HB 1293

1	A bill to be entitled
2	An act relating to medical malpractice insurance;
3	providing a short title; creating the Patient Safety and
4	Provider Liability Act; providing legislative findings;
5	creating s. 627.41485, F.S.; authorizing insurers to issue
6	insurance coverage that excludes medical negligence for
7	certain health care professionals within a hospital;
8	authorizing the Department of Financial Services to adopt
9	rules; amending s. 766.110, F.S.; specifying certain
10	authorized insurers who may make available liability
11	insurance; amending s. 766.118, F.S.; providing a
12	limitation on noneconomic damages for a hospital facility
13	that complies with certain patient-safety measures;
14	creating s. 766.401, F.S.; providing definitions; creating
15	s. 766.402, F.S.; authorizing an eligible hospital to
16	petition the agency for an order certifying the hospital
17	as a certified patient-safety facility; providing
18	requirements for certification as a patient-safety
19	facility; authorizing the agency to conduct onsite
20	examinations; providing for revocation of an order
21	certifying approval of a certified patient-safety
22	facility; providing that an order certifying the approval
23	of a certified patient-safety facility is conclusive
24	evidence of compliance with statutory patient-safety
25	requirements; providing that evidence of noncompliance is
26	not admissible for any action for medical malpractice;
27	creating s. 766.403, F.S.; providing requirements for a
28	hospital to demonstrate that it is engaged in a common
29	enterprise for the care and treatment of patients;
30	specifying required patient-safety measures; prohibiting a
31	report or document generated under the act from being
32	admissible or discoverable as evidence; creating s.
33	766.404, F.S.; requiring a certified patient-safety
34	facility to submit an annual report to the agency and the
35	Legislature; providing requirements for the annual report;
36	providing that the annual report may include certain
37	information from the Office of Insurance Regulation within
38	the Department of Financial Services; providing that the
39	annual report is subject to public-records requirements
40	but is not admissible as evidence in a legal proceeding;
41	creating s. 766.405, F.S.; providing for limitations on
42	damages for eligible hospitals that are certified for
43	compliance with certain patient-safety measures; creating
44	s. 766.406, F.S.; providing rulemaking authority;
45	providing for severability; providing for broad statutory
46	view of the act; providing for self-execution of the act;
47	providing an effective date.
48
49	Be It Enacted by the Legislature of the State of Florida:
50
51	Section 1.  Short title.--This act may be cited as the
52	"Patient Safety and Provider Liability Act."
53	Section 2.  Legislative findings.--The Legislature finds
54	that:
55	(1)  This state is in the midst of a prolonged medical
56	malpractice insurance crisis that has serious adverse effects on
57	patients, practitioners, licensed health care facilities, and
58	all residents of this state.
59	(2)  Hospitals are central components of the modern health
60	care delivery system.
61	(3)  The medical malpractice insurance crisis in this state
62	can be alleviated by the adoption of innovative approaches for
63	patient safety in teaching hospitals, which can lead to a
64	reduction in medical errors coupled with a limitation on
65	noneconomic damages that can be awarded against a teaching
66	hospital that implements such innovative approaches.
67	(4)  Statutory incentives are necessary to facilitate
68	innovative approaches for patient safety in hospitals and that
69	such incentives and patient-safety measures will benefit all
70	persons seeking health care services in this state.
71	(5)  Coupling patient safety measures and a limitation on
72	provider liability in teaching hospitals will lead to a
73	reduction in the frequency and severity of incidents of medical
74	malpractice in hospitals.
75	(6)  A reduction in the frequency and severity of incidents
76	of medical malpractice in hospitals will reduce attorney's fees
77	and other expenses inherent in the medical liability system.
78	(7)  There is no alternative method that addresses the
79	overwhelming public necessity to implement patient-safety
80	measures and limit provider liability.
81	(8)  Making high-quality health care available to the
82	residents of this state is an overwhelming public necessity.
83	(9)  Medical education in this state is an overwhelming
84	public necessity.
85	(10)  Statutory teaching hospitals are essential for high-
86	quality medical care and medical education in this state.
87	(11)  The critical mission of statutory teaching hospitals
88	is severely undermined by the ongoing medical malpractice
89	crisis.
90	(12)  Teaching hospitals are appropriate health care
91	facilities for the implementation of innovative approaches to
92	enhancing patient safety and limiting provider liability.
93	(13)  There is an overwhelming public necessity to impose
94	reasonable limitations on actions for medical malpractice
95	against teaching hospitals in furtherance of the critical public
96	interest in promoting access to high-quality medical care,
97	medical education, and innovative approaches to patient safety
98	and provider liability.
99	(14)  There is an overwhelming public necessity for
100	teaching hospitals to implement innovative measures for patient
101	safety and limit provider liability in order to generate
102	empirical data for state policymakers concerning the
103	effectiveness of these measures. Such data may lead to broader
104	application of these measures in a wider array of hospitals
105	after a reasonable period of evaluation and review.
106	(15)  There is an overwhelming public necessity to promote
107	the academic mission of teaching hospitals. Furthermore, the
108	Legislature finds that the academic mission of these medical
109	facilities is materially enhanced by statutory authority for the
110	implementation of innovative approaches to promoting patient
111	safety and limiting provider liability. Such approaches can be
112	carefully studied and learned by medical students, medical
113	school faculty, and affiliated physicians in appropriate
114	clinical settings, thereby enlarging the body of knowledge
115	concerning patient safety and provider liability which is
116	essential for advancement of patient safety, reduction of
117	expenses inherent in the medical liability system, and
118	curtailment of the medical malpractice insurance crisis in this
119	state.
120	Section 3.  Section 627.41485, Florida Statutes, is created
121	to read:
122	627.41485  Medical malpractice insurers; optional coverage
123	exclusion for insureds that maintain a patient-safety plan
124	specified in s. 766.403.--
125	(1)  An insurer issuing policies of professional liability
126	coverage for claims arising out of the rendering of, or the
127	failure to render, medical care or services may make available
128	to physicians licensed under chapter 458, osteopathic physicians
129	licensed under chapter 459, podiatric physicians licensed under
130	chapter 461, dentists licensed under chapter 466, and nurses
131	licensed under part I of chapter 464 coverage having an
132	appropriate exclusion for acts of medical negligence occurring
133	within the premises of a hospital that has agreed to indemnify
134	covered persons for legal liability pursuant to s. 766.110(2),
135	subject to the usual underwriting standards.
136	(2)  The Department of Financial Services may adopt rules
137	pursuant to ss. 120.536(1) and 120.54 to administer this
138	section.
139	Section 4.  Subsection (2) of section 766.110, Florida
140	Statutes, is amended to read:
141	766.110  Liability of health care facilities.--
142	(2)  Every hospital licensed under chapter 395 may carry
143	liability insurance or adequately insure itself in an amount of
144	not less than $1.5 million per claim, $5 million annual
145	aggregate to cover all medical injuries to patients resulting
146	from negligent acts or omissions on the part of those members of
147	its medical staff who are covered thereby in furtherance of the
148	requirements of ss. 458.320 and 459.0085. Notwithstanding s.
149	626.901, a licensed hospital and verified trauma center may
150	extend insurance and self-insurance coverage to members of the
151	medical staff, including physicians' practices, individually or
152	through a professional association, as defined in chapter 621,
153	and other health care practitioners, as defined in s.
154	456.001(4), including students preparing for licensure. Such
155	coverage may be limited to legal liability arising out of
156	medical negligence within the hospital premises as defined under
157	s. 766.401. Self-insurance Coverage extended hereunder to a
158	member of a hospital's medical staff meets the financial
159	responsibility requirements of ss. 458.320 and 459.0085 if the
160	physician's coverage limits are not less than the minimum limits
161	established in ss. 458.320 and 459.0085 and the hospital is a
162	verified trauma center that has extended self-insurance coverage
163	continuously to members of its medical staff for activities both
164	inside and outside of the hospital. Any authorized insurer as
165	defined in s. 626.914(2), risk retention group as defined in s.
166	627.942, or joint underwriting association established under s.
167	627.351(4) which is authorized to write casualty insurance may
168	make available, but is shall not be required to write, such
169	coverage. The hospital may assess on an equitable and pro rata
170	basis the following individuals to whom it extends coverage
171	pursuant to this section professional health care providers for
172	a portion of the total hospital insurance cost for this
173	coverage: physicians licensed under chapter 458, osteopathic
174	physicians licensed under chapter 459, podiatric physicians
175	licensed under chapter 461, dentists licensed under chapter 466,
176	and nurses licensed under part I of chapter 464, and other
177	health professionals. The hospital may provide for a deductible
178	amount to be applied against any individual health care provider
179	found liable in a law suit in tort or for breach of contract.
180	The legislative intent in providing for the deductible to be
181	applied to individual health care providers found negligent or
182	in breach of contract is to instill in each individual health
183	care provider the incentive to avoid the risk of injury to the
184	fullest extent and ensure that the citizens of this state
185	receive the highest quality health care obtainable.
186	Section 5.  Present subsections (6) and (7) of section
187	766.118, Florida Statutes, are renumbered as subsections (7) and
188	(8), respectively, and a new subsection (6) is added to that
189	section, to read:
190	766.118  Determination of noneconomic damages.--
191	(6)  LIMITATION ON NONECONOMIC DAMAGES FOR NEGLIGENCE OF
192	CERTAIN HOSPITALS.--With respect to a complaint for personal
193	injury or wrongful death arising from medical negligence, a
194	hospital that has received an order from the Agency for Health
195	Care Administration pursuant to s. 766.402 which certifies that
196	the facility complies with patient-safety measures specified in
197	s. 766.403 shall be liable for no more than $500,000 in
198	noneconomic damages, regardless of the number of claimants,
199	number of claims, or theory of liability, including vicarious
200	liability, arising from the same nucleus of operative fact,
201	notwithstanding any other provision of this section.
202	Section 6.  Section 766.401, Florida Statutes, is created
203	to read:
204	766.401  Definitions.--As used in this section and ss.
205	766.402-766.405, the term:
206	(1)  "Affected patient" means a patient of a certified
207	patient-safety facility.
208	(2)  "Affected practitioner" means any person, including a
209	physician, who is credentialed by the eligible hospital to
210	provide health care services in a certified patient-safety
211	facility.
212	(3)  "Agency" means the Agency for Health Care
213	Administration.
214	(4)  "Certified patient-safety facility" means any eligible
215	hospital that, in accordance with an order from the Agency for
216	Health Care Administration, has adopted a patient-safety plan.
217	(5)  "Clinical privileges" means the privileges granted to
218	a physician or other licensed health care practitioner to render
219	patient-care services in a hospital.
220	(6)  "Eligible hospital" or "licensed facility" means a
221	statutory teaching hospital, as defined by s. 408.07, which
222	maintains at least seven different accredited programs in
223	graduate medical education and has 100 or more full-time
224	equivalent resident physicians.
225	(7)  "Health care provider" or "provider" means:
226	(a)  An eligible hospital.
227	(b)  A physician or a physician assistant licensed under
228	chapter 458.
229	(c)  An osteopathic physician or an osteopathic physician
230	assistant licensed under chapter 459.
231	(d)  A registered nurse, nurse midwife, licensed practical
232	nurse, or advanced registered nurse practitioner licensed or
233	registered under part I of chapter 464 or any facility that
234	employs nurses licensed or registered under part I of chapter
235	464 to supply all or part of the care delivered by that
236	facility.
237	(e)  A health care professional association and its
238	employees or a corporate medical group and its employees.
239	(f)  Any other medical facility in which the primary
240	purpose is to deliver human medical diagnostic services or to
241	deliver nonsurgical human medical treatment, including an office
242	maintained by a provider.
243	(g)  A free clinic that delivers only medical diagnostic
244	services or nonsurgical medical treatment free of charge to low-
245	income persons not otherwise covered by Medicaid or other
246	programs for low-income persons.
247	(h)  Any other health care professional, practitioner, or
248	provider, including a student enrolled in an accredited program,
249	who prepares the student for licensure as any one of the
250	professionals listed in this subsection.
251	(i)  Any person, organization, or entity that is
252	vicariously liable under the theory of respondeat superior or
253	any other theory of legal liability for medical negligence
254	committed by any licensed professional listed in this
255	subsection.
256	(j)  Any nonprofit corporation qualified as exempt from
257	federal income taxation under s. 501(a) of the Internal Revenue
258	Code and described in s. 501(c) of the Internal Revenue Code,
259	including any university or medical school that employs licensed
260	professionals listed in this subsection or which delivers health
261	care services provided by licensed professionals listed in this
262	subsection, any federally funded community health center, and
263	any volunteer corporation or volunteer health care provider that
264	delivers health care services.
265	(8)  "Health care practitioner" or "practitioner" means any
266	person, entity, or organization identified in subsection (7),
267	except for a hospital.
268	(9)  "Medical incident" or "adverse incident" has the same
269	meaning as provided in ss. 381.0271, 395.0197, 458.351, and
270	459.026.
271	(10)  "Medical negligence" means medical malpractice,
272	whether grounded in tort or in contract, arising out of the
273	rendering of or failure to render medical care or services.
274	(11)  "Person" means any individual, partnership,
275	corporation, association, or governmental unit.
276	(12)  "Premises" means those buildings, beds, and equipment
277	located at the address of the licensed facility and all other
278	buildings, beds, and equipment for the provision of the
279	hospital, ambulatory surgical, mobile surgical care, primary
280	care, or comprehensive health care under the dominion and
281	control of the licensee, including offices and locations where
282	the licensed facility offers medical care and treatment to
283	affected patients.
284	(13)  "Statutory teaching hospital" or "teaching hospital"
285	has the same meaning as provided in s. 408.07.
286	Section 7.  Section 766.402, Florida Statutes, is created
287	to read:
288	766.402  Agency approval of patient-safety plans.--
289	(1)  An eligible hospital that has adopted a patient-safety
290	plan may petition the agency to enter an order certifying
291	approval of the hospital as a certified patient-safety facility.
292	(2)  In accordance with chapter 120, the agency shall enter
293	an order certifying approval of the certified patient-safety
294	facility upon a showing that, in furtherance of an approach to
295	patient safety:
296	(a)  The petitioner has established safety measures for the
297	care and treatment of patients.
298	(b)  The petitioner satisfies requirements for patient-
299	protection measures, as specified in s. 766.403.
300	(c)  The petitioner satisfies all other requirements of ss.
301	766.401-766.405.
302	(3)  Upon entry of an order approving the petition, the
303	agency may conduct onsite examinations of the licensed facility
304	to ensure continued compliance with the terms and conditions of
305	the order.
306	(4)  The order approving a petition under this section
307	remains in effect until revoked. The agency may revoke the order
308	upon reasonable notice to the eligible hospital that it fails to
309	comply with material requirements of s. 766.403 and that the
310	hospital has failed to cure stated deficiencies upon reasonable
311	notice. Revocation of an agency order pursuant to s. 766.403
312	applies prospectively to any cause of action for medical
313	negligence which arises on or after the effective date of the
314	order of revocation.
315	(5)  An order approving a petition under this section is,
316	as a matter of law, conclusive evidence that the hospital
317	complies with the applicable patient-safety requirements of s.
318	766.403. A hospital's noncompliance with the requirements of s.
319	766.403 does not affect the limitations on damages conferred by
320	this section. Evidence of noncompliance with s. 766.403 is not
321	admissible for any purpose in any action for medical
322	malpractice. This section, or any portion thereof, may not give
323	rise to an independent cause of action for damages against any
324	hospital.
325	Section 8.  Section 766.403, Florida Statutes, is created
326	to read:
327	766.403  Patient-safety plans.--
328	(1)  In order to satisfy the requirements of s. 766.402,
329	the licensed facility shall have a patient-safety plan, which
330	provides that the facility shall:
331	(a)  Have in place a process, either through the facility's
332	patient-safety committee or a similar body, for coordinating the
333	quality control, risk management, and patient-relations
334	functions of the facility and for reporting to the facility's
335	governing board at least quarterly regarding such efforts.
336	(b)  Establish within the facility a system for reporting
337	near misses and agree to submit any information collected to the
338	Florida Patient Safety Corporation. Such information must be
339	submitted by the facility and made available by the Patient
340	Safety Corporation in accordance with s. 381.0271(7).
341	(c)  Design and make available to facility staff, including
342	medical staff, a patient-safety curriculum that provides lecture
343	and web-based training on recognized patient-safety principles,
344	which may include training in communication skills, team-
345	performance assessment and training, risk-prevention strategies,
346	and best practices and evidence-based medicine. The licensed
347	facility shall report annually the programs presented to the
348	agency.
349	(d)  Implement a program to identify health care providers
350	on the facility's staff who may be eligible for an early-
351	intervention program that provides additional skills assessment
352	and training and offer such training to the staff on a voluntary
353	and confidential basis with established mechanisms to assess
354	program performance and results.
355	(e)  Implement a simulation-based program for skills
356	assessment, training, and retraining of a facility's staff in
357	those tasks and activities that the agency identifies by rule.
358	(f)  Designate a patient advocate who coordinates with
359	members of the medical staff and the facility's chief medical
360	officer regarding the disclosure of adverse medical incidents to
361	patients. In addition, the patient advocate shall establish an
362	advisory panel, consisting of providers, patients or their
363	families, and other health care consumers or consumer groups to
364	review general patient-safety concerns and other issues related
365	to relations among and between patients and providers and to
366	identify areas where additional education and program
367	development may be appropriate.
368	(g)  Establish a procedure to biennially review the
369	facility's patient-safety program and its compliance with the
370	requirements of this section. Such review shall be conducted by
371	an independent patient-safety organization as defined in s.
372	766.1016(1) or other professional organization approved by the
373	agency. The organization performing the review shall prepare a
374	written report that contains detailed findings and
375	recommendations. The report shall be forwarded to the facility's
376	risk manager or patient-safety officer, who may make written
377	comments in response. The report and any written comments shall
378	be presented to the governing board of the licensed facility. A
379	copy of the report and any of the facility's responses to the
380	findings and recommendations shall be provided to the agency
381	within 60 days after the date that the governing board reviewed
382	the report. The report is confidential and exempt from
383	production or discovery in any civil action. Likewise, the
384	report and the information contained therein are not admissible
385	as evidence for any purpose in any action for medical
386	negligence.
387	(h)  Establish a system for the trending and tracking of
388	quality and patient-safety indicators that the agency may
389	identify by rule and a method for review of the data at least
390	semiannually by the facility's patient-safety committee.
391	(2)  This section does not constitute an applicable
392	standard of care in any action for medical negligence or
393	otherwise create a private right of action, and evidence of
394	noncompliance with this section is not admissible for any
395	purpose in any action for medical negligence against any health
396	care provider.
397	(3)  This section does not prohibit the licensed facility
398	from implementing other measures for promoting patient safety
399	within the premises. This section does not relieve the licensed
400	facility from the duty to implement any other patient-safety
401	measure that is required by state law. The Legislature intends
402	that the patient-safety measures specified in this section are
403	in addition to all other patient-safety measures required by
404	state law, federal law, and applicable accreditation standards
405	for licensed facilities.
406	(4)  A review, report, or other document created, produced,
407	delivered, or discussed pursuant to this section is not
408	discoverable or admissible as evidence in any legal action.
409	Section 9.  Section 766.404, Florida Statutes, is created
410	to read:
411	766.404  Annual report.--
412	(1)  Each certified patient-safety facility shall submit an
413	annual report to the agency containing information and data
414	reasonably required by the agency to evaluate performance and
415	effectiveness of its patient-safety plan. However, information
416	may not be submitted or disclosed in violation of any patient's
417	right to privacy under state or federal law.
418	(2)  The agency shall aggregate information and data
419	submitted by all certified patient-safety facilities, and each
420	year, on or before March 1, the agency shall submit a report to
421	the President of the Senate and the Speaker of the House of
422	Representatives which evaluates the performance and
423	effectiveness of the approach to enhancing patient safety and
424	limiting provider liability in certified patient-safety
425	facilities. The report must include, but need not be limited to,
426	pertinent data concerning:
427	(a)  The number and names of certified patient-safety
428	facilities;
429	(b)  The number and types of patient-protection measures
430	currently in effect in these facilities;
431	(c)  The number of affected patients;
432	(d)  The number of surgical procedures on affected
433	patients;
434	(e)  The number of medical incidents, claims of medical
435	malpractice, and claims resulting in indemnity;
436	(f)  The average time for resolution of contested and
437	uncontested claims of medical malpractice;
438	(g)  The percentage of claims which result in civil trials;
439	(h)  The percentage of civil trials which result in adverse
440	judgments against affected facilities;
441	(i)  The number and average size of an indemnity paid to
442	claimants;
443	(j)  The estimated liability expense, inclusive of medical
444	liability insurance premiums; and
445	(k)  The percentage of medical liability expense, inclusive
446	of medical liability insurance premiums, which is borne by
447	affected practitioners in certified patient-safety facilities.
448
449	The report may also include other information and data that the
450	agency deems appropriate to gauge the cost and benefit of
451	patient-safety plans.
452	(3)  The agency's annual report to the President of the
453	Senate and the Speaker of the House of Representatives may
454	include relevant information and data obtained from the Office
455	of Insurance Regulation within the Department of Financial
456	Services concerning the availability and affordability of
457	enterprise-wide medical liability insurance coverage for
458	affected facilities and the availability and affordability of
459	insurance policies for individual practitioners which contain
460	coverage exclusions for acts of medical negligence in facilities
461	that indemnify health practitioners. The Office of Insurance
462	Regulation shall cooperate with the agency in the reporting of
463	information and data specified in this subsection.
464	(4)  Reports submitted to the agency by certified patient-
465	safety facilities pursuant to this section are public records
466	under chapter 119. However, these reports, and the information
467	contained therein, are not admissible as evidence in a court of
468	law in any action.
469	Section 10.  Section 766.405, Florida Statutes, is created
470	to read:
471	766.405  Damages in malpractice actions against certain
472	hospitals that meet patient-safety requirements; agency approval
473	of patient-safety measures.--
474	(1)  In recognition of their essential role in training
475	future health care providers and in providing innovative medical
476	care for this state's residents, in recognition of their
477	commitment to treating indigent patients, and further in
478	recognition that teaching hospitals, as defined in s. 408.07,
479	provide benefits to the residents of this state through their
480	roles in improving the quality of medical care, training of
481	health care providers, and caring for indigent patients, the
482	limits of liability for medical malpractice arising out of the
483	rendering of, or the failure to render, medical care by all such
484	hospitals shall be determined in accordance with the
485	requirements of this section.
486	(2)  Upon entry of an order and for the entire period of
487	time that the order remains in effect, the damages recoverable
488	from an eligible hospital covered by the order and from its
489	employees and agents in actions arising from medical negligence
490	shall be determined in accordance with the following provisions:
491	(a)  Noneconomic damages shall be limited to a maximum of
492	$500,000, regardless of the number of claimants, number of
493	claims, or the theory of liability pursuant to s. 766.118(6).
494	(b)  Awards of economic damages shall be offset by payments
495	from collateral sources, as defined by s. 766.202(2), and any
496	set-offs available under ss. 46.015 and 768.041. Awards for
497	future economic losses shall be offset by future collateral
498	source payments.
499	(c)  After being offset by collateral sources, awards of
500	future economic damages shall, at the option of the eligible
501	hospital, be reduced by the court to present value or paid
502	through periodic payments in the form of an annuity or a
503	reversionary trust. A company that underwrites an annuity to pay
504	future economic damages shall have a rating of "A" or higher by
505	A.M. Best Company. The terms of the reversionary instrument used
506	to periodically pay future economic damages must be approved by
507	the court. Such approval may not be unreasonably withheld.
508	(3)  The limitations on damages in subsection (2) apply
509	prospectively to causes of action for medical negligence which
510	arise on or after the effective date of the order.
511	Section 11.  Section 766.406, Florida Statutes, is created
512	to read:
513	766.406  Rulemaking authority.--The agency may adopt rules
514	pursuant to ss. 120.536(1) and 120.54 to administer ss.
515	766.401-766.405.
516	Section 12.  If any provision of this act or its
517	application to any person or circumstance is held invalid, the
518	invalidity does not affect other provisions or applications of
519	the act which can be given effect without the invalid provision
520	or application, and to this end, the provisions of this act are
521	severable.
522	Section 13.  If a conflict exists between any provision of
523	this act and s. 456.052, s. 456.053, s. 456.054, s. 458.331, s.
524	459.015, or s. 817.505, Florida Statutes, the provisions of this
525	act shall govern. The provisions of this act shall be broadly
526	construed in furtherance of the overriding legislative intent to
527	facilitate innovative approaches for enhancing patient
528	protection and limiting provider liability in eligible
529	hospitals.
530	Section 14.  It is the intention of the Legislature that
531	the provisions of this act are self-executing.
532	Section 15.  This act shall take effect upon becoming a
533	law.

CODING: Words stricken are deletions; words underlined are additions.