1928-S.E AMS HEA S2860.2

ESHB 1928 - S COMM AMD

By Committee on Health & Long-Term Care

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that it is in the best interest of the people of the state of Washington to contain the significantly increasing costs of malpractice insurance for licensed health care professionals and institutions and to ensure the continued availability and affordability of health care services in this state by enacting further reforms to the health care tort liability system.

The legislature finds that, notwithstanding the tort reform measures it has enacted in the past, the amounts being paid out in judgments and settlements have continued to increase inordinately, and that as a result there have been dramatic increases in the cost of health care professional liability insurance coverage. The legislature further finds that the upward pressures on already high malpractice insurance premiums threaten the public health by discouraging physicians and other health care professionals from initiating or continuing their practice in this state.

The legislature further finds that the state of California, largely as a result of its enactment of the "medical injury compensation reform act" in 1975, has been able to successfully stabilize the health care professional liability insurance market, maintain access to affordable quality health care services, and avert the kind of crisis now facing the residents of Washington.

The legislature finds that such reforms are rationally related to the legitimate goals of reducing the costs associated with the health care tort liability system while ensuring adequate and appropriate compensation for persons injured as a result of health care, ensuring the continued availability and affordability of health care services in this state, preventing the curtailment of health care services in this state, stabilizing insurance and health care costs, preventing stale health care liability claims, and protecting and preserving the public health, safety, and welfare as a whole.

Sec. 2. RCW 4.56.250 and 1986 c 305 s 301 are each amended to read as follows:

(1) As used in this section, the following terms have the meanings indicated unless the context clearly requires otherwise.

(a) "Economic damages" means objectively verifiable monetary losses, including medical expenses, loss of earnings, burial costs, loss of use of property, cost of replacement or repair, cost of obtaining substitute domestic services, loss of employment, and loss of business or employment opportunities.

(b) "Noneconomic damages" means subjective, nonmonetary losses, including((,)) but not limited to pain, suffering, inconvenience, mental anguish, disability or disfigurement incurred by the injured party, loss of ability to enjoy life, emotional distress, loss of society and companionship, loss of consortium, injury to reputation and humiliation, ((and)) destruction of the parent-child relationship, and other nonpecuniary damages of any type.

(d) "Average annual wage" means the average annual wage in the state of Washington as determined under RCW 50.04.355.

(2) In no action seeking damages for personal injury or death may a claimant recover a judgment for noneconomic damages exceeding an amount determined by multiplying 0.43 by the average annual wage and by the life expectancy of the person incurring noneconomic damages, as the life expectancy is determined by the life expectancy tables adopted by the insurance commissioner. For purposes of determining the maximum amount allowable for noneconomic damages, a claimant's life expectancy shall not be less than fifteen years. The limitation contained in this subsection applies to all claims for noneconomic damages made by a claimant who incurred bodily injury. Claims for loss of consortium, loss of society and companionship, destruction of the parent-child relationship, and all other derivative claims asserted by persons who did not sustain bodily injury are to be included within the limitation on claims for noneconomic damages arising from the same bodily injury.

(3) If a case is tried to a jury, the jury shall not be informed of the limitation contained in subsection (2) of this section.

NEW SECTION. Sec. 3. A new section is added to chapter 4.56 RCW to read as follows:

(1) In an action or arbitration for damages for injury or death occurring as a result of health care, or arranging for the provision of health care, brought under chapter 7.70 RCW, the total amount of noneconomic damages may not exceed three hundred fifty thousand dollars.

(2) The limitation on noneconomic damages contained in subsection (1) of this section includes all noneconomic damages claimed by or on behalf of the person whose injury or death occurred as a result of health care, or arranging for the provision of health care, as well as all claims for loss of consortium, loss of society and companionship, destruction of the parent-child relationship, and other derivative claims asserted by or on behalf of others arising from the same injury or death. If the jury's assessment of noneconomic damages exceeds the limitation contained in subsection (1) of this section, nothing in RCW 4.44.450 precludes the court from entering a judgment that limits the total amount of noneconomic damages to those limits provided in subsection (1) of this section.

Sec. 4. RCW 4.16.350 and 1998 c 147 s 1 are each amended to read as follows:

(1) Any civil action for damages for injury or death occurring as a result of health care which is provided after June 25, 1976, against:

(((1))) (a) A person licensed by this state to provide health care or related services, including, but not limited to, a physician, osteopathic physician, dentist, nurse, optometrist, podiatric physician and surgeon, chiropractor, physical therapist, psychologist, pharmacist, optician, physician's assistant, osteopathic physician's assistant, nurse practitioner, or physician's trained mobile intensive care paramedic, including, in the event such person is deceased, his estate or personal representative;

(((2))) (b) An employee or agent of a person described in (a) of this subsection (((1) of this section)), acting in the course and scope of his or her employment, including, in the event such employee or agent is deceased, his or her estate or personal representative; or

(((3))) (c) An entity, whether or not incorporated, facility, or institution employing one or more persons described in (a) of this subsection (((1) of this section)), including, but not limited to, a hospital, clinic, health maintenance organization, or nursing home; or an officer, director, employee, or agent thereof acting in the course and scope of his or her employment, including, in the event such officer, director, employee, or agent is deceased, his or her estate or personal representative;

based upon alleged professional negligence shall be commenced within three years of the act or omission alleged to have caused the injury or condition, or one year of the time the patient or his or her representative or custodial parent or guardian discovered or reasonably should have discovered that the injury or condition was caused by said act or omission, whichever period ((expires later, except that in no event shall an action be commenced more than eight years after said act or omission: PROVIDED, That the time for commencement of an action is tolled upon proof of fraud, intentional concealment, or the presence of a foreign body not intended to have a therapeutic or diagnostic purpose or effect, until the date the patient or the patient's representative has actual knowledge of the act of fraud or concealment, or of the presence of the foreign body; the patient or the patient's representative has one year from the date of the actual knowledge in which to commence a civil action for damages.

For purposes of this section, notwithstanding RCW 4.16.190, the knowledge of a custodial parent or guardian shall be imputed to a person under the age of eighteen years, and such imputed knowledge shall operate to bar the claim of such minor to the same extent that the claim of an adult would be barred under this section. Any action not commenced in accordance with this section shall be barred.

For purposes of this section, with respect to care provided after June 25, 1976, and before August 1, 1986, the knowledge of a custodial parent or guardian shall be imputed as of April 29, 1987, to persons under the age of eighteen years)) occurs first.

(2) In no event may an action be commenced more than three years after the act or omission alleged to have caused the injury or condition except:

(a) Upon proof of fraud, intentional concealment, or the presence of a foreign body not intended to have a therapeutic or diagnostic purpose or effect, in which case the patient or the patient's representative has one year from the date the patient or the patient's representative or custodial parent or guardian has actual knowledge of the act of fraud or concealment or of the presence of the foreign body in which to commence a civil action for damages.

(b) In the case of a minor, for any period during minority, but only for such period during minority in which the minor's custodial parent or guardian and the defendant or the defendant's insurer have committed fraud or collusion in the failure to bring an action on behalf of the minor.

(c) In the case of a minor under the full age of six years, in which case the action on behalf of the minor must be commenced within three years or prior to the minor's eighth birthday, whichever provides a longer period.

(3) Any action not commenced in accordance with this section is barred.

(4) For purposes of this section, the tolling provisions of RCW 4.16.190 do not apply.

(5) This section does not apply to a civil action based on intentional conduct brought against those individuals or entities specified in this section by a person for recovery of damages for injury occurring as a result of childhood sexual abuse as defined in RCW 4.16.340(5).

NEW SECTION. Sec. 5. A new section is added to chapter 4.56 RCW to read as follows:

In the event that the Washington state supreme court or other court of competent jurisdiction rules or affirms that section 3 of this act is unconstitutional, then the prescribed cap on noneconomic damages takes effect upon the ratification of a state constitutional amendment that empowers the legislature to place limits on the amount of noneconomic damages recoverable in any or all civil causes of action.

Sec. 6. RCW 4.96.010 and 2001 c 119 s 1 are each amended to read as follows:

(1) All local governmental entities, whether acting in a governmental or proprietary capacity, shall be liable for damages arising out of their tortious conduct, or the tortious conduct of their past or present officers, employees, or volunteers while performing or in good faith purporting to perform their official duties, to the same extent as if they were a private person or corporation, subject to the limitations provided in subsection (2) of this section. Filing a claim for damages within the time allowed by law shall be a condition precedent to the commencement of any action claiming damages. The laws specifying the content for such claims shall be liberally construed so that substantial compliance therewith will be deemed satisfactory.

(2)(a) In an action or arbitration for damages for injury or death occurring as a result of health care brought against a rural public hospital district or its officers, employees, volunteers, or members of its medical staff, brought under chapter 7.70 RCW, the total amount of economic and noneconomic damages may not exceed five hundred thousand dollars.

(b) The limitation on economic and noneconomic damages contained in (a) of this subsection includes all damages claimed by or on behalf of the person whose injury or death occurred as a result of health care or arranging for the provision of health care, as well as all claims for loss of consortium, loss of society and companionship, destruction of the parent-child relationship, and other derivative claims asserted by or on behalf of others arising from the same injury or death. If the jury's assessment of damages exceeds the limitation contained in (a) of this subsection, nothing in RCW 4.44.450 precludes the court from entering a judgment that limits the total amount of damages to those provided in (a) of this subsection.

(c) Notwithstanding the limitation on damages contained in (a) of this subsection, the board of commissioners of a rural public hospital district may elect in its sole and absolute discretion to purchase insurance coverage and settle or pay claims in amounts in excess of the limit specified in (a) of this subsection. Neither the purchase of insurance nor the settlement or payment of claims in amounts in excess of the limit specified in (a) of this subsection shall be deemed to be a waiver of the defense of sovereign immunity.

(d) The liability of rural public hospital districts, officers, employees, volunteers, or members of its medical staff is several only and is not joint.

(3) Unless the context clearly requires otherwise, for the purposes of this chapter((,)):

(a) "Local governmental entity" means a county, city, town, special district, municipal corporation as defined in RCW 39.50.010, quasi- municipal corporation, or public hospital; and

(b) "Rural public hospital district" means a public hospital district authorized under chapter 70.44 RCW whose geographic boundaries do not include a city with a population greater than thirty thousand.

(((3))) (4) For the purposes of this chapter, "volunteer" is defined according to RCW 51.12.035.

NEW SECTION. Sec. 7. A new section is added to chapter 7.70 RCW to read as follows:

(1)(a) In an action or arbitration for damages for injury or death occurring as a result of health care brought against a rural hospital or its officers, employees, volunteers, or members of its medical staff, brought under this chapter, the total amount of economic and noneconomic damages may not exceed five hundred thousand dollars.

(c) Notwithstanding the limitation on damages contained in (a) of this subsection, a rural hospital may purchase insurance coverage and settle or pay claims in amounts in excess of the limit specified in (a) of this subsection.

(d) The liability of rural hospitals, officers, employees, volunteers, or members of its medical staff is several only and not joint.

(2) For the purposes of this section, "rural hospital" means a hospital licensed under chapter 70.41 RCW in a city or town with a population of less than fifteen thousand.

Sec. 8. RCW 4.22.070 and 1993 c 496 s 1 are each amended to read as follows:

(1) In all actions involving fault of more than one entity, the trier of fact shall determine the percentage of the total fault which is attributable to every entity which caused the claimant's damages except entities immune from liability to the claimant under Title 51 RCW. The sum of the percentages of the total fault attributed to at- fault entities shall equal one hundred percent. The entities whose fault shall be determined include the claimant or person suffering personal injury or incurring property damage, defendants, third-party defendants, entities released by the claimant, entities with any other individual defense against the claimant, and entities immune from liability to the claimant, but shall not include those entities immune from liability to the claimant under Title 51 RCW. Judgment shall be entered against each defendant except those who have been released by the claimant or are immune from liability to the claimant or have prevailed on any other individual defense against the claimant in an amount which represents that party's proportionate share of the claimant's total damages. The liability of each defendant shall be several only and shall not be joint except:

(a) A party shall be responsible for the fault of another person or for payment of the proportionate share of another party where both were acting in concert or when a person was acting as an agent or servant of the party.

(b)(i) Except as provided in (b)(ii) of this subsection, if the trier of fact determines that the claimant or party suffering bodily injury or incurring property damages was not at fault, the defendants against whom judgment is entered shall be jointly and severally liable for the sum of their proportionate shares of the ((claimants [claimant's])) claimant's total damages.

(ii) Subsection (b)(i) of this subsection does not apply to health care providers as defined in RCW 7.70.020, in all cases governed by chapter 7.70 RCW with respect to judgments for noneconomic damages. In all cases governed by chapter 7.70 RCW, the liability of health care providers for noneconomic damages is several only. For the purposes of this section, "noneconomic damages" has the meaning given in RCW 4.56.250.

(2) If a defendant is jointly and severally liable under one of the exceptions listed in subsections (1)(a) or (1)(b) of this section, such defendant's rights to contribution against another jointly and severally liable defendant, and the effect of settlement by either such defendant, shall be determined under RCW 4.22.040, 4.22.050, and 4.22.060.

(3)(a) Nothing in this section affects any cause of action relating to hazardous wastes or substances or solid waste disposal sites.

(b) Nothing in this section shall affect a cause of action arising from the tortious interference with contracts or business relations.

(c) Nothing in this section shall affect any cause of action arising from the manufacture or marketing of a fungible product in a generic form which contains no clearly identifiable shape, color, or marking.

NEW SECTION. Sec. 9. It is the intent of the legislature that health care providers should remain personally liable for their own negligent or wrongful acts or omissions in connection with the provision of health care services and that hospitals should remain liable for their own negligent or wrongful acts or omissions in connection with the provision of health care services, but that their vicarious liability for the negligent or wrongful acts or omissions of others should be curtailed. Consequently, it is the intent of the legislature that the holding in Adamski v. Tacoma General Hospital, 20 Wn. App. 98, 579 P.2d 970 (1978), that hospitals may be held liable for a physician's acts or omissions under so-called "apparent agency" or "ostensible agency" theories be abrogated, so that, in the future, hospitals may not be held liable for the act or omission of a health care provider granted hospital privileges unless the health care provider is an actual agent or employee of the hospital. However, it is further the intent of the legislature that Pedroza v. Bryant, 101 Wn. 2d 226, 677 P.2d 166 (1984), and its holding that hospitals owe an independent duty to their patients to exercise reasonable care in granting and renewing credentials and practice privileges to a health care provider, continue to be followed. It is further the intent of the legislature that, notwithstanding any generally applicable principle of vicarious liability to the contrary, individual health care professionals will not be liable for the negligent or wrongful acts of others, except those who were acting under their direct supervision and control.

NEW SECTION. Sec. 10. A public or private hospital shall be liable for an act or omission of a health care provider granted privileges to provide health care at the hospital only if the health care provider is an actual agent or employee of the hospital and the act or omission of the health care provider occurred while the health care provider was acting within the course and scope of the health care provider's agency or employment with the hospital.

NEW SECTION. Sec. 11. A person who is a health care provider under RCW 7.70.020 (1) or (2) shall not be personally liable for any act or omission of any other health care provider who was not the person's actual agent or employee or who was not acting under the person's direct supervision and control at the time of the act or omission. A health care provider shall remain personally liable for the health care provider's own negligent or wrongful acts or omissions in connection with the provision of health care services.

NEW SECTION. Sec. 12. Sections 10 and 11 of this act are each added to chapter 7.70 RCW.

NEW SECTION. Sec. 13. Unless otherwise provided in this act, this act applies to all causes of action filed on or after the effective date of this section.

NEW SECTION. Sec. 14. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected."

ESHB 1928 - S COMM AMD

By Committee on Health & Long-Term Care

On page 1, line 2 of the title, after "RCW;" strike the remainder of the title and insert "amending RCW 4.56.250, 4.16.350, 4.96.010, and 4.22.070; adding new sections to chapter 4.56 RCW; adding new sections to chapter 7.70 RCW; and creating new sections."

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