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Introduced Version - Originating in Committee Senate Bill 729 History

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Key: Green = existing Code. Red = new code to be enacted
The quick brown fox jumps over the lazy dog
Senate Bill No. 729

(By Senators Kessler, Caldwell, Fanning, Hunter, Jenkins, Minard, Oliverio, Ross, Rowe, Snyder, White, Deem, Harrison, McKenzie, Smith and Weeks)

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[Originating in the Committee on the Judiciary;


reported March 1, 2004.]

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A BILL to amend the code of West Virginia, 1931, as amended, by adding thereto a new article, designated §29-12D-1, §29-12D-2 and §29-12D-3, all relating to the establishment, initial funding and operation of a patient injury compensation fund; creating a patient injury compensation fund; providing initial funding for the fund; specifying that the fund shall not be considered a defendant for certain actions and shall not be considered an insurer or insurance company under the code; providing that the fund shall be administered by the board of risk and insurance management; specifying certain powers and authority of the board in respect of the fund; providing that the assets of the fund shall be held in trust for their intended purposes and managed and invested by the investment management board; requiring an annual audit of the fund by an independent actuary; providing that in no circumstance shall the state, the board, the investment board or any person or persons acting on their behalf be liable for the debts, liabilities or obligations of the fund; providing for payments from the fund to qualified claimants; providing limits on the amount on payment in respect of any occurrence; authorizing payments from the fund either in lump sums or in the form of periodic payments; authorizing the board to make payments from the fund in connection with the settlement of claims; establishing procedures for the payment of claims and settlement amounts; providing for proration of payments in a given fiscal year in the event there are insufficient assets in the fund to make full payment of a claim or claims in such fiscal year; and authorizing the payment of attorney fees out of the fund in accordance with a sliding scale based upon the amount of the payment.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §29-12D-1, §29-12D-2 and §29-12D-3, all to read as follows:
ARTICLE 12D. WEST VIRGINIA PATIENT INJURY COMPENSATION FUND.

§ 29-12D-1. Creation of patient injury compensation fund; purpose; initial funding of patient injury compensation fund. (a) There is hereby created the West Virginia patient injury compensation fund, for the purpose of providing fair and reasonable compensation to claimants in medical malpractice actions for any portion of economic damages awarded that is uncollectible as a result of limitations on economic damage awards for trauma care, or as a result of the operation of the joint and several liability principles and standards, set forth in article seven-b, chapter fifty-five of this code. The fund shall consist of all contributions, revenues and monies which may be paid into the fund from time to time by the state of West Virginia or from any other source whatsoever, together with any and all interest, earnings, dividends, distributions, monies or revenues of any nature whatsoever accruing thereunto.
(b) Initial funding for the fund shall be provided as follows: During fiscal year two thousand five, two million two hundred thousand dollars of the revenues that would otherwise be transferred to the tobacco account established at
subsection (b), section two, article eleven-a, chapter four of this code pursuant to the provisions of section fourteen, article three, chapter thirty-three of this code shall be transferred to the fund; during fiscal year two thousand six, two million two hundred thousand dollars of the revenues that would otherwise be transferred to the tobacco account established at subsection (b), section two, article eleven-a, chapter four of this code pursuant to the provisions of section fourteen, article three, chapter thirty-three of this code, shall be transferred to the fund; and during fiscal year two thousand seven, two million two hundred thousand dollars of the revenues that would otherwise be transferred to the tobacco account established at subsection (b), section two, article eleven-a, chapter four of this code pursuant to the provisions of section fourteen, article three, chapter thirty-three of this code shall be transferred to the fund . Beginning fiscal year two thousand eight, if and to the extent additional funding for the fund is required from time to time to maintain the actuarial soundness of the fund, such additional funding may be provided by further act of the legislature, either from the revenue stream identified in this subsection or otherwise.
(c) The fund is not and shall not be considered a defendant in any civil action arising under article seven-b, chapter fifty-five of this code.
(d) The fund is not and shall not be considered an insurance company or insurer for any purpose under this code.
§ 29-12D-2. Administration of fund; investment of fund assets; annual actuarial review and audit; fund assets and liabilities not assets and liabilities of the state.

(a) The patient injury compensation fund shall be implemented, administered and operated by the board of risk and insurance management. In addition to such other powers and authority elsewhere expressly or impliedly conferred on the board of risk and insurance management, the board shall have the authority to:
(1)  Receive, collect and deposit all revenues and monies due the fund;
(2)  Employ, or in accordance with the provisions of law applicable to contracting for personal, professional or consulting services, retain the services of a qualified competent actuary to perform the annual actuarial study of the fund required by this Section and to advise the board on all aspects of the fund's administration, operation and defense which require application of the actuarial science;
(3)  Contract for any services necessary or advisable to implement the authority and discharge the responsibilities conferred and imposed on the board by this article;
(4)  Employ, or contract with, legal counsel of the board's choosing to advise and represent the board and represent the fund in respect of any and all matters relating to the operation of the fund and payments out of the fund;
(5)  Employ such clerical personnel as may be necessary or appropriate to carry out the responsibilities of the board under this Part; and
(6) Adopt and promulgate such rules, regulations and standards as it may deem necessary or advisable to implement the authority and discharge the responsibilities conferred and imposed on the board by this article.
(b) The assets of the fund, and any and all income, dividends, distributions or other income or monies earned by or accruing to the benefit of the fund, shall be held in trust for the purposes contemplated by this article, and shall not be spent for any other purpose; provided that the assets of the fund may be used to pay for all reasonable costs and expenses of any nature whatsoever associated with the ongoing administration and operation of the of the fund. All assets of the fund from time to time shall be deposited with, held and invested by, and accounted for separately by the investment management board. All monies and assets of the fund shall be invested and reinvested by the investment management board in the same manner as provided by law for the investment of other trust fund assets held and invested by the investment management board.
(c) The board shall cause an annual review of the assets and liabilities of the fund to be conducted on an annual basis by a qualified, independent actuary.
(d) The board shall cause an annual audit of the fund to be conducted on an annual basis by a qualified, independent auditor.
(e) The state of West Virginia is not and shall not be liable for any liabilities of the fund whatsoever. No claims or expenses against the fund shall be deemed to constitute a debt of the state of West Virginia or a charge against the general revenue fund of the state of West Virginia. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the board of risk and insurance management, the fund, or the investment management board, or any of its or their respective agents, employees, professional advisers or consultants, members of the board, trustees, officers, directors, or representatives in respect of any action taken or not taken by them in the performance of their respective powers and duties pursuant to this article.
§ 29-12D-3. Payments from the patient injury compensation fund. (a) Other than payments in connection with the ongoing operation and administration of the fund, no payments may be made from the fund other than in satisfaction of claims for economic damages to qualified claimants who otherwise would have collected economic damages but for the operation of the limits on economic damages set forth in article seven-b, chapter fifty-five of this code. For purposes of this article, a qualified claimant must be both a "patient" and a "plaintiff" as those terms are defined in article seven-b, chapter fifty-five of this code. Any qualified claimant seeking payment from the fund must establish to the satisfaction of the board that he or she has exhausted all reasonable means to recover from all applicable liability insurance an award of economic damages, following such procedures as the board in its discretion may prescribe from time to time.
(b) Upon a determination by the board that a qualified claimant to the fund for compensation has exhausted all reasonable means to recover from all applicable liability insurance an award of economic damages arising under article seven-b, chapter fifty- five of this code, the board shall make a payment or payments to such applicant in respect of the economic damages which have been awarded but are uncollectible after the exhaustion of all reasonable means of recovery, provided that in no event shall the amount paid by the board in respect of any one occurrence exceed one million dollars or the maximum amount of money that could have been collected from all applicable insurance prior to the creation of the patient injury compensation fund under this article, regardless of the number of plaintiffs or the number of defendants or, in the case of wrongful death, regardless of the number of distributees.
(c) The board, in its discretion, may make payments to a qualified claimant in a lump sum amount or in the form of periodic payments.
(d) In its discretion, the board may make a payment or payments out of the fund to a qualified claimant in connection with the settlement of claims arising under article seven-b, chapter fifty-five of this code, all according to such procedures and policies as the board may establish regarding same; provided that in all such cases the board shall have determined that the payment of monies out of the fund to a qualified applicant in connection with the settlement of any such claim is in the best interests of the fund.
In the event the claimant and the board agree upon an amount in respect of any such settlement, the following procedure shall be followed:
(1) A petition shall be filed by the claimant with the court in which the action is pending, or if none is pending, in a court of appropriate jurisdiction, for approval of the agreement between the claimant and the board.
(2) The court shall set such petition for hearing as soon as the court's calendar permits, and notice of the time, date and place of hearing shall be given to the claimant and to the board.
(3) At such hearing the court shall approve the proposed settlement if the court finds it to be valid, just and equitable.
(e) If and to the extent that any payment to one or more qualified claimants under this section would deplete the fund during any fiscal year, payments to and among qualified claimant shall be prorated in such fiscal year according to such procedures as the board may adopt from time to time. Any amounts due and unpaid to qualified claimants shall be paid in subsequent fiscal years from available funds, but only to the extent of funds available in any fiscal year all according to such procedures as the board may establish from time to time. In no event shall the state of West Virginia be or become liable for any liabilities of the fund whatsoever.

(f) Payments out of the fund may be used to pay the attorney fees of attorneys representing qualified claimants receiving compensation in respect of economic damages, according to the following scale: Forty percent on the first fifty thousand dollars of payment made by the fund in respect of any occurrence; thirty- three percent on the next fifty thousand dollars of payment made by the fund in respect of any occurrence; twenty-five percent on the next five hundred thousand of payment made by the fund in respect of any occurrence; and fifteen percent on all payments in excess of six hundred thousand dollars of payment made by the fund in respect of any occurrence. No payments in excess of the scale set forth in this subsection may be made to any person or persons, regardless of the number of attorneys involved in representing any one or more qualified claimants in respect of any occurrence giving rise to a payment or payments out of the fund.

(NOTE: This bill provides for the establishment, funding and operation of a patient injury compensation fund, to provide a means for providing fair and appropriate compensation to persons awarded economic damages in medical malpractice actions which economic damages are uncollectible due to the operation of either the cap on economic damage awards for trauma care, or economic damage awards under joint and several liability standards for medical malpractice actions, or both.

This is a new article; therefore, underscoring and strike- throughs have been omitted.)
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