Academy of Medicine of Cleveland/
Northern Ohio Medical Association
Academy of Medicine of Cleveland/
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Senate Bill 281, sponsored by State Senator David Goodman ( R - Bexley ), is medical liability reform legislation. The bill was amended in the Senate Insurance, Commerce and Labor Committee on November 20, 2002 and passed the Ohio Senate by a vote of 22 - 9 on November 21, 2002. The bill was referred to the Ohio House of Representatives Civil and Commercial Law Committee; was substituted and amended by the House Committee; and was reported out of the Committee on December 2, 2002.
This summary is based on Sines & Towner Policy Group placing the amendments adopted into the substitute bill (version 3) that was reported by the House Civil and Commercial Law Committee. Technical changes may yet be made to the bill by the Legislative Service Commission.
Notice of Intent to Commence Action Upon Medical Claim - Senate Bill 281 as passed by the Ohio Senate required a claimant to give a 90-day notice of an intention to bring suit for alleged professional negligence; if the notice is given within 90 days of the expiration of the statute of limitations, the statute was extended 90 days from the date of the notice.
Senate Bill 281, as reported by the House Committee goes back to current Ohio law and provides that if prior to the expiration of the one year period of limitations for commencing an action upon a medical claim a claimant gives to the person who is the subject of the claim written notice that the claimant is considering bringing an action, that action may be commenced against the person notified within 180 days after the notice is given. (2305.113 (B)(1))
New language in the version reported by the House Committee prohibits an insurance company from considering the existence or nonexistence of such a written notice in setting the liability insurance premium rates that the company may charge the company's insured person who was notified. (2305.113(B)(2))
Evidence of Collateral Source Payments - Senate Bill 281, as passed by the Ohio Senate, listed specific sources that the defendant could introduce as evidence of any amount payable as a benefit to the plaintiff as a result of the damages.
Senate Bill 281, as reported by the House Committee, permits a defendant to introduce evidence of any amount payable as a benefit to the plaintiff as a result of the damages, except if the source of collateral benefits has a mandatory self-effectuating federal right of subrogation, a contractual right of subrogation, or a statutory right of subrogation. Bill as reported by the House Committee also provides that if the defendant elects to introduce that evidence, the plaintiff may introduce evidence of any amount the plaintiff has paid or contributed to secure the right to receive the benefits of which the defendant has introduced evidence. (section 2323.41 (A)).
Statute of Repose - As passed by the Ohio Senate, the bill requires a claim for alleged medical negligence to be brought within one after the cause of action accrued. Except for persons within the age of minority or of unsound mind, both of the following apply:
As reported by the House Committee, the bill requires a claim for alleged medical negligence to be brought within one after the cause of action accrued. Except for persons within the age of minority or of unsound mind, both of the following apply:
The following additional exceptions have been included in the House reported bill:
The following language is included in the House reported version: A person who commences an action upon a medical claim under the above circumstances (3 or 4) has the affirmative burden of proving by clear and convincing evidence, that the person, with reasonable care and diligence, could not have discovered the injury resulting from the act or omission constituting the alleged basis of the claim within the 3 year period described in #3 above, or within the one year period described in #4 above, whichever is applicable. (section 2305.113).
Good Faith Motion - As reported by the House Committee, Senate Bill 281 includes the "good faith motion" provision included in House Bill 665 in the bill as reported by the House Committee. Allows the filing of a good faith motion by the defendant to a medical claim. Requires the court to conduct a hearing regarding the existence or nonexistence of a reasonable good faith basis upon which the claim is asserted against the defendant; if the plaintiff lacked a good faith basis for continuing to assert the claim, the court is to award all of the following in favor of the defendant: all court costs incurred by the defendant; reasonable attorneys' fees incurred by the defendant in defense of the claim after the time that the court determines that no reasonable good faith basis existed upon which to assert or continue to assert the claim; and reasonable attorneys' fees incurred in support of the good faith motion.
Requires a defendant that intends to file such motion to serve a "notice of demand for dismissal and intention to file a good faith motion" prior to filing a good faith motion and allows the plaintiff to dismiss the defendant from the action within fourteen days of service of that notice. (section 2323.42)
Limits Non-Economic Damages - The Senate passed version provided
limits non-economic damages for non-catastrophic injury as not to exceed the greater of
$250,000 or an amount that is equal to three times the plaintiff's economic loss, as
determined by the trier of fact, to a maximum of $500,000, with the limits for
catastrophic non-economic damages as the greater of $750,000 or $35,000 times the number
of years remaining in the plaintiff's expected life.
The bill reported by the House Committee places limits on non-economic damages for
non-catastrophic injury for each plaintiff as not to exceed the greater of $250,000 or an
amount that is equal to three times the plaintiff's economic loss to a maximum of
$500,000. For catastrophic injury the amount recoverable for noneconomic losses by each
plaintiff are not to exceed the greater of $1 million or $15,000 times the number of years
remaining in the plaintiff's expected life. (section 2323.43).
Procedures for Limitation on Noneconomic Damages - Senate Bill 281, as reported by the House Committee, provides the following procedures regarding the award of damages in a civil action upon a medical claim:
1. If a trial is conducted and the plaintiff prevails with respect to a medical claim, the court in a nonjury trial must make findings of fact, and the jury in a jury trial, must return a general verdict accompanied by answers to interrogatories, that must specify all of the following: (a) the total compensatory damages recoverable by the plaintiff; (b) the portion of the total compensatory damages representing economic loss; and (c) the portion of the total compensatory damages representing noneconomic loss.
2. The court must enter a judgment for the plaintiff for compensatory damages for economic loss in the amount determined in (1)(b) above, and for compensatory damages for noneconomic loss subject to the provision that a court of common pleas has no jurisdiction to enter judgment on an award of compensatory damages for noneconomic loss in excess of the limits set forth above. In no event may a judgment for noneconomic damages exceed the maximum amount recoverable pursuant to the limits on those damages. The provisions regarding the recovery of damages must be applied in a jury trial only after the jury has made its factual findings and determinations as to the damages.
3. Prior to the trial, any party may seek summary judgment with respect to the nature of the alleged injury or loss to person or property, seeking a determination of the damages for the nature of the injury.
4. If the trier of fact is a jury, the court must not instruct the jury with respect to the limits on the noneconomic damages and neither counsel for any party nor a witness may inform the jury or potential jurors of that limit.
The limitation on non-economic damages does not apply a wrongful death actions brought pursuant to Chapter 2125 of the Ohio Revised Code. (section 2323.43).
Periodic Payments of Future Damages - Allows a health care provider to elect to pay a claimant's future economic damages, if over $50,000, in periodic amounts. Includes under the definitions of "past damages" and "future damages" economic and noneconomic losses. Senate Bill 281, as reported by the House Committee, requires the court, in approving a periodic payments plan to "require" (instead of "to take into consideration" as the Senate passed version states) interest on the judgment in question in accordance with section 1343.03 of the Ohio Revised Code. (section 2323.55)
Expert Testimony - Senate Bill 281, as reported by the House Committee, requires licensed physicians to provide expert testimony on liability issues in a medical claim; however, it also includes a provision that provides that such provision is not to be construed to limit the power of the trail court to allow the testimony of any other expert witness that is relevant to the medical claim involved. (2743.43)
Limits on Attorney Contingency Fees - The Senate passed version limited an attorney's contingency fees in an action against a health care provider for professional negligence; 35% of the first $100,000, 25% of the next $500,000, and 15% of any amount exceeding $600,000. (section 4705.15).
Under Senate Bill 281, as reported by the House, the limit on attorney contingency fees has been removed.
Binding Arbitration of Disputes - Allows patients and their health care providers to agree that any future dispute may be resolved through binding arbitration. Senate Bill 281, as reported by the House Committee, doesn't require a physician to be on an arbitration panel. The term "physician" has been changed to "health care provider". (sections 2711.22, 2711.23, and 2711.24)
Reporting of Malpractice Actions - House version requires every clerk of a court of common pleas in Ohio, before the 15th day of January, April, July, and October of each year, to send to the Ohio Department of Insurance a quarterly report containing all of the following information relating to each civil action upon a medical claim that was filed or is pending in that court:
The court is required to collect $5 as an additional filing fee in each civil action upon a medical claim that is filed with the court. (2303.23)
Ohio Medical Malpractice Commission - Creates the Ohio Medical Malpractice Commission consisting of seven members: 3 appointed by the President of the Ohio Senate; 3 appointed by the Speaker of the Ohio House; and the Director of the Ohio Department of Insurance or his designee. One is to represent the Ohio State Bar Association, the Ohio State Medical Association, and one is to represent the insurance companies in Ohio, and all of them must have expertise in medical malpractice insurance issues.
The Commission is to do all of the following: study the effects of the Act; investigate the problems posed by, and the issues surrounding, medical malpractice; and submit a report of its finding to the Ohio General Assembly not later than 2 years after the Act's effective date.
Legislative Intent Clause - Adds to the legislative intent clause contained in the Senate passed version.
Applicability - provides in the temporary language that this Act applies to civil actions upon a medical claim in which the Act or omission that constitutes the alleged basis of the claim occurs on or after the Act's effective date.
Patient Compensation Fund - Creates in temporary law that the Superintendent of the Ohio Department of Insurance is to study the feasibility of a Patient Compensation Fund to cover medical malpractice claims, including, but not limited to the following: (a) the financial responsibility limits for providers that are covered in Senate Bill 281 and the Patient Compensation Fund; (b) the identification of methods of funding, which include, but are not limited to, surcharges on providers and all insurers authorized to write and engaged in writing liability insurance policies including insurers covering such perils in multiple peril package policies; (c) the operation and administration of such a fund; (d) the participation requirements.
The Superintendent is to submit a copy of a preliminary report by March 3, 2003, with a final report by May 1, 2003, to the Governor, the Speaker, the Senate President, and the Chairs of the relevant House and Senate Committees with jurisdiction over issues relating to medical malpractice liability. The final report is to include the Department's recommendations for implementing the Patient's Compensation Fund which the Ohio General Assembly is to implement not later than July 1, 2003.
The Superintendent is to make recommendations for the operation of a Patient's Compensation Fund designed to assist health care practitioners in satisfying medical malpractice awards above designated amounts. The Fund is to be designed and funded as necessary to satisfy that portion of the awards for damages for noneconomic loss from medical malpractice claims against hospitals, physicians and other health care practitioners in excess of $350,000. The recommendations are to also provide for the satisfaction of the awards for damages for noneconomic loss from medical malpractice claims against hospitals, physicians and other health care practitioners in excess of $500,000 to a maximum of the greater of $1 million or $15,000 times the number of years remaining in the plaintiff's expected life. The Fund is to act to satisfy awards for damages in the amounts provided only as to awards made after the implementation of the Fund's operation.
In order to create a source of money for the Fund sufficient to satisfy claims made against it for that portion of medical malpractice awards identified, the Superintendent is to also make recommendations for another source of state or private money for the Fund. The money in the Fund and any income from the Fund is to be used solely for the satisfaction of claims made against the Fund and the expenses of administering the Fund. The Superintendent's recommendations are to include a mechanism for making, and the assessment of, claims against the Fund.
Report to Ohio General Assembly - In the temporary law, language was included requiring the Ohio Department of Insurance to annually, beginning with information relative to the year 2002, provide the Ohio General Assembly with a report on all of the following: medical malpractice insurance rates in Ohio; the number of insurers offering medical malpractice insurance in Ohio; and the number of insurer applications submitted to the Ohio Department of Insurance seeking rate increases for medical malpractice insurance, and the Department's decision on those requests. The Ohio Department of Insurance is required to provide the annual report to the Speaker and minority leader of the House, the President and minority leader of the Ohio Senate, and the Chair and ranking minority member of the Insurance Committees in both houses, on or before March 31 of each year.
Preemption by Federal Law - Provides that if any item of law that
constitutes the whole or part of a section of law contained in this act, or if any
application of any item of law contained in this act, is held to be preempted by federal
law, the preemption of the item of law or its application does not affect other items of
law or applications that can be given affect (Temporary Language).
Severability Language - Includes language that if any item of law that constitutes the
whole or part of a section of law contained in this act, or if any application of any item
of law that constitutes the whole or part of a section of law contained in this act, is
held invalid, the invalidity does not affect other items of law or applications of items
of law that can be given effect without the invalid item of law or application (Temporary
Language).
Sines & Towner Policy Group