiting insurers providing professional liability insurance coverage from increasing rates by two and one half per cent in any twelve month period;

(5) Exempting insurers from the foregoing caps if implementation of the caps will result in imminent insolvency or failure to earn a fair rate of return;

(6) Providing for the immediate repeal of the cap on noneconomic damages if any insurer fails to comply with the premium rate caps imposed by the measure;

(7) Allowing any person to bring a declaratory judgment for the determination of an insurer's noncompliance with the premium rate caps imposed by the measure; and

(8) Making technical, nonsubstantive amendments for the purposes of clarity and style.

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 757, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 757, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.

Respectfully submitted on behalf of the members of the Committee on Health,

____________________________

ROSALYN H. BAKER, Chair