HB575 HD1.DOC

PART I

SECTION 1. Section 671-16, Hawaii Revised Statutes, is amended to read as follows:

"§671-16 Subsequent litigation; costs and fees; excluded evidence. (a) The claimant may institute litigation based upon the claim in an appropriate court only after a party to a medical claim conciliation panel hearing rejects the decision of the panel, or after the twelve-month period under section 671-18 has expired.

(b) In cases where the claimant rejects damages awarded by the panel and institutes litigation, the claimant shall be liable for the health care provider's attorneys' fees and costs and the provider's time in preparing for and attending any court hearings, unless the litigation results in an award of more than two hundred per cent of the damages awarded by the medical claim conciliation panel.

(c) In cases where the claimant rejects the panel's finding that the health care provider was not negligent and institutes litigation, the claimant shall be liable for the attorneys' fees and costs of all defendants to the action, unless the litigation results in a judgment in favor of the claimant.

(d) No statement made in the course of the hearing of the medical claim conciliation panel shall be admissible in evidence either as an admission, to impeach the credibility of a witness, or for any other purpose in any trial of the action; provided that such statements may be admissible for the purpose of section 671-19, hereof. No decision, conclusion, finding, or recommendation of the medical claim conciliation panel on the issue of liability or on the issue of damages shall be admitted into evidence in any subsequent trial, nor shall any party to the medical claim conciliation panel hearing, or the counsel or other representative of such party, refer or comment thereon in an opening statement, an argument, or at any other time, to the court or jury; provided that such decision, conclusion, finding, or recommendation may be admissible for the purpose of section 671-19, hereof."

PART II

SECTION 2. Chapter 671, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . Medical claim conciliation

§671-A Medical claim conciliation office. (a) There is established in the department of commerce and consumer affairs for administrative purposes a medical claim conciliation office that shall conduct administrative hearings and issue binding opinions in medical tort claims against health care providers.

(b) The office shall be headed by an executive director who shall be appointed by the director of commerce and consumer affairs and shall be exempt from chapter 76 and 89. The executive director shall serve in a full time capacity and shall perform such duties and exercise such powers and authority as may be delegated to the executive director by the director of commerce and consumer affairs.

(c) There shall be a medical claim conciliation hearing officer who shall handle proceedings and hold hearings on medical claims. The hearing officer shall be appointed by the director of commerce and consumer affairs and exempt from chapter 76 and 89. The director shall develop the qualifications for the hearing officer and shall include training in administrative hearings and legal proceedings and training in the medical field that shall include but not be limited to in-classroom clinical training and a program in which the hearing officer shadows physicians in different health care settings.

(d) The office and administrative hearing space, secretarial and clerical assistance, office equipment, and office supplies for the medical claim conciliation office shall be furnished by the department.

(e) The director shall adopt rules pursuant to chapter 91 to establish the procedures governing the administrative hearing process for medical claims.

§671-B Medical claims; filing fee. (a) For each claim filed pursuant to this part, the claimant shall pay a filing fee to the department, the amount of which shall be established by the executive director. Failure to pay the filing fee shall result in the claim being rejected for filing unless it is accompanied by a motion made pursuant to subsection (b). Each health care provider and other parties to the claim shall pay a filing fee of $450 to the department within twenty days of being served with the claim. Filing fees shall be non-refundable and shall be deposited into the compliance resolution fund.

(b) If any party to a claim cannot pay the required filing fee, the party may file with the executive director a motion to waive the filing fee. The motion to waive the filing fee shall be accompanied by an affidavit in the format prescribed by the department, showing in detail:

(1) The party's inability to pay the filing fee;

(2) The party's belief that the party is entitled to redress; and

(3) A statement of the issues that the party intends to present at the hearing before the medical claims hearing officer.

(c) The filing of a motion to waive the filing fee shall toll the time limitation in section 671-C. The executive director shall decide the motion to waive the filing fee as expeditiously as possible and no oral arguments shall be permitted.

(d) If the executive director grants the motion to waive the filing fee the claim shall proceed. If the motion is denied the executive director shall state the reason for the denial in writing. The executive director shall promptly provide a copy of the order granting or denying the motion to the claimant.

(e) If a motion to waive the filing fee is denied by the executive director, the party may seek judicial review under section 91-14.

(f) If the executive director denies a party's motion to waive the filing fee, the party shall pay the filing fee within thirty days after denial of the motion, unless the party has filed an appeal under section 91-14. If the party has filed an appeal under section 91-14, the party may proceed without payment of the filing fee until a final judicial determination is rendered on the appeal.

(g) If the party files an appeal under section 91-14 and the court upholds the executive director's denial of the party's motion to waive the filing fee, the party shall pay the filing fee within thirty days after the court's affirmation of the denial. If the court determines that the party's motion for waiver of the filing fee was improperly denied, the party shall be allowed to proceed without payment of the filing fee.

§671-C Limitation of actions; time. (a) No claim for injury or death against a health care provider that is based upon the provider's alleged professional negligence, or for rendering professional services without consent, or for an error or omission in the provider's practice shall be brought more than two years after the claimant discovers, or through the use of reasonable diligence should have discovered, the injury, but in any event not more than six years after the date of the alleged act or omission causing the injury or death. The six-year time limitation shall be tolled for any period during which the person has failed to disclose any act, error, or omission upon which the action is based and which is known to the person.

(b) Actions by a minor shall be commenced within six years from the date of the alleged wrongful act except that actions by a minor under the age of ten years shall be commenced within six years or by the minor's tenth birthday, whichever provides a longer period. The time limitation shall be tolled for any minor for any period during which the parent, guardian, insurer, or health care provider has committed fraud or gross negligence, or has been a party to a collusion in the failure to bring action on behalf of the injured minor for a medical tort. The time limitation shall also be tolled for any period during which the minor's injury or illness alleged to have arising, in whole or in part, from the alleged wrongful act or omission could not have been discovered through the use of reasonable diligence.

§671-D Medical claim conciliation hearing. Except as otherwise provided in this part, medical claim conciliation hearings shall be conducted in accordance with chapter 91.

§671-E Annual report. The director of commerce and consumer affairs shall prepare and submit to the legislature annually, twenty days prior to the convening of each regular session, a report containing the director's evaluation of the operation and effects of this chapter. The report shall include a summary of the claims brought before the medical claim hearing office and the disposition of each claim, a description and summary of the work of the office under this chapter, an appraisal of the effectiveness of this chapter in securing prompt and fair disposition of medical tort claims, a review of the number and outcomes of claims brought under this part and recommendations for changes, modifications, or repeal of this chapter or parts thereof with accompanying reasons and data."

SECTION 3. Section 26-9, Hawaii Revised Statutes, is amended by amending subsection (o) to read as follows:

"(o) Every person licensed under any chapter within the jurisdiction of the department of commerce and consumer affairs and every person licensed subject to chapter 485A or registered under chapter 467B shall pay upon issuance of a license, permit, certificate, or registration a fee and a subsequent annual fee to be determined by the director and adjusted from time to time to ensure that the proceeds, together with all other fines, income, and penalties collected under this section, do not surpass the annual operating costs of conducting compliance resolution activities required under this section. The fees may be collected biennially or pursuant to rules adopted under chapter 91, and shall be deposited into the special fund established under this subsection. Every filing pursuant to chapter 514E or section 485A-202(a)(26) shall be assessed, upon initial filing and at each renewal period in which a renewal is required, a fee that shall be prescribed by rules adopted under chapter 91, and that shall be deposited into the special fund established under this subsection. Any unpaid fee shall be paid by the licensed person, upon application for renewal, restoration, reactivation, or reinstatement of a license, and by the person responsible for the renewal, restoration, reactivation, or reinstatement of a license, upon the application for renewal, restoration, reactivation, or reinstatement of the license. If the fees are not paid, the director may deny renewal, restoration, reactivation, or reinstatement of the license. The director may establish, increase, decrease, or repeal the fees when necessary pursuant to rules adopted under chapter 91. The director may also increase or decrease the fees pursuant to section 92-28.

There is created in the state treasury a special fund to be known as the compliance resolution fund to be expended by the director's designated representatives as provided by this subsection. Notwithstanding any law to the contrary, all revenues, fees, and fines collected by the department shall be deposited into the compliance resolution fund. Unencumbered balances existing on June 30, 1999, in the cable television fund under chapter 440G, the division of consumer advocacy fund under chapter 269, the financial institution examiners' revolving fund, section 412:2-109, the special handling fund, section 414-13, and unencumbered balances existing on June 30, 2002, in the insurance regulation fund, section 431:2-215, shall be deposited into the compliance resolution fund. This provision shall not apply to the drivers education fund underwriters fee, section 431:10C-115, insurance premium taxes and revenues, revenues of the workers' compensation special compensation fund, section 386-151, the captive insurance administrative fund, section 431:19-101.8, the insurance commissioner's education and training fund, section 431:2-214, the medical malpractice patients' compensation fund as administered under section 5 of Act 232, Session Laws of Hawaii 1984, and fees collected for deposit in the office of consumer protection restitution fund, section 487-14, the real estate appraisers fund, section 466K-1, the real estate recovery fund, section 467-16, the real estate education fund, section 467-19, the contractors recovery fund, section 444-26, the contractors education fund, section 444-29, the condominium management education fund, section 514A-131, and the condominium education trust fund, section 514B-71. Any law to the contrary notwithstanding, the director may use the moneys in the fund to employ, without regard to chapter 76, hearings officers and attorneys[.] and the executive director and hearing officer of the medical claim conciliation office. All other employees may be employed in accordance with chapter 76. Any law to the contrary notwithstanding, the moneys in the fund shall be used to fund the operations of the department. The moneys in the fund may be used to train personnel as the director deems necessary and for any other activity related to compliance resolution.

As used in this subsection, unless otherwise required by the context, "compliance resolution" means a determination of whether:

(1) Any licensee or applicant under any chapter subject to the jurisdiction of the department of commerce and consumer affairs has complied with that chapter;

(2) Any person subject to chapter 485A has complied with that chapter;

(3) Any person submitting any filing required by chapter 514E or section 485A-202(a)(26) has complied with chapter 514E or section 485A-202(a)(26);

(4) Any person has complied with the prohibitions against unfair and deceptive acts or practices in trade or commerce; or

(5) Any person subject to chapter 467B has complied with that chapter;

and includes work involved in or supporting the above functions, licensing, or registration of individuals or companies regulated by the department, consumer protection, and other activities of the department.

The director shall prepare and submit an annual report to the governor and the legislature on the use of the compliance resolution fund. The report shall describe expenditures made from the fund including non-payroll operating expenses."

SECTION 4. Section 657-7.3, Hawaii Revised Statutes, is amended to read as follows:

"§657-7.3 Medical torts; limitation of actions; time. [No] Except for medical tort claims covered by chapter 671, no action for injury or death against a chiropractor, clinical laboratory technologist or technician, dentist, naturopath, nurse, nursing home administrator, dispensing optician, optometrist, osteopath, physician or surgeon, physical therapist, podiatrist, psychologist, or veterinarian duly licensed or registered under the laws of the State, or a licensed hospital as the employer of any such person, based upon such person's alleged professional negligence, or for rendering professional services without consent, or for error or omission in such person's practice, shall be brought more than two years after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the injury, but in any event not more than six years after the date of the alleged act or omission causing the injury or death. This six-year time limitation shall be tolled for any period during which the person has failed to disclose any act, error, or omission upon which the action is based and which is known to the person.

Actions by a minor shall be commenced within six years from the date of the alleged wrongful act except the actions by a minor under the age of ten years shall be commenced within six years or by the minor's tenth birthday, whichever provides a longer period. Such time limitation shall be tolled for any minor for any period during which the parent, guardian, insurer, or health care provider has committed fraud or gross negligence, or has been a party to a collusion in the failure to bring action on behalf of the injured minor for a medical tort. The time limitation shall also be tolled for any period during which the minor's injury or illness alleged to have arisen, in whole or in part, from the alleged wrongful act or omission could not have been discovered through the use of reasonable diligence."

SECTION 5. Section 671-4, Hawaii Revised Statutes, is amended to read as follows:

"§671-4 Notice of damages. (a) In any medical tort action, the party against whom the [~~complaint,~~] claim, counterclaim, or cross-claim is made at any time may request a statement setting forth the nature and amount of the damages sought. The request shall be served upon the [~~complainant,~~] claimant, counterclaimant, or cross-claimant who shall serve a responsive statement as to the damages within fifteen days thereafter. In the event a response is not served, the requesting party may petition the [~~court~~] medical claim hearing officer with notice to the other parties, to order the appropriate party to serve a responsive statement.

(b) If no request is made for a statement setting forth the nature and amount of damages sought, the [~~complainant,~~] claimant, counterclaimant, or cross-claimant, as the case may be, shall give notice to the other of the amount of special and general damages sought to be recovered, either before a default may be taken, or in the event an answer is filed, [~~at least sixty days prior to the date set for trial.~~] prior to the hearing, in accordance with rules adopted by the director."

SECTION 6. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval.

HOUSE OF REPRESENTATIVES	H.B. NO.	575
TWENTY-FIFTH LEGISLATURE, 2009		H.D. 1
STATE OF HAWAII