Excess liability account.

WORKING DRAFT
2005
STATE OF WYOMING
05LSO-0661.E1

HOUSE BILL
NO.
HB0319

Excess liability account.

Sponsored by:
Representative(s) Wasserburger, Gay and Jorgensen

A BILL

for

AN ACT relating to a medical malpractice liability; creating the Wyoming excess liability account; specifying legislative findings and purposes; providing definitions; specifying requirements; specifying duties; providing for a report; providing for investment of monies from the account; authorizing corresponding modifications in medical malpractice liability insurance policies; and providing for effective dates.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.
W.S. 35
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1001 through 35
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1008 are created to read:

ARTICLE 10
WYOMING EXCESS LIABILITY ACCOUNT

35
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1001.

Definitions.

(a)

As used in this article:

(i)

"Account" means the Wyoming excess liability account;

(ii)

"Noneconomic damages" means any loss, harm, damage or impairment suffered by a person as a result of malpractice which is nonpecuniary and subjective in nature and extent, including but not limited to pain, suffering, inconvenience, mental anguish, emotional distress, loss of society and companionship, loss of consortium and any other intangible loss, harm, damage or impairment;

(iii)

"Physician" means a person licensed under W.S. 33
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303.

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1002.

Wyoming excess liability account; creation; duties of state treasurer; contract required; payment limits.

(a)

There is created the Wyoming excess liability account within the trust and agency fund. The account and any investment income earned from the account shall be held in trust and invested and reinvested by the state treasurer pursuant to W.S. 9
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711.

(b)

Any physician who is licensed and practicing in Wyoming, who meets the financial requirements and enters into an agreement as specified by this article, shall be eligible to have any settlements or final judgments for noneconomic damages in excess of
five hundred thousand dollars ($500,000.00), up to a maximum payment by the state from the account of five hundred thousand dollars ($500,000.00) per settlement or judgment. In no event shall the state pay from the account any amounts in excess of one million dollars ($1,000,000.00) for coverage of any one (1) physician over the term of any agreement entered pursuant to W.S. 35
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1003(a)(ii).

(c)

Nothing in this article shall be interpreted to affect the provisions of the medical liability compensation account created by W.S. 26
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105.

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1003.

Wyoming excess liability account; qualifications and requirements; eligibility.

(a)

T
o be qualified to participate in the
Wyoming excess liability account under W.S. 35
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1002(b)
, a physician shall
:

(i)

Establish financial responsibility by filing proof with the attorney general that he is insured by a policy of malpractice liability insurance of at least one million dollars ($1,000,000.00) coverage per occurrence issued by an authorized insurer and proof that if the insurance is cancelled for any reason that the carrier has agreed to notify the Wyoming attorney general; and

(ii)

The physician shall enter into a written agreement with the state, wherein the physician shall agree:

(A)

To actively provide medical care in the state of Wyoming for a continuous period of no less than three (3) years after entry into the agreement;

(B)

To notify the attorney general in writing if any claim is made or any action is filed against the physician alleging medical injury caused by the physician;

(C)

To allow the office of the attorney general to participate on behalf of the account in all aspects of any claim, demand or suit, including any settlement negotiations, that may occur as a result of any claim made pursuant to this article;

(D)

To continuously maintain the primary insurance coverage as set forth in paragraph (a)(i) of this section in each specialty area the physician will practice under his agreement with the state;

(E)

To accept and provide medical care to patients qualified under the medical assistance and services act, the child health insurance program or any other state or federally funded program who seek medical care the physician is qualified to provide; and

(F)

To notify the attorney general in writing within fifteen (15) days if the physician is no longer practicing under the terms of this article or if the physician no longer carries the primary insurance coverage required under paragraph (a)(i) of this section.

(b)

The state may enter into contracts with any physician practicing under a valid license who is practicing in the state at least seventy percent (70%) of any contract year or any physician practicing medicine only in Wyoming on a less than full-time basis who agrees to the terms required under subsection (a) of this section.

(c)

The attorney general shall provide a certificate of participation to each physician who has entered into an agreement under this article and is eligible for coverage under the account.

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1004.

Duties and responsibilities of the attorney general; payment from account; audits required.

(a)

The Wyoming attorney general shall administer the account created by this article. The attorney general shall promulgate rules and regulations as he considers necessary to carry out the purposes of this act and shall take other appropriate action to carry out the provisions of this act. No agreements shall be entered into under this section until final adoption of rules and regulations pursuant to this subsection. Subject to other provisions of this article, upon application from any physician who has entered into an agreement under this article and proof of a final judgment or settlement for noneconomic damages in excess of five hundred thousand dollars ($500,000.00) as a result of a medical negligence claim against the physician for acts or omissions occurring in Wyoming, the attorney general shall pay the noneconomic damages in excess of five hundred thousand dollars ($500,000.00) from the account to the extent payment is within the limitations of this article and only if the attorney general has fully participated in the case or has fully participated in and approved the settlement terms.

(b)

In any agreement entered into under this article, the attorney general shall not pay more than five hundred thousand dollars ($500,000.00) in noneconomic damages for any one claim and shall not pay more than one million dollars ($1,000,000.00) in claims or judgments against any one (1) physician over the term of any agreement entered pursuant to W.S. 35-1-1003(a)(ii).

(c)

Payment of noneconomic damages in excess of the five hundred thousand dollars ($500,000.00) for any one (1) claim or judgment shall remain the liability of the physician.

(d)

The attorney general may use funds from the account to purchase reinsurance as deemed prudent to minimize expenditures under this section.

(e)

The attorney general shall have the authority to conduct audits, actuarial analysis or studies deemed necessary to ensure the ongoing financial stability of the account.

(f)

Audits, actuarial analysis or studies conducted pursuant to this article shall be paid for out of the funds in the account.

(g)

On or before March 1 of each calendar year, the attorney general shall submit a completed annual audit of the account and a closed claims report to the legislative management council and the governor. The audit and report shall include recommendations as to any policy or legal changes necessary to ensure the account is meeting its purposes and maintaining financial stability.

(h)

The attorney general may hire counsel to represent the interests of the state with respect to the account on his behalf. The attorney general shall employ the counsel with funds of the account, and shall pay expenses associated with any claim, demand or suit from the account, including but not limited to witness fees, travel expenses and expert witness fees related to the state's interest in the case.

(j)

Any medical malpractice liability insurance policy issued or renewed in this state on or after the effective date of this article which provides required coverage under W.S. 35
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1003(a)(i), may provide that the insurer's liability under the policy for a claim may be reduced by the amount paid from the account pursuant to W.S. 35
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1004(a) for that claim.

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1005.

Default; authority of attorney general.

(a)

Any physician who enters into an agreement and who fails or refuses to fulfill the terms of the agreement required under W.S. 35
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1004(b), shall not be eligible for participation in the account.
Any physician who violates the provisions of the agreement after any payment is made from the account on the physician's behalf shall be liable for repayment of the amount paid pursuant to this article.

(b)

Any noneconomic damages that may be attributable to medical treatment provided by a physician deemed not to be in compliance with an agreement with the state at the time of the treatment shall not be eligible for payment from the account created by this section, regardless of the amount of the final judgment or settlement.
The noncompliant physician and his malpractice liability insurance shall assume all responsibility for defending the claim and payment of any award under the claim.

(c)

The attorney general may institute an action to recover any payments from the account created by this section that were incorrectly made on behalf of the defaulting physician under the agreement
or were made on behalf of a physician who subsequently violates any provision of the agreement.

(d)

The attorney general may make any payment under this article under any reservation of rights he deems appropriate to protect the state's interests.

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1006.

Punitive damages.

Punitive damages shall not be
paid from the Wyoming excess liability fund account.

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1007.

Notice of claim against account required; role of the state in settlements and civil actions.

(a)

Any claimant seeking recovery from a physician for noneconomic damages covered by the account shall name the fund as a party to any claim, demand or suit, and shall serve the claim upon the attorney general.

(b)

The state shall fully participate in all aspects of each claim, demand or suit, including settlement negotiations and allocation of damages between economic and noneconomic damages, in which the account has been named a party and in which it has received notice through the attorney general.
No payment shall be made from the account unless the attorney general fully participates in all aspects of each claim, demand or suit, including settlement negotiations and allocation of damages between economic and noneconomic damages.

(c)

Failure to allow full and complete participation in all aspects of each claim shall result in no payment from the account.

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1008.

Claims data reported.

(a)

Within thirty (30) days after each claim is closed, any insurer writing medical malpractice liability coverage in this state shall file with the insurance commissioner a report of each claim against a health care provider. The insurer shall remove any information from the report which could be used to identify the patient and their medical history.

(b)

The closed claim report shall contain the following information for the preceding calendar year:

(i)

For each closed claim:

(A)

Specialty and primary coverage of the insured;

(B)

Nature and substance of the claim;

(C)

Age of the injured party;

(D)

After final disposition of the claim, the date and manner of disposition, whether by judgment, settlement, arbitration or otherwise, and an itemization of the amounts paid, if any, reported separately or reasonably segregated and identified for:

(I)

Medical and prescription costs;

(II)

Economic damages;

(III)

Noneconomic damages;

(IV)

Costs of defense, including attorney's fees, costs and expenses; and

(V)

Any additional information required by the commissioner.

Section 2.

(a)

The Wyoming legislature finds that:

(i)

Physicians' medical malpractice insurance is available from a very limited number of authorized insurers in Wyoming and has been recognized to be a noncompetitive market by the Wyoming insurance commissioner;

(ii)

Medical malpractice insurance premiums generally are increasing. These premiums are even more costly if a physician is required to change insurers. The increased premiums are causing and will continue to cause physicians to limit or close their practices, or in some cases, to leave the state;

(iii)

Wyoming has difficulty recruiting and retaining sufficient numbers of physicians to practice in various parts of the state. Elements of this difficulty include the limited availability of insurance and its high cost;

(iv)

Sufficient numbers of physicians actively practicing throughout the state is critical to the availability of adequate medical care for Wyoming citizens, particularly individuals under the Wyoming Medical Assistance and Services Act, the Wyoming Uninsured Child Health Insurance Program, and to other needy individuals;

(v)

The availability of adequate medical care to Wyoming citizens is threatened without implementation of this act.

(b)

The legislature determines that the assistance contemplated by this act is necessary to support the compelling state interests of ensuring the availability of adequate medical care, encouraging physicians to offer medical care in Wyoming's communities, and encouraging physicians to provide medical care to the needy and the poor. The legislature therefore determines that assistance contemplated by this act is both for a public purpose and for necessary support of the poor as authorized in article 16, section 6 of the Wyoming constitution.

Section 3.

(a)

There is appropriated from the budget reserve account to the Wyoming excess liability account within the trust and agency fund, five million dollars ($5,000,000.00) to implement the purposes of this act, including payment of qualified payments under W.S. 35
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1002, costs of defense, witness fees and administrative costs incurred by the attorney general in the implementation of the act.

(b)

There is appropriated from the general fund fifty thousand dollars ($50,000.00) for the insurance department to conduct an actuarial study to consider the benefits of reinsurance and to estimate the anticipated annual cost and terms of reinsurance under this act.

Section 4.

(a)

On or before September 1 of each year, the attorney general shall annually examine the excess liability account program and submit his report to the governor and the legislature. The examination and report shall include an analysis of the following:

(i)

The number of claims paid from the account, including the dollar amount paid for each claim;

(ii)

A description of the level of participation of the attorney general in each case or settlement covered under the account;

(iii)

An analysis of how the account is affecting the number of physicians practicing in the state; and

(iv)

An analysis of how the account is affecting medical malpractice insurance premiums in the state.

Section 5.

(a)

This act is effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(b)

This act shall apply to all medical malpractice settlements or claims based upon errors or omissions alleged to have occurred between the effective date of this act and July 1, 2008.

(END)

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HB0319