Legislature(2003 - 2004)

03/16/2004 01:10 PM House JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 472 - CLAIMS AGAINST HEALTH CARE PROVIDERS                                                                                 
Number 0977                                                                                                                     
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  announced that she would  hold the vote on  HB 472                                                               
until 3:00 p.m.  when other members should be present.   She then                                                               
turned to public testimony.                                                                                                     
Number 0901                                                                                                                     
PATRICK  LUBY, Advocacy  Director, AARP  Alaska, began  by saying                                                               
that medical  mistakes happen.   Therefore, AARP  Alaska believes                                                               
that  this legislation  should focus  on  error reduction  rather                                                               
than damages.  Furthermore, the  tort system encourages providers                                                               
to  cover up  mistakes in  order  to avoid  lawsuits rather  than                                                               
reporting  errors and  learning how  to prevent  them.   Mr. Luby                                                               
opined that  someone who is hurt  by a medical error  is entitled                                                               
to fair compensation, but emphasized  that it's more important to                                                               
ensure that errors are reported in order prevent future errors.                                                                 
MR. LUBY, noting that older  people with limited income potential                                                               
will  receive  less in  economic  damages  than younger  victims,                                                               
informed the  committee that  AARP believes  $250,000 is  too low                                                               
for noneconomic  damages.   He also  informed the  committee that                                                               
the Institute of Medicine (IOM)  has proposed testing nonjudicial                                                               
no-fault alternatives to the tort  system for medical errors.  If                                                               
Alaska  adopted one  of the  IOM's  recommended alternatives,  it                                                               
would foster fair compensation and  error reduction, which should                                                               
be the real  goal of consumer-oriented reform, he  opined.  Under                                                               
the IOM  approach, compensation would be  based on "avoidability"                                                               
of  error  rather than  negligence,  and  there would  be  preset                                                               
schedules for  compensation with reasonable limits  that may help                                                               
stabilize malpractice  premiums.  Mr.  Luby relayed that  the IOM                                                               
believes  that  mandating  the reporting  of  errors  would  help                                                               
experts find  systemwide [solutions] and improve  patient safety.                                                               
Mr. Luby encouraged the committee  to review adopting some of the                                                               
IOM's recommendations.                                                                                                          
Number 0743                                                                                                                     
REPRESENTATIVE ANDERSON  noted that Mr. Luby  has experience with                                                               
California's model, and asked Mr. Luby his opinion of it.                                                                       
MR. LUBY  commented that  what works well  is dependent  upon the                                                               
perspective.   He  relayed  that the  AARP  takes the  consumer's                                                               
perspective, although reducing  the number of errors  would be in                                                               
the best interest of all concerned.                                                                                             
REPRESENTATIVE   ANDERSON   mentioned   that  he   expected   the                                                               
legislation to move  from committee today, but said  he wanted to                                                               
talk further with Mr. Luby.                                                                                                     
REPRESENTATIVE GARA  relayed his  sense that this  legislation is                                                               
going to move before anyone  has time to consider IOM's proposal.                                                               
Therefore, he inquired  as to AARP's position  if the legislation                                                               
is left with the $250,000 noneconomic damages cap.                                                                              
MR. LUBY reiterated that the  $250,000 noneconomic damages cap is                                                               
too  low, as  is the  current  $400,000.   Therefore, AARP  would                                                               
oppose the legislation.   He reiterated the  need for legislators                                                               
to  review  the  IOM  recommendations  and  whether  any  can  be                                                               
incorporated into statute.                                                                                                      
The committee took an at-ease from 2:45 p.m. to 3:20 p.m.                                                                       
[Tape ends early; no testimony is missing.]                                                                                     
TAPE 04-36, SIDE A                                                                                                            
Number 0001                                                                                                                     
CHAIR McGUIRE  announced that HB  472 would be set  aside briefly                                                               
and be brought up later in the meeting.                                                                                         
HB 472 - CLAIMS AGAINST HEALTH CARE PROVIDERS                                                                                 
Number 0191                                                                                                                     
CHAIR  McGUIRE   announced  that   the  committee   would  return                                                               
attention to 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."                                                                                           
REPRESENTATIVE  ANDERSON,  speaking as  the  sponsor  of HB  472,                                                               
recalled that at the last  meeting there were two amendments that                                                               
he was considering  [one of which was offered as  Amendment 1 and                                                               
then withdrawn  on 3/3/04].   He announced  that at this  time he                                                               
wouldn't offer either amendment because  he supports HB 472 as it                                                               
CHAIR McGUIRE, in response  to Representative Gruenberg, reminded                                                               
the committee that the original version  of HB 472 was before the                                                               
REPRESENTATIVE  GARA recalled  testimony  from insurance  company                                                               
[representatives] regarding whether  malpractice settlements have                                                               
increased  or decreased  over  the  years.   He  noted that  he'd                                                               
provided the  committee with the  [Alaska State  Medical Board's]                                                               
record  of all  malpractice settlements  and verdicts,  which, he                                                               
opined, illustrates  that the settlements and  verdicts radically                                                               
change  from  year  to  year   because  these  are  statistically                                                               
irrelevant  samplings.    Of  the claims  in  2003,  the  average                                                               
settlement  was about  $341,000 while  in 1991  it was  $380,000.                                                               
Representative Gara  said that  he didn't  believe that  there is                                                               
any evidence  which establishes that  verdicts have  increased in                                                               
recent years.   He  also noted that  he'd provided  the committee                                                               
with [the Alaska  State Medical Board's] case  by case [analysis]                                                               
of each settlement  and verdict over the last 15  years, and with                                                               
information   from  Legislative   Legal  and   Research  Services                                                               
regarding the  number of  physicians in Alaska.   He  pointed out                                                               
that although there has been  growth, the number of physicians in                                                               
Alaska remains inadequate.                                                                                                      
Number 0488                                                                                                                     
REPRESENTATIVE  GARA recalled  debate over  California's $250,000                                                               
cap and mentioned that he  provided the committee with a document                                                               
from  the Foundation  for Taxpayer  & Consumer  Rights [entitled,                                                               
"Five  Dangerous  Myths  About California's  Medical  Malpractice                                                               
Restrictions"].    Representative  Gara   related  that  in  1975                                                               
Medical  Injury Compensation  Reform Act  (MICRA) was  enacted in                                                               
California  and was  subsequently litigated  until 1986  when the                                                               
California   Supreme  Court   upheld  the   $250,000  cap.     He                                                               
highlighted that  in 1986, [medical] malpractice  premiums didn't                                                               
decrease  but, in  fact, increased.   In  1988 California  voters                                                               
passed a proposition  specifying that there shall  be a reduction                                                               
in  premiums paid  and  it gave  the  insurance commissioner  the                                                               
right  to reject  rate  increase applications  and  the right  to                                                               
lower  insurance rates.   From  1988  on, California  experienced                                                               
[medical malpractice insurance]  rate reductions.  Representative                                                               
Gara   opined  that   the  proposition   reduced  the   rates  in                                                               
REPRESENTATIVE  GARA turned  attention to  the Legislative  Legal                                                               
and  Research   Services  memorandum   [dated  March   16,  2004]                                                               
regarding  the  daily recovery  for  noneconomic  losses under  a                                                               
$250,000 cap even for the  most serious injuries.  He highlighted                                                               
that the calculation specifies that  under a $250,000 cap someone                                                               
with a 50-year  life expectancy is paid for  the pain, suffering,                                                               
and loss  of enjoyment of  life at the  value of $13.69  per day.                                                               
The aforementioned value is too low, he opined.                                                                                 
Number 0713                                                                                                                     
REPRESENTATIVE  GARA   moved  that  the  committee   adopt  [new]                                                               
Amendment  1,  labeled  23-LS1743\A.1,  Bullock,  3/10/04,  which                                                               
     Page 2, line 19, following "$250,000":                                                                                     
          Insert ", except that, in the case of severe                                                                          
     permanent physical impairment or severe disfigurement,                                                                     
      the damages may not exceed $1,000,000.  The limit on                                                                      
     damages applies"                                                                                                           
     Page 2, line 25:                                                                                                           
          Delete "$250,000"                                                                                                     
          Insert "the maximum amount allowed under (d) of                                                                       
     this section"                                                                                                              
CHAIR McGUIRE recognized that there was an objection.                                                                           
REPRESENTATIVE GARA explained that  Amendment 1 would essentially                                                               
reinstate the  current two-tier damage  cap that  already exists.                                                               
The current two-tier damage cap  is $400,000 with the possibility                                                               
of  more for  those with  a long  life expectancy.   However,  in                                                               
cases  of   severe  permanent   physical  impairment   or  severe                                                               
disfigurement [the  noneconomic damage cap]  is $1 million  or in                                                               
some rare cases it could go  up to $2 million, depending upon the                                                               
life  expectancy of  the individual.   Amendment  1 provides  the                                                               
insurance  industry certainty  with  a hard  cap [on  noneconomic                                                               
damages] of  $250,000, except in  cases in which there  is severe                                                               
permanent  physical  impairment  or  severe  disfigurement  which                                                               
allows  for  a noneconomic  damages  cap  of  up to  $1  million.                                                               
Therefore,  Amendment  1 addresses  his  concern  with regard  to                                                               
valuing the damages of an individual at $13.69 a day.                                                                           
REPRESENTATIVE ANDERSON  said that  although he  wasn't adamantly                                                               
opposed to  [Amendment 1] in  the context of those  severe cases,                                                               
the  other side  is  that such  [noneconomic  damage caps]  would                                                               
[work  against] attracting  new  physicians  and solidifying  the                                                               
insurance market.   With regard to the argument  about the $13.69                                                               
per day  [damage award], Representative  Anderson said  he didn't                                                               
believe the  $400,000 cap would  provide that much more  per day.                                                               
Furthermore, he posited, a $250,000  award could be quadrupled by                                                               
the individual if he/she makes the proper investments.                                                                          
REPRESENTATIVE  ANDERSON  relayed  his fear  that  the  insurance                                                               
companies  wouldn't  know  whether  the cap  is  $250,000  or  $1                                                               
million until the jury [rules].   Therefore, he suggested that in                                                               
order to protect  itself the insurance company  will assume every                                                               
case  is a  $1  million  worth of  exposure  and  so perhaps  the                                                               
insurance  rates would  increase.   Representative Anderson  said                                                               
that it's  a balance between  individuals who [should  receive $1                                                               
million in  compensation] for pain and  suffering, and physicians                                                               
leaving   and   the   inability  to   recruit   new   physicians.                                                               
Representative  Anderson   requested  that  the   committee  vote                                                               
against  Amendment  1  and  allow [the  legislation]  to  try  to                                                               
recruit more physicians.  "Again,  the cases where this occurs is                                                               
so miniscule,  I think the needs  of the many outweigh  the needs                                                               
of the few," he said.                                                                                                           
Number 1015                                                                                                                     
REPRESENTATIVE HOLM  said he agrees  with Representative  Gara on                                                               
this issue, noting  that he has received  some compelling e-mails                                                               
regarding the $250,000 cap, especially  considering that that cap                                                               
minus  attorney's  fees  may  result in  nothing  for  a  damaged                                                               
individual.   The compensation for malfeasance  should be greater                                                               
than  $250,000, he  opined, though  he said  he also  agrees with                                                               
Representative Anderson with  regard to the need  to attract more                                                               
physicians to  Alaska.  Representative  Holm said that  he didn't                                                               
believe that  the case  has been made  that physicians  will come                                                               
because of  a specific [noneconomic]  damage cap nor has  it been                                                               
made  that  there  will  be any  [rate]  reduction  or  increased                                                               
availability  [due to  this  legislation].   Representative  Holm                                                               
announced his support of Amendment 1.                                                                                           
REPRESENTATIVE   SAMUELS   expressed   concern   with   insurance                                                               
companies  leaving  the  state  as  well  as  with  the  lack  of                                                               
physicians in the state.  He  inquired as to how one measures the                                                               
person who  has to catch  a Medivac  flight because there  was no                                                               
physician to perform a certain  procedure and the individual dies                                                               
en route.  Representative Samuels  asked if there are definitions                                                               
for  "severe  disfigurement"  or  if  it is  based  on  what  the                                                               
attorney claims.   Representative  Samuels said that  although he                                                               
has no  illusions with regard  to insurance rates  decreasing, he                                                               
is fearful of it not being available.                                                                                           
REPRESENTATIVE GARA  explained that he  thought it would  be best                                                               
to use  the standard that  has been on  the books since  the late                                                               
1980s, during  the first  round of  Tort Reform.   He  noted that                                                               
there is one supreme court  case and several superior court cases                                                               
that  address  it.    The   [current]  standard  seems  to  be  a                                                               
reasonable standard.   In  a case in  which the  individual isn't                                                               
terribly  injured,  but the  higher  standard  is satisfied,  the                                                               
question regarding what should be  awarded in noneconomic damages                                                               
would be submitted to the  jury.  Representative Gara highlighted                                                               
that Alaska  is a  conservative state and  that jury  verdicts in                                                               
the  state  tend  to  be   so  as  well,  especially  in  medical                                                               
malpractice cases.   Therefore, he  opined, there shouldn't  be a                                                               
fear that  there will be  an automatic award  of $1 million  in a                                                               
case that  isn't serious.   Representative Gara pointed  out that                                                               
the language is tailored narrowly.                                                                                              
Number 1360                                                                                                                     
REPRESENTATIVE  OGG  turned  attention   to  the  [case  by  case                                                               
analysis  provided by  ASMA], and  highlighted  those cases  that                                                               
were over the cap.  He  indicated that it seems the claim amounts                                                               
are increasing,  although he  noted that  the chart  merely shows                                                               
the total  claim.   The increase is  concerning, he  said, adding                                                               
that he  likes the $250,000 cap,  although he noted that  he is a                                                               
bit uncomfortable with  it having known individuals  who have had                                                               
something  happen  to them.    The  key,  he  said, is  that  the                                                               
negligence or malpractice has to  be proven.  Although $1 million                                                               
is a bit high, at least it's certain.                                                                                           
REPRESENTATIVE HOLM  asked if the  [information provided  by ASMA                                                               
refers   to]  jury   awards,   and   therefore  are   "agreed-to"                                                               
REPRESENTATIVE  GARA answered  that  these  are mostly  agreed-to                                                               
settlements.   He clarified  that [the  settlements] are  all the                                                               
payments,  some of  which are  after a  verdict while  others are                                                               
after a settlement.                                                                                                             
REPRESENTATIVE  OGG  announced  that   he  would  go  along  with                                                               
Amendment 1.                                                                                                                    
CHAIR McGUIRE  clarified that the  record shouldn't  be construed                                                               
to  have emphasis  on any  one [issue]  that has  been discussed,                                                               
since  the record  is comprehensive  and includes  testimony from                                                               
various groups.   She highlighted that  [since the implementation                                                               
of MICRA]  in California, California's costs  have only increased                                                               
100 percent  while nationwide  the costs  have increased  by over                                                               
563 percent.   Although there is no proof or  knowledge that this                                                               
legislation  will  keep  the two  medical  malpractice  insurance                                                               
providers  in the  state  or will  attract  more physicians,  the                                                               
[committee] has looked to other  jurisdictions to review what was                                                               
done.  California was the model  for the $250,000 cap that appear                                                               
to work, at least in part.                                                                                                      
CHAIR  McGUIRE  declared  a  conflict because  her  father  is  a                                                               
physician [and requested that she be excused from voting].                                                                      
REPRESENTATIVES  GRUENBERG  and  OGG  objected  [and  thus  Chair                                                               
McGuire was required to vote].                                                                                                  
CHAIR McGUIRE specified that her  father doesn't really fall into                                                               
any of the categories listed.   She further specified that she is                                                               
reviewing this legislation in terms  of the overall health of the                                                               
medical industry  in this state.   Alaska  is close to  a crisis,                                                               
and therefore it's incumbent upon  the legislature to address it.                                                               
Furthermore, it's important to remember  that this cap is dealing                                                               
with noneconomic damages.                                                                                                       
Number 1655                                                                                                                     
CHAIR  McGUIRE  remarked  that [medical  malpractice]  suits  are                                                               
similar  to aviation  lawsuits because  the liability  has to  be                                                               
projected  in  terms  of  the   possible  amount  that  could  be                                                               
recovered.     Therefore,  it  doesn't   matter  that   there  is                                                               
information  that  says  Alaska  juries  are  more  conservative.                                                               
Insurance  companies,  she  reiterated,  have to  factor  in  the                                                               
entire amount  that is possible  to recover.   The aforementioned                                                               
is the  problem with Amendment  1, she opined.   Furthermore, the                                                               
terms  "serious  physical  impairment and  disfigurement"  aren't                                                               
defined.  She said she  understood the reluctance to define those                                                               
terms in  this [statute]  because they  already appear  in common                                                               
law, but relayed that discussions  with health care professionals                                                               
have  revealed  that  these  terms  have  been  interpreted  more                                                               
loosely than  committee members probably envision.   Furthermore,                                                               
most cases  are borne  out through  settlements, for  which there                                                               
are no  statistics.   The statistics are  related to  the trials.                                                               
However, the real  costs come into play with  the settlements for                                                               
which everyone pays the cost.                                                                                                   
CHAIR McGUIRE  reminded the committee  that during  testimony she                                                               
asked  every  medical  malpractice attorney  questions  regarding                                                               
contingency fees and  costs.  She relayed  her understanding that                                                               
it's illegal  to include the  cost of  hiring experts as  part of                                                               
the [contingency]  percentage.   She reminded the  committee that                                                               
the federal government has said  that the maximum contingency fee                                                               
is 20  percent, unless it's 30  days prior to the  trial in which                                                               
case  the   maximum  contingency   fee  is   25  percent.     The                                                               
aforementioned has to  be addressed, she emphasized.   After [the                                                               
injured party] pays [25] percent  in contingency fees and $50,000                                                               
in  costs, she  questioned what  would  be left  for the  injured                                                               
party.   Chair McGuire  encouraged the  trial bar  to contemplate                                                               
the aforementioned and  she suggested that perhaps  the trial bar                                                               
would want  to lower its  contingency fees because 20  percent of                                                               
$250,000 is a lot of money.                                                                                                     
CHAIR McGUIRE relayed  her belief that Amendment 1  would gut the                                                               
goal of  HB 472, which  is to reduce  the amount of  exposure and                                                               
the amount of settlements.                                                                                                      
REPRESENTATIVE ANDERSON  offered that  it's a matter  of balance.                                                               
He  reminded  the  committee  that  many  of  the  hospitals  and                                                               
physicians, and the Alaska State  Medical Association (ASMA) seem                                                               
to believe this legislation will work.                                                                                          
REPRESENTATIVE  GARA  informed  the   committee  that  the  other                                                               
important  reason for  Amendment  1 is  that  often [the  injured                                                               
party]  doesn't  receive  anything  outside  of  the  noneconomic                                                               
damages.   Although the medical  expenses are covered,  those are                                                               
paid to the entity for  the services provided.  Furthermore, many                                                               
don't  receive lost  wages,  such as  seniors  because they  have                                                               
stopped  working.    He  questioned  whether  those  following  a                                                               
subsistence  lifestyle  would  receive lost  wages.    Therefore,                                                               
there is  little left  once the  $250,000 cap  is reduced  by one                                                               
third  because  it's taxable  and  by  another third  because  of                                                               
attorney fees.   Therefore, the two-tiered  approach in Amendment                                                               
1 provides a  compromise in which the insurance  companies have a                                                               
hard cap.                                                                                                                       
REPRESENTATIVE ANDERSON maintained his objection.                                                                               
Number 2017                                                                                                                     
A roll  call vote  was taken.   Representatives  Gara, Gruenberg,                                                               
Ogg, and  Holm voted  in favor of  Amendment 1.   Representatives                                                               
Anderson,  Samuels, and  McGuire  voted against  it.   Therefore,                                                               
Amendment 1 was adopted by a vote of 4-3.                                                                                       
Number 2037                                                                                                                     
REPRESENTATIVE OGG  moved that the  committee adopt  Amendment 2,                                                               
labeled 23-LS1743\A.3, Bullock, 3/10/04, which read:                                                                            
     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 gross negligence or reckless or                                                                        
     intentional misconduct."                                                                                                   
     Page 2, line 25, following "judgment":                                                                                     
          Insert "unless the personal injury or wrongful                                                                        
      death was the result of gross negligence or reckless                                                                      
     or intentional misconduct"                                                                                                 
Number 2040                                                                                                                     
REPRESENTATIVE ANDERSON objected.                                                                                               
REPRESENTATIVE OGG explained that  many insurance companies don't                                                               
cover people  for [personal injury  or wrongful  death] resulting                                                               
from gross negligence or reckless  disregard.  Representative Ogg                                                               
opined  that [this  legislation]  would allow  those who  [commit                                                               
conduct that is grossly negligent  or reckless or intentional] to                                                               
"walk."  He said  he wants to be sure that  those who commit such                                                               
conduct are accountable  for the damage they do, which  is why he                                                               
offered Amendment 2.                                                                                                            
REPRESENTATIVE  ANDERSON relayed  that  the associations  believe                                                               
Amendment  2  is irrelevant  because  punitive  damages apply  in                                                               
these  cases  of  gross negligence  or  reckless  or  intentional                                                               
[misconduct].  He recalled that  someone told him that 50 percent                                                               
of punitive damages go to  the state, and therefore it's believed                                                               
that [Amendment 2] is an  attempt to get around that arrangement.                                                               
Representative  Anderson  specified  that those  supporting  this                                                               
legislation feel  that this doesn't  need any  correction because                                                               
there  are  adequate remedies  in  the  statute.   Therefore,  he                                                               
announced that he didn't concur with Amendment 2.                                                                               
REPRESENTATIVE GRUENBERG  pointed out  that punitive  damages are                                                               
extraordinary  and  not  often  awarded,  and  almost  require  a                                                               
separate phase of the trial.   Furthermore, punitive damages have                                                               
to be  proven by clear and  convincing evidence, which is  a much                                                               
higher standard  of proof.  Therefore,  [punitive damages] aren't                                                               
a substitution for [Amendment 2].                                                                                               
REPRESENTATIVE GARA  explained that [Amendment 2]  would say that                                                               
in the  actual damages phase,  the caps wouldn't apply  for those                                                               
who  are  [injured  due  to]  gross negligence  or  worse.    The                                                               
punitive  damages  question would  be  separate.   Therefore,  by                                                               
adding the  [language] specified  in [Amendment 2],  the punitive                                                               
damages  wouldn't  be  reduced  nor would  the  state's  take  be                                                               
reduced.   Representative Gara acknowledged that  sometimes there                                                               
is a bifurcated  trial in which liability  [issues] are addressed                                                               
and  then punitive  damages are  addressed;  however, that's  not                                                               
Number 2184                                                                                                                     
CHAIR McGUIRE  informed the committee  that the  section covering                                                               
punitive damages  under civil damages and  apportionment of fault                                                               
is AS 09.17.020 from which she highlighted the following:                                                                       
          (b) The fact finder may make an award of punitive                                                                     
     damages  only  if the  plaintiff  proves  by clear  and                                                                    
     convincing evidence that the defendant's conduct                                                                           
          (1) was outrageous, including acts done with                                                                          
     malice or bad motives; or                                                                                                  
          (2) evidenced reckless indifference to the                                                                            
     interest of another person.                                                                                                
          (c) At the separate proceeding to determine the                                                                       
     amount  of punitive  damages to  be  awarded, the  fact                                                                    
     finder may consider                                                                                                        
          (1) the likelihood at the time of the conduct                                                                         
     that  serious harm  would  arise  from the  defendant's                                                                    
          (2) the degree of the defendant's awareness of                                                                        
     the likelihood described in (1) of this subsection;                                                                        
          (3) the amount of financial gain the defendant                                                                        
     gained  or  expected  to  gain   as  a  result  of  the                                                                    
     defendant's conduct;                                                                                                       
          (4) the duration of the conduct and any                                                                               
     intentional concealment of the conduct;                                                                                    
          (5) the attitude and conduct of the defendant                                                                         
     upon discovery of the conduct;                                                                                             
       (6) the financial condition of the defendant; and                                                                        
          (7) the total deterrence of other damages and                                                                         
     punishment imposed on the defendant  as a result of the                                                                    
     conduct,  including compensatory  and punitive  damages                                                                    
     awards  to persons  in situations  similar to  those of                                                                    
     the  plaintiff   and  the  severity  of   the  criminal                                                                    
     penalties to  which the  defendant has  been or  may be                                                                    
REPRESENTATIVE GRUENBERG indicated  that the [financial condition                                                               
of the defendant] isn't normally admissible.                                                                                    
REPRESENTATIVE  ANDERSON  expressed  concern with  the  "ceiling"                                                               
aspect, which he said he didn't believe was fair.                                                                               
REPRESENTATIVE  OGG  remarked that  he  has  offered Amendment  2                                                               
because  when the  conduct  reaches the  level  specified in  the                                                               
amendment,  there shouldn't  be a  protection for  the individual                                                               
committing  [the  misconduct].    Such an  individual  should  be                                                               
subject to the present law.                                                                                                     
CHAIR  McGUIRE expressed  interest in  knowing the  percentage of                                                               
claims that  are brought  on the  basis of  the mental  intent of                                                               
simple negligence.   She  pointed out that  now that  Amendment 1                                                               
has been  adopted, the [noneconomic  damages] cap  is essentially                                                               
at $1  million.   Furthermore, the  common law  interpretation of                                                               
serious physical  injury is  broad enough to  assume that  the $1                                                               
million  will be  factored in  and settlements  will be  adjusted                                                               
accordingly  based  upon  people's unwillingness  to  go  through                                                               
trials and pay the costs.                                                                                                       
REPRESENTATIVE OGG said  that the claims brought on  the basis of                                                               
simple negligence weren't identified.                                                                                           
REPRESENTATIVE GARA  remarked that punitive damages  and informed                                                               
consent aside,  all medical  malpractice cases  are brought  on a                                                               
simple negligence theory.                                                                                                       
TAPE 04-36, SIDE B                                                                                                            
Number 2393                                                                                                                     
REPRESENTATIVE  GARA said  that one  would never  find out  which                                                               
cases involved  gross negligence  because only negligence  has to                                                               
be proven in order to be entitled to basic damages.                                                                             
CHAIR McGUIRE surmised  that [with the adoption  of Amendment 2],                                                               
there  would be  an  incentive  to argue  the  higher levels  [of                                                               
negligence] knowing that the caps would not apply.                                                                              
REPRESENTATIVE  GARA interjected  to  say that  such  would be  a                                                               
separate claim.                                                                                                                 
CHAIR McGUIRE  opined that Amendment  2 should be  rejected given                                                               
the fact that  the caps have been increased.   She suggested that                                                               
Amendment 2  "opens it  up too far,"  highlighting that  it's not                                                               
what's  proved but  rather  what's alleged.    A clever  attorney                                                               
could easily argue  gross negligence.  Chair  McGuire pointed out                                                               
that  this legislation  doesn't  impact  punitive damages,  which                                                               
attempts  to  deter bad  conduct.    Compensatory damages  aren't                                                               
going to change due to one's  mental intent, she noted.  She also                                                               
noted that  there have been  statements that  noneconomic damages                                                               
are being used  to address loss of consortium,  loss of enjoyment                                                               
of life,  and possibly to  grant recovery  to groups such  as the                                                               
elderly who don't have the  ability to recover under an economic-                                                               
damages  basis.   However, Chair  McGuire  opined, that's  mixing                                                               
apples and oranges because she  believes that when the discussion                                                               
is regarding someone's  mental intent [at the  level specified in                                                               
Amendment 2], the discussion should  be about punitive damages as                                                               
a  separate consideration.   Therefore,  Chair McGuire  announced                                                               
that she opposes Amendment 2.                                                                                                   
Number 2228                                                                                                                     
REPRESENTATIVE SAMUELS  relayed his understanding that  under the                                                               
present  law,  the  cap  [for gross  negligence  or  reckless  or                                                               
intentional misconduct]  is $2 million.   Therefore,  Amendment 2                                                               
would [eliminate]  the present cap.   He expressed  interest with                                                               
regard  to where  the suits  normally fall.   Although  he didn't                                                               
believe  there  would  be   any  argument  regarding  intentional                                                               
misconduct, he  doubted that there  are many suits  brought based                                                               
on it.   Representative Samuels asked if "this"  is covered under                                                               
the punitive damages portion.   He expressed concern with proving                                                               
negligence  versus  gross negligence  to  jurors  who don't  know                                                               
anything about the law or medicine.   Such a situation would seem                                                               
to result in a contest of attorneys.                                                                                            
REPRESENTATIVE  OGG  said  he  has a  problem  with  those  whose                                                               
actions rise  to the  level [of gross  negligence or  reckless or                                                               
intentional  misconduct], and  therefore  he  believes that  such                                                               
behavior  should  be reigned  in  somewhat.   He  echoed  earlier                                                               
comments that  punitive [damages]  are a  separate category.   He                                                               
reiterated his  understanding that the insurance  companies don't                                                               
cover  claims  of  gross  negligence,  and  therefore  he  didn't                                                               
believe the notion that [injured  parties] go for the deep pocket                                                               
would fit in this case.                                                                                                         
REPRESENTATIVE GARA informed the  committee that the only medical                                                               
malpractice case  he ever  took involved  intentional misconduct,                                                               
for which others in the  medical community congratulated him.  He                                                               
relayed  that  in most  [medical]  malpractice  cases [there  are                                                               
charges  of]  negligence.    However,  in  American  society  the                                                               
thought is  that if  someone is  hurt by  exercising unreasonable                                                               
care,  the victim  should  be  compensated.   At  some point,  he                                                               
remarked,  the conduct  becomes  so egregious  that  there is  no                                                               
reason  for society  to offer  any  protections.   Representative                                                               
Gara  relayed his  experience with  the medical  malpractice case                                                               
and  highlighted   the  [usual]   practice  of  offering   a  low                                                               
settlement until the  eve of trial.  The  aforementioned seems to                                                               
be a strategy to deter people  from filing for claims by "running                                                               
them through  the ringer if  they file them."   Furthermore, just                                                               
because [a  case] qualifies for a  higher cap, it isn't  the case                                                               
that the  money is just  given out, because [the  attorneys] take                                                               
into account what  a jury is likely to do  with the evidence, the                                                               
client,  and the  extent of  the injuries.   Representative  Gara                                                               
concluded  that ultimately,  there  are some  classes of  conduct                                                               
that the  legislature shouldn't protect, and  therefore he agreed                                                               
with Representative Ogg.                                                                                                        
REPRESENTATIVE GRUENBERG  turned attention to the  [case by case]                                                               
list  of [malpractice  cases],  and commented  that  there are  a                                                               
number  of things  that are  clearly negligence  while there  are                                                               
others that seem to fall under  Amendment 2.  He pointed out that                                                               
even for serious [misconduct], such  as performing arthroscopy on                                                               
the  wrong  knee,  it  doesn't  necessarily  result  in  a  large                                                               
settlement.  He expressed the need to be fair.                                                                                  
CHAIR McGUIRE, upon  being informed that someone had  flown in to                                                               
testify on other legislation, announced  that HB 472 would be set                                                               
aside with Amendment 2 pending.                                                                                                 

Document Name Date/Time Subjects