HB1784 HD1.DOC

PART I

SECTION 1. Over the years, a number of doctors have retired or left Hawaii, especially the neighbor islands, citing reasons that include high medical malpractice insurance rates, low insurance reimbursement rates, and the high cost of living. Hawaii has been unable to replace these doctors in a manner that provides Hawaii residents timely access to adequate healthcare.

Doctors are critical components of our society, providing a very important service to everyone in the state, and addressing the needs and concerns of healthcare providers is a key step toward keeping Hawaii healthy.

The purpose of this Act is to address the high cost of medical malpractice insurance and defensive medicine by placing a $250,000 cap for non-economic damages in medical tort cases for certain physician specialists.

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

"§671-A Evidence of collateral benefits admissible. (a) In the event the defendant so elects, in an action for a medical tort, the defendant may introduce evidence of any amount payable as a benefit to the plaintiff as a result of the personal injury underlying the action pursuant to the United States Social Security Act, any state or federal income disability or worker's compensation act, any health, sickness or income-disability insurance, accident insurance that provides health benefits or income-disability coverage, and any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, dental, or other health care services. Where the defendant elects to introduce evidence of collateral benefits, the plaintiff may introduce evidence of any amount that the plaintiff has paid or contributed to secure the plaintiff's right to any insurance benefits concerning which the defendant has introduced evidence.

(b) No entity that is a source of collateral benefits, evidence of which is introduced pursuant to subsection (a), shall recover any amount against the plaintiff nor shall it be subrogated to the rights of the plaintiff against a defendant.

§671-B Attorney fees. (a) An attorney shall not contract for or collect a contingency fee for representing any person seeking damages in connection with an action for a medical tort in excess of the following limits:

(1) Forty per cent of the first $50,000 recovered;

(2) Thirty-three and one-third per cent of the next $50,000 recovered;

(3) Twenty-five per cent of the next $500,000 recovered; and

(4) Fifteen per cent of any amount of recovery that exceeds $600,000.

The fee limitations shall apply regardless of whether the recovery is by settlement, arbitration, or judgment or whether the person for whom the recovery is made is a responsible adult, an infant, or a person of unsound mind.

(b) If periodic payments are awarded to the plaintiff pursuant to section 671-C, the court shall place a total value on these payments based upon the projected life expectancy of the plaintiff and include this amount in computing the total award from which attorney's fees are calculated under this

section.

§671-C Periodic payments. (a) In any medical tort action, a court, at the request of either party, shall enter a judgment ordering that money damages or the equivalent for future damages of the judgment creditor be paid in whole or in part by periodic payments, rather than by a lump-sum payment, if the award equals or exceeds $50,000 in future damages. In entering a judgment ordering the payment of future damages by periodic payments, the court shall make a specific finding as to the dollar amount of periodic payments that will compensate the judgment creditor for the future damages; provided that when authorizing periodic payments of future damages, the court shall require a judgment debtor who is not adequately insured to post security adequate to ensure full payment of the damages awarded by the judgment. Upon termination of periodic payments of future damages, the court shall order the return of this security, or so much as remains, to the judgment debtor.

(b) A judgment ordering the payment of future damages by periodic payments shall specify the recipient or recipients of the payments, the dollar amount of the payments, the interval between payments, and the number of payments or the period of time over which payments shall be made. The payments shall only be subject to modification in the event of the death of the judgment creditor.

(c) In the event that the court finds that the judgment debtor has exhibited a continuing pattern of failing to make payments, the court shall find the judgment debtor in contempt of court, and in addition to the required periodic payments, shall order the judgment debtor to pay the judgment creditor all damages caused by the failure to make the periodic payments, including court costs and attorney's fees.

(d) Financial damages awarded for loss of future earnings shall not be reduced or terminated by reason of the death of the judgment creditor, but shall be paid to persons to whom the judgment creditor owed a duty of support, as provided by law, immediately prior to death. In such a case, the court that rendered the original judgment, upon petition of any party in interest, may modify the judgment to award and apportion the unpaid future damages in accordance with this subsection.

(e) Following the performance or expiration of all obligations specified in the periodic payment judgment, any obligation of the judgment debtor to make further payments shall cease and any remaining security given pursuant to subsection (a) shall revert to the judgment debtor.

§671-D Limitation on noneconomic damages. In an action on a medical tort claim where final judgment is rendered against a physician specialist, the limit on civil liability for noneconomic damages of the physician specialist, inclusive of all persons and entities for which vicarious liability theories may apply, shall be limited to an amount not to exceed $250,000 for each claimant, regardless of the number of defendant physician specialists. Notwithstanding section 663-8.7, noneconomic damages as defined in section 663-8.5 shall be limited in medical tort actions to a maximum award of:

(1) $250,000 against any physician specialist; or

(2) $3,000,000 allocated proportionately based upon percentage of fault if the gross negligence standards are met.

§671-E Economic damages. A trier of fact may render a verdict for the plaintiff in a medical tort action that includes economic damages, including but not limited to past and future medical expenses, loss of past and future earnings, loss of use of property, cost of repair or replacement, cost of obtaining domestic services, loss of employment, or loss of business and employment opportunities.

§671-F Proportionate allocation of economic damages. The amount of economic damages allocated to a physician specialist in a medical tort action shall be based upon the physician specialist's proportionate percentage of negligence or other fault.

§671-G Allocation of noneconomic damages. (a) If the trier of fact renders a verdict for the plaintiff in a medical tort action, the court shall enter judgment of liability against each defendant physician specialist in accordance with the percentage of negligence or other fault for compensatory damages that is attributed to the physician specialist by the trier of fact.

(b) Judgment shall not be entered against any physician specialist who has not been named a party or has been released, dismissed, or otherwise discharged as a party pursuant to section 663-15.5."

SECTION 3. Section 657-7.3, Hawaii Revised Statutes, is amended to read as follows:

"§657-7.3 Medical torts; limitation of actions; time. [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.] An action for a medical tort, as defined in section 671-1, shall commence within three years after the date of injury or one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first. In no event shall the time for commencement of the legal action exceed three years unless tolled for:

(1) Proof of fraud;

(2) Proof of intentional concealment; or

(3) Discovery of the presence of a foreign body that has no therapeutic or diagnostic purpose or effect in the person of the injured person.

(b) Actions by a minor shall be commenced within three years from the date of the alleged wrongful act, except that actions by a minor under the age of six years shall be commenced within three years, or prior to the eighth birthday of the minor, whichever provides a longer period. The time limitation shall be tolled for minors for any period during which a parent or guardian and defendant's insurer or health care provider have committed fraud or collusion in the failure to bring an action on behalf of the injured minor for professional negligence."

SECTION 4. Section 663-11, Hawaii Revised Statutes, is amended to read as follows:

"§663-11 Joint tortfeasors defined. For the purpose of this part, the term "joint tortfeasors" means two or more persons jointly or severally liable in tort for the same injury to person or property, whether or not judgment has been recovered against all or some of them[.], except as provided for physician specialists as defined in chapter 671."

SECTION 5. Section 671-1, Hawaii Revised Statutes, is amended to read as follows:

"§671-1 Definitions. As used in this chapter:

"Future damages" means damages for future medical treatment, care, or custody, loss of future earnings, loss of bodily function, or future pain and suffering of the judgment creditor.

"Gross negligence" means the reckless provision of health care that is clearly below the standard of acceptable medical practice, without regard for potential consequences or with wilful or wanton disregard for the well-being of the patient.

[~~(1)~~] "Health care provider" means a physician or surgeon licensed under chapter 453, [~~a physician and surgeon licensed under chapter 460,~~] a podiatrist licensed under chapter 463E, a health care facility as defined in section 323D-2, and the employees of any of them. Health care provider shall not mean any nursing institution or nursing service conducted by and for those who rely upon treatment by spiritual means through prayer alone, or employees of [~~such~~] the institution or service.

[~~(2)~~] "Medical tort" means professional negligence, the rendering of professional service without informed consent, or an error or omission in professional practice[,] by a health care provider[~~, which~~] that proximately causes death, injury, or other damage to a patient[.]; provided that the services are within the scope of services for which the provider is licensed and that are not within any restriction imposed by the licensing agency or licensed hospital.

"Periodic payments" means the payment of money or delivery of other property to the judgment creditor at regular intervals.

"Physician specialist" means a physician or osteopathic physician licensed in this state and board certified by the American Board of Medical Specialties or Bureau of Osteopathic Specialties in one of the following specialties:

(1) Emergency medicine;

(2) Neurological surgery;

(3) Obstetrics and gynecology;

(4) Orthopedic surgery, or

(5) Surgery.

"Recovered" means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim; provided that costs of medical care incurred by the plaintiff and any administrative fees, including overhead costs, are not deductible disbursements or costs for such purposes."

SECTION 6. Beginning January 1, 2010, all insurers providing professional liability insurance for health care providers in the state shall implement a premium rate that is twenty-five per cent of the lowest rate in effect between January 1, 2003, and December 31, 2009, for physicians or osteopathic physicians licensed in this state and board certified by the American Board of Medical Specialties or Bureau of Osteopathic Specialties in one of the following specialties:

(1) Emergency medicine;

(2) Neurological surgery;

(3) Obstetrics and gynecology;

(4) Orthopedic surgery, or

(5) Surgery;

provided that such a premium rate reduction shall not cause imminent insolvency or fail to provide a fair rate of return.

SECTION 7. The department of commerce and consumer affairs shall submit a report to the legislature no later than twenty days prior to the convening of the 2013 regular session that identifies any benefits and detriments related to passage of part I of this Act as well as any suggested legislation for recommended changes.

PART II

SECTION 8. Chapter 321, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§321‑ Duty to notify patients of adverse events; definitions; penalty; rules. (a) An appropriately trained designee of a health care provider shall notify in person each patient, or the patient's relative or representative, regarding any adverse event that results in serious harm to or a life threatening situation for the patient within seventy-two hours of the adverse event or discovery of the adverse event.

(b) The notification under subsection (a) shall not be admissible as evidence of an admission of liability pursuant to rule 409.5, Hawaii rules of evidence, under section 626‑1.

"Adverse event" means an event that is a negative consequence of care resulting in unintended injury or illness that may or may not have been preventable.

"Health care provider" means a physician or surgeon or osteopathic physician or surgeon licensed under chapter 453, a podiatrist licensed under chapter 463E, and a health care facility as defined in section 323D-2.

"Notify" means a forthright and empathetic discussion of clinically significant facts about the occurrence of an adverse event that resulted in patient harm, or could result in patient harm in the foreseeable future.

"Relative" means the patient's spouse, parent, grandparent, adult children, adult siblings or any other adult person who has a family-type relationship with the patient.

"Representative" means a legal guardian, attorney, person designated to have medical power of attorney, executor of the patient's estate, or any other person recognized in law as a patient's agent.

(d) Failure to comply with this section may subject a health care provider to license revocation and any other civil or criminal penalties permitted by law.

(e) The Hawaii medical board shall adopt rules in accordance with chapter 91 to carry out the effect of this section."

PART III

SECTION 9. The purpose of this part is to ensure that consumers have basic information about medical treatment providers by providing consumers with physician profiles.

SECTION 10. Chapter 453, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"§453‑ Physician profiles. (a) The board shall make available to the public a profile of each physician licensed to practice medicine in the state through an Internet website and, if requested, in writing. The physician profile shall contain the following information:

(1) The full name of the physician, address and telephone number of primary practice office, and electronic mail address;

(2) A description of any criminal convictions for felonies and serious misdemeanors, as determined by the board, including convictions reported to the board pursuant to section 329‑44;

(3) A description of any final disciplinary action by the board against the physician, including fines, penalties, probation, suspension, or revocation of license;

(4) A description of any final disciplinary action taken by any other licensing jurisdiction in other states against the physician within the last five years;

(5) A description of revocation or involuntary restriction of hospital privileges for reasons related to competence, character, or substance abuse that have been taken by the hospital's governing board or administrative officer, or resignation from or nonrenewal of medical staff membership or restriction of privileges at a hospital taken in lieu of or in settlement of a pending disciplinary action. Adverse decisions reported to the board pursuant to section 663-1.7 shall be included in the profile;

(6) All medical malpractice court judgments or awards in which a payment was awarded to a complainant, including those reported to the board pursuant to sections 453-8.7, 671-5, and 671-15;

(7) Name of medical school attended, dates of attendance, and date of graduation;

(8) Name of graduate medical education program, dates of attendance, and date of completion;

(9) Specialty board certification. The toll free number of the American Board of Medical Specialties shall be included to verify current board certification status;

(10) State or jurisdiction in which the physician is licensed, date of licensure, and current status of licensure;

(11) Names of hospitals where the physician has privileges;

(12) Status of compliance with continuing education requirements;

(13) Name of the professional liability insurance carrier or self-insured and status of compliance with financial responsibility provisions; and

(14) Indication of whether the physician participates in the Medicaid program, health plans, or accepts workers' compensation cases.

(b) The board shall provide a copy of the profile to the physician prior to initial publication and the physician shall have sixty days after receipt to correct inaccurate factual information. The physician may elect to include the following information: professional and community memberships, community activities, publications in peer reviewed medical literature, appointments to medical school faculty, language access, and any specialized areas of treatment.

(c) The physician shall update information in the profile within thirty days of any change in the information by reporting the change to the board.

(d) The board may take disciplinary action, including assessing a fine or penalty, against the physician for failure to comply with this section.

(e) The board may adopt rules pursuant to chapter 91 necessary to carry out the purposes of this section."

SECTION 11. Section 453-7.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Reports of adverse decisions of peer review committees transmitted to the department under section 663-1.7 shall not be available to public inspection or subject to discovery and shall be held confidential by the department; provided that:

(1) A written affirmative or negative reply may be given to a written inquiry by a hospital or health care facility as to whether a report of an adverse decision is on file with the department; [~~and~~]

(2) A subpoenaed report shall be subject to the requirements under section 453-17[.]; and

(3) The board shall include in the physician profile under section 453- a statement that an adverse decision has been reported to the board."

PART IV

SECTION 12. Part I of this Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 13. 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 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 15. This Act shall take effect on July 1, 2009; provided that part I of this Act shall be repealed on June 30, 2014.

HOUSE OF REPRESENTATIVES	H.B. NO.	1784
TWENTY-FIFTH LEGISLATURE, 2009		H.D. 1
STATE OF HAWAII