Third Substitute S.B. 145

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Wed, Mar 3, 2010 at 10:12 AM by rday. --> This document includes House Floor Amendments incorporated into the bill on Thu, Mar 4, 2010 at 3:51 PM by lerror. -->

Senator J. Stuart Adams proposes the following substitute bill:

1 MEDICAL MALPRACTICE AMENDMENTS
2 2010 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: J. Stuart Adams
5 House Sponsor: Bradley G. Last
6
7 LONG TITLE
8 General Description:
9 This bill amends the Utah Health Care Malpractice Act.
10 Highlighted Provisions:
11 This bill:
12 . amends the cap on non-economic damages that may be awarded in a malpractice
13 action;
14 . requires an affidavit of merit from a health care professional to proceed with an
15 action if the pre-litigation panel makes a finding of non-meritorious; and
16 . limits the liability of a health care provider, in certain circumstances, for the acts or
17 omissions of an ostensible agent.
18 Monies Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 None
22 Utah Code Sections Affected:
23 AMENDS:
24 78B-3-410, as renumbered and amended by Laws of Utah 2008, Chapter 3
25 78B-3-412, as renumbered and amended by Laws of Utah 2008, Chapter 3

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- 2 - 26 78B-3-416, as renumbered and amended by Laws of Utah 2008, Chapter 3
27 78B-3-418, as renumbered and amended by Laws of Utah 2008, Chapter 3
28 ENACTS:
29 78B-3-423, Utah Code Annotated 1953
30 78B-3-424, Utah Code Annotated 1953
31
32 Be it enacted by the Legislature of the state of Utah:
33 Section 1. Section 78B-3-410 is amended to read:
34 78B-3-410. Limitation of award of noneconomic damages in malpractice actions.
35 (1) In a malpractice action against a health care provider, an injured plaintiff may
36 recover noneconomic losses to compensate for pain, suffering, and inconvenience. The amount
37 of damages awarded for noneconomic loss may not exceed:
38 (a) for a cause of action arising before July 1, 2001, $250,000;
39 (b) for a cause of action arising on or after July 1, 2001 and before July 1, 2002, the
40 limitation is adjusted for inflation to $400,000; [and]
41 (c) for a cause of action arising on or after July 1, 2002, and before May 15, 2010 the
42 $400,000 limitation described in Subsection (1)(b) shall be adjusted for inflation as provided in
43 Subsection (2)[.]; and
44 (d) for a cause of action arising on or after May 15, 2010, $450,000.
45 (2) (a) Beginning July 1, 2002 and each July 1 thereafter until July 1, 2009, the limit
46 for damages under Subsection (1)(c) shall be adjusted for inflation by the state treasurer.
47 (b) By July 15 of each year until July 1, 2009, the state treasurer shall:
48 (i) certify the inflation-adjusted limit calculated under this Subsection (2); and
49 (ii) inform the Administrative Office of the Courts of the certified limit.
50 (c) The amount resulting from Subsection (2)(a) shall:
51 (i) be rounded to the nearest $10,000; and
52 (ii) apply to a cause of action arising on or after the date the annual adjustment is made.
53 (3) As used in this section, "inflation" means the seasonally adjusted consumer price
54 index for all urban consumers as published by the Bureau of Labor Statistics of the United
55 States Department of Labor.
56 (4) The limit under Subsection (1) does not apply to awards of punitive damages.

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- 3 - 57 Section 2. Section 78B-3-412 is amended to read:
58 78B-3-412. Notice of intent to commence action.
59 (1) A malpractice action against a health care provider may not be initiated unless and
60 until the plaintiff:
61 (a) gives the prospective defendant or his executor or successor, at least 90 days' prior
62 notice of intent to commence an action; and
63 (b) except for an action against a dentist, the plaintiff receives a certificate of
64 compliance from the division in accordance with Section 78B-3-418 .
65 (2) The notice shall include:
66 (a) a general statement of the nature of the claim;
67 (b) the persons involved;
68 (c) the date, time, and place of the occurrence;
69 (d) the circumstances surrounding the claim;
70 (e) specific allegations of misconduct on the part of the prospective defendant; and
71 (f) the nature of the alleged injuries and other damages sustained.
72 (3) Notice may be in letter or affidavit form executed by the plaintiff or his attorney.
73 Service shall be accomplished by persons authorized and in the manner prescribed by the Utah
74 Rules of Civil Procedure for the service of the summons and complaint in a civil action or by
75 certified mail, return receipt requested, in which case notice shall be considered served on the
76 date of mailing.
77 (4) Notice shall be served within the time allowed for commencing a malpractice
78 action against a health care provider. If the notice is served less than 90 days prior to the
79 expiration of the applicable time period, the time for commencing the malpractice action
80 against the health care provider shall be extended to 120 days from the date of service of
81 notice.
82 (5) This section shall, for purposes of determining its retroactivity, not be construed as
83 relating to the limitation on the time for commencing any action, and shall apply only to causes
84 of action arising on or after April 1, 1976. This section shall not apply to third party actions,
85 counterclaims or crossclaims against a health care provider.
86 Section 3. Section 78B-3-416 is amended to read:
87 78B-3-416. Division to provide panel -- Exemption -- Procedures -- Statute of

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- 4 - 88 limitations tolled -- Composition of panel -- Expenses -- Division authorized to set license
89 fees.
90 (1) (a) The division shall provide a hearing panel in alleged medical liability cases
91 against health care providers as defined in Section 78B-3-403 , except dentists.
92 (b) (i) The division shall establish procedures for prelitigation consideration of medical
93 liability claims for damages arising out of the provision of or alleged failure to provide health
94 care.
95 (ii) The division may establish rules necessary to administer the process and
96 procedures related to prelitigation hearings and the conduct of prelitigation hearings in
97 accordance with Sections 78B-3-416 through 78B-3-420 .
98 (c) The proceedings are informal, nonbinding, and are not subject to Title 63G, Chapter
99 4, Administrative Procedures Act, but are compulsory as a condition precedent to commencing
100 litigation.
101 (d) Proceedings conducted under authority of this section are confidential, privileged,
102 and immune from civil process.
103 (2) (a) The party initiating a medical liability action shall file a request for prelitigation
104 panel review with the division within 60 days after the service of a statutory notice of intent to
105 commence action under Section 78B-3-412 .
106 (b) The request shall include a copy of the notice of intent to commence action. The
107 request shall be mailed to all health care providers named in the notice and request.
108 (3) (a) The filing of a request for prelitigation panel review under this section tolls the
109 applicable statute of limitations until the [earlier] later of:
110 (i) 60 days following the division's issuance of:
111 (A) an opinion by the prelitigation panel[,]; or [60 days following the termination of
112 jurisdiction by the division as provided in this subsection.]
113 (B) a certificate of compliance under Section 78B-3-418 ; or
114 (ii) the expiration of the time for holding a hearing under Subsection (3)(b)(ii).
115 (b) The division shall:
116 (i) send any opinion issued by the panel to all parties by regular mail[.]; and
117 [(b) (i)] (ii) [The division shall] complete a prelitigation hearing under this section
118 within:

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(A) 180 days after the filing of the request for prelitigation panel review[,]; or
120 (B) H. [ within ] .H any longer period as agreed upon in writing by all parties to the
120a review.
121 [(ii)] H. [ (iii) ] (c) .H If the prelitigation hearing has not been completed within the time
121a limits
122 established in Subsection (3)(b)[(i)](ii), the [division has no further jurisdiction over the matter
123 subject to review and the claimant is considered to have complied with all conditions precedent
124 required under this section prior to the commencement of litigation.] claimant shall:
125 H. [ (A) ] (i) .H file an affidavit of merit under the provisions of Section 78B-3-423 ; or
126 H. [ (B) ] (ii) .H file an affidavit with the division within 180 days of the request for
126a prelitigation
127 review, in accordance with Subsection (3) H. [ (c) ] (d).H , alleging that the respondent has failed
127a to
128 reasonably cooperate in scheduling the hearing.
129 H. [ (c) ] (d).H If the claimant files an affidavit under
129a Subsection (3) H. [ (b)(iii)(B) ] (c) (ii) .H :
130 (i) within 15 days of the filing of the affidavit under
130a Subsection (3) H. [ (b)(iii)(B) ] (c) (ii) .H , the
131 division shall determine whether either the respondent or the claimant failed to reasonably
132 cooperate in the scheduling of a prelitigation hearing; and
133 (ii) (A) if the determination is that the respondent failed to reasonably cooperate in the
134 scheduling of a hearing, and the claimant did not fail to reasonably cooperate, the division
135 shall, issue a certificate of compliance for the claimant in accordance with Section 78B-3-418 ;
136 or
137 (B) if the division makes a determination other than the determination in Subsection
138 (3) H. [ (c) ] (d) .H (ii)(A), the claimant shall file an affidavit of merit in accordance with
138a Section 78B-3-423 ,
139 within 30 days of the determination of the division under this Subsection (3).
140 [(c)] H. [ (d) ] (e) .H (i) The claimant and any respondent may agree by written stipulation
140a that no
141 useful purpose would be served by convening a prelitigation panel under this section.
142 (ii) When the stipulation is filed with the division, the division shall within 10 days
143 after receipt [enter an order divesting itself of jurisdiction over the claim] issue a certificate of
144 compliance under Section 78B-3-418 , as it concerns the stipulating respondent, and stating that

145 the claimant has complied with all conditions precedent to the commencement of litigation
146 regarding the claim.
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House Floor Amendments 3-4-2010 le/cjd 147

(4) The division shall provide for and appoint an appropriate panel or panels to hear
148 complaints of medical liability and damages, made by or on behalf of any patient who is an
149 alleged victim of medical liability. The panels are composed of:

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- 6 - 150 (a) one member who is a resident lawyer currently licensed and in good standing to
151 practice law in this state and who shall serve as chairman of the panel, who is appointed by the
152 division from among qualified individuals who have registered with the division indicating a
153 willingness to serve as panel members, and a willingness to comply with the rules of
154 professional conduct governing lawyers in the state of Utah, and who has completed division
155 training regarding conduct of panel hearings;
156 (b) (i) one member who is a licensed health care provider listed under Section
157 78B-3-403 , who is practicing and knowledgeable in the same specialty as the proposed
158 defendant, and who is appointed by the division in accordance with Subsection (5); or
159 (ii) in claims against only hospitals or their employees, one member who is an
160 individual currently serving in a hospital administration position directly related to hospital
161 operations or conduct that includes responsibility for the area of practice that is the subject of
162 the liability claim, and who is appointed by the division; and
163 (c) a lay panelist who is not a lawyer, doctor, hospital employee, or other health care
164 provider, and who is a responsible citizen of the state, selected and appointed by the division
165 from among individuals who have completed division training with respect to panel hearings.
166 (5) (a) Each person listed as a health care provider in Section 78B-3-403 and practicing
167 under a license issued by the state, is obligated as a condition of holding that license to
168 participate as a member of a medical liability prelitigation panel at reasonable times, places,
169 and intervals, upon issuance, with advance notice given in a reasonable time frame, by the
170 division of an Order to Participate as a Medical Liability Prelitigation Panel Member.
171 (b) A licensee may be excused from appearance and participation as a panel member
172 upon the division finding participation by the licensee will create an unreasonable burden or
173 hardship upon the licensee.
174 (c) A licensee whom the division finds failed to appear and participate as a panel
175 member when so ordered, without adequate explanation or justification and without being
176 excused for cause by the division, may be assessed an administrative fine not to exceed $5,000.
177 (d) A licensee whom the division finds intentionally or repeatedly failed to appear and
178 participate as a panel member when so ordered, without adequate explanation or justification
179 and without being excused for cause by the division, may be assessed an administrative fine not
180 to exceed $5,000, and is guilty of unprofessional conduct.

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(e) All fines collected under Subsections (5)(c) and (d) shall be deposited in the
182 Physicians Education Fund created in Section 58-67a-1 .
183 (6) Each person selected as a panel member shall certify, under oath, that he has no
184 bias or conflict of interest with respect to any matter under consideration.
185 (7) Members of the prelitigation hearing panels shall receive per diem compensation
186 and travel expenses for attending panel hearings as established by rules of the division.
187 (8) (a) In addition to the actual cost of administering the licensure of health care
188 providers, the division may set license fees of health care providers within the limits
189 established by law equal to their proportionate costs of administering prelitigation panels.
190 (b) The claimant bears none of the costs of administering the prelitigation panel except
191 under Section 78B-3-420 .
192 Section 4. Section 78B-3-418 is amended to read:
193 78B-3-418. Decision and recommendations of panel -- No judicial or other review.
194 (1) (a) The H. [ [ ] panel [ ] ] [ division ] .H shall issue an opinion and H. the division
194a shall .H issue a certificate of compliance
195 with the pre-litigation hearing requirements of this part in accordance with this section.
196 (b) A certificate of compliance issued in accordance with this section is proof that the
197 claimant has complied with all conditions precedent under this part prior to the commencement
198 of litigation as required in Subsection 78B-3-412 (1).
199 (2) (a) The panel shall render its opinion in writing not later than 30 days after the end
200 of the proceedings[. The panel shall]; and
201 (i) determine on the basis of the evidence whether:
202 (A) each claim against each health care provider has merit or has no merit; and[,]
203 (B) if a claim is meritorious, whether the conduct complained of resulted in harm to the
204 claimant.
205 (b) There is no judicial or other review or appeal of the panel's decision or
206 recommendations.
207 (3) The division shall issue a certificate of compliance to the claimant, for each
208 respondent named in the intent to file a claim under this part, if:
209 (a) for a named respondent, the panel issues an opinion of merit under Subsections
210 (2)(a)(i)(A) and (B);
211 (b) for a named respondent, the claimant files an affidavit of merit in accordance with

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Section 78B-3-423 if the opinion under Subsection (1)(a) is non-meritorious under either
213 Subsection (2)(a)(i)(A) or (B);
214 (c) the claimant has complied with the provisions of Subsections 78B-3-416 (3)
214a H. [ (b)(iii) ] (c) .H
215 and H. [ (c) ] (d) .H ; or
216 (d) the parties submitted a stipulation under Subsection 78B-3-416 (3)(d).
217 Section 5. Section 78B-3-423 is enacted to read:
218 78B-3-423. Affidavit of merit.
219 (1) (a) Before a claimant may receive a certificate of compliance under Sections
220 78B-3-416 and 78B-3-418 , a claimant shall file an affidavit of merit under this section
220a H. [ if ] .H :
221 (i) H. within 60 days of the date of the panel's opinion, if .H the claimant receives a
221a finding from the pre-litigation panel in accordance with
222 Section 78B-3-418 of non-meritorious for either:
223 (A) the claim of breach of applicable standard of care; or
224 (B) that the breach of care was the proximate cause of injury;
225 (ii) H. within 60 days of the expiration of the time limit in Subsection
225a 78B-3-416(3)(b)(ii), if .H a pre-litigation hearing is not held within the time limits under Section
226 78B-3-416 (3)(b)(ii); or
227 (iii) H. within 30 days of the divisions determination under
227a Subsection 78B-3-416(3)(d)(ii)(B), if .H the division makes a determination under Section
227b 78B-3-416 (3) H. [ (c) ] (d) .H (ii)(B) H. . .H
228 (b) A claimant who is required to file an affidavit of merit under Subsection (1)(a)
229 shall H. [ :
230 (i) ] .H file the affidavit of merit with the division H. ; [ within:
231 (A) 60 days of:
232 (I) the expiration of the time limit in Section 78B-3-416 (3)(b)(i);
233 (II) the date of the panel's opinion under Subsection 78B-3-418 (2)(b); or
234 (B) within 30 days of the division's determination under Subsection 78B-3-416 (3)(c); ] .H
235 and
236 (ii) serve each defendant with the affidavit of merit in accordance with Subsection
237 78B-3-412 (3).
238 (2) The affidavit of merit shall:
239 (a) be executed by the claimant's attorney or the claimant if the claimant is proceeding
240 pro se, stating that the affiant has consulted with and reviewed the facts of the case with a
241 health care provider who has determined after a review of the medical record and other relevant
242 material involved in the particular action that there is a reasonable and meritorious cause for

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the filing of a medical liability action; and
244 (b) include an affidavit signed by a health care provider who meets the requirements of
245 Subsection (3), which states that in the health care provider's opinion:
246 (i) S. [ if the claimant received a finding that there was no breach of the applicable standard
247 of care, that ] .S there are reasonable grounds to believe that the applicable standard of care was
248 breached;
249 (ii) the breach was a proximate cause of the injury claimed in the notice of intent to
250 commence action; and
251 (iii) the reasons for the health care provider's opinion.
252 (c) The statement required in Subsection (2)(b)(i) shall be waived if the claimant
253 received an opinion that there was a breach of the applicable standard of care under Subsection
254 78B-3-418 (2)(a)(i)(A).
255 (3) A health care provider who signs the affidavit of merit under Subsection (2) shall:
256 (a) if none of the respondents is a physician licensed under Title 58, Chapter 67, Utah
257 Medical Practice Act, or an osteopathic physician licensed under Title 58, Chapter 68, Utah
258 Osteopathic Medical Practice Act, hold a current unrestricted license issued by the appropriate
259 licensing authority of Utah or another state in the same specialty or of the same class of license
260 as the respondents; or
261 (b) if at least one of the respondents is a physician licensed under Title 58, Chapter 67,
262 Utah Medical Practice Act, or an osteopathic physician licensed under Title 58, Chapter 68,
263 Utah Osteopathic Medical Practice Act, hold a current unrestricted license issued by the
264 appropriate licensing authority of Utah or another state to practice medicine in all its branches.
265 (4) A claimant's attorney or claimant may obtain up to a 60-day extension to file the
266 affidavit of merit if:
267 (a) the claimant or the claimant's attorney submits a signed affidavit for extension with
268 notice to the division attesting to the fact that the claimant is unable to submit an affidavit of
269 merit as required by this section because:
270 (i) a statute of limitations would impair the action; and
271 (ii) the affidavit of merit could not be obtained before the expiration of the statute of
272 limitations; and
273 (b) the claimant or claimant's attorney submits the affidavit for extension to each

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- 10 - 274 named respondent in accordance with Subsection 78B-3-412 (3) no later than 60 days after the
275 date specified in Subsection (1)(b)(i).
276 (5) (a) A claimant or claimant's attorney who submits allegations in an affidavit of
277 merit that are found to be without reasonable cause and untrue, based on information available
278 to the plaintiff at the time the affidavit was submitted to the division, is liable to the defendant
279 for the payment of reasonable expenses and reasonable attorney fees actually incurred by the
280 defendant or the defendant's insurer.
281 (b) An affidavit of merit is not admissible, and cannot be used for any purpose, in a
282 subsequent lawsuit based on the claim that is the subject of the affidavit, except for the purpose
283 of establishing the right to recovery under Subsection (5)(c).
284 (c) A court, or arbitrator under Section 78B-3-421 , may award costs and attorney fees
285 under Subsection (5)(a) if the defendant files a motion for costs and attorney fees within 60
286 days of the judgment or dismissal of the action in favor of the defendant. The person making a
287 motion for attorney fees and costs may depose and examine the health care provider who
288 prepared the affidavit of merit.
289 (6) If a claimant or the claimant's attorney does not file an affidavit of merit as required
290 by this section, the division may not issue a certificate of compliance for the claimant and the
291 malpractice action shall be dismissed by the court.
292 (7) This section applies to a cause of action that arises on or after July 1, 2010.
293 Section 6. Section 78B-3-424 is enacted to read:
294 78B-3-424. Limitation of liability for ostensible agent.
295 (1) For purposes of this section:
296 (a) "Agent" means a person who is an "employee," "worker," or "operative," as defined
297 in Section 34A-2-104 , of a health care provider.
298 (b) "Ostensible agent" means a person:
299 (i) who is not an agent of the health care provider; and
300 (ii) who the plaintiff reasonably believes is an agent of the health care provider because
301 the health care provider intentionally, or as a result of a lack of ordinary care, caused the
302 plaintiff to believe that the person was an agent of the health care provider.
303 (2) A health care provider named as a defendant in a medical malpractice action is not
304 liable for the acts or omissions of an ostensible agent if:

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- 11 - 305 (a) the ostensible agent has privileges with the health care provider, but is not an agent
306 of the healthcare provider;
307 (b) the health care provider has by policy or practice, ensured that a person providing
308 professional services has insurance of a type and amount required, if any is required, by the
309 rules or regulations as established in:
310 (i) medical staff by-laws for a health care facility; or
311 (ii) other health care facility contracts, indemnification agreements, rules or
312 regulations;
313 (c) the insurance required in Subsection (2)(a) is in effect at the time of the alleged act
314 or omission of the ostensible agent; and
315 (d) there is a claim of agency or ostensible agency in a plaintiff's notice of intent to
316 commence an action, the healthcare provider, within 60 days of the service of the notice of
317 intent to commence an action, lists each person identified by the plaintiff who the provider
318 claims is not an agent or ostensible agent of the provider.
319 (3) This section applies to a cause of action that arises on or after July 1, 2010.