Texas Tech Law School Releases ‘Legislative Intent Roadmap’ on 2003 Lawsuit Reforms

Texas Tech Law Review has issued a comprehensive overview of lawsuit reform measures passed in 2003. According to an announcement released by the Texas Alliance for Patient Access, the 357-page article, the culmination of a year of review and written by six leading Texas attorneys, is designed to serve as the “authoritative word” or a “legislative intent roadmap” on the landmark liability reforms passed by lawmakers in 2003 and approved by voters that same year.

“Two years ago, Texas lawmakers passed arguably the most expansive rewrite of the state’s civil justice laws since the adoption of the Texas constitution 140 years ago,” said Walter Huffman, Dean of the Texas Tech University School of Law. “The article in today’s Texas Tech Law Review is intended as an objective research tool on these landmark reforms — a roadmap to what lawmakers intended to enact. This scholarly article may serve as a guide for attorneys, as well as judges at all levels, to understand and properly apply the hundreds of new laws.”

The Tech law review article — “House Bill 4 and Proposition 12: An Analysis with Legislative History” — captures what the Legislature did and did not intend in the wording of the reform legislation. The review includes more than 1,850 footnotes.

The review weaves together legislative testimony and debate, commentary during floor votes and research submitted for the record to capture what legislators were considering and why they made the decisions they did.

Jon Opelt, executive director of Texas Alliance for Patient Access, said the article will help hasten the application of the 2003 legislation, improving patient access to care and reducing insurance rates for providers.

He said the number of physicians in Texas has risen dramatically since the legislation’s passage. Two years before the reforms, the number of internists, emergency care physicians, orthopedic surgeons and neurosurgeons had remained flat or declined.

The article is written by six Texas attorneys: Donald Wilcox, general counsel for the Texas Medical Association; Charles Bailey, general counsel for the Texas Hospital Association; and Gavin Gadberry, general counsel for the Texas Health Care Association, a coalition of the state’s long-term care providers. Michael Hull, Brent Cooper, and Michael Wallach, three of the state’s most highly regarded medical liability defense lawyers, also contributed.

All of the authors were intimately involved in the hearings and debates surrounding the passage of House Bill 4, as well as House Joint Resolution 3, enabling legislation that allowed voters to consider a change in the state’s Constitution.

State Sen. Robert Duncan, R-Lubbock, chairman of the Senate State Affairs Committee, and state Rep. Joe Nixon, R-Houston, chairman of the House Civil Practices Committee — both of whom guided House Bill 4 and HJR 3 through the legislative process — also contributed to the project.

Discussion items range from statute of limitations and expert reports to emergency care, charitable immunity, as well as the new non-economic damage cap, widely regarded as the lynchpin of the reform package. The article also analyzes changes in general tort law with respect to such issues as class action reform, settlement offers, forum shopping and proportionate responsibility.

The Texas Tech Law Review article retraces work by three interim committees in 2002, assessing the cause of rising medical liability insurance rates, as well a multitude of hearings during the 2003 legislative session.

Copies of Volume 36 entitled “House Bill 4 and Proposition 12: An Analysis with Legislative History” can be ordered by contacting Donna Jones, secretary of the Texas Tech Law Review at (806/ 742-3990 ext. 291).

Key Findings Cited in Law Review Article

1. That a healthcare crisis was occurring in Texas was never a subject of dispute, although the root cause of rising insurance rates was a matter of debate.

2. Medical liability insurance premiums began to rise dramatically between 2000 and 2002 — exacerbating an already growing crisis that was jeopardizing access to care for Texans.

3. Major insurers began to drop coverage or raise premiums to unaffordable levels forcing doctors to abandon patients and practices, particularly in high-risk specialties such as emergency medicine, obstetrics, and gynecology.

4. A disturbingly high number of physicians were limiting their scope of practice to minimize liability costs and lawsuit concerns.

5. Across the state, hospitals were turning away ambulances due to a critical shortage of doctors and nurses.

6. The November 2002 “Nelson Report” found major increases in both the frequency of lawsuits and severity of awards, punctuated by significant regional trouble spots.

7. A study conducted by the Texas Hospital Association in January of 2003 found that, on average, liability costs for Texas hospitals more than doubled between 2000 and 2003. These increases occurred even as hospitals purchased lower levels of insurance coverage with higher deductibles and higher self-retention levels.

8. The liability crisis caused hospitals to experience problems obtaining adequate physician on-call coverage for emergency departments, as well as surgery and obstetrics.

9. Underwriting losses, not a decline in investment income, was the major factor influencing rates charged by insurers.

10. The Nelson Report refuted assertions that the crisis was the fault of insurance companies arbitrarily raising rates to offset risky stock market losses. Rather, the Texas market became so unpredictable that 13 carriers left the state between 1999 and 2003.

11. Approximately 85 percent of medical liability claims against Texas physicians were closed with no payment made to the patient.

12. In Texas the average medical liability award quadrupled from 1989 to 1999, rising from $472,982 to $2,048.541. This jump was largely influenced by a disproportionate surge in non-economic awards.

13. The average long-term care legal claim in Texas was the second highest in the country, behind only Florida.

14. By January 2003, half of Texas nursing homes no longer carried liability insurance either because they couldn’t find or afford it.

15. This crisis in coverage was most likely spurred by changes in the law that allowed survey reports — essentially nothing more than hearsay reports of other problems with other patients — to be admitted as evidence in cases of nursing home neglect. Those surveys reports were skillfully used by plaintiff personal injury trial lawyers to produce verdicts so substantial that there were almost no carriers writing insurance for nursing homes in Texas by 2003.

16. Imposition of a damage cap in healthcare lawsuits is a matter of public concern because 44 percent of health care spending comes from public sources, be they federal, state or local governments.