The team at Dodson Parker Behm & Capparella, PC shares updates and thoughts on developments in the law.

Legislative Update

February 28, 2017

The General Assembly is back in session and that means that more than a few items of interest will be considered in the next few months.  Here are some matters under consideration that will impact the legal system and the ability of Tennesseans to have access to justice.

Patients’ Compensation System

Legislation proposed in 2015 and revisited in 2016 that seeks to move medical malpractice claims out of the court system and into a Patients’ Compensation System is back again in 2017.  The bill (SB744/HB1150) is innocuously captioned as the Insurance Costs Reduction Act and currently has no description listed on the General Assembly website.  What it is intended to do, however, is to establish a system managed by the Department of Health that would investigate and review claims of medical malpractice and would govern how compensation to injured patients is handled.

The bill’s sponsors, Williamson County Republicans Senator Jack Johnson and Representative Glen Casada, have described the proposed system as follows: an administrative law judge would serve as the initial gatekeeper to determine whether there is sufficient evidence for the claim to move forward and, if so, the claim would then be reviewed by a review panel.  This 11-member panel would be appointed by the governor, lieutenant governor, and the speaker of the House.  It would be comprised of at least three physicians, two patient advocates, one business executive, one hospital administrator, one accountant, and one lawyer. The panel would oversee how compensation is awarded from a pool of funds collected from fees charged to the state’s physicians.

The bill is currently winding its way through House and Senate committees.  It is being pushed by a Georgia-based advocacy group called Patients for Fair Compensation, which is working to establish such patient compensation systems in Alabama, Florida, and Georgia, as well.  In a November 29, 2016 Nashville Post article, the general counsel for the Tennessee Medical Association noted his opposition to the bill and was quoted as saying:

Tennesseans do not want or need an unproven healthcare liability system.  Our present system is working well and is fair and transparent. Tennessee has significantly reduced frivolous lawsuits while maintaining accountability for providers who are negligent. Throwing out our current system in favor of an untried and unproven experiment will be costly and cause undue stress on our medical system, both for patients and providers. And there is no guarantee of cost savings or any other benefits.

Taking these decisions out of the hands of juries would mark a radical departure from what we usually conceive as the right to a jury trial.  We’ll have to stay tuned to see if this proposed legislation makes it out of committee for the first time this year.

Healthcare Liability, Generally

There are a handful of other bills that would also affect healthcare liability lawsuits.  One such bill (SB333/HB591) concerns the certificate of good faith requirement.  This legislation would impose sanctions upon an attorney who files a healthcare liability action in violation of the certificate of good faith requirement.  The sanctions could include payment of the defendant’s attorney’s fees and a referral to the Board of Professional Responsibility.  The bill also requires, rather than authorizes, courts to order a plaintiff who failed to offer any competent expert testimony to produce a copy of any expert’s signed written statements that supported the certificate of good faith to both the court and the prevailing defendant.

Another bill (SB328/HB639) seeks to increase from 60 to 65 the number of days prior to filing a healthcare liability lawsuit giving written notice of the potential claim to each healthcare provider that will be named as a defendant.  Both of these bills seem to be solutions in search of a problem.

Finally, one piece of proposed legislation (SB892/HB1089) would not have an immediate effect on tort litigation, but seeks to assemble a task force comprised of members of the insurance industry and healthcare providers to study creating a no-fault system for healthcare liability.  No-fault systems have been adopted in New Zealand, Denmark, and Sweden.  These compensation systems involve review panels and more predictable (formulaic?) mechanisms for compensation.  Critics of no-fault systems have raised concerns about a decline in the quality of care a physician provides.

Collateral Source Rule

One bill (SB207/HB350) was filed as a caption bill related to car insurance that was believed to be intended to defend the collateral source rule in personal injury cases.  The current version of this bill seeks, in part, to amend Tenn. Code Ann. § 56-7-1201, which allows a personal injury plaintiff to provide an itemization of medical bills along with the complaint and to then have a presumption that those bills, so long as they do not exceed $4,000, are reasonable and necessary.  Paragraph (b)(2) of the statute requires a defendant who seeks to offer evidence at trial that the medical expenses are not reasonable and necessary, to serve the other parties with a statement specifying which bills the defendant believes are unreasonable.  The proposed legislation would allow the defendant to attach “any evidence supporting such statement.”

This legislation seems to be a small backdoor to dismantling the collateral source rule.  I expect that a defendant may want to attach an itemization of the amounts actually paid by insurance for the medical bills presented by the plaintiff and argue that the amount presented by plaintiff is unreasonable.

This bill is currently making its way through committees and is one that should be monitored.

Tort Law Hodge Podge

The current political atmosphere has led to more protests and marches than we’ve seen in recent history.  As a response, Senator Bill Ketron (R – Murfreesboro) recognized a need to ensure that drivers who hit protestors with their car are immune from civil liability.  In reality, this is more political statement than change in the law.  The bill (SB944/HB668) provides civil immunity for a driver who hits a protestor who is blocking traffic in a public right-of-way if the driver was exercising due care.  A driver who intentionally hits a protestor is not immune under this proposed legislation.  Because this is already the state of the law, explicitly identifying immunity in this context seems designed more to annoy and demean protestors than actually accomplish any real purpose.

There is one bill before the legislature that seeks to make a common sense amendment to the way an award of attorney’s fees is handled on motions to dismiss.  This legislation (SB637/HB270) would limit a judge’s ability to award attorney’s fees to a party that prevails on a motion to dismiss to those occasions when the entirety of the lawsuit is dismissed on a motion to dismiss, as opposed to rulings where just individual claims are dismissed.

Caps on damages are popular with Tennessee’s legislature.  One bill (SB950/HB673) seeks to extend GTLA caps on damages to private entities that contract with the State of Tennessee to provide direct client services on behalf of the departments of children’s services, mental health and substance abuse services, and intellectual and developmental disabilities.

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