HB1538.DOC

SECTION 1. 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~~] sections 431:10C-115 and 431:10G-107, 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 claims 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 2. Chapter 671, Hawaii Revised Statutes, is amended as follows:

1. By amending the title of part II to read:

"PART II. MEDICAL [~~CLAIM~~] CLAIMS CONCILIATION OFFICE"

2. By amending section 671-11 to read:

"§671-11 Medical [~~claim~~] claims conciliation [~~panels~~] office; [~~composition, selection, compensation~~] establishment. (a) There [~~are~~] is established in the department of commerce and consumer affairs for administrative purposes a medical [~~claim~~] claims conciliation [~~panels which shall review and render findings and advisory opinions on the issues of liability and damages~~] office that shall conduct administrative hearings and issue binding opinions in medical tort claims against health care providers filed pursuant to section 671-12.

[(b) A medical claim conciliation panel shall be formed for each claim filed pursuant to section 671-12 and after each panel renders its decision or the claim is otherwise disposed of it shall be disbanded. Each medical claim conciliation panel shall consist of one chairperson selected from among persons who are familiar with and experienced in the personal injury claims settlement process, one attorney licensed to practice in the courts of the State and experienced in trial practice, and one physician, osteopathic physician, or surgeon licensed to practice under chapter 453. The chairperson shall be appointed by the director of the department of commerce and consumer affairs from a list of eligible persons approved by the chief justice of the supreme court of Hawaii. The attorney shall be appointed by the chairperson from a list of not less than thirty-five attorneys experienced in trial practice submitted annually by the supreme court. The physician, osteopathic physician, or surgeon shall be appointed by the chairperson and shall be currently licensed and in good standing under chapter 453.

(c) The chairperson shall preside at the meetings of the panel. The chairperson, all panel members, and any consultant called by the panel to appear before the panel shall be compensated at the rate of $300 per claim which will become payable when the decision of the panel is submitted. At the discretion of the director, the chairperson, panel members, and any consultant called by the panel to appear before the panel, may be compensated at one-half the amount of compensation specified in this section, if the claim is disposed of by any means prior to the hearing by the panel. The chairperson, all panel members, and any consultant called by the panel to appear before the panel also shall be paid allowances for travel and living expenses which may be incurred as a result of the performance of their duties on or for the panel. These costs shall be paid by the department of commerce and consumer affairs from the filing fees paid by the parties.]

(b) The medical claims conciliation 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 chapters 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 claims 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 shall be exempt from chapters 76 and 89. The director shall develop the qualifications for the hearing officer and shall provide training in administrative hearings and legal proceedings and training in the medical field, including in-classroom clinical training and a program in which the hearing officer shadows physicians in different health care settings.

[(d) The claimant shall pay a filing fee of $450 to the department upon the filing of the claim and the failure to do so shall result in the claim being rejected for filing. 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. Each party to a claim shall be assessed a non- refundable processing fee by the department in the amount of $50. The non-refundable processing fee shall be retained from each party's filing fee, and shall be used to defray the administrative costs of the medical claims conciliation panel program.

(e) After the panel has made a final decision on a claim, or after a final disposition of the claim has been made without a hearing before the panel, the department shall return any moneys remaining after all panel costs have been paid, to the respective parties on a pro rata basis.]

[~~(f)~~] (d) The office and [~~meeting~~] administrative hearing space, secretarial and clerical assistance, office equipment, and office supplies for the [~~panel~~] medical claims conciliation office shall be furnished by the department of commerce and consumer affairs. The [~~chairperson~~] medical claims conciliation hearing officer may designate any alternative meeting place or site for the hearing.

[(g) The Hawaii medical board shall prepare a list of physicians, osteopathic physicians, surgeons, and podiatrists, as the case may be, along with their respective specialties. These physicians, osteopathic physicians, and surgeons shall be eligible to serve as consultants to the panel in their respective fields. Panel members may consult with other legal, medical, and insurance specialists.]"

SECTION 3. Section 671-11.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§671-11.5[]] Medical claims; Filing fee; Waiver of filing fee. (a) For each claim filed pursuant to this part, the claimant shall pay a filing fee to the department of commerce and consumer affairs, the amount of which shall be established by the executive director. Failure to pay the filing fee shall result in the claim's 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, other than the claimant, shall pay a filing fee of $450 to the department of commerce and consumer affairs within twenty days of being served with the claim. Filing fees shall be non-refundable and shall be deposited into the compliance resolution fund.

[~~(a)~~] (b) If any party to a claim cannot pay the required filing fee, the party may file [~~with the director~~] 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 a format prescribed by the department of commerce and consumer affairs, 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 a medical claims conciliation [~~panel~~] hearing officer.

[~~(b)~~] (c) The filing of a motion to waive the filing fee shall toll the time limitation in section 671-18. The executive director shall decide on the motion to waive the filing fee as expeditiously as possible, and no oral arguments shall be permitted.

[~~(c)~~] (d) If the executive director grants the motion to waive the filing fee, the [~~party may~~] claim shall proceed [~~without further application to the director or panel, and without payment of the filing fee~~]. If the motion is denied, the executive director shall state the reasons for the denial in writing. The executive director shall promptly provide [~~the party with a filed~~] a copy of the [~~director's~~] order granting or denying the motion to the claimant.

[~~(d)~~] (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.

[~~(e)~~] (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 the 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 such time as a final judicial determination is rendered on the appeal.

[~~(f)~~] (g) If the party files an appeal under section 91-14, and the court upholds the executive director's denial of the [~~aggrieved~~] 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 entitled to proceed without payment of the filing fee."

SECTION 4. Section 671-12, Hawaii Revised Statutes, is amended to read as follows:

"§671-12 Review by [~~panel~~] office required; notice; presentation of claims; request for a more definite statement of the claim. (a) [~~Effective July 1, 1976, any~~] Any person or the person's representative claiming that a medical tort has been committed shall submit a statement of the claim to the medical [~~claim~~] claims conciliation [~~panel~~] office before a suit based on the claim may be commenced in any court of this State. Claims shall be submitted to the medical [~~claim~~] claims conciliation [~~panel~~] office in writing. The claimant shall set forth facts upon which the claim is based and shall include the names of all parties against whom the claim is or may be made who are then known to the claimant.

(b) Within five business days thereafter the [~~panel~~] medical claims conciliation office shall give notice of the claim and the statement of the claim, by certified mail, to all health care providers and others who are or may be parties to the claim and shall furnish copies of written claims to such persons. Such notice shall set forth a date, not more than twenty days after mailing the notice, within which any health care provider against whom a claim is made shall file a written response to the claim, and a date and time, not less than five days following the last date for filing a response, for a hearing [~~of the panel~~] by the medical claims conciliation hearing officer. Such notice shall describe the nature and purpose of the [~~panel's~~] proceedings and shall designate the place of the meeting. The times originally set forth in the notice may be enlarged by [~~the chairperson~~] by the medical claims conciliation hearing officer, on due notice to all parties, for good cause.

(c) If the statement of the claim in the notice is so vague or ambiguous that any party receiving notice of the claim cannot reasonably be required to frame a written response, the party may submit a written request to the director of commerce and consumer affairs for a more definite statement before filing the written response. Copies of the request shall be provided to the [~~panel~~] medical claims conciliation office and the medical claims conciliation hearing officer, the claimant, and other affected parties. The request, which shall be ex parte and stay the proceedings of the [~~panel~~] hearing officer until notice of the director's decision is given to the [~~panel~~] office, the hearing officer, and all parties, shall specify the defects complained of and the details desired. The director may deny, grant, or modify the request at the director's own discretion, without the necessity of a hearing, although the director may reach a decision after consulting with the [~~panel~~] hearing officer or the claimant. The director shall provide notice of the decision to the [~~panel~~] office, the hearing officer, the claimant, and other affected parties. If the request is granted and the claimant fails to provide a more definite statement of the claim within five days after notice of the decision, the [~~panel~~] the hearing officer may make such order as it deems just. This subsection shall not be used as a tactic to delay the proceedings."

SECTION 5. Section 671-12.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§671-12.5[]] Certificate of consultation. (a) Any claim filed with the medical [~~claim~~] claims conciliation [~~panel~~] office under this chapter shall be accompanied by a certificate which declares one of the following:

(1) That the claimant or the claimant's attorney has consulted with at least one physician who is licensed to practice in this State or any other state, and who is knowledgeable or experienced in the same medical specialty as the health care professional against whom the claim is made, and that the claimant or claimant's attorney has concluded on the basis of such consultation that there is a reasonable and meritorious cause for filing the claim. If the claimant or the claimant's attorney is not able to consult with a physician in the same medical specialty as the health care professional against whom the claim is made, the claimant or claimant's attorney may consult with a physician who is licensed in this State or in any other state who is knowledgeable and experienced in a medical specialty that is as closely related as practicable to the medical specialty of the health care professional against whom the claim is made. The physician or physicians consulted by the claimant or the claimant's attorney may not be a party to the case, nor be compelled to testify or otherwise participate in the hearing before the medical [~~claim~~] claims conciliation [~~panel~~] hearing officer;

(2) That the claimant or the claimant's attorney was unable to obtain the consultation required by paragraph (l) because a statute of limitations would impair the action and that the certificate required by paragraph (1) could not be obtained before the impairment of the action. If a certificate is executed pursuant to this paragraph, the certificate required by paragraph (1) shall be filed by the claimant or the claimant's attorney within ninety days after filing the claim; or

(3) That the claimant or the claimant's attorney was unable to obtain the consultation required by paragraph (1) after the claimant or the claimant's attorney had made a good faith attempt to obtain such consultation and the physician contacted would not agree to such a consultation. For purposes of this paragraph, "good faith attempt" refers to the responsibility of a claimant or claimant's attorney to make reasonable efforts to contact a physician for the purpose of reviewing the circumstances upon which a claim is based. The claimant or claimant's attorney may contact physicians by letter, telephone, facsimile, or other electronic means of communication. If the physician does not respond within a reasonable time, the claimant or claimant's attorney may submit its claim to the medical [~~claim~~] claims conciliation [~~panel~~] office along with a certificate declaring such nonresponse to claimant's good faith attempt. A "good faith attempt" shall ultimately be evaluated in light of the goal of having a qualified physician assist the claimant or claimant's attorney in understanding the basis of the claim, and such determination shall depend upon the circumstances of each individual case.

(b) Where a claimant or the claimant's attorney intends to rely solely on a failure to inform of the consequences of a procedure (informed consent), this section shall be inapplicable. The claimant or the claimant's attorney shall certify upon filing of the claim that the claimant or the claimant's attorney is relying solely on the failure to inform of the consequences of a procedure and for that reason is not filing a certificate as required by this section.

(c) For the purposes of this section, the claimant or the claimant's attorney shall not be required to disclose the names of any physician consulted to fulfill the requirements of subsection (a) to any of the other parties to the claim. The [~~medical claim conciliation panel~~] office may require the claimant or the claimant's attorney to disclose the name of any physician consulted to fulfill the requirements of subsection (a). No disclosure of the name of any physician consulted to fulfill the requirements of subsection (a) shall be made to any of the other parties to the claim; provided that the medical [~~claim~~] claims conciliation [~~panel~~] office may contact any such physician to determine if the requirements of subsection (a) were met.

(d) Unless a certificate is filed pursuant to subsection (a) or (b), the claim shall not be received for filing by the medical [~~claim~~] claims conciliation [~~panel~~] office."

SECTION 6. Section 671-13, Hawaii Revised Statutes, is amended to read as follows:

"§671-13 Medical [~~claim~~] claims conciliation [~~panel~~] office hearing; fact-finding; evidence; voluntary settlement. Every claim of a medical tort shall be heard by the medical [~~claim~~] claims conciliation [~~panel~~] hearing officer within thirty days after the last date for filing a response. No persons other than the [~~panel~~] hearing officer, witnesses, and consultants called by the [~~panel~~] hearing officer, and the persons listed in section 671-14 shall be present except with the permission of the [~~chairperson~~] hearing officer. The [~~panel~~] hearing officer may, in [~~its~~] the hearing officer's discretion, conduct an inquiry of a party, witness, or consultant without the presence of any or all parties.

[~~The hearing shall be informal. Chapters 91 and 92 shall not apply.~~] The [~~panel~~] hearing officer may require a stenographic record of all or part of [~~its~~] the proceedings for [~~the~~] use [of] by the [~~panel,~~] hearing officer, but such record shall not be made available to the parties. The [~~panel~~] hearing officer may receive any oral or documentary evidence. Questioning of parties, witnesses, and consultants may be conducted by the [~~panel~~] hearing officer, and the [~~panel~~] hearing officer may, in [~~its~~] his discretion, permit any party, or any counsel for a party to question other parties, witnesses, or consultants. The [~~panel~~] hearing officer may designate who, among the parties, shall have the burden of going forward with the evidence with respect to such issues as [it] the hearing officer may consider, and unless otherwise designated by the [~~panel~~] hearing officer, when medical and hospital records have been provided to the claimant for the claimant's proper review, such burden shall initially rest with the claimant at the commencement of the hearing.

The [~~panel~~] hearing officer shall have the power to require by subpoena the appearance and testimony of witnesses and the production of documentary evidence. When such subpoena power is [~~utilized,~~] used, notice shall be given to all parties. The testimony of witnesses may be taken either orally before the [~~panel,~~] hearing officer, or by deposition. In cases of refusal to obey a subpoena issued by the [~~panel~~] hearing officer, the [~~panel~~] hearing officer may invoke the aid of any circuit court in the State, which may issue an order requiring compliance with the subpoena. Failure to obey such order may be punished by the court as a contempt thereof. [~~Any member of the panel,~~] The hearing officer, the director of the department, or any person designated by the director of the department may sign subpoenas. [~~Any member of the panel~~] The hearing officer may administer oaths and affirmations, examine witnesses, and receive evidence. Notwithstanding such powers, the [~~panel~~] hearing officer shall attempt to secure the voluntary appearance, testimony, and cooperation of parties, witnesses, and consultants without coercion.

At the hearing of the [~~panel~~] hearing officer and in arriving at [~~its~~] an opinion, the [~~panel~~] hearing officer shall consider, but not be limited to, statements or testimony of witnesses, hospital and medical records, nurses' notes, x-rays, and other records kept in the usual course of the practice of the health care provider without the necessity for other identification or authentication, statement of fact, or opinion on a subject contained in a published treatise, periodical, book, or pamphlet, or statements of experts without the necessity of the experts appearing at the hearing. The [~~panel~~] hearing officer may, upon the application of any party or upon its own decision, appoint as a consultant, an impartial and qualified physician, surgeon, physician and surgeon, or other professional person or expert to testify before the [~~panel~~] hearing officer or to conduct any necessary professional or expert examination of the claimant or relevant evidentiary matter and to report to or testify as a witness thereto. Such a consultant shall not be compensated or reimbursed except for travel and living expenses [~~to be paid as provided in section 671-11~~]. Except for the production of hospital and medical records, nurses' notes, x-rays, and other records kept in the usual course of the practice of the health care provider, discovery by the parties shall not be allowed.

During the hearing and at any time prior to the [~~rendition~~] rendering of an advisory decision pursuant to section 671-15, the [~~panel~~] hearing officer may encourage the parties to settle or otherwise dispose of the case voluntarily.

Except as otherwise provided in this section, medical claims conciliation hearings shall be conducted in accordance with chapter 91."

SECTION 7. Section 671-14, Hawaii Revised Statutes, is amended to read as follows:

"§671-14 Same; persons attending hearings of [~~panel~~] medical claims conciliation hearing officer. Unless excluded or excused by the [~~panel,~~] medical claims conciliation hearing officer, the following persons shall attend hearings before the [~~panel~~] hearing officer:

(1) The party or parties making the claim;

(2) The health care provider or providers against whom the claim is made or representatives thereof, other than counsel, authorized to act for such health care provider or providers;

(3) Counsel for the parties, if any."

SECTION 8. Section 671-15, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:

"(a) Within thirty days after the completion of a hearing, the medical [~~claim~~] claims conciliation [~~panel~~] hearing officer shall file a written [~~advisory~~] decision with the insurance commissioner, who shall thereupon mail copies to all parties concerned, their counsel, and the representative of each health care provider's liability insurance carrier authorized to act for such carrier, as appropriate. The insurance commissioner [~~also~~] shall also mail copies of the [~~advisory~~] decision to the department of commerce and consumer affairs, if the claim is against a physician, osteopathic physician, or surgeon licensed under chapter 453 or a podiatrist licensed under chapter 463E. The [~~panel~~] medical claims conciliation hearing officer shall decide the issue of liability and shall state [~~its~~] the hearing officer's conclusions in substantially the following language: "[We] I find the health care provider was actionably negligent in his or her care and treatment of the patient and [we] I, therefore, find for the claimant"; or "[We] I find the health care provider was not actionably negligent in his or her care and treatment of the patient and [we] I, therefore, find for the health care provider".

(b) After a finding of liability, the medical [~~claim~~] claims conciliation [~~panel~~] hearing officer shall decide the amount of damages, if any, which should be awarded in the case. The decision as to damages shall include in simple, concise terms a division as to which portion of the damages recommended are attributable to economic losses and which to noneconomic losses; provided the [~~panel~~] hearing officer may not [~~recommend~~] award punitive damages.

(c) The decisions shall be signed by [~~all members of~~] the medical [~~claim~~] claims conciliation [~~panel~~] hearing officer[~~; provided that any member of the panel may file a written concurring or dissenting opinion~~]."

SECTION 9. Section 671-15.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§671-15.5[]] Expungement of records; malpractice insurance rates. (a) Upon a decision by the medical [~~claim~~] claims conciliation [~~panel~~] hearing officer's finding for the health care provider pursuant to section 671-15(a), the health care provider may apply to the [~~panel~~] hearing officer for expungement of all records of the related proceedings. The [~~panel~~] hearing officer shall expunge all records if [~~a majority of the panel~~] the hearing officer finds that the complaint is fraudulent or frivolous.

(b) No insurer providing professional liability insurance for a health care provider shall increase any premium rate for the health care provider on the basis of the filing of a medical tort claim against the health care provider that is determined by the medical [~~claim~~] claims conciliation [~~panel~~] hearing officer to be fraudulent or frivolous."

SECTION 10. Section 671-16, Hawaii Revised Statutes, is amended to read as follows:

"§671-16 Subsequent litigation; excluded evidence. [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.]

(a) Within twenty days after the decision of the medical claims conciliation hearing officer is served upon the parties, any party may file with an appropriate court of this State and serve on the other parties and the executive director of the medical claims conciliation office, a written notice of appeal and request for trial de novo of the action. This period may be extended to a period of not more than forty days after the decision of the hearing officer is served upon the parties by stipulation signed by all parties remaining in the action. After the filing and service of written notice of appeal and request for trial de novo, the case shall be set for trial pursuant to applicable court rules.

(b) If after twenty days after the award is served upon the parties, no party has filed a written notice of appeal and request for trial de novo, the court shall, upon notification by the hearing officer, enter the award as a final judgment of the court. This period may be extended to a period of not more than forty days after the award is served upon the parties by written stipulation. Said award shall have the same force and effect as final judgment of the court in a civil action but may not be appealed.

(1) Appealed and improved upon the award by seventy per cent or more; or

(2) Did not appeal and the appealing party failed to improve upon the award by seventy per cent or more.

For the purposes of this subsection "improve" or "improved" means to increase the award for the appealing party or to decrease the award for the non-appealing party.

(d) After the verdict is received and filed, or the court's decision rendered in a trial de novo, the trial court may impose sanctions as set forth below against the non-prevailing party whose appeal resulted in the trial de novo:

(1) Reasonable costs and fees (other than attorney's fees) actually incurred by the party but not otherwise taxable under the law including expert witness fees, travel costs, and deposition costs;

(2) Costs of jurors; and

(3) Attorney's fees.

(e) No statement made in the course of the hearing of the [~~medical claim conciliation panel~~] hearing officer 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~~] claims conciliation [~~panel~~] hearing officer 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."

SECTION 11. Section 671-16.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§671-16.5[]] Arbitration; subsequent litigation. Any person or the person's representative claiming that a medical tort has been committed or any health care provider against whom a claim has been made may elect to bypass the court annexed arbitration program under section 601-20 after the claim has been submitted to the medical [~~claim~~] claims conciliation [~~panel~~] office and [~~panel~~] the medical claims conciliation hearing officer has rendered a decision or has not reached a decision within the tolling period of the statute of limitations under section 671-18."

SECTION 12. Section 671-16.6, Hawaii Revised Statutes, is amended to read as follows:

"[[]§671-16.6[]] Submission of claim to an alternative dispute resolution provider. (a) Any claim initially filed with the medical [~~claim~~] claims conciliation [~~panel~~] office may be subsequently submitted to an alternative dispute resolution provider upon the written agreement of all of the parties to the claim and with the written approval of the executive director of the office. The executive director shall approve the alternative dispute resolution provider and the alternative dispute resolution procedures.

(b) The parties shall comply with the procedures established by the alternative dispute resolution provider and approved by the executive director. If a party does not comply with those procedures, any other party may file a motion with the executive director to have the claim resubmitted to the medical [~~claim~~] claims conciliation [~~panel~~] office.

(c) Within thirty days after the completion of the alternative dispute resolution process, the alternative dispute resolution provider shall notify all parties concerned, their counsel, and the representative of each health care provider's liability insurance carrier authorized to act for the carrier, as appropriate, that the alternative dispute resolution process has been completed.

(d) The claimant may institute litigation based upon the claim in an appropriate court only if:

(1) The parties were not able to resolve the entire claim through the alternative dispute resolution process and the matter has not been resubmitted to the medical [~~claim~~] claims conciliation [~~panel~~] office pursuant to subsection (b) of this section; or

(2) The claim has not been resolved through the alternative dispute resolution process after twelve months from the date the claim was filed with the approved alternative dispute resolution provider.

(e) No statement made in the course of the approved alternative dispute resolution process shall be admissible in evidence as an admission, to impeach the credibility of a witness, or for any other purpose in any trial of the action. No decision, conclusion, finding, or recommendation of the approved alternative dispute resolution provider 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 approved alternative dispute resolution hearing, their counsel, or other representative of such party, refer or comment thereon in an opening statement, in an argument, or at any time, to the court or jury."

SECTION 13. Section 671-17, Hawaii Revised Statutes, is amended to read as follows:

"[[]§671-17[]] Immunity [~~of panel members~~] from liability. No member of [a] the medical [~~claim~~] claims conciliation [~~panel~~] office shall be liable in damages for libel, slander, or other defamation of character of any party to medical [~~claim~~] claims conciliation [~~panel~~] office [~~proceeding~~] proceedings for any action taken or any decision, conclusion, finding, or recommendation made by the [~~member~~] medical claims conciliation hearing officer while acting within the [~~member's~~] hearing officer's capacity [~~as a member of a medical claim conciliation panel~~] under this [~~Act.~~] Chapter."

SECTION 14. Section 671-18, Hawaii Revised Statutes, is amended to read as follows:

"§671-18 Statute of limitations tolled. The filing of the claim with the medical [~~claim~~] claims conciliation [~~panel~~] office or with an approved alternative dispute resolution provider shall toll any applicable statute of limitations, and any such statute of limitations shall remain tolled until sixty days after the date the decision of the panel or the notification of completion from the approved alternative dispute resolution provider is mailed or delivered to the parties. If a decision by the medical [~~claim~~] claims conciliation [~~panel~~] hearing officer is not reached within twelve months, or the alternative dispute resolution process is not completed within twelve months, the statute of limitations shall resume running and the party filing the claim may commence a suit based on the claim in any appropriate court of this State. The [~~panel~~] hearing officer or the approved alternative dispute resolution provider shall notify all parties in writing of this provision."

SECTION 15. Section 671-19, Hawaii Revised Statutes, is amended to read as follows:

"§671-19 Duty to cooperate; assessment of costs and fees. It shall be the duty of every person who files a claim with the medical [~~claim~~] claims conciliation [~~panel~~] office, every health care provider against whom the claim is made, and every insurance carrier or other person providing medical tort liability insurance for the health care provider, to cooperate with the [~~medical claim conciliation panel~~] office for the purpose of achieving a prompt, fair, and just disposition or settlement of the claim, provided that cooperation shall not prejudice the substantive rights of those persons.

Any party may apply to the [~~panel~~] medical claims conciliation hearing officer to have the costs of the action assessed against any party for failure to cooperate with the [~~panel~~] hearing officer. The [~~panel~~] hearing officer may award costs, or a portion thereof, including attorney's fees[,]; witness fees, including those of expert witnesses[,]; filing fees[,]; and costs of the medical claim conciliation [~~panel~~] hearing to the party applying therefor.

In determining whether any person has failed to cooperate in good faith, the [~~panel~~] hearing officer shall consider, but is not limited to, the following:

(1) The attendance of the persons at the medical claims conciliation hearing [~~of the medical claim conciliation panel~~];

(2) The extent to which representatives of parties and counsel representing parties [~~came to panel~~] attended hearings with knowledge of the claims and defenses and authority to negotiate a settlement or other disposition of the claim;

(3) The [~~testimony of members of the panel as to the~~] facts of the person's participation in the [~~panel~~] hearing;

(4) The extent of the person's cooperation in providing [~~the panel with~~] documents and testimony called for by the [~~panel~~] hearing officer;

(5) The reasons advanced by the person so charged for not fully cooperating or negotiating; and

(6) The failure of the person to submit any required fees to the department of commerce and consumer affairs, as required by this chapter.

The party against whom costs are awarded may appeal the award to the circuit court. The court may affirm or remand the case with instructions for further proceedings; or it may reverse or modify the award if the substantial rights of the petitioners may have been prejudiced because the award is characterized as abuse of discretion."

SECTION 16. Section 671-20, Hawaii Revised Statutes, is amended to read as follows:

"[[]§671-20[]] Annual report. The director of commerce and consumer affairs shall prepare and submit to the legislature [~~annually~~], at least twenty days prior to the convening of each regular session, [a] an annual 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~~] claims conciliation [~~panel~~] office and the disposition of such claims, a description and summary of the work of the [~~panel~~] medical claims conciliation hearing officer 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 section 671-12 and recommendations for changes, modifications or repeal of this chapter or parts thereof with accompanying reasons and data."

SECTION 17. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 18. This Act shall take effect upon its approval.

INTRODUCED BY:

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HOUSE OF REPRESENTATIVES	H.B. NO.	1538
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII