Legislature(2003 - 2004)
03/22/2004 01:10 PM House JUD
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HB 472 - CLAIMS AGAINST HEALTH CARE PROVIDERS Number 1038 CHAIR McGUIRE announced that the next order of business would be HOUSE BILL NO. 472, "An Act relating to claims for personal injury or wrongful death against health care providers; and providing for an effective date." CHAIR McGUIRE noted that [the committee packet] includes a proposed committee substitute as well as two amendments. Chair McGuire opined that the committee has had a lot of good language on the record with regard to the intent of HB 472 and the amendments made to it thus far. Number 1194 REPRESENTATIVE GRUENBERG moved to adopt the proposed committee substitute (CS) for HB 472, Version 23-LS1743\D, Bullock, 3/22/04, as the work draft. There being no objection, Version D was before the committee. Number 1215 REPRESENTATIVE HOLM moved that the committee adopt Amendment 1, which read [original punctuation provided]: Page 2, Line 22, following "death.": Insert "The limits on damages in this subsection do not apply if the personal injury or wrongful death was the result of reckless or intentional misconduct." Page 2, Line 25, following "judgment": Insert "unless the personal injury or wrongful death was the result of reckless or intentional misconduct" REPRESENTATIVE HOLM said that he didn't want this legislation to be a vehicle that would allow reckless conduct. He offered his understanding that the standard should be clear and convincing evidence, not just negligence, because it "only takes 51 percent" to make negligence the charge. Number 1233 REPRESENTATIVE ANDERSON objected. He requested that Roger Holmes comment on Amendment 1. Number 1277 ROGER F. HOLMES, Attorney at Law, Biss & Holmes, said: If the amendment read that ... the limits on damages do not apply in instances where the jury has made a finding by clear and convincing evidence that the conduct was outrageous, including acts done with malice or bad motives or evidenced reckless indifference to the interest of another person, then it would follow that the punitive damage statute would be compatible and would be easy for the judge and the jury to ... apply the same standard in the same case. REPRESENTATIVE HOLM stated that the above is his intention. CHAIR McGUIRE asked if Representative Holm wanted to conceptually amend Amendment 1 to that effect. REPRESENTATIVE HOLM replied yes. CHAIR McGUIRE clarified, "So, ... it's clear and convincing evidence and it's acts that are outrageous, or done with malice or bad motive, evidenced reckless indifference to another person." REPRESENTATIVE ANDERSON surmised, then, that the punitive damage standard would be in place. CHAIR McGUIRE further clarified that the standard will be applied to punitive damages as well as noneconomic damages. [Amendment 1 was treated as amended.] REPRESENTATIVE ANDERSON withdrew his objection. Number 1392 REPRESENTATIVE GARA objected and suggested [a second] amendment to Amendment 1 [as amended] such that the term "gross negligence" is included. REPRESENTATIVE GARA explained that if the only way to recover more than $250,000 in damages from loss of enjoyment of life is by clear and convincing evidence of recklessness or malice, then the committee would be adopting a standard that has never been met before in a medical malpractice case in this state. He opined that there has never been a finding of the punitive damages standard in Alaska, and he further opined that there has never been a finding of punitive damages in a medical malpractice case in this state. Therefore, [with the adoption of this amendment], the only serious injuries that will be granted more than $250,000 in noneconomic damages are ones in which a physician has engaged in malice, or a condition in which a physician recklessly disregards his or her duties. The aforementioned will result in the $250,000 cap being imposed in a case in which someone is brain injured, severely handicapped, severely paralyzed, or totally paralyzed. Such situations would occur when the physician has violated the duty to act with reasonable care. REPRESENTATIVE GARA explained that [a medical professional] isn't found negligent in a medical malpractice case in Alaska unless a physician has failed to adhere to the standard of care exercised by other physicians in the community. In those cases in which a physician has performed negligently, injured the patient, and hasn't adhered to the standard of care adhered to by other physicians in the community, [the legislation] only allows recovery of $250,000 in noneconomic damages. If the aforementioned is to be the case, Representative Gara said that he preferred Representative Ogg's amendment, which specifies that the cap doesn't apply in cases of recklessness or malice. He reiterated his desire to remove the cap in cases of gross negligence, which is a high standard itself. Representative Gara said that he didn't want a physician performing work on members of the community when the physician doesn't adhere to the standard of care of other physicians, which is the negligence standard. Number 1548 REPRESENTATIVE GARA moved that the committee adopt [a second] amendment to Amendment 1 [as amended], such that the language "grossly negligent" would be added. REPRESENTATIVE OGG objected. Representative Ogg asked Mr. Holmes if the difference between negligence and gross negligence is easily defined. He asked if the clear and convincing standard for gross negligence is enough "to clarify the difference or clarify that you really have to get into this higher category; that's what we're trying to do here, I believe." MR. HOLMES answered that the difference between negligence and gross negligence is difficult to define, which is why the 1997 legislature adopted the language it did for punitive damages. He explained that the problem is that there would be three separate standards: one for negligence; one for punitive damages; and one for when the cap doesn't apply. The aforementioned, he further explained, builds in the chance of error in every case that goes to the jury. The reason to make the exception to the cap match the punitive damage standard is that then there would clearly be two standards that would be given to the jury. Conceptually, Mr. Holmes said he had no problem with Representative Gara's comments with regard to gross negligence as opposed to the punitive damage standard. However, in order to accomplish what Representative Gara wants, the legislation would require the jury to apply three separate standards. He noted that it's already difficult for the jury to apply two. REPRESENTATIVE OGG inquired as to defining the difference between reckless disregard, reckless indifference, and gross negligence. MR. HOLMES opined that most jurors that would find something that was grossly negligent would also find something that was reckless. He offered his opinion that a physician who operates while intoxicated would be grossly negligent and he opined that most jurors wouldn't have a problem with the [finding] that this is reckless indifference to the interests of the patient. Mr. Holmes said he believes the definition of gross negligence is so close to reckless indifference that having three different standards in each case invites error and confusion. He remarked that although he did believe there is a slight difference between gross negligence and reckless [indifference], the difference is probably less than there is between gross negligence and ordinary negligence. REPRESENTATIVE OGG said that that was his intent, to separate [gross negligence and reckless indifference], in having made his amendment at a previous meeting. Representative Ogg indicated that [gross negligence and reckless indifference] is the type of action [this legislation] wants to avoid, although the language "reckless indifference" is used. "Because we have to have only two standards to clarify it, then I'm comfortable with that as long ... [as] somebody can come and look at this and say, 'We're not going after just the negligent person; we're going after that higher [standard] and we don't want those people protected,'" he explained. Number 1759 CHAIR McGUIRE informed the committee that in Alaska, reckless [indifference] has been interpreted as "a conscious disregard of a known risk" while Black's Law dictionary defines gross negligence as "the intentional failure to perform a manifest duty in reckless disregard of the consequences." Therefore, she opined, the two are almost identical [definitions]. REPRESENTATIVE ANDERSON offered his understanding that Mr. Holmes is acknowledging that there is a difference [between reckless indifference and gross negligence]. MR. HOLMES reiterated that if the gross negligence standard is added, then the juror is being asked to apply three separate standards. However, he opined, the difference between reckless [indifference] and gross [negligence] is so small that the benefit [of listing both] doesn't outweigh the risk of confusion. REPRESENTATIVE GARA said he isn't convinced that the jury would be so confused. In many cases, especially in criminal cases, the jury receives instructions on 10-15 different counts. The courts maintain clarity by providing a separate instruction on each issue. Normally, a packet of jury instructions could contain 20-50 instructions or even more. Representative Gara offered his understanding that there is already a patterned jury instruction for gross negligence, and asked if that is true. MR. HOLMES replied, "Not since '97 when ... the punitive damage statute was amended." REPRESENTATIVE GARA recalled seeing jury instructions for gross negligence. Therefore, he asked if that is because gross negligence is defined in the criminal statutes. MR. HOLMES explained that gross negligence has been the punitive damage standard for years. He noted that there are several supreme court opinions that discuss what it took to reach gross negligence and what it meant, although those are no longer in effect. Mr. Holmes recalled that many of those decisions were authored by Justice Robert L. Eastaugh of the Alaska Supreme Court, and the term "gross negligence" was defined as reckless indifference. In the supreme court opinions, the term "recklessness" was used in defining gross negligence. REPRESENTATIVE GARA offered his belief that the term "gross negligence" is defined in the statutes because that standard is used in many criminal cases. He inquired as to Mr. Holmes' understanding. MR. HOLMES said he can't answer that question. REPRESENTATIVE GARA returned to the [second] amendment to Amendment 1 [as amended]. He remarked that if the reckless standard is adopted, the standard will almost never result in someone getting more than the $250,000 damages cap. Therefore, he said the [committee] might as well just adopt the $250,000 damages cap. Representative Gara highlighted his belief in the importance of preserving the rights of people who have been terribly injured by conduct that simply falls to the standard of not exercising the same care that other physician's in the community exercise. CHAIR McGUIRE noted that the objection to the [second] amendment to Amendment 1 [as amended] is maintained. Number 1964 A roll call vote was taken. Representatives Gara and Gruenberg voted in favor of the [second] amendment to Amendment 1 [as amended]. Representatives Ogg, Samuels, Holm, Anderson, and McGuire voted against it. Therefore, the second amendment to Amendment 1 [as amended] failed by a vote of 2-5. CHAIR McGUIRE announced that Amendment 1 [as amended] was before the committee. Chair McGuire, upon determining there were no further objections, announced that Amendment 1 [as amended] was adopted. Number 1989 REPRESENTATIVE GARA moved that the committee adopt Amendment 2, labeled 23-LS1743\A.6, Bullock, 3/22/04,which read: Page 2, line 19, following $250,000: Insert ", except that the limit on damages is $1,000,000 if it is shown, by clear and convincing evidence, that the injury is a serious debilitating physical injury or disfigurement. Each limit applies" Page 2, line 25: Delete "$250,000" Insert "the limit in (d) of this section" Number 1992 REPRESENTATIVE ANDERSON objected. REPRESENTATIVE GARA recalled that there was a concern with regard to the dual cap, that is a higher cap for those with serious debilitating injuries and a lower cap for those who don't have serious debilitating injuries or disfigurement. He recalled that Representative Holm inquired as to what can be done to ensure that those with marginal claims of serious disfigurement or serious debilitating injury proceed with their claims. The aforementioned has been accomplished in the law by specifying that in those circumstances, the evidence is required to be proven by clear and convincing evidence, which will weed out the marginal claims. REPRESENTATIVE GARA offered his understanding that clear and convincing evidence is defined in case law as follows: "clear and convincing evidence means and is that amount of evidence which produces in the trier of fact a firm belief or conviction about the existence of a fact to be proved." Representative Gara noted that sometimes the court will tell jurors that the evidence has to be much higher than a preponderance of the evidence but not as high as proof beyond a reasonable doubt. "It's a high level of evidence, it's used in the punitive damages statute ... and that's why punitive damages are so rarely granted," he said. Furthermore, [clear and convincing evidence] is a good bar to [avoid] marginal claims. REPRESENTATIVE GARA pointed out that although the committee at a prior meeting adopted the $1 million cap, the term "clear and convincing evidence" wasn't included. He explained that he has been convinced that in order to make the system more predictable so that we know the higher cap is only to be applied to those with valid claims, the term "clear and convincing evidence" should be included in the dual cap structure. He reminded the committee that the $250,000 cap works out to about $13.59 a day for the value of one's enjoyment of life and pain and suffering, which Representative Gara opined isn't right. REPRESENTATIVE GARA recalled that Representative Anderson has said that it wouldn't really be $13.59 a day because that money can be placed in an annuity. However, he opined, the truth is that one-third of a $250,000 award would go to pay taxes, one- third would pay for attorney fees, and anyone other than a rich person wouldn't be able to place the remaining funds into an 30- year annuity. Representative Gara emphasized that $13.59 a day for someone suffering from a brain injury due to medical care that falls below the standard of care of other physicians in the community is too low. He remarked that although physicians don't agree with Amendment 2, it provides two levels of certainty that physicians have requested. That certainty is in the form of the $1 million hard cap with a lower cap of $250,000. Currently, there is a soft cap of [$400,000] and $1 million, which might turn out to be [$800,000] and $2 million. "So we're coming down to hard caps: $250,000 and [$1] million, and we're only extending it to very limited cases of serious injury that is validly provable with clear and convincing evidence," he explained. Representative Gara requested the committee's support of Amendment 2. Number 2133 REPRESENTATIVE GRUENBERG moved that the committee adopt an amendment to Amendment 2 adding the following language: "or if the defendant acts with criminal negligence as defined in [AS 04.21.080(a)(1)]", after the word "disfigurement" in Amendment 2. He informed the committee that [the language he is suggesting adding to Amendment 2] is a long-standing definition in the alcoholic beverages title that reads: a person acts with "criminal negligence" with respect to a result or to a circumstance described by a provision of law defining an offense when the person fails to perceive a substantial and unjustifiable risk that the result will occur or that the circumstance exists; the risk must be of such a nature and degree that the failure to perceive it constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation; REPRESENTATIVE GARA said that he accepts the amendment to Amendment 2. However, he pointed out that physicians benefit from a much stricter standard of negligence than do others. Therefore, in order to be fair to the medical community, he suggested inserting the language "to [a] reasonable medical practitioner in the area". REPRESENTATIVE GRUENBERG suggested also inserting the language ", except that the term 'reasonable person' shall be reasonable medical practitioner in the field". REPRESENTATIVE GARA said that he accepted the [second] amendment to Amendment 2. CHAIR McGUIRE announced that the [amendments] to Amendment 2 are adopted, adding that Amendment 2, as amended, is now before the committee. Number 2257 REPRESENTATIVE ANDERSON maintained his objection. He recalled Representative Holm's concern that if someone is reckless or intentionally does something, then that [medical professional] should be liable and there shouldn't be a cap. Representative Anderson surmised that Representative Holm saw the caps as the only way to correct it. REPRESENTATIVE ANDERSON offered the following analogy: "When you go out on the street and you ask a senior ... is it more important for you to have medical care and treatment or to ensure that out of 10,000 times, the one time when you ... think there was an egregious act by a doctor, you can get over $250,000 pain and suffering, ... that senior ... would say, 'I want medical coverage.'" Representative Anderson said that [this legislation] brings predictability with the $250,000 cap and emulates California, which Alaska's courts as well as federal courts constantly reference. California is a state with a cap that has been successful and brought in physicians and recruited physicians, he opined, and said he wants the same for Alaska, which is why he sponsored HB 472. Increasing the cap changes that and removes the predictability. TAPE 04-44, SIDE B Number 2378 REPRESENTATIVE ANDERSON emphasized that he defers to all the associations, hospitals, and physicians that have endorsed HB 472, but who [oppose] this amendment and want the legislation to move from committee to the House floor. REPRESENTATIVE OGG specified that he is supportive of [Amendment 2] without the amendments. He characterized [the amendments to Amendment 2] as redundant. Through the discussion, the committee has decided that those who act intentionally or with reckless disregard aren't subject to this cap. Therefore, [amending Amendment 2] is confusing because it has already been addressed. Representative Ogg opined that he likes the differentiation in the caps, which he believes provides predictability. Therefore, Representative Ogg said that he would have to oppose Amendment 2, as amended. REPRESENTATIVE GARA recalled that when the amendments to Amendment 2 were offered, there didn't seem to be any objection. However, if there is an objection to the [amendments] to Amendment 2, then he would also withdraw his support. Therefore, he requested that Representative Gruenberg withdraw his amendments to Amendment 2. Number 2235 REPRESENTATIVE GRUENBERG moved that the committee withdraw the language of the amendments to Amendment 2 such that it would read as follows [which is identical to the original, unamended Amendment 2]: Page 2, line 19, following $250,000: Insert ", except that the limit on damages is $1,000,000 if it is shown, by clear and convincing evidence, that the injury is a serious debilitating physical injury or disfigurement. Each limit applies" Page 2, line 25: Delete "$250,000" Insert "the limit in (d) of this section" REPRESENTATIVE HOLM objected. REPRESENTATIVE ANDERSON asked Chair McGuire not to allow further amendments to change the limits should this amendment fail, otherwise, he said, he felt that the chair would be dilatory. REPRESENTATIVE GARA stated, "If we're going to pass this bill out of this committee, it should be done without gamesmanship. Certainly, I understand the Representative's view that if we kill the amendment with the amendment to the amendment, then we'll never have to vote on the amendment." Therefore, if the amendments to Amendment 2 are left in just to kill it, he announced that he would offer a clean amendment. Representative Gara opined that it would fair for that to be heard. However, he suggested that it would be quicker to delete the language inserted by Representative Gruenberg. Number 2165 REPRESENTATIVE HOLM withdrew his objection to removing the language inserted by the [amendments] to Amendment 2. CHAIR McGUIRE, upon determining that there were no further objections, announced that the [amendments] to Amendment 2 had been removed. Therefore, the question of whether to adopt an unamended Amendment 2, was before the committee. Number 2147 A roll call vote was taken. Representatives Ogg, Gara, and Gruenberg voted in favor of Amendment 2. Representatives Samuels, Holm, Anderson, and McGuire voted against it. Therefore, Amendment 2 failed by a vote of 3-4. Number 2106 REPRESENTATIVE GRUENBERG moved that the committee adopt Amendment 3 [labeled 23-LS1743\A.5, Bullock, 3/16/04, which was formerly failed Amendment 6 to the original version on 3/19/04], which read as follows: Page 2, following line 27: Insert a new subsection to read: "(g) The limitation on damages under (d) of this section shall be adjusted by the administrative director of the Alaska Court System on October 1 of each year, calculated to the nearest whole percentage point between the index for January of that year and January of the prior year according to the Consumer Price Index for all urban consumers for the Anchorage metropolitan area compiled by the Bureau of Labor Statistics, United States Department of Labor. The administrative director of the Alaska Court System shall provide notification of a change in the limitation of damages to the clerks of court in each judicial district of the state. The court shall adjust the award for noneconomic damages under this subsection and (e) of this section, if necessary, before the entry of judgment." The committee took an at-ease from 2:13 p.m. to 2:14 p.m. Number 2079 REPRESENTATIVE ANDERSON objected. CHAIR McGUIRE pointed out that these Consumer Price Index (CPI) amendments are frequently offered. If there could be this type of certainty with all of the things that each person cares about in the budget, it would be great. However, that's not the case. Chair McGuire explained that the legislature, as an appropriating body, needs the ability to have some sense of predictability. When a CPI index clause is added into something that a private individual or a public entity has to pay, a level of uncertainty is created. Therefore, she suggested that the appropriate course would be to revisit this in a specified amount of time. Chair McGuire turned to the issue of a certificate of need. She noted that the $1 million limit put into effect in the 1970s is no longer applicable because the CPI would place it closer to $2 million. She indicated that she didn't support Amendment 3. REPRESENTATIVE GRUENBERG specified that he has reoffered this amendment because two of the members of the committee weren't present when it was initially offered, and more importantly, the legislation now includes caps again. He turned to Chair McGuire's comments, and remarked that there is a difference between putting this into a budget or a public-funding type of thing because those are the kinds of legislation that the legislature is involved with on an annual basis. However, medical malpractice is not [reviewed by the legislature every year]. REPRESENTATIVE GRUENBERG stated that medical malpractice is a very divisive issue, albeit not a common issue. If limits in this area have to be changed, the arguments are in regard to the impacts of raising the limits on the availability of health insurance and the number of physicians and other health care professionals to practice in the state. On the other hand, an automatic adjustment for cost of living is something that insurance companies deal with frequently. Furthermore, it's a measure of certainty because actuaries and economists are accustomed to dealing with it. "It does not require that we re- open the entire issue of medical malpractice and get the legislature embroiled in this," he explained. This amendment attempts to provide an area of certainty so that [the legislature] doesn't have to go through the "medical malpractice trauma" every few years. Number 1850 REPRESENTATIVE OGG agreed that there is a difference between the annual budget and funding and including the CPI. He recalled that the [CPI] was put "into labor" with regard to those who [pay] minimum wage. Very shortly, the argument was that the unforeseen cost [of the CPI] was putting some folks out of business. Representative Ogg turned to criminal fines, and pointed out that those are set and then revisited at some point when the pressure rises. He recalled recent [legislation] in which the limit for small claims court was decided and the CPI wasn't put in place for it. Representative Ogg acknowledged that insurance companies want certainty, and highlighted that currently, the legislature is wrestling with a change in an actuarial status on mortality such that the Public Employees' Retirement System (PERS) and Teachers' Retirement System (TRS) programs have become one of the larger difficulties in the state's fiscal problems. REPRESENTATIVE OGG indicated that he would prefer to leave [the legislation] as it is and when times and the economy have changed, the legislature at the time could address it. He acknowledged that the arguments [made by Representative Gruenberg] will come up and he indicated that those are the proper arguments to be visited each time this comes up rather than being addressed by a standard that's out of the legislature's hands. Representative Ogg expressed his desire for the legislature to not foreclose its ability to deal with these issues on behalf of the public. Therefore, Representative Ogg announced that he wouldn't support Amendment 3. Number 1663 REPRESENTATIVE GARA commented that in the context of those debates, the legislature has never done anything as severe as what is being done today. In the case of fines, the minimum wage, and other limits, the legislature has developed numbers that are within a broad range of something that is fair. However, [this legislation] values a human life at $250,000. He said he didn't believe anyone on the committee believes that $250,000 is a fair value of someone's ability to hold a child, kiss a spouse, walk, hike, and fish. "I think what we're doing is, the policy judgment on this committee has been that the insurance industry needs this -- the insurance industry needs us to take these rights away from human beings. REPRESENTATIVE GARA opined that because nobody says that this is a fair amount of money to give to people, not adopting the CPI adds insult to injury because it means that today the aforementioned life attributes are worth $13.69 a day, and those will be worth less each year thereafter. "So, I think the CPI argument becomes much more forceful in a case where we're already inadequately compensating somebody," he remarked. He concluded by announcing that he would vote for Amendment 3. CHAIR McGUIRE thanked Representative Ogg for his comments. She highlighted that it's important to consider that sometimes something could be used as a method of achieving a goal that wasn't achieved through the regular process, which is similar to what happened with the minimum wage. Chair McGuire encouraged the committee to look at the [addition of the CPI] on its merits versus using it to reach another policy goal. She pointed out that business license fees were $25 for almost 20 years without the CPI, which certainly would've been a benefit for the state and a potential hardship to businesses. Finally, there was debate on that last year and the successful argument was that the business license fee hadn't been altered in some time. She noted her expectation that such arguments will be made about this legislation some time in the future. REPRESENTATIVE ANDERSON maintained his objection. Number 1553 A roll call vote was taken. Representatives Gara and Gruenberg voted in favor of Amendment 3 [labeled 23-LS1743\A.5, Bullock, 3/16/04]. Representatives Ogg, Samuels, Holm, Anderson, and McGuire voted against it. Therefore, Amendment 3 failed by a vote of 2-5. Number 1520 REPRESENTATIVE ANDERSON moved to report the proposed CS for HB 472, Version 23-LS1743\D, Bullock, 3/22/04, as amended, out of committee with individual recommendations and the accompanying zero fiscal notes. Number 1509 REPRESENTATIVE GARA objected. REPRESENTATIVE GRUENBERG noted that he can't support the legislation, but reminded the committee that he'd agreed at a prior meeting that he wouldn't object to moving it. Number 1455 A roll call vote was taken. Representatives Ogg, Samuels, Holm, Anderson, and McGuire voted in favor of reporting the proposed CS for HB 472, Version 23-LS1743\D, Bullock, 3/22/04, as amended. Representative Gara voted against it. Representative Gruenberg abstained from voting but wished his presence to be noted for the record. Therefore, CSHB 472(JUD) was reported out of the House Judiciary Standing Committee by a vote of 5-1-1.
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