H. B. 2368
(By Delegate Pulliam)
[Introduced February 6, 1995; referred to the
Committee on Health and Human Resources then the Judiciary.]
A BILL to amend and reenact sections two, three, four, eight and
ten, article seven-b, chapter fifty-five of the code of West
Virginia, one thousand nine hundred thirty-one, as amended;
and to further amend said article by adding thereto seven
new sections, designated sections three-a, four-a, five-a,
eight-a, eight-b, eight-c and twelve, all relating to
medical professional negligence and liability; reforming
medical injury compensation to limit noneconomic damages,
attorney contingency fees, punitive damages and statutes of
limitation; defining professional negligence and other
terms; requiring a notice of intent to sue; authorizing periodic payments of future damages and curtailing windfalls
to nondependent heirs; waiving right to trial under a health
care contract arbitration clause; allowing evidence of
collateral benefits; and subjecting attorneys to
professional discipline for violating reform requirements.
Be it enacted by the Legislature of West Virginia:
That sections two, three, four, eight and ten, article
seven-b, chapter fifty-five of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended and
reenacted; and that said article be further amended by adding
thereto seven new sections, designated sections three-a, four-a,
five-a, eight-a, eight-b, eight-c and twelve, all to read as
follows:
ARTICLE 7B. MEDICAL PROFESSIONAL LIABILITY.
§55-7B-2. Definitions.
(a) "Future damages" includes damages for future medical
treatment, care or custody, loss of future earnings, loss of
bodily function or future pain and suffering of the judgment
creditor.
(b) "Fraud" means an intentional misrepresentation, deceit
or concealment of a material fact known to the defendant with the intention on the part of the defendant of depriving a person of
property or legal rights or otherwise causing injury.
(a) (c) "Health care" means any act or treatment performed
or furnished, or which should have been performed or furnished,
by any health care provider for, to or on behalf of a patient
during the patient's medical care, treatment or confinement.
(b) (d) "Health care facility" means any clinic, hospital,
nursing home, or extended care facility in and licensed by the
state of West Virginia and any state operated institution of
clinic providing health care.
(c) (e) "Health care provider" means a person, partnership,
corporation, facility or institution licensed by, or certified
in, this state or another state to provide health care or
professional health care services, including, but not limited to,
a physician, osteopathic physician, hospital, dentist, registered
or licensed practical nurse, optometrist, podiatrist,
chiropractor, physical therapist or psychologist, or an officer,
employee or agent thereof acting in the course and scope of such
officer's, employee's or agent's employment. The term shall
include the legal representation of a health care provider.
(f) "Malice" means conduct which is intended by the
defendant to cause injury to the plaintiff or despicable conduct
which is carried on by the defendant with a willful and conscious
disregard of the rights or safety of others.
(d) (g) "Medical professional liability" means any liability
for damages resulting from the death or injury of a person for
any tort or breach of contract based on health care services
rendered, or which should have been rendered, by a health care
provider or health care facility to a patient.
(h) "Oppression" means despicable conduct that subjects a
person to cruel and unjust hardship in conscious disregard of
that person's rights.
(e) (i) "Patient" means a natural person who receives or
should have received health care from a licensed health care
provider under a contract, expressed or implied.
(j) "Periodic payments" means the payment of money or
delivery of other property to the judgment creditors at regular,
court ordered intervals.
(k) "Professional negligence" means a negligent act or
omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate
cause of a personal injury or wrongful death, provided that such
services are within the scope of services for which the provider
is licensed and which are not within any restriction imposed by
the licensing agency or licensed health care facility.
(l) "Recovered" means the net sum recovered after deducting
any disbursements or costs incurred in connection with
prosecution or settlement of the claim. Costs of medical care
incurred by the plaintiff and an attorney's overhead costs or
charges are not deductible disbursements or costs for such
purpose.
(f) (m) "Representative" means the spouse, parent, guardian,
trustee, attorney or other legal agent of another.
(g) (n) "Noneconomic loss" means losses, including, but not
limited to, pain, suffering, mental anguish, and grief,
inconvenience, physical impairment, disfigurement and other
nonpecuniary damage.
§55-7B-3. Elements of proof.
The following are necessary elements of proof that an injury
or death resulted from the failure of a health care provider to follow the accepted standard of care thereby resulting in medical
professional negligence or liability:
(a) The health care provider failed to exercise that degree
of care, skill and learning required or expected of a reasonable,
prudent health care provider in the profession or class to which
the health care provider belongs acting in the same or similar
circumstances; and
(b) Such failure was a proximate cause of the injury or
death; and
(c) The nature of the professional service in question is
within the scope of services for which the health care provider
is licensed and which are not within any restriction imposed by
the licensed agency or licensed health care facility.
§55-7B-3a. Collateral benefits rule.
(a) In the event the defendant so elects, in an action for
personal injury against a health care provider based upon
professional negligence, he or she may introduce evidence of any
amount payable as a benefit to the plaintiff as a result of the
personal injury pursuant to the federal Social Security Act, any
state or federal income disability or workers' compensation act, any health, sickness or income-disability insurance, any accident
insurance that provides health benefits or income-disability
coverage, and any contract or agreement of any group,
organization, partnership or corporation to provide, pay for or
reimburse the cost of medical, hospital, dental or other health
care services. Where the defendant elects to introduce such
evidence, the plaintiff may introduce evidence of any amount
which the plaintiff has paid or contributed in order to secure
his or her right to any insurance benefits concerning which the
defendant has introduced evidence.
(b) No source of collateral benefits introduced pursuant to
subsection (a) of this section shall recover any amount against
the plaintiff nor shall it be subrogated to the rights of the
plaintiff against a defendant.
§55-7B-4. Health care injuries; limitations of actions;
exceptions.
(a) A cause of action for injury to a person alleging
medical professional liability against a health care provider
arises as of the date of injury, except as provided in subsection
(b) of this section, and must be commenced within two three years of the date of such injury, or within two one year of the date
when such person discovers, or with the exercise of reasonable
diligence, should have discovered such injury, whichever last
first occurs: Provided, That in no event shall any such action
be commenced more than ten three years after the date of injury
unless tolled upon proof of any of the following:
(1) Fraud;
(2) Intentional concealment; or
(3) The presence of a foreign body, which has no therapeutic
purpose or effect, in the person of the injured person.
(b) A cause of action for injury to a minor, brought by or
on behalf of a minor, shall be commenced within three years of
the alleged wrongful act except that actions by a minor who was
under the age of ten six years at the time of such injury, shall
be commenced within two three years of the date of such injury,
or prior to the minor's twelfth eighth birthday, whichever
provides the longer period.
(c) The periods of limitation set forth in this section for
minors shall be tolled for any period during which the parent or
guardian and defendant's insurer or health care provider or its representative has have committed fraud or collusion by
concealing or misrepresenting material facts about the injury. in
the failure to bring an action on behalf of the injured minor for
professional negligence or liability.
§55-7B-4a. Notice of intent to sue.
(a) No action based upon a health care provider's
professional negligence may be commenced unless the defendant has
been given at least ninety days' notice of the complainant's
intention to commence the action.
(b) No particular form is required, but the notice shall
notify the defendant of the legal basis of the claim and the type
of loss sustained, including with specificity the nature of the
injuries suffered.
(c) The notice may be served in the manner prescribed for
service of process under civil procedure rules currently
effective in state courts.
(d) If the notice is served within ninety days of the
expiration of any statute of limitation set forth in section four
of this article, the time for the commencement of the action
shall be extended ninety days from the service of the notice.
(e) The provisions of this section shall not be applicable
with respect to any defendant whose name, as permitted by the
rules of civil procedure, is unknown to the plaintiff at the time
of filing the complaint and who is identified therein by a
fictitious name.
§55-7B-5a. Arbitration language in health care service
contracts; waiving right to trial; required
language and warning; effective unless rescinded
by written notice; limiting a minor's
disaffirmance; contract not unconscionable or
otherwise improper.
(a) Any health care service contract which contains a
provision for arbitration of any dispute as to the medical
professional negligence or liability of a health care provider
shall make that provision the first article of the contract and
shall express it in the following language: "It is understood
that any dispute alleging medical professional negligence or
liability relative to whether any health care services rendered
under this contract were unnecessary or unauthorized or were
improperly, negligently or incompetently rendered will be
determined by submission to arbitration and not by a lawsuit or resort to court process except as West Virginia law provides for
judicial review of arbitration proceedings. Both parties to this
contract, by entering into it, are giving up their constitutional
right to have any such dispute decided in a court of law before
a jury and, instead, are accepting the use of arbitration.
(b) Immediately before the signature line provided for the
individual who is contracting for the health care services must
appear the following statement in at least ten point boldface red
type: "NOTICE: BY SIGNING THIS CONTRACT, YOU ARE AGREEING TO
HAVE ANY ISSUE OF MEDICAL PROFESSIONAL NEGLIGENCE OR LIABILITY
DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT
TO A JURY OR COURT TRIAL. READ ARTICLE ONE OF THIS CONTRACT."
(c) Once signed, such contract governs all subsequent
open-book account transactions for health care services for which
the contract was signed until or unless rescinded by written
notice within thirty days of signature. Written notice of such
rescission may be given by a guardian, conservator, medical power
of attorney or health care surrogate decision maker if the
patient is incapacitated or a minor.
(d) Where the contract is one for health care or medical services to a minor, it shall not be subject to disaffirmance if
signed by the minor's parent or legal guardian.
(e) Such a contract is not a contract of adhesion, nor
unconscionable, nor otherwise improper when it complies with
subsections (a), (b) and (c) of this section.
§55-7B-8. Limit on liability for noneconomic loss.
In any medical professional liability action brought against
a health care provider, the maximum amount recoverable as damages
for noneconomic loss shall not exceed one million two hundred
fifty thousand dollars and the jury may be so instructed.
§55-7B-8a. Attorney contingency fees; limits on allowable fee
percentages; effect of periodic payments.
(a) An attorney shall not contract for or collect a
contingency fee for representing any persons seeking damages in
connection with an action for injury or damage against a health
care provider based upon that person's alleged professional
negligence or liability in excess of the following limits:
(1) Forty percent of the first fifty thousand dollars
recovered;
(2) Thirty-three and one-third percent of the next fifty thousand dollars recovered;
(3) Twenty-five percent of the next five hundred thousand
dollars recovered; and
(4) Fifteen percent of any amount on which the recovery
exceeds six hundred thousand dollars.
These limitations shall apply regardless of whether the
recovery is by settlement, arbitration or judgment, or whether
the person for whom the recovery is made is a responsible adult,
an infant or a person of unsound mind.
(b) If periodic payments are awarded to the plaintiff
pursuant to section eight-c of this article, the court shall
place a total value on these payments based upon the projected
life expectancy of the plaintiff and include this amount in
computing the total award from which attorney fees are calculated
under this section.
§55-7B-8b. Pu
nitive damages; when permitted; when employer
liable for the acts of an employee.
(a) In an action for the breach of an obligation not arising
from contract, where it is proven by clear and convincing
evidence that the defendant has been guilty of oppression, fraud or malice, the plaintiff, in addition to the actual damages, may
recover damages for the sake of example and by way of punishing
the defendant.
(b) An employer shall not be liable for damages pursuant to
subsection (a) of this section, based upon acts of an employee of
the employer, unless the employer: (1) Had advance knowledge of
the unfitness of the employee and employed him or her with
conscious disregard of the rights or safety of others or
authorized; or (2) ratified the wrongful conduct for which the
damages are awarded or was personally guilty of oppression, fraud
or malice. With respect to a corporate employer, the advance
knowledge and conscious disregard, authorization, ratification or
act of oppression, fraud or malice must be on the part of an
officer, director or managing agent of the corporation.
§55-7B-8c. Periodic payments authorized for future damages;
legislative intent; either party's option; specific
findings as to amounts, intervals and recipients of
periodic payments; penalty if payments delayed;
effect of death.
(a) It is the intent of the Legislature in enacting this
section to authorize the entry of judgments in medical professional negligence or liability actions against health care
providers which provide for the payment of future damages through
periodic, rather than lump sum, payments. By authorizing
periodic payment judgments, it is the further intent of the
Legislature that the courts will utilize such judgments to
provide compensation sufficient to meet the needs of an injured
plaintiff and those persons who are dependent on the plaintiff
for whatever period is necessary while eliminating the potential
windfall from a lump sum recovery which was intended to provide
for the care of an injured plaintiff over an extended period who
then dies shortly after the judgment is paid, leaving the balance
of the judgment award to persons and purposes for which it was
not intended. It is also the intent of the Legislature that all
elements of the periodic payment program be specified with
certainty in the judgment ordering such payments and that the
judgment not be subject to modification at some future time which
might alter the specifications of the original judgment.
(b) In any action for injury or damages against a provider
of health care services, a superior court shall, at the request
of either party, enter a judgment ordering that future damages awarded against the judgment creditor in an amount that equals or
exceeds fifty thousand dollars be paid, in whole or in part, by
periodic payments rather than by a lump sum payment. In entering
a judgment ordering the payment of future damages by periodic
payments, the court shall make a specific finding as to the
dollar amount of periodic payments which will compensate the
judgment creditor for such future damages. As a condition to
authorizing periodic payments of future damages, the court shall
require the judgment debtor who is not adequately insured to post
security adequate to assure full payment of such damages awarded
by the judgment. Upon termination of periodic payments of future
damages, the court shall order the return of this security, or so
much as remains, to the judgment debtor.
(c) As it relates to the payment of future damages by
periodic payments:
(1) The judgment shall specify the recipient or recipients
of the payments, the dollar amount of each recipient's payments,
the interval between payments, and the number of payments or
period of time over which the payments shall be made. Such
payments shall only be subject to modification in the event of the death of the judgment creditor.
(2) A court which finds the judgment debtor has exhibited a
continuing pattern of failing to make payments, as specified in
subdivision (1) of this subsection, shall find the judgment
debtor in contempt of court and, in addition to the required
periodic payments, shall order the judgment debtor to pay the
judgment creditor all damages caused by the failure to make such
periodic payments, including court costs and attorney's fees.
(d) Money damages awarded for loss of future earnings,
however, shall not be reduced nor shall payments be terminated by
reason of the death of the judgment creditor, but shall be paid
to persons to whom the judgment creditor owed a duty of support,
as provided by law, immediately prior to his or her death. In
such cases, the court which rendered the original judgment may,
upon petition of any party in interest, modify the judgment to
award and apportion the unpaid future damages in accordance with
this subsection.
(e) Following the occurrence or expiration of all
obligations specified in the periodic payment judgment, any
obligations of the judgment debtor to make further payments shall cease and any security given, pursuant to subsection (b) of this
section, shall revert to the judgment debtor.
§55-7B-10. Effective date; applicability of provisions.
(a) The provisions of House Bill 149, enacted during the
first extraordinary session of the Legislature, one thousand nine
hundred eighty-six, shall be effective at the same time that the
provisions of Enrolled Senate Bill 714, enacted during the
regular session, one thousand nine hundred eighty-six, become
effective, and the provisions of said House Bill 149 shall be
deemed to amend the provisions of Enrolled Senate Bill 714. The
provisions of this article shall not apply to injuries which
occur before the effective date of this said Enrolled Senate Bill
714.
(b) The amendments to this article made by House Bill [blank
to be completed upon introduction], enacted during the regular
session of the Legislature, one thousand nine hundred
ninety-five, shall not apply to injuries which occur before the
effective date of this said Enrolled House Bill [blank to be
completed upon introduction].
§55-7B-12. Short title.
This article may be cited as the "Medical Injury
Compensation Reform Act."
NOTE: This bill, designated the Medical Injury Compensation
Reform Act, limits noneconomic damages to $250,000; caps attorney
contingency fees with an ultimate ceiling of 15%; alters
deadlines for filing suits; requires a notice of intent to sue;
curbs punitive damages; permits evidence of collateral benefits;
authorizes periodic payments of future damages and curtails
windfalls to nondependent heirs; redefines certain terms; permits
trial waiver via contracting for arbitration in health care
contracts; and subjects attorneys to professional discipline for
violating reform standards.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§§55-7B-3a, 4a, 5a, 8a, 8b, 8c and 12 are new; therefore,
strike-throughs and underscoring have been omitted.