PRINTER'S NO. 1588
No. 1278 Session of 2003
INTRODUCED BY GANNON, BARD, CORRIGAN, CRAHALLA, DALEY, FRANKEL,
HARHAI, HARPER, LEACH, McNAUGHTON, S. MILLER, RUBLEY, SHANER,
SOLOBAY, THOMAS, WASHINGTON, WATSON AND YOUNGBLOOD,
MAY 5, 2003
REFERRED TO COMMITTEE ON INSURANCE, MAY 5, 2003
AN ACT
1 Amending the act of March 20, 2002 (P.L.154, No.13), entitled
2 "An act reforming the law on medical professional liability;
3 providing for patient safety and reporting; establishing the
4 Patient Safety Authority and the Patient Safety Trust Fund;
5 abrogating regulations; providing for medical professional
6 liability informed consent, damages, expert qualifications,
7 limitations of actions and medical records; establishing the
8 Interbranch Commission on Venue; providing for medical
9 professional liability insurance; establishing the Medical
10 Care Availability and Reduction of Error Fund; providing for
11 medical professional liability claims; establishing the Joint
12 Underwriting Association; regulating medical professional
13 liability insurance; providing for medical licensure
14 regulation; providing for administration; imposing penalties;
15 and making repeals," further providing for medical
16 professional liability insurance, for the Medical Care
17 Availability and Reduction of Error Fund, for administration
18 of fund and for medical professional liability claims; and
19 providing for rates, for mandatory referral for claims
20 history and for penalties.
21 The General Assembly of the Commonwealth of Pennsylvania
22 hereby enacts as follows:
23 Section 1. Section 711(d) and (f) of the act of March 20,
24 2002 (P.L.154, No.13), known as the Medical Care Availability
25 and Reduction of Error (Mcare) Act, are amended by adding
26 paragraphs to read:
1 Section 711. Medical professional liability insurance.
2 * * *
3 (d) Basic coverage limits.--A health care provider shall
4 insure or self-insure medical professional liability in
5 accordance with the following:
6 * * *
7 (5) Notwithstanding any other provision of law to the
8 contrary, upon a finding by the commissioner that medical
9 malpractice liability insurance is either unavailable or
10 unaffordable, the fund may write such coverage as is
11 necessary for the health care provider to be fully insured as
12 required by this act, pursuant to the following conditions:
13 (i) During the period of unavailability or
14 unaffordability, the fund may administer the claims files
15 itself without referral to any third party and may fully
16 perform any and all underwriting.
17 (ii) The fund shall provide a rate reduction of 40%
18 as compared to any renewal which took place during the
19 first quarter of 2003 with respect to applicable primary
20 coverage on an occurrence basis during said quarter.
21 (iii) All surcharges and premiums shall be paid
22 within 30 days of levy or the health care provider shall
23 be liable for a fine of $5,000 per day.
24 (iv) The premiums attributable to the applicable
25 primary coverage shall be deposited in a separate reserve
26 fund administered by the fund to be utilized for
27 administration and payment of claims.
28 (v) Nothing in this section shall prevent any
29 medical health care provider from purchasing primary
30 coverage from a private insurance carrier, risk retention
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1 group or through an adequately secured self-insurance
2 system.
3 * * *
4 (f) Self-insurance.--
5 * * *
6 (3) The health care provider shall provide at a minimum
7 proof of financial resources, deposits, commitments, bonds,
8 securities, guarantees or other reliable financial
9 arrangements.
10 (4) Hospitals shall have the option of not participating
11 in the fund and thereby avoid the annual assessment levied by
12 the fund if the hospital obtains insurance coverage or self-
13 insures for itself and the physicians it employs in amounts
14 that encompass the basic coverage insurance amounts as well
15 as the levels of protection the fund would have provided had
16 the hospital not opted out of the fund. For purposes of self-
17 insurance, the requirements set forth in subsection (c) and
18 the accompanying regulations must be met.
19 Section 2. Sections 712(l) and (n), 713(a) and 714(g) and
20 (h) of the act are amended and the sections are amended by
21 adding subsections to read:
22 Section 712. Medical Care Availability and Reduction of Error
23 Fund.
24 * * *
25 (l) Sole and exclusive source of funding.--Except as
26 provided in subsection (m), the surcharges imposed under section
27 701(e)(1) of the Health Care Services Malpractice Act and
28 assessments on participating health care providers and any
29 income realized by investment or reinvestment shall constitute
30 the sole and exclusive sources of funding for the fund. Nothing
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1 in this subsection shall prohibit the fund from accepting
2 contributions from governmental or nongovernmental sources. A
3 claim against or a liability of the fund shall not be deemed to
4 constitute a debt or liability of the Commonwealth or a charge
5 against the General Fund. The following shall apply:
6 (1) At the end of each calendar year, if the fund
7 experiences any profits or losses it may carry forward those
8 profits or losses into succeeding years, to reserve those
9 profits or losses and otherwise to function as an insurance
10 entity.
11 (2) The annual and emergency surcharges may be
12 supplemented from the sale of bonds backed by the full faith
13 and credit of the Commonwealth or issued by a separate
14 authority created for that purpose, including any interest
15 income, reinsurance reimbursement and borrowed funds or other
16 legal sources of income.
17 (3) The director is hereby empowered to purchase on
18 behalf of the fund as much insurance, reinsurance,
19 guarantees, sureties and other insurance and financial
20 products, as well as borrow money as is necessary, to
21 preserve the fund and further the purposes of this act.
22 (4) The fund shall have the power to borrow money to
23 fulfill its duties and obligations under this act and to
24 evidence the power through the execution and delivery of
25 bonds under this act; to secure payment of such bonds or any
26 part thereof, by pledge of or security interest in all or any
27 part of its revenues, receipts, accounts, tangible personal
28 property and contract rights, to make such agreements with
29 purchasers or holders of such bonds or with any other
30 obligees of the fund, which agreements shall be in such form
20030H1278B1588 - 4 -
1 and contain such terms and conditions as shall be necessary,
2 proper or desirable to effect the purpose of the fund and
3 shall constitute contracts with the holders of such bonds,
4 obtain such credit enhancement or liquidity facilities in
5 connection with any such bond as the fund shall determine to
6 be advantageous and in general, provide for the security of
7 any such bonds and the rights of the owners or holders of the
8 bonds.
9 * * *
10 (n) Waiver of right to consent to settlement.--[A
11 participating health care provider may maintain the right to
12 consent to a settlement in a basic insurance coverage policy for
13 medical professional liability insurance upon the payment of an
14 additional premium amount.] Any and all consent to settlement,
15 approval of settlement or provisions of similar title contained
16 within professional liability insurance policies that grant a
17 health care provider settlement approval authority are hereby
18 deemed void and contrary to public policy. This subsection shall
19 not preclude provisions providing for the nonbinding advice of
20 the insured. This subsection shall apply to all professional
21 liability insurance policies issued or renewed after the
22 effective date of this subsection.
23 (o) Delay damages for late tender.--The primary insurers or
24 self-insurers shall be responsible for delay damages based upon
25 the length of time they had control of the case, starting from
26 one year after the suit is filed until the unconditional tender
27 is made to the fund. Delay damages shall be proportional based
28 upon each party's share of the verdict.
29 (p) Penalty for late payment of surcharge.--The following
30 shall apply:
20030H1278B1588 - 5 -
1 (1) All premiums and assessments are to be paid by their
2 due date and if they are not, the director may impose a late
3 payment penalty of up to $1,000 per day until the premiums or
4 assessments are paid, as well as reasonable attorney fees and
5 costs the fund may incur to enforce this paragraph. The
6 remedies provided in this paragraph shall be in addition to
7 any other remedies provided for in this act.
8 (2) At the end of each calendar year, if the fund
9 experiences any profits or losses, it may carry forward those
10 profits or losses into succeeding years.
11 (q) Bad faith.--The following shall apply:
12 (1) For the benefit of the claimant, the insured and the
13 fund, the professional liability insurer shall exercise good
14 faith in assessing, defending, evaluating and in considering
15 and acting upon a resolution of any medical malpractice
16 claim. For the benefit of the claimant and the fund, a self-
17 insured health care provider shall exercise good faith in
18 assessing, defending, evaluating and in considering and
19 acting upon a resolution of any medical malpractice claim.
20 For the benefit of the claimant, the insured, the
21 professional liability insurer or self-insured, the fund
22 shall exercise good faith in assessing, defending, evaluating
23 and in considering and acting upon a resolution of any
24 medical malpractice claim. A professional liability insurer,
25 a self-insured health care provider and the fund shall be
26 liable for all consequential damages for any bad faith
27 conduct. In addition, a professional liability insurer or
28 self-insured health care provider shall be liable for
29 punitive damages for bad faith conduct where such bad faith
30 conduct is outrageous.
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1 (2) The fund shall not be afforded immunity protection
2 under the Constitution of Pennsylvania or 42 Pa.C.S.
3 (relating to judiciary and judicial procedure). The
4 Commonwealth hereby waives immunity to the extent permitted
5 under the Eleventh Amendment to the Constitution of the
6 United States.
7 (3) If after all claims and expenses have been paid for
8 any claims period, the fund has a surplus exceeding 30% of
9 the final claims and expenses incurred during the preceding
10 claims period, the director shall reduce the assessment for
11 the following year by an amount the director deems reasonable
12 under the circumstances so long as the fund is maintained
13 with at least 15% of the final claims and expenses incurred
14 during the preceding claims period.
15 (4) Any health care provider who desires to challenge
16 the propriety of the assessment relative to the fund's
17 maintenance level or otherwise believes that the director has
18 not complied with the mandates of this act, may request the
19 director to make available all pertinent information with the
20 exception of ongoing claims information. After review of the
21 information, if the health care provider reasonably and in
22 good faith believes that the mandates of this act have not
23 been complied with, a written request for an administrative
24 hearing with the commissioner may be made setting forth the
25 grounds relied upon. The commissioner shall respond to that
26 request within 60 days and if the commissioner finds that the
27 health care provider has set forth reasonable grounds and
28 made the request in good faith, shall schedule a hearing, to
29 be held within a reasonable period of time. If after the
30 hearing, the commissioner finds that the mandates of this act
20030H1278B1588 - 7 -
1 have not been complied with, the commissioner shall order
2 that appropriate relief be given, which may include interest,
3 costs and reasonable attorney fees.
4 (r) Apportionment of delay damages.--The basic insurance
5 carrier, self-insurer and the fund shall be jointly responsible
6 for delay damages on the entire verdict and severally
7 responsible in the same proportion their coverage is
8 proportionate to total coverage. If the basic insurance carrier,
9 self-insurer or the fund made an unconditional tender of their
10 coverage limits prior to trial, they shall not be responsible
11 for delay damages beyond their several proportionate share.
12 (s) Mandatory experience rating.--The following shall apply:
13 (1) The commissioner in his sole discretion shall,
14 within 30 days of the effective date of this subsection,
15 establish and implement a plan whereby all professional
16 liability insurers shall place physicians in at least one
17 insurance rating class. Physicians shall not be placed in
18 more than ten insurance rating classes with not more than
19 four subclasses. The loss and loss adjustment expense costs
20 for each class shall progressively increase from class one
21 through the final class. The plan shall also provide that:
22 (i) each insurer develop and submit for approval by
23 the commissioner expenses to be added to the loss and
24 loss adjustment expense costs that are established by the
25 commissioner for each class;
26 (ii) each insurer shall develop and submit to the
27 commissioner an experience rating plan which provides
28 that the premium for each health care provider within a
29 class shall be based upon the individual health care
30 provider's experience; and
20030H1278B1588 - 8 -
1 (iii) the commissioner may approve deviations in the
2 premiums for each class of health care providers on the
3 basis of no more than two territories, urban and
4 nonurban, approved or established by the commissioner.
5 (2) A professional liability insurer who fails to
6 comply with the requirements of this subsection shall pay a
7 civil penalty of $25,000 and a fine of $1,000 per day until
8 the insurer is in compliance.
9 Section 713. Administration of fund.
10 (a) General rule.--The fund shall be administered by the
11 department. The department [shall] may contract with an entity
12 or entities for the administration of claims against the fund in
13 accordance with 62 Pa.C.S. (relating to procurement), and, to
14 the fullest extent practicable, the department shall contract
15 with entities that:
16 (1) Are not writing, underwriting or brokering medical
17 professional liability insurance for participating health
18 care providers; however, the department may contract with a
19 subsidiary or affiliate of any writer, underwriter or broker
20 of medical professional liability insurance.
21 (2) Are not trade organizations or associations
22 representing the interests of participating health care
23 providers in this Commonwealth.
24 (3) Have demonstrable knowledge of and experience in the
25 handling and adjusting of professional liability or other
26 catastrophic claims.
27 (4) Have developed, instituted and utilized best
28 practice standards and systems for the handling and adjusting
29 of professional liability or other catastrophic claims.
30 (5) Have demonstrable knowledge of and experience with
20030H1278B1588 - 9 -
1 the professional liability marketplace and the judicial
2 systems of this Commonwealth.
3 (6) Will not increase the cost of claims handling over
4 that which can be accomplished internally after due study and
5 an opportunity for cost comparison and public comment.
6 (a.1) Power to adjust claims.--The fund may adjust,
7 investigate and settle claims without using the services of a
8 third party administrator. The fund shall have the power to
9 contract for the services of a third party administrator if,
10 after utilizing Commonwealth bidding regulations, the cost of
11 the claims adjustment or handling is less than can be performed
12 by the fund itself.
13 * * *
14 (d.1) Secrecy, confidentiality and nondisclosure.--The
15 following shall apply:
16 (1) Any secrecy, confidentiality or nondisclosure
17 clause, provision or language that has the purpose or effect
18 of concealing information in any order, judgment, contract,
19 release, compromise or settlement agreement or in any other
20 document memorializing the resolution of a claim or suit to
21 which the fund is a party is hereby deemed void, contrary to
22 public policy and unenforceable.
23 (2) The fund, in every claim it is a party, shall retain
24 for public inspection all orders, judgments, contracts,
25 releases, compromises, settlement agreements or any other
26 similar document pertaining to the resolution of a claim of
27 medical malpractice.
28 (3) The information contained in paragraph (2) shall be
29 made available for public inspection.
30 (4) Any citizen of this Commonwealth shall have standing
20030H1278B1588 - 10 -
1 to enforce this subsection.
2 (5) This subsection shall apply to all contracts,
3 releases, compromises or settlement agreements or any
4 alternative claim resolution method or procedure to which the
5 fund is a party that were entered into on or after the
6 effective date of this subsection.
7 (e) Database.--The director shall create a database
8 containing the following information concerning claims on which
9 the fund has made a payment, for each year, commencing with
10 1990, using the coded system developed by the fund:
11 (1) A listing of the top ten categories (e.g.
12 obstetrics, orthopedics, anesthesiology, neurosurgery,
13 general surgery, etc.) of injuries for which payments were
14 made.
15 (2) The number of claims the fund contributed to under
16 each category.
17 (3) A general description of each injury within each
18 category.
19 (4) The year in which the injury was to have occurred.
20 (5) The amount of moneys the fund contributed toward
21 each claim.
22 (6) The age and sex of each claimant at the time of
23 injury.
24 (7) Any other pertinent information that would be
25 helpful in analyzing the funds payout history.
26 The director shall have the authority to conduct or arrange
27 audits of the records of insurers, health care providers and the
28 Joint Underwriting Association, in order to protect the rights
29 and responsibilities of the fund, notwithstanding any other
30 provisions of this act.
20030H1278B1588 - 11 -
1 (f) Settlement authority of basic coverage insurer or self-
2 insured provider.--If after receiving sufficient information of
3 a medical malpractice claim, a basic coverage insurer or self-
4 insured provider reasonably concludes that medical malpractice
5 was committed, resulting in the claimant's injury, the basic
6 coverage insurer or self-insured provider may settle or
7 compromise the claim for an amount that exceeds the basic
8 coverage insurers or self-insured providers required liability
9 limit and then seek indemnification from the fund, up to the
10 funds liability limit, of the excess settlement or compromise
11 amount. The fund shall indemnify, up to its required liability
12 limit, the basic coverage insurer or self-insured provider for
13 the amount of funds the basic coverage insurer or self-insured
14 provider tendered in excess of the basic coverage insurers or
15 self-insured providers limit of liability, except that if the
16 fund in good faith has reasonable grounds to believe that the
17 settlement or compromise exceeded the value of the claim, that
18 bad faith was involved or that fraud was involved, it shall have
19 the right to deny indemnification and request that the matter be
20 resolved by way of binding arbitration as provided for in this
21 act, if such denial and request are made within 30 days of being
22 requested to indemnify the basic coverage insurer or self-
23 insured provider. If the fund, without having a reasonable basis
24 to do so, refuses to indemnify the basic coverage insurer or
25 self-insured provider the excess settlement or compromise
26 amount, up to the fund's liability limit, the basic coverage
27 insurer or self-insured provider can seek reimbursement, along
28 with reasonable attorney fees, interest, costs and a 10% award
29 penalty through mandatory binding arbitration as provided for in
30 this act. Any moneys owed by the fund shall be paid in
20030H1278B1588 - 12 -
1 accordance with the time period set forth in section 714.
2 Section 714. Medical professional liability claims.
3 * * *
4 (g) [Mediation. - Upon the request of a party to a medical
5 professional liability claim within the fund coverage limits,
6 the department may provide for a mediator in instances where
7 multiple carriers disagree on the disposition or settlement of a
8 case. Upon the consent of all parties, the mediation shall be
9 binding. Proceeding conducted and information provided in
10 accordance with this section shall be confidential and shall not
11 be considered public information subject to disclosure under the
12 Act of June 21, 1957 (P.L. 390, No. 212), referred to as the
13 Right-to-Know Law, or 65Pa.C.S. Ch. 7 (relating to open
14 meetings).] Medical malpractice small claims dispute
15 resolution.--
16 (1) If a claimant believes that he is a victim of
17 medical malpractice, he shall have the right to try and have
18 the claim heard by medical malpractice small claims
19 arbitration, medical malpractice small claims mediation or
20 summary jury trial as alternatives to formal litigation in
21 Federal or State court.
22 (2) (i) In order to utilize the medical malpractice
23 small claims arbitration procedure, all parties must
24 agree in writing to submit the claim to medical
25 malpractice small claims arbitration and be subject to
26 the provisions of this subsection. The arbitration
27 procedure shall be commenced by the claimant serving the
28 defendant, via certified or registered mail, with a
29 statement of claim and notice of intent. The statement of
30 claim shall set forth, with sufficient specificity as
20030H1278B1588 - 13 -
1 required in a formal civil complaint pursuant to the
2 Pennsylvania Rules of Civil Procedure, the nature of the
3 alleged malpractice, the resulting injuries and the
4 damages sought. The notice of intent shall state that the
5 claimant desires to have the claim heard by medical
6 malpractice small claims arbitration and inquires whether
7 the defendant desires the same. If the defendant does not
8 respond within 30 days of service of the statement of
9 claim and notice of intent, it shall be deemed that the
10 defendant does not agree to have the claim heard by
11 medical malpractice small claims arbitration and the
12 claim shall not be heard in that manner. If the defendant
13 does agree to have the claim heard in that manner, an
14 affirmative response shall be served upon the claimant
15 within 30 days of initial service along with an answer to
16 the statement of claim, as would be filed in response to
17 a formal civil complaint pursuant to the Pennsylvania
18 Rules of Civil Procedure. A defendant's agreement,
19 disagreement or lack of response to a medical malpractice
20 small claims arbitration request shall in no way be
21 deemed an admission of liability.
22 (ii) (A) Nonparty testimony, whether expert
23 testimony or lay testimony, can be submitted without
24 standard formalities by means of affidavit, opinion
25 letter, deposition testimony, curriculum vitae and
26 exhibits including, but not limited to, photographs,
27 medical records, reports and bills, radiology
28 studies, employment records, wage information,
29 business records, official records maintained by the
30 Commonwealth and standard U.S. Government life
20030H1278B1588 - 14 -
1 expectancy tables, if at least 30 days' advance
2 written notice was given to the opposing party along
3 with copies of all materials that are to be
4 submitted.
5 (B) Any materials submitted may be used only for
6 purposes which would be permissible if the person
7 whose testimony is waived were present and testifying
8 at the hearing.
9 (C) The parties can testify live, by standard
10 deposition or by videotape deposition.
11 (D) Except as provided for in this subsection,
12 the Pennsylvania Rules of Evidence shall be
13 applicable.
14 (E) Any party may have a transcript and
15 recording of the arbitration proceeding made at his
16 or her own expense.
17 (F) Legal memoranda can be submitted.
18 (G) The arbitrators are to ensure that a full,
19 fair and impartial hearing and review of the evidence
20 is conducted.
21 (H) The hearing may proceed in the absence of a
22 party who, after due notice, fails to appear.
23 (I) Unless the parties agree otherwise, the
24 hearing is to be held in the county where the cause
25 of action arose.
26 (iii) The following criteria shall apply to the
27 arbitration panel:
28 (A) There shall be three arbitrators in an
29 arbitration proceeding.
30 (B) Each arbitrator shall be an attorney
20030H1278B1588 - 15 -
1 licensed in this Commonwealth.
2 (C) Each party will select an arbitrator. The
3 selected arbitrators shall select a chair arbitrator.
4 If a party does not select an arbitrator within 20
5 days of being requested to do so, if the arbitrators
6 selected cannot agree within 20 days on the selection
7 of a chair arbitrator or if there are more than two
8 parties involved and they cannot agree within 20 days
9 of being requested to jointly select an arbitrator,
10 either party may petition a court of competent
11 jurisdiction to make the necessary selections.
12 (D) The arbitrators shall be independent of all
13 parties, witnesses and legal counsel.
14 (E) Each party shall be responsible for the
15 compensation of the arbitrator selected by or for
16 that party. The compensation for the chair arbitrator
17 will be shared by the parties.
18 (F) After the arbitrators are selected and
19 before an award is made, there shall be no ex parte
20 communication with the arbitrators by the parties or
21 their counsel.
22 (G) The arbitrators shall consider all relevant
23 evidence that has been properly submitted along with
24 any legal memoranda and shall decide the issues of
25 liability, amount of damages and apportionment of
26 liability among the parties.
27 (H) The chair arbitrator, at the request of a
28 party and upon good cause shown, may subpoena a party
29 or individual to attend the hearing or a deposition
30 and unless otherwise provided for in this subsection,
20030H1278B1588 - 16 -
1 the party requesting the subpoena shall pay the
2 reasonable fees and costs of the person being
3 subpoenaed to testify, including a reasonable expert
4 witness fee if applicable.
5 (I) The chair arbitrator shall determine the
6 date, time and place of the hearing and shall provide
7 the other arbitrators and parties with at least 30
8 days' advance notice.
9 (J) The chair arbitrator shall decide any
10 prehearing issues that may arise.
11 (K) Issues that arise during the hearing shall
12 be heard by the arbitrators and shall be decided by a
13 majority of the arbitrators.
14 (L) The chair arbitrator shall have the
15 authority to administer oaths or affirmations to
16 witnesses and to adjourn an uncompleted hearing from
17 day to day.
18 (M) The arbitrators shall have the authority to
19 decide all issues of law and fact, determine
20 liability and award damages.
21 (N) The decision of the arbitrators shall not be
22 used as evidence in any future proceeding.
23 (O) The arbitrators may not be called as
24 witnesses in any future proceeding.
25 (P) Except as provided for in this subsection,
26 the arbitrators shall follow the laws of this
27 Commonwealth and shall be guided by the Pennsylvania
28 Rules of Civil Procedure and the Pennsylvania Rules
29 of Evidence.
30 (iv) If requested by a defendant, the claimant shall
20030H1278B1588 - 17 -
1 undergo one physical examination, one mental examination
2 and one vocational examination. All expenses associated
3 with the examination shall be borne by the requesting
4 party. All examinations shall be conducted in this
5 Commonwealth. If the examination to be conducted is
6 located more than 50 miles from the claimant's residence,
7 any traveling and associated expenses of the claimant are
8 to be borne by the party requesting the examination. Upon
9 a clear showing of good cause and substantial need, the
10 chair arbitrator can order additional examinations.
11 (v) Each party shall provide up to five depositions
12 without any request to be compensated for lost wages or
13 travel expenses. It is up to the parties to agree where
14 the depositions are to be held with the objective of
15 minimizing the expense and inconvenience of the parties
16 and witnesses. If the parties cannot agree, the chair
17 arbitrator shall have the authority to decide when and
18 where the deposition will be held. Parties shall bear
19 their own expenses and those of their counsel. The party
20 requesting the deposition shall bear any costs of the
21 witness and any stenographic and video costs of the
22 deposition.
23 (vi) Other than as provided for in this act, the
24 parties may exercise all discovery rights, remedies and
25 procedures available as if the claim were pending in a
26 court of common pleas except that the chair arbitrator
27 shall decide all discovery issues and there shall be no
28 right to appeal the chair arbitrator's decision regarding
29 discovery issues.
30 (vii) The total monetary award, excluding any award
20030H1278B1588 - 18 -
1 of delay damages, that can be rendered for any and all
2 damages per claim, whether the claim includes one or more
3 individual claimants, cannot exceed $250,000.
4 (viii) If the parties stipulate or otherwise agree
5 in writing that the arbitration award shall be binding,
6 the claimant shall be entitled to reasonable attorney
7 fees and costs if the claimant is the prevailing party as
8 defined in 42 U.S.C. § 1988 (Public Law 94-559).
9 (ix) Arbitrators shall have the authority to award
10 delay damages.
11 (x) Arbitrators shall render an award within 10 days
12 from the conclusion of the hearing. The award shall
13 dispose of all claims and be signed by all arbitrators or
14 by a majority of them. The award need not contain factual
15 findings or legal conclusions. Once signed, the award
16 shall be immediately sent to all parties and filed with
17 the prothonotary in a court of competent jurisdiction
18 where the action could have been originally filed had the
19 parties not agreed to small claims arbitration.
20 (xi) Unless the parties stipulate or otherwise agree
21 in writing, either party shall have the right to appeal
22 the award for a trial de novo in a court of competent
23 jurisdiction. No reference to the agreement of medical
24 malpractice small claims arbitration, the hearing, the
25 findings or the award shall be made during a subsequent
26 trial, except that testimony introduced at the
27 arbitration hearing may be used for purposes otherwise
28 permitted under the laws of this Commonwealth. An appeal
29 by any party shall be deemed an appeal by all parties as
30 to all issues unless otherwise stipulated to in writing
20030H1278B1588 - 19 -
1 by all parties. The appeal shall be filed in accordance
2 with the Pennsylvania Rules of Civil Procedure.
3 (xii) Unless an appeal is properly filed, a
4 defendant shall, if there was no finding of joint and
5 several liability, immediately pay any monetary
6 arbitration award or its respective portion of the award.
7 If no appeal has been properly filed and the arbitration
8 has not been paid by the 30th day from the date of the
9 award, interest shall accrue at the rate of 18% per annum
10 from the date of the award. The award may be enforced
11 pursuant to the Pennsylvania Rules of Civil Procedure.
12 (xiii) Other than as provided for in this section,
13 the procedures that can be undertaken once an award has
14 been rendered, including, but not limited to,
15 transferring, recording and enforcing a judgment, shall
16 be governed by the Pennsylvania Rules of Civil Procedure.
17 (xiv) The service of a statement of claim and notice
18 of intent will toll the statute of limitations. All
19 claims for recovery pursuant to this section must be
20 commenced within the applicable statute of limitations.
21 (3) (i) In order to utilize the medical malpractice
22 small claims mediation procedure set forth in this
23 subsection, all parties must agree in writing to the
24 procedure. The mediation procedure shall be commenced by
25 the claimant serving the defendant, via certified or
26 registered mail, with a statement of claim and notice of
27 intent. The statement of claim shall set forth, with
28 sufficient specificity as required in a formal civil
29 complaint pursuant to the Pennsylvania Rules of Civil
30 Procedure, the nature of the alleged malpractice, the
20030H1278B1588 - 20 -
1 resulting injuries and the damages sought. The notice of
2 intent shall state that the claimant desires to have the
3 claim heard by medical malpractice small claims mediation
4 and inquires whether the defendant desires the same. If
5 the defendant does not respond within 30 days of service
6 of the statement of claim and notice of intent, it shall
7 be deemed that the defendant does not agree to have the
8 claim heard by medical malpractice small claims mediation
9 and the claim shall not be heard in that manner. If the
10 defendant does agree to have the claim heard in that
11 manner, an affirmative response shall be served upon the
12 claimant within 30 days of initial service along with an
13 answer to the statement of claim as would be filed in
14 response to a formal civil complaint pursuant to the
15 Pennsylvania Rules of Civil Procedure. A defendant's
16 agreement, disagreement or lack of response to a medical
17 malpractice small claims mediation request shall in no
18 way be deemed an admission of liability.
19 (ii) The conduct of mediation conferences shall be as
20 follows:
21 (A) Testimony shall be submitted by affidavit,
22 opinion letter, deposition testimony and curriculum
23 vitae and exhibits, including, but not limited to,
24 photographs, medical records, reports and bills,
25 radiology studies, employment records, wage
26 information, business records, official records
27 maintained by the Commonwealth and standard U.S.
28 Government life expectancy tables can be submitted if
29 at least 30 days' advance written notice was given to
30 the opposing party along with copies of all materials
20030H1278B1588 - 21 -
1 that are to be submitted.
2 (B) Any materials submitted may be used only
3 for purposes which would be permissible if the person
4 whose testimony is waived were present and testifying
5 at the hearing.
6 (C) Legal memoranda can be submitted.
7 (D) The mediator shall ensure that a full, fair
8 and impartial mediation and review of the evidence is
9 conducted.
10 (E) Other than the mediator, only counsel of the
11 parties shall attend the mediation conference.
12 (F) Unless the parties agree otherwise, the
13 mediation conference shall be held in the county
14 where the cause of action arose.
15 (G) Any discussions or statements made during
16 the mediation conference shall remain confidential,
17 shall not be deemed admissions by a party and shall
18 not be utilized in any future proceeding.
19 (iii) The following criteria shall apply to
20 mediation conferences:
21 (A) There shall be one mediator for each
22 mediation conference.
23 (B) Each mediator shall be an attorney licensed
24 in the Commonwealth, in private practice, who has at
25 least ten years of medical malpractice litigation
26 experience and who has represented both claimants and
27 physicians in medical malpractice cases.
28 (C) The parties can agree on a mediator or the
29 commissioner shall select a mediator if the parties
30 are unable to agree and at least 60 days have passed
20030H1278B1588 - 22 -
1 since the parties agreed to have the claim decided
2 under this subsection.
3 (D) The mediator shall be independent of all
4 parties, witnesses and legal counsel.
5 (E) The compensation for the mediator shall be
6 shared by the parties.
7 (F) After the mediator is selected there shall
8 be no ex parte communication with the mediator by the
9 parties or their counsel.
10 (G) The mediator shall consider all relevant
11 evidence that has been properly submitted along with
12 any legal memoranda to help the parties reach a
13 resolution of the claim.
14 (H) The mediator shall determine the date, time
15 and place of the conference and shall provide the
16 parties with at least 30 days' advance notice.
17 (I) The mediator shall not be called as a
18 witness in any future proceeding.
19 (iv) Each party shall provide up to five depositions
20 without any request to be compensated for lost wages or
21 travel expenses. All depositions shall be held in this
22 Commonwealth. The parties shall agree where the
23 depositions are to be held with the objective of
24 minimizing the expense and inconvenience of the parties
25 and witnesses. If the parties cannot agree, the mediator
26 shall decide when and where the deposition will be held.
27 Parties shall bear their own expenses and those of their
28 counsel. The party requesting the deposition shall bear
29 any costs of the witness and any stenographic and video
30 costs of the deposition.
20030H1278B1588 - 23 -
1 (v) Other than as provided for in this act, the
2 parties may exercise all discovery rights, remedies and
3 procedures available as if the claim were pending in a
4 court of common pleas except that the chair arbitrator
5 shall decide all discovery issues and there shall be no
6 right to appeal the chair arbitrator's decision regarding
7 discovery issues.
8 (vi) The total damages, excluding any award of delay
9 damages, the mediator can recommend for any and all
10 damages per claim, whether a claim includes one or more
11 individual claimants, cannot exceed $250,000.
12 (vii) If the parties stipulate or otherwise agree in
13 writing that the mediator's recommendation shall be
14 binding, the claimant shall be entitled to reasonable
15 attorney fees and, if applicable, costs and delay damages
16 if the claimant is the prevailing party.
17 (viii) Unless the parties stipulate or otherwise
18 agree in writing, the recommendations by the mediator
19 shall not be binding.
20 (ix) If the parties resolve the claim, any monetary
21 settlement shall be paid within 30 days. If the
22 settlement amount has not been paid in full by the 30th
23 day from the date of settlement of the claim, interest
24 shall accrue at the rate of 18% per annum from the date
25 of the settlement. If a nonbreaching party has to file an
26 action with a court for breach of contract or to
27 otherwise enforce the settlement agreement, reasonable
28 attorney fees, costs and a penalty of 50% of the
29 settlement may be imposed on the breaching party.
30 (x) The service of a statement of claim and notice
20030H1278B1588 - 24 -
1 of intent will toll the statute of limitations. All
2 claims for recovery pursuant to this subsection must be
3 commenced within the applicable statute of limitations.
4 (4) After a writ of summons or complaint has been
5 properly filed, the parties may agree, if permitted by the
6 court in which the summons or complaint has been filed, to
7 have the claim heard by way of summary jury trial. Unless the
8 court in which the summons or complaint was filed provides
9 otherwise, the summary jury trial procedure shall be as
10 follows:
11 (i) Unless otherwise agreed to by the parties, the
12 summary jury trial shall not be binding.
13 (ii) The parties, their counsel and an individual
14 who has settlement authority shall attend the summary
15 jury trial.
16 (iii) The parties shall at all times exercise good
17 faith effort to amicably resolve the claim.
18 (iv) Unless otherwise agreed to by the parties,
19 summary juries shall consist of 12 jurors.
20 (v) Each party shall be entitled to two peremptory
21 challenges.
22 (vi) The claimant shall proceed first and may save a
23 portion of his allotted time for rebuttal.
24 (vii) Counsel for each party shall be entitled to a
25 one-half hour presentation of the case. The presentation
26 may involve a combination of argument, a summary of the
27 evidence to be presented and a statement of the
28 applicable law, if needed to answer any special verdict
29 questions. Counsel may quote from depositions and may use
30 exhibits. Counsel shall provide a list of exhibits he
20030H1278B1588 - 25 -
1 intends to use to opposing counsel at least 30 days prior
2 to the summary jury trial. Counsel shall provide proposed
3 jury instructions to opposing counsel and the court at
4 least 30 days prior to the summary jury trial. Nothing
5 done by counsel with regard to the summary jury trial
6 will be binding on counsel or the parties or shall
7 constitute a waiver.
8 (viii) No live testimony shall be permitted.
9 (ix) The claim shall be submitted to the jury by
10 special verdict questions which will be provided by the
11 parties.
12 (x) A majority verdict representing 5/6 of the jury
13 shall be required with respect to each verdict question.
14 (xi) The jury shall determine liability and damages.
15 (5) The methods of dispute resolution in this subsection
16 shall not be construed as a limitation on the parties'
17 ability to agree on alternative dispute resolution methods or
18 to agree to modify the methods provided in this subsection.
19 (h) Delay damages and postjudgment interest.--[Delay damages
20 and postjudgment interest applicable to the funds liability on a
21 medical professional liability claim shall be paid by the fund
22 and shall not be charged against the participating health care
23 providers annual aggregate limits. The basic coverage insurer or
24 self-insured participating health care provider shall be
25 responsible for its proportionate share of delay damages and
26 postjudgment interest.]
27 (1) The basic coverage insurance carrier or self-insured
28 provider shall notify the director in writing:
29 (i) Within 30 days of receiving information on a
30 medical malpractice claim, regardless of whether the
20030H1278B1588 - 26 -
1 claim is a formal complaint, threat of a complaint, or
2 otherwise.
3 (ii) Every 90 days from the date the director was
4 initially notified of the medical malpractice claim as to
5 whether there has been a tender of payment, and if there
6 has been a tender, notification of tender must be given
7 at least 30 days prior to trial.
8 (iii) As soon as it places a reserve or value of at
9 least $200,000 on the claim.
10 (iv) As soon as it reasonably believes that the
11 value of the claim exceeds the basic insurer's coverage
12 or self-insurance plan.
13 (v) At least 30 days prior to any scheduled trial
14 date.
15 (vi) As soon as possible concerning all material
16 developments in the claim.
17 (vii) As the director requires.
18 (2) Failure to notify the director pursuant to paragraph
19 (1) shall make the basic coverage insurance carrier or self-
20 insured provider responsible for payment of the entire award
21 or verdict and for the fund's share of any delay damages.
22 Within 60 days of receiving information of a tender, the
23 director shall evaluate the claim and report all information
24 relative to the claim and the director's assessment of the
25 claim to the board.
26 (3) The basic coverage insurance carrier, including the
27 fund if it has written a professional liability insurance
28 coverage, or self-insured provider shall be responsible to
29 provide a defense to the claim, including a defense of the
30 fund, except as provided for in section 715. In such
20030H1278B1588 - 27 -
1 instances where the director has been notified in accordance
2 with paragraph (1), the director may join in the defense and
3 be represented by counsel.
4 (4) In the event that the basic coverage insurance
5 carrier or self-insured provider enters into a settlement
6 with the claimant to the full extent of its liability it may,
7 provided the notifications in paragraph (1) along with any
8 other required notification in this act and accompanying
9 regulations are met, obtain a release from the claimant to
10 the extent of its payment, which payment shall have no effect
11 upon any excess claim against the fund or its duty to
12 continue the defense of the claim.
13 (5) The director is authorized to defend, litigate,
14 settle or compromise any claim payable by the fund. The
15 director is further authorized to settle or compromise a
16 claim even if there has been no tender from the basic
17 coverage insurance carrier or self-insured provider. If the
18 director settles or compromises a claim prior to any tender
19 by the basic insurance carrier or self-insured provider and
20 has reasonable grounds to believe that medical malpractice
21 was committed by the insured health care provider or self-
22 insured provider resulting in the claimant's injury, the
23 director can seek the return of the settlement or compromise
24 moneys that should have been paid by the basic insurance
25 carrier or self-insured provider along with associated costs,
26 interest, reasonable attorney fees and a 10% award penalty by
27 utilizing mandatory binding arbitration as provided for in
28 this act.
29 (i) Review and approval.--
30 (1) Hospitals, nursing homes and public health centers
20030H1278B1588 - 28 -
1 qualifying as a health care provider as defined in this
2 chapter shall submit to the commissioner for review and
3 approval an institutional plan of risk management.
4 (2) Each institutional plan of risk management shall be
5 set forth in a comprehensive risk management manual which
6 meets the following criteria:
7 (i) Has patient safety and the delivery of quality
8 health care as top priorities.
9 (ii) Has a broad-based risk management committee
10 whose members will be responsible for taking proactive
11 roles in risk management issues.
12 (iii) Has a director of risk management who has
13 sufficient training and experience in healthcare risk
14 management.
15 (iv) Has up-to-date, systemwide, risk management
16 policies and procedures to minimize risk of injuries to
17 patients.
18 (v) Has a systemwide incident reporting system.
19 (vi) Develops a database from information learned by
20 the investigation and analysis of incidents causing or
21 potentially causing injury to patients.
22 (vii) Provides for at least quarterly risk
23 management safety training workshops with all
24 administrators, department heads and supervisors.
25 (viii) Has a monitoring system to assure compliance
26 with the risk management plan and an auditing system to
27 assess the plans effectiveness.
28 (ix) Has methods to keep the plan up-to-date based
29 on technological and informational advancements to meet
30 changing risks of injury.
20030H1278B1588 - 29 -
1 (x) Meets any other criteria the commissioner
2 requires.
3 (3) Every insurance or exchange or self-insurance plan
4 providing professional liability coverage to individuals
5 defined as health care providers in this chapter shall submit
6 to the department for review and approval a program of risk
7 management to be offered to all such individuals.
8 (4) Each health care provider in paragraph (1) shall,
9 within 30 days of the end of each calendar year, provide to
10 the commissioner a risk management annual summary report for
11 the preceding year to the commissioner containing the
12 following information:
13 (i) The names and job titles of all risk management
14 committee members throughout the year.
15 (ii) The name of the director of risk management.
16 (iii) The dates of risk management meetings along
17 with a brief description of each meeting.
18 (iv) The dates of risk management safety training
19 workshops along with a brief description of the safety
20 training workshop.
21 (v) A description of any modifications that have
22 been made to the plan throughout the year.
23 (vi) The risk management goals that have been met.
24 (vii) The risk management goals for the upcoming
25 year.
26 (viii) Any other reporting requirement the
27 commissioner requires.
28 (5) Upon request, the commissioner shall make available
29 for purposes of inspection and copying, the reports filed in
30 accordance with paragraph (4) to any interested party.
20030H1278B1588 - 30 -
1 (6) The commissioner shall have the authority to impose
2 a penalty of up to $5,000 per day for each violation of this
3 subsection as well as attorney fees and costs the department
4 incurs to enforce this subsection.
5 (j) Application of mandatory binding arbitration.--
6 (1) Mandatory binding arbitration shall apply to section
7 713(f) pertaining to disputes between or among the fund,
8 primary carriers and/or excess carriers.
9 (2) A binding arbitration claim shall be commenced by
10 one party serving the other, via certified or registered
11 mail, with a statement of claim. The statement of claim shall
12 set forth, with sufficient specificity as required in a
13 formal civil complaint pursuant to the Pennsylvania Rules of
14 Civil Procedure, the nature of the alleged claim and the
15 damages sought. The defendant, within 30 days of service,
16 shall serve an answer to the statement of claim as would be
17 served in response to a formal civil complaint pursuant to
18 the Pennsylvania Rules of Civil Procedure. If the defendant
19 does not serve an answer to the statement of claim within 30
20 days of being served, all averments in the statement of claim
21 shall be deemed admitted.
22 (3) Hearings shall be conducted as follows:
23 (i) Nonparty testimony, whether expert or lay, can
24 be submitted by affidavit, opinion letter, deposition
25 testimony and curriculum vitae and exhibits, including,
26 but not limited to, photographs, medical records, reports
27 and bills, radiology studies, employment records, wage
28 information, business records, official records
29 maintained by the Commonwealth and standard U.S.
30 Government life expectancy tables can be submitted if at
20030H1278B1588 - 31 -
1 least 30 days' advance written notice was given to the
2 opposing parties along with copies of all materials that
3 are to be submitted.
4 (ii) Any materials submitted may be used only for
5 purposes which would be permissible if the person whose
6 testimony is waived were present and testifying at the
7 hearing.
8 (iii) The parties can testify live, by standard
9 deposition or by videotape deposition.
10 (iv) Except as provided for in this section, the
11 Pennsylvania Rules of Evidence should be followed.
12 (v) Legal memoranda can be submitted.
13 (vi) The arbitrators are to ensure that a full, fair
14 and impartial hearing and review of the evidence is
15 conducted.
16 (vii) The hearing may proceed in the absence of a
17 party who, after due notice, fails to appear.
18 (viii) Unless the parties agree otherwise, the
19 hearing shall be held in Dauphin County.
20 (ix) The parties may agree to have the dispute
21 resolved on the basis of document submission.
22 (4) The following criteria shall apply to the
23 arbitration panel:
24 (i) There shall be three arbitrators in an
25 arbitration proceeding.
26 (ii) Each arbitrator shall be an attorney licensed
27 in the Commonwealth.
28 (iii) Each party shall select an arbitrator and then
29 those arbitrators shall select a chair arbitrator. If a
30 party does not select an arbitrator within 20 days of
20030H1278B1588 - 32 -
1 being requested to do so, if the arbitrators selected
2 cannot agree within 20 days on the selection of a chair
3 arbitrator or if there are more than two parties involved
4 and they cannot agree within 20 days of being requested
5 to jointly select an arbitrator, either party may
6 petition a court of competent jurisdiction to make the
7 necessary selections.
8 (iv) The arbitrators shall be independent of all
9 parties, witnesses and legal counsel.
10 (v) Each party shall be responsible for the
11 compensation of the arbitrator selected by or for that
12 party. The compensation for the chair arbitrator shall be
13 shared by the parties.
14 (vi) After the arbitrators are selected and before
15 an award is made, there shall be no ex parte
16 communication with the arbitrators by the parties or
17 their counsel.
18 (vii) The arbitrators shall consider all relevant
19 evidence that has been properly submitted along with any
20 legal memoranda and shall decide the issues of liability,
21 amount of damages and apportionment of liability among
22 the parties.
23 (viii) The chair arbitrator, at the request of a
24 party and upon good cause shown, may subpoena a party or
25 individual to attend the hearing or a deposition and
26 unless provided otherwise in this section, the party
27 requesting the subpoena shall pay any reasonable attorney
28 fees and costs of the person being subpoenaed to testify
29 including a reasonable expert witness fee.
30 (ix) The chair arbitrator shall determine the date,
20030H1278B1588 - 33 -
1 time and place of the hearing and shall provide the other
2 arbitrators and parties with at least 30 days' advance
3 notice.
4 (x) The chair arbitrator shall decide any prehearing
5 issues that may arise.
6 (xi) Issues that arise during the hearing shall be
7 heard by the arbitrators and shall be decided by a
8 majority of them.
9 (xii) The chair arbitrator shall have the authority
10 to administer oaths or affirmations to witnesses and to
11 adjourn an uncompleted hearing from day to day.
12 (xiii) The arbitrators shall have the authority to
13 decide all issues of law and fact, determine liability
14 and award damages.
15 (xiv) The award by the arbitrators shall be final,
16 binding and cannot be appealed. If the arbitrators cannot
17 reach a majority award, a new hearing shall be conducted
18 with new arbitrators selected in the manner required in
19 this subsection.
20 (xv) Except as provided for in this subsection, the
21 arbitrators shall follow the laws of this Commonwealth
22 and shall be guided by the Pennsylvania Rules of Civil
23 Procedure and the Pennsylvania Rules of Evidence.
24 (5) All depositions shall be held in this Commonwealth.
25 The parties shall agree where the depositions are to be held
26 with the objective of minimizing the expense and
27 inconvenience of the parties and witnesses. If the parties
28 cannot agree, the chair shall decide when and where the
29 deposition will be held. Parties shall bear their own
30 expenses and those of their counsel. The party requesting the
20030H1278B1588 - 34 -
1 deposition will bear any costs of the witness and any
2 stenographic and video costs of the deposition.
3 (6) Other than as provided for in this act, the parties
4 may exercise all discovery rights, remedies and procedures
5 available as if the claim were pending in a court of common
6 pleas except that the chair arbitrator shall decide all
7 discovery issues and there shall be no right to appeal the
8 chair arbitrator's decision regarding discovery issues.
9 (7) Arbitrators shall have the authority to make an
10 award not exceeding a parties statutory liability limit,
11 along with reasonable attorney fees, costs, interest and all
12 consequential damages.
13 (8) Arbitrators shall render an award within ten days of
14 the conclusion of the hearing. The award shall dispose of all
15 claims and be signed by all arbitrators or by a majority of
16 them. The award need not contain factual findings or legal
17 conclusions. Once signed, the award shall be immediately sent
18 to all parties and filed with the prothonotary in a court of
19 competent jurisdiction.
20 (9) Neither party shall have a right to appeal the award
21 rendered by the arbitrators.
22 (10) Any monetary award rendered shall be paid within 30
23 days from the date of the award. A monetary award that has
24 not been paid by the 30th day from the date of the award
25 shall accrue interest at the rate of 18% per annum from the
26 date of the award. The award may be enforced pursuant to the
27 Pennsylvania Rules of Civil Procedure.
28 (11) For purposes of mandatory arbitration under section
29 713(f) as required by section 713(j), the applicable statute
30 of limitations shall be one year from the date the basic
20030H1278B1588 - 35 -
1 coverage insurer or self-insured provider settled or
2 compromised the claim in excess of its liability limits. For
3 purposes of mandatory arbitration under section 713(f) as
4 required by section 713(j), the applicable statute of
5 limitations shall be one year from the date the director
6 settled or compromised the claim despite there being no
7 tender from the basic coverage insurer or self-insured
8 provider.
9 Section 3. The act is amended by adding sections to read:
10 Section 717. Rates.
11 (a) Adjusted rates.--All professional liability insurers and
12 the Joint Underwriting Association doing business in this
13 Commonwealth shall file for approval with the commissioner new
14 adjusted rates within 60 days of the effective date of this
15 section. The new adjusted rates shall apply to all policies
16 issued or renewed on and after January 1, 2003. Any rate
17 requests that have been filed prior to the effective date of
18 this section for the calendar year 2003, whether those requests
19 were approved or not, are hereby deemed disapproved as being in
20 conflict with this section.
21 (b) Rate rollback.--The new adjusted rates implemented
22 pursuant to subsection (a) shall not reflect an increase of more
23 than 20% from the rates charged for the same coverage and
24 coverage limits to health care providers that were charged
25 during the calendar year 2002. To the extent any rates reflect
26 more than a 20% increase for the calendar year 2003 and the
27 respective premiums have already been paid, the applicable
28 professional liability insurer and the Joint Underwriting
29 Association shall issue refunds for the excess amount to their
30 insureds within 60 days of the effective date of this section.
20030H1278B1588 - 36 -
1 Refunds not paid within 60 days shall accrue interest after the
2 30th day at 18% per annum. In addition to any interest that may
3 accrue, a fine of up to $1,000 per day can be imposed along with
4 reasonable attorney fees and costs to enforce this section.
5 (c) Rate freeze.--No professional liability insurer or the
6 Joint Underwriting Association may increase rates for the
7 calendar year 2004 above the approved, new adjusted rates for
8 the calendar year 2003.
9 (d) Rate increase limitations.--The rates charged by
10 professional liability insurers and the Joint Underwriting
11 Association shall not increase by more than 5% per annum for the
12 calendar years 2005 and 2006 and 10% per annum for the calendar
13 years 2007 and 2008 above the approved, new adjusted rates for
14 the calendar year 2003.
15 (e) Grievance.--An insurer aggrieved by the rate rollback,
16 rate freeze or rate increase limitations mandated in this
17 section may seek relief from the commissioner and relief may be
18 granted when the commissioner deems it necessary in
19 extraordinary circumstances.
20 (f) Authority.--The rate rollback, rate freeze and rate
21 increase limitations in this section shall not effect the
22 commissioners or directors authority to adjust rates and impose
23 assessments that are provided for elsewhere in this act.
24 Section 718. Mandatory referral for claims history.
25 If any health care provider shall have a judgment entered
26 against it or be party to a settlement involving contribution by
27 the fund three times within any two-year period, the provider
28 shall be referred to its respective professional licensure board
29 for investigation.
30 Section 4. This act shall take effect in 60 days.
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