Medical liability-noneconomic damages.

WORKING DRAFT
2011
STATE OF
WYOMING
11LSO-0290

HOUSE BILL
NO.
HB0213

Medical liability-noneconomic damages.

Sponsored by:
Representative(s) Gay, Brechtel, Krone, Semlek and Stubson and Senator(s)
Jennings
and Nutting

A BILL

for

AN ACT relating to medical malpractice liability; creating the Wyoming excess liability account; specifying legislative findings and purposes; providing definitions; specifying requirements; specifying duties
of the attorney general
; providing for report
s
; providing for investment of monies from the account; authorizing corresponding modifications in medical malpractice liability insurance policies;
providing for applicability;
providing appropriations;

and providing for
an
effective date.

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

Section 1.
W.S. 35
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2
01 through 35
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0
9
are created to read:

ARTICLE 1
2
WYOMING
EXCESS LIABILITY ACCOUNT

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01.

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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26
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303.

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02.

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

(a)

There is created the
Wyoming
excess liability account. 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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4
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71
5
.

(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
,
resulting from a professional malpractice claim against the physician,
paid by the state from
the Wyoming excess liability account as provided in this article.

(c)

A payment from the
Wyoming
excess liability account shall be limited to
the amount by which a
settlement or final judgment
against the physician
for noneconomic damages
resulting from one (1) occurrence
exceeds
five hundred thousand dollars ($500,000.00)
. However, the state's
payment from the account
shall be limited to fi
ve hundred thousand dollars ($500,000.00) per
occurrence
and
one million dollars ($1,000,000.00)
per
physician over the term of
the
agreement entered
into
pursuant to W.S. 35
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03(a)(ii).

(
d
)

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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33
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105.

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03.

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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02(b)
, a physician shall
:

(i)

F
il
e
proof with the attorney general that
t
he
physician
is insured by a policy of
professional
malpractice liability insurance
issued by an authorized insurer and having payment limits
of at least one million dollars ($1,000,000.00) per occurrence
. The policy documents shall provide that,
if the insurance is cancelled for any reason
,
the carrier
shall
notify the
Wyoming
attorney general; and

(ii)

E
nter into a written agreement with the state
in which
the physician agree
s
:

(A)

To actively provide medical care in the state of
Wyoming
for a continuous period of no
t
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
state
in all aspects of any claim, demand or suit, including settlement negotiations,
resulting
from

alleg
ed
medical injury caused by the physician
;

(D)

To continuously maintain th
e primary insurance
coverage described in paragraph
(i) of this
sub
section in each specialty area the physician will practice
during
his agreement with the state;

(E)

To provide medical care
which
the physician is qualified to provide
to patients
who are
qualified
participants
under the
M
edical
Assistance and S
ervices
A
ct, the child health insurance program or any other state or federally funded program; and

(F)

To notify the attorney general in writing within fifteen (15) days if the physician is no longer practicing under the terms of
the agreement entered into pursuant to W.S. 35
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03(a)(ii),
if the physician no longer carries the insurance coverage required under paragraph (i) of this
sub
section
or if the physician
otherwise
ceases to be eligible for the program under this article
.

(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
payments from
the account.

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04.

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
and
shall promulgate rules and regulations to carry out the purposes of this
article
. No agreements shall be entered into under this
article
until final adoption of rules and regulations pursuant to this subsection. Subject to
the limitations of W.S. 35
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02(c) and
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 as a result of a medical negligence claim against the physician for acts or omissions occurring in Wyoming, the attorney general shall pay the
state's share of
noneconomic damages from the account only if the attorney general has fully participated in the case or has fully participated in and approved the settlement terms.

(
b
)

Payment of noneconomic damages in excess of the
amounts
provided by this article
for any one (1)
occurrence
shall remain the liability of the physician.

(
c
)

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

(
d
)

The attorney general shall have the authority to conduct audits, actuarial analysis or studies
,

paid for out of the account,
deemed necessary to ensure the ongoing fin
ancial stability of the account.

(
e
)

On or before March 1 of each 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
, contract
or
statutory
changes necessary to ensure th
at funds in the
account
are

adequate and

the fund is
financial
ly
stab
le
.

(f
)

The attorney general may hire counsel to represent the interests of the state with respect to the account.
Costs for hired
counsel and
other appropriate
expenses associated with any claim
or demand or suit
, including but not limited to witness fees, travel expenses and expert witness fees
, shall be paid from the account
.

(
g
)

Any medical malpractice liability insurance policy issued or renewed in this state on or after the effective date of this article may provide that the insurer's liability under the policy
for noneconomic damages
may be reduced by the amount paid
pursuant to this article
.

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05.

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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04(b), shall not be eligible for
payment of noneconomic damages from
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 while the physician was out of
compliance with an agreement
pursuant to this article
shall not be eligible for payment from the account,
and the state shall have no

obligation

to
defend
or participate in the settlement of
the claim
.

(c)

The attorney general may institute an action to recover any payments from the account that were incorrectly made on behalf of
a
physician
who was in default of the
agreement
entered into pursuant to W.S. 35
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03(a)(ii) at the time of the occurrence or payment,
or
that
were made on behalf of a physician who subsequently violate
d
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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06.

Punitive damages.

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

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07.

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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08.

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.

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1209.

Annual report
.

(a)

On or before September 1 of each year, the attorney general shall 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 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)

Maintenance of a s
ufficient number 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
c
hild
h
ealth
i
nsurance
p
rogram and 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 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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02, costs of defense, witness fees and administrative costs incurred by the attorney general in the implementation of the
Wyoming excess liability account
.

(b)

There is appropriated from the general fund fifty thousand dollars ($50,000.00)
to
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
for the Wyoming excess liability account
.

Section 4.

This act shall apply to all medical malpractice settlements or claims based upon errors or omissions alleged to have occurred after the effective date of this act.

Section 5.

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.

(END)

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HB0213