SB 204: "An Act relating to civil actions; amending Alaska Rule of Civil Procedure 68; repealing Alaska Rule of Civil Procedure 72.1; and providing for an effective date."

00SENATE BILL NO. 204 01 "An Act relating to civil actions; amending Alaska Rule of Civil Procedure 68; 02 repealing Alaska Rule of Civil Procedure 72.1; and providing for an effective 03 date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. INTENT OF SECTION 16. It is the intent of the legislature in enacting 06 AS 09.65.096 in sec. 16 of this Act to overrule the decision of the Alaska Supreme Court in 07 Jackson v. Power, 743 P.2d 1376 (Alaska 1987), but not to otherwise change existing law. 08 * Sec. 2. AS 08.64.326 is amended to read: 09  Sec. 08.64.326. GROUNDS FOR IMPOSITION OF DISCIPLINARY 10 SANCTIONS. (a) The board may impose a sanction if the board finds after a hearing 11 that a licensee 12  (1) secured a license through deceit, fraud, or intentional 13 misrepresentation; 14  (2) engaged in deceit, fraud, or intentional misrepresentation while

01 providing professional services or engaging in professional activities; 02  (3) advertised professional services in a false or misleading manner; 03  (4) has been convicted, including conviction based on a guilty plea or 04 plea of nolo contendere, of 05  (A) a felony or other crime if the felony or other crime 06 is substantially related to the qualifications, functions, or duties of the 07 licensee; or 08   (B) a crime involving the unlawful procurement, sale, 09 prescription, or dispensing of drugs; 10  (5) has procured, sold, prescribed, or dispensed drugs in violation of 11 a law, regardless of whether there has been a criminal action; 12  (6) intentionally or negligently permitted the performance of patient 13 care by persons under the licensee's supervision that does not conform to minimum 14 professional standards even if the patient was not injured; 15  (7) failed to comply with this chapter, a regulation adopted under this 16 chapter, or an order of the board; 17  (8) has demonstrated 18  (A) professional incompetence, gross negligence, or 19 repeated negligent conduct; the board may not base a finding of 20 professional incompetence solely on the basis that a licensee's practice 21 is unconventional or experimental in the absence of demonstrable 22 physical harm to a patient; 23   (B) addiction to, severe dependency on, or habitual 24 overuse of alcohol or other drugs that impairs the licensee's 25 ability to practice safely; 26  (C) unfitness because of physical or mental disability; 27  (9) engaged in unprofessional conduct or in lewd or immoral conduct 28 in connection with the delivery of professional services to patients; 29  (10) has violated AS 18.16.010; 30  (11) has violated any code of ethics adopted by regulation by the board; 31 or

01  (12) [HAS DENIED CARE OR TREATMENT TO A PATIENT OR 02 PERSON SEEKING ASSISTANCE FROM THE PHYSICIAN IF THE ONLY 03 REASON FOR THE DENIAL IS THE FAILURE OR REFUSAL OF THE PATIENT 04 TO AGREE TO ARBITRATE AS PROVIDED IN AS 09.55.535(a); OR 05  (13)] has had a license or certificate to practice medicine in another 06 state or territory of the United States, or a province or territory of Canada suspended 07 or revoked unless the suspension or revocation was caused by the failure of the 08 licensee to pay fees to that state, territory, or province. 09  (b) In a case involving (a)(12) [(a)(13)] of this section, the final findings of 10 fact, conclusions of law, and order of the authority that suspended or revoked a license 11 or certificate constitutes a prima facie case that the license or certificate was suspended 12 or revoked and the grounds under which the suspension or revocation was granted. 13 * Sec. 3. AS 08.68.270 is amended to read: 14  Sec. 08.68.270. GROUNDS FOR DENIAL, SUSPENSION, OR 15 REVOCATION. The board may deny, suspend, or revoke the license of a person who 16  (1) has obtained or attempted to obtain a license to practice nursing by 17 fraud or deceit; 18  (2) has been convicted of a felony or other crime if the felony or other 19 crime is substantially related to the qualifications, functions or duties of the licensee; 20  (3) habitually abuses alcoholic beverages, or illegally uses controlled 21 substances; 22  (4) has impersonated a registered or practical nurse; 23  (5) has intentionally or negligently engaged in conduct that has resulted 24 in a significant risk to the health or safety of a client or in injury to a client; 25  (6) practices or attempts to practice nursing while afflicted with 26 physical or mental illness, deterioration, or disability that interferes with the 27 individual's performance of nursing functions; 28  (7) is guilty of unprofessional conduct as defined by regulations 29 adopted by the board; 30  (8) has wilfully or repeatedly violated a provision of this chapter or 31 regulations adopted under it;

01  (9) is professionally incompetent [; 02  (10) DENIES CARE OR TREATMENT TO A PATIENT OR PERSON 03 SEEKING ASSISTANCE IF THE SOLE REASON FOR THE DENIAL IS THE 04 FAILURE OR REFUSAL OF THE PATIENT OR PERSON SEEKING ASSISTANCE 05 TO AGREE TO ARBITRATE AS PROVIDED IN AS 09.55.535(a)]. 06 * Sec. 4. AS 09.10 is amended by adding a new section to read: 07  Sec. 09.10.065. LIMITATION ON ACTIONS AGAINST HEALTH CARE 08 PROVIDERS. (a) Notwithstanding AS 09.10.140, an action based on professional 09 negligence may not be brought against a health care provider unless 10  (1) the action is brought within two years from the date of the alleged 11 negligent act or omission; or 12  (2) if the injured person is, on the date of the alleged negligent act or 13 omission less than six years of age, the action is brought before the person's eighth 14 birthday. 15  (b) The limitation imposed under (a) of this section is tolled during any period 16 in which there exists 17  (1) fraud, including fraud or collusion by a parent, guardian, insurer, 18 or health care provider, resulting in the failure to bring an action on behalf of an 19 injured minor; 20  (2) intentional concealment of facts that would give notice of a 21 potential action; or 22  (3) the undiscovered presence of a foreign body, that has no therapeutic 23 or diagnostic purpose or effect, in the body of the injured person and the action is 24 based on the presence of the foreign body. 25  (c) In this section, 26  (1) "health care provider" has the meaning given in AS 09.55.560; 27  (2) "professional negligence" means a negligent act or omission by a 28 health care provider in rendering professional services; 29  (3) "professional services" means services provided by a health care 30 provider that are within the scope of services for which the health care provider is 31 licensed, and that are not prohibited under the health care provider's license or by a

01 hospital in which the health care provider practices. 02 * Sec. 5. AS 09.17.010(b) is amended to read: 03  (b) The amount of damages awarded by a court or a jury under (a) of this 04 section may not exceed $250,000 [$500,000] for each claim based on a separate 05 incident or injury, except as adjusted under (d) of this section. 06 * Sec. 6. AS 09.17.010 is amended by adding a new subsection to read: 07  (d) The limit under (b) of this section shall be adjusted July 1 of each year by 08 the Department of Labor to reflect changes in the Anchorage consumer price index. 09 The base year for the index is 1992. The Department of Labor shall adopt regulations 10 that provide for public notice of the adjusted consumer price index required under this 11 subsection. 12 * Sec. 7. AS 09.17.080(a) is amended to read: 13  (a) In all actions involving fault of more than one party to the action, including 14 third-party defendants and persons who have been released under AS 09.17.091 15 [AS 09.16.040], the court, unless otherwise agreed by all parties, shall instruct the jury 16 to answer special interrogatories or, if there is no jury, shall make findings, indicating 17  (1) the amount of damages each claimant would be entitled to recover 18 if contributory fault is disregarded; and 19  (2) the percentage of the total fault of all of the parties to each claim 20 that is allocated to each claimant, defendant, third-party defendant, [AND] person who 21 has been released from liability under AS 09.17.091, or other person responsible for 22 the damages to each claimant regardless of whether the other person is subject 23 to an action by the claimant [AS 09.16.040], except as adjusted under (d) of this 24 section. 25 * Sec. 8. AS 09.17.080(c) is amended to read: 26  (c) The court shall determine the award of damages to each claimant in 27 accordance with the findings, subject to a reduction under AS 09.17.091 28 [AS 09.16.040], and enter judgment against each party liable. The court also shall 29 determine and state in the judgment each party's equitable share of the obligation to 30 each claimant in accordance with the respective percentages of fault. 31 * Sec. 9. AS 09.17 is amended by adding a new section to read:

01  Sec. 09.17.091. EFFECT OF RELEASE. When a release or covenant not to 02 sue or not to enforce judgment is given in good faith to one of two or more persons 03 civilly liable for the same injury or the same wrongful death 04  (1) it does not discharge any of the other persons from liability for the 05 injury or wrongful death unless its terms so provide; but it reduces the claim against 06 the others to the extent of any amount stipulated by the release or the covenant, or in 07 the amount of the consideration paid for it, whichever is the greater; and 08  (2) it discharges the person to whom it is given from all liability for 09 contribution to any other person. 10 * Sec. 10. AS 09.30.070(a) is amended to read: 11  (a) The rate of interest on judgments and decrees for the payment of money 12 is equal to the 2nd Federal Reserve District discount rate in effect on January 2 13 of the year in which the judgment or decree is entered [10.5 PERCENT A YEAR], 14 except that a judgment or decree founded on a contract in writing, providing for the 15 payment of interest until paid at a specified rate not exceeding the legal rate of interest 16 for that type of contract, bears interest at the rate specified in the contract if the 17 interest rate is set out in the judgment or decree. 18 * Sec. 11. AS 09.30.070 is amended by adding a new subsection to read: 19  (c) Prejudgment interest may not be awarded for future economic damages, 20 future noneconomic damages, or for punitive damages. 21 * Sec. 12. AS 09.55.535 is repealed and reenacted to read: 22  Sec. 09.55.535. MANDATORY ARBITRATION. (a) A person who files an 23 action for damages against a health care provider resulting from medical malpractice, 24 shall also submit the claim to the court for arbitration. 25  (b) When a claim is submitted as required by (a) of this section, the court shall 26 appoint an arbitrator to review the claim. The arbitrator appointed to review the claim 27 shall interview the parties and examine all records or materials relating to the claim 28 and may compel the attendance of witnesses, interview the parties, or consult with 29 medical specialists. 30  (c) An arbitrator appointed under this section shall conduct a prehearing 31 settlement conference within 30 days after the appointment. The arbitrator shall

01 establish a period for discovery and a date for a hearing. The hearing date may not 02 be more than 120 days after the settlement conference. 03  (d) An arbitrator shall render a decision within 30 days after hearing a claim 04 under (c) of this section. The decision must contain findings of fact and conclusions 05 of law. The decision of the arbitrator may be rejected by a party. 06  (e) If the decision of the arbitrator is rejected by a party, the action may 07 proceed in the appropriate court. The arbitrator's decision is admissible evidence in 08 that action and may be used by a party to support or oppose a claim of damages. 09  (f) The provisions of AS 09.43.010 - 09.43.180 (Uniform Arbitration Act) 10 apply to an arbitration under this section to the extent the provisions do not conflict 11 with the provisions of this section. 12 * Sec. 13. AS 09.55.536 is amended to read: 13  Sec. 09.55.536. EXPERT ADVISOR [ADVISORY PANEL]. (a) In an action 14 for damages due to personal injury or death based upon the provision of professional 15 services by a health care provider [WHEN THE PARTIES HAVE NOT AGREED TO 16 ARBITRATION OF THE CLAIM UNDER AS 09.55.535,] the court shall appoint 17 within 20 days after filing of answer to a summons and complaint an expert medical 18 advisor [A THREE-PERSON EXPERT ADVISORY PANEL] unless the court decides 19 that an expert advisory opinion is not necessary for a decision in the case. When the 20 action is filed the court shall, by order, determine the professions or specialties to be 21 represented by the medical expert [ON THE EXPERT ADVISORY PANEL], giving 22 the parties the opportunity to object or make suggestions. 23  (b) The expert advisor [ADVISORY PANEL] may compel the attendance of 24 witnesses, interview the parties, physically examine the injured person if alive, consult 25 with the specialists or learned works they consider appropriate, and compel the 26 production of and examine all relevant hospital, medical, or other records or materials 27 relating to the health care in issue. The advisor [PANEL] may meet in camera, but 28 shall maintain a record of any testimony or oral statements of witnesses, and shall keep 29 copies of all written statements received [IT RECEIVES]. 30  (c) Not more than 30 days after selection of the advisor, the advisor [PANEL, 31 IT] shall make a written report to the parties and to the court, answering the following

01 questions and other questions submitted to the advisor [PANEL] by the court: 02  (1) What was the disorder for which the plaintiff came to medical care? 03  (2) What would have been the probable outcome without medical care? 04  (3) Was the treatment selected appropriate for the case? 05  (4) Did an injury arise from the medical care? 06  (5) What is the nature and extent of the medical injury? 07  (6) What specifically caused the medical injury? 08  (7) Was the medical injury caused by unskillful care? 09  (8) If a medical injury had not occurred, how would the plaintiff's 10 condition differ from the plaintiff's present condition? 11  (d) In any case in which the answer to one or more of the questions submitted 12 to the advisor [PANEL] depends upon the resolution of factual questions which are 13 not the proper subject of expert opinion, the report shall so state and may answer 14 questions based upon hypothetical facts that are fully set out in the opinion. The 15 report must [SHALL] include copies of all written statements, opinions, or records 16 relied upon by the advisor [PANEL] and either a transcription or other record of any 17 oral statements or opinions; must [SHALL] specify any medical or scientific authority 18 relied upon by the advisor [PANEL]; and must [SHALL] include the results of any 19 physical or mental examination performed on the plaintiff. The advisor [EACH 20 MEMBER] shall sign the report and the signature constitutes the advisor's 21 [MEMBER'S] adoption of all statements and opinions contained in it [; HOWEVER, 22 A MEMBER MAY, INSTEAD OF SIGNING THE REPORT, SUBMIT A 23 CONCURRING OR DISSENTING REPORT WHICH COMPLIES WITH THE 24 REQUIREMENTS OF THIS SUBSECTION]. An advisor [A MEMBER] may not 25 attest to any portion of the report as to which the advisor [MEMBER] is not qualified 26 to give expert testimony. 27  (e) The report of the advisor [PANEL WITH ANY DISSENTING OR 28 CONCURRING OPINION] is admissible in evidence to the same extent as though its 29 contents were orally testified to by the person [OR PERSONS] preparing it. The court 30 shall delete any portion that would not be admissible because of lack of foundation for 31 opinion testimony, or otherwise. Either party may submit testimony to support or refute

01 the report. The jury shall be instructed in general terms that the report shall be 02 considered and evaluated in the same manner as any other expert testimony. The 03 expert advisor [ANY MEMBER OF THE PANEL] may be called by any party and 04 may be cross-examined as to the contents of the report [OR OF THAT MEMBER'S 05 DISSENTING OR CONCURRING OPINION]. 06  (f) Discovery [NO DISCOVERY] may not be undertaken in a case until the 07 report of the expert advisor [ADVISORY PANEL] is received. However, the court 08 may relax this prohibition upon a showing of good cause by a [ANY] party. If the 09 advisor [PANEL] has not completed its report within the 30-day period prescribed in 10 (c) of this section, the court may, upon application, grant [IT] an additional 30 days. 11  (g) The expert advisor is [MEMBERS OF A PANEL ARE] entitled to travel 12 expenses and per diem in accordance with state law pertaining to members of boards 13 and commissions for all time spent in preparing its report. If an advisor [A PANEL 14 MEMBER] is called upon as a witness at trial or upon deposition, the advisor 15 [MEMBER] is entitled to payment of an expert witness fee, which may not exceed 16 $150 per day. All expenses incurred by the advisor [PANEL] shall be paid by the 17 court. However, in any case in which the court determines that a party has made a 18 patently frivolous claim or a patently frivolous denial of liability, it shall order that all 19 costs of the expert advisor [ADVISORY PANEL] be borne by the party making that 20 claim or denial. 21  (h) Parties to the case and their counsel may not initiate communication out 22 of court with an expert advisor [MEMBERS OF THE PANEL] on the subject matter 23 of its inquiry and report or cause or solicit others to do so, except through ordinary 24 discovery proceedings. 25 * Sec. 14. AS 09.55.548 is repealed and reenacted to read: 26  Sec. 09.55.548. AWARDS, PERIODIC PAYMENTS, COLLATERAL 27 SOURCE; SUBROGATION. (a) Damages in a medical malpractice action shall be 28 awarded under principles of the common law, except as otherwise provided by statute. 29 The fact finder in a medical malpractice action shall render an award for damages by 30 category of loss. 31  (b) Notwithstanding AS 09.17.040(d), the court shall, at the request of either

01 party, enter a judgment that future damages in a medical malpractice action be paid 02 in whole or in part by periodic payments rather than by a lump-sum payment if the 03 award equals or exceeds $100,000 in future damages. When the court enters a 04 judgment ordering the payment of future damages by periodic payments, the judgment 05 must include, if necessary, other provisions to assure that funds are available as 06 periodic payments become due. Insurance from an insurer is sufficient assurance that 07 funds will be available. If periodic payments for future damages are awarded, the 08 present value of the periodic payments shall be used in computing the total award. In 09 this subsection, 10  (1) "future damages" includes damages for future medical treatment, 11 care or custody, loss of future earnings, or loss of bodily function of the claimant; and 12  (2) "insurer" has the meaning given in AS 21.90.900. 13  (c) Except when the collateral source is a federally funded program that is 14 required by law to seek subrogation or are death benefits paid under life insurance, a 15 plaintiff in a medical malpractice action may only recover damages from the defendant 16 that exceed amounts received by the plaintiff, or that with reasonable probability will 17 be received in the future by the plaintiff as compensation for the injuries from 18 collateral sources, whether private, group, or governmental, and whether contributory 19 or noncontributory. 20  (d) If the defendant elects, in an action for personal injury or death against a 21 health care provider based upon claims of medical malpractice, the defendant may 22 introduce into evidence any amount paid or payable as a benefit to the plaintiff as a 23 result of the personal injury under 42 U.S.C. 301-1397 (United States Social Security 24 Act), and state or federal income disability or workers' compensation act, a health, 25 sickness, or income disability insurance, accident insurance that provides health 26 benefits or income disability coverage, a contract or agreement of a group, 27 organization, partnership, or corporation, or other collateral source, to provide, pay for, 28 or reimburse the cost of medical, hospital, dental, or other health care services. If the 29 defendant elects to introduce evidence described in this subsection, the plaintiff may 30 introduce evidence of an amount that the plaintiff has paid or contributed to secure the 31 plaintiff's right to insurance benefits for which the defendant has introduced evidence.

01  (e) Unless evidence of collateral sources has already been introduced under (d) 02 of this section, evidence of collateral sources, other than a federal program that is 03 required by law to seek subrogation and a death benefit paid under life insurance, is 04 admissible after the fact finder has rendered an award. The court may take into 05 account the value of the plaintiff's rights to coverage exhausted or depleted by 06 payment of these collateral benefits by adding back a reasonable estimate of their 07 probable value, or by earmarking and holding for possible periodic payment under (b) 08 of this section that amount of the award that would otherwise have been deducted, to 09 see if the impairment of the plaintiff's rights actually takes place in the future. 10  (f) A source of collateral benefits may not recover an amount against the 11 plaintiff and may not be subrogated to the rights of the plaintiff against a defendant. 12 * Sec. 15. AS 09.55.560 is repealed and reenacted to read: 13  Sec. 09.55.560. DEFINITION. In AS 09.55.530 - 09.55.560, "health care 14 provider" means an acupuncturist licensed under AS 08.06; an audiologist licensed 15 under AS 08.11; a chiropractor licensed under AS 08.20; a dental hygienist licensed 16 under AS 08.32; a dentist licensed under AS 08.36; a nurse licensed under AS 08.68; 17 a dispensing optician licensed under AS 08.71; a naturopath licensed under AS 08.45; 18 an optometrist licensed under AS 08.72; a pharmacist licensed under AS 08.80; a 19 physical therapist or occupational therapist licensed under AS 08.84; a physician 20 licensed under AS 08.64; a podiatrist licensed under AS 08.64; a psychologist and a 21 psychological associate licensed under AS 08.86; and a hospital as defined in 22 AS 18.20.130, including a governmentally owned or operated hospital; and an 23 employee of a health care provider acting within the course and scope of employment. 24 * Sec. 16. AS 09.65 is amended by adding a new section to read: 25  Sec. 09.65.096. CIVIL LIABILITY OF HOSPITALS FOR NONEMPLOYEES. 26 (a) A hospital is not liable for civil damages as a result of an act or omission by a 27 health care provider who is not an employee of the hospital if the claim is based solely 28 on the grounds that the hospital 29  (1) is required to provide services by law or by regulation, or is subject 30 to regulation with respect to the provision of services; 31  (2) is required to comply or has voluntarily complied with the standards

01 of a public or private licensing or accreditation agency with respect to provision of 02 services; or 03  (3) has adopted bylaws, policies, or regulations governing the provision 04 of services. 05  (b) A hospital is not, solely for the reason that a health care provider was the 06 apparent or implied agent of the hospital, liable for civil damages caused by the acts 07 or omissions of a health care provider who is not the hospital's employee, if the 08 hospital provides notice that the health care provider is an independent contractor. The 09 notice required by this subsection must be posted conspicuously in all admitting areas 10 of the hospital, published at least annually in a newspaper of general circulation in the 11 area, and must be in substantially the following form: 12 Notice of Limited Liability 13 The following health care providers are independent contractors 14 and are not employees of the hospital: 15 (List specific health care providers) 16 The hospital is responsible for exercising reasonable care in granting staff privileges 17 to practice in the hospital, for reviewing those privileges on a regular basis, and for 18 taking appropriate steps to revoke or restrict privileges in appropriate circumstances. 19 The hospital is not otherwise liable for the acts or omissions of a health care provider 20 who is an independent contractor. 21  (c) This section does not preclude liability for civil damages that are the 22 proximate result of the hospital's own negligence or intentional misconduct. 23  (d) In this section, 24  (1) "health care provider" has the meaning given in AS 18.23.070, 25 except that it does not include a hospital or an employee of the hospital; 26  (2) "hospital" has the meaning given in AS 18.20.130 and includes a 27 governmentally owned or operated hospital. 28 * Sec. 17. Alaska Rule of Civil Procedure 72.1 is repealed. 29 * Sec. 18. AS 09.30.070(c), added by sec. 11 of this Act, has the effect of amending 30 Alaska Rule of Civil Procedure 68 by providing that prejudgment interest may not be awarded 31 for future economic or noneconomic damages.

01 * Sec. 19. APPLICABILITY. This Act applies to all causes of action accruing on or after 02 the effective date of this Act. 03 * Sec. 20. (a) This Act takes effect only if an Act establishing the Alaska Health 04 Insurance Corporation, relating to hospitals, insurers, and duties of the Department of Health 05 and Social Services that are related to health care is passed by the Eighteenth Alaska State 06 Legislature and becomes law. 07 (b) If the condition described in (a) of this section is fulfilled, this Act takes effect on 08 the effective date of the Act described in (a) of this section.