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Indicates Matter Stricken
Indicates New Matter
Sponsors: Reps. W.D. Smith, Taylor, G.M. Smith, Clemmons, Walker, Owens, Keegan, Barfield, Viers, G.R. Smith, Rice, White and Sandifer
Document Path: l:\council\bills\nbd\12012ac04.doc
Companion/Similar bill(s): 948
Introduced in the House on January 13, 2004
Introduced in the Senate on January 28, 2004
Last Amended on January 21, 2004
Currently residing in the Senate Committee on Judiciary
Summary: Medical Malpractice and Patient Safety Reform Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 12/17/2003 House Prefiled 12/17/2003 House Referred to Committee on Judiciary 1/13/2004 House Introduced and read first time HJ-84 1/13/2004 House Referred to Committee on Judiciary HJ-84 1/14/2004 House Member(s) request name added as sponsor: Owens 1/14/2004 House Committee report: Favorable with amendment Judiciary HJ-82 1/15/2004 House Member(s) request name added as sponsor: Keegan 1/15/2004 House Objection by Rep. Harrison HJ-291 1/15/2004 Scrivener's error corrected 1/20/2004 House Requests for debate-Rep(s). Sandifer, Bingham, Toole, White, Scott, Chellis, Hosey, Cato, Moody-Lawrence, Altman, Owens, Whipper and J. Brown HJ-23 1/21/2004 House Member(s) request name added as sponsor: Barfield, Viers, G.R.Smith, Rice, White, Sandifer 1/21/2004 House Amended HJ-53 1/21/2004 House Read second time HJ-73 1/21/2004 House Roll call Yeas-91 Nays-25 HJ-73 1/22/2004 House Read third time and sent to Senate HJ-26 1/22/2004 Scrivener's error corrected 1/28/2004 Senate Introduced and read first time SJ-14 1/28/2004 Senate Referred to Committee on Judiciary SJ-14
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
Indicates Matter Stricken
Indicates New Matter
January 21, 2004
Introduced by Reps. W.D. Smith, Taylor, G.M. Smith, Clemmons, Walker, Owens, Sandifer, Barfield, Viers, G.R. Smith, Rice, White and Keegan
S. Printed 1/21/04--H. [SEC 1/22/04 11:55 AM]
Read the first time January 13, 2004.
EXPLANATION OF IMPACT:
Department of Insurance
The bill allows the department to place an assessment on medical malpractice insurance premiums to generate revenues to carry out the provisions of this bill. The department is unable to determine the exact cost needed to carry out the provisions of the bill at this time but estimates that it would be minimal in comparison to the revenues that would be generated by the assessment.
Department of Labor, Licensing and Regulation
The bill allows the department to establish licensing fees and other fees to generate sufficient revenue to enable the board to perform its duties and responsibilities under the provisions of this bill.
Budget and Control Board - Office of Research and Statistics
Section 1, Article 4 requires the board in conjunction with the Department of Insurance and the South Carolina Board of Medical Examiners to develop procedures for providing certain information to various parties. It is estimated that one additional position (Program Manager) with salary and fringe of approximately $60,000 and other operating expenses of $12,000 representing a total cost of $72,000 to the general fund will be required to provide the information.
Budget and Control Board - Statewide
A review of this bill by the Office of General Counsel has identified two areas that could have a significant adverse fiscal impact on state and local governments including school districts.
Section 15-80-820(B) allows a plaintiff who has been unable to collect a judgment in a medical malpractice action to pursue recovery from the remaining defendants up to two years after the exhaustion of all appeals. Pending the timeframe to settle appeals and if the judgments should exceed the caps in the South Carolina Tort Claims Act, then the state and local governments may incur an unexpected liability years after the trial of a case.
If Section 15-80-830(F) is to be interpreted to repeal the statutory limitations of the Tort Claims Act, then state and local governments, special purpose and school districts may incur unlimited liability for any tort claims. This unlimited liability would be unfunded and uninsurable.
The Department of Health & Human Services, Department of Health & Environmental Control and the Patient Compensation Fund have been forwarded a copy of this bill. The impact on these agencies will be forwarded upon receipt and review.
LOCAL GOVERNMENT IMPACT:
See above Budget and Control Board - Statewide impact explanation.
The Board of Economic Advisors is the appropriate agency to address any revenue impact of this legislation. Any assessments would be a retaliatory tax item and therefore could impact general fund retaliatory tax revenue.
Additional statutory authority may be necessary to allow the Department of Insurance to reduce retaliatory tax revenue deposits to the general fund to cover the costs needed to carry out the provisions of this Act.
Office of State Budget
TO ENACT THE "MEDICAL MALPRACTICE AND PATIENT SAFETY REFORM ACT" BY ADDING TITLE 15, CHAPTER 80 TO THE CODE OF LAWS OF SOUTH CAROLINA, 1976.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 15 of the 1976 Code is amended by adding:
Section 15-80-10. This chapter may be cited as the 'Medical Malpractice and Patient Safety Reform Act'.
Section 15-80-20. As used in this chapter:
(1) 'Healthcare provider' means a physician, surgeon, osteopath, nurse, oral surgeon, dentist, pharmacist, chiropractor, optometrist, podiatrist, hospital, nursing home, or any similar category of licensed healthcare provider, including a healthcare practice, association, partnership, or other legal entity.
(2) 'Insurance carrier' means any corporation, fraternal organization, burial association, other association, partnership, society, order, individual, or aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations and includes the joint underwriting association created pursuant to Chapter 79, Title 38 for the purpose of providing medical malpractice insurance.
(3) 'Medical Malpractice' means doing that which the reasonably prudent healthcare provider would not do or not doing that which the reasonably prudent healthcare provider would do in the same or similar circumstances.
(4) 'Claims review office' or 'office' means the Medical Claims Review Office established in the Department of Insurance pursuant to this chapter.
Section 15-80-30. The Department of Insurance shall promulgate regulations necessary to carry out the provisions of this chapter.
Section 15-80-40. The provisions of this chapter do not affect any right, privilege, or provision of the South Carolina Tort Claims Act, as provided for in Chapter 78, Title 15 of the 1976 Code.
Section 15-80-200. There is established the Medical Claims Review Office in the Department of Insurance which shall review all claims against healthcare providers for damages allegedly resulting from medical malpractice.
Section 15-80-210. (A)(1) Except as provided for in Section 15-80-250, before an individual may file an action in a court in this State against a healthcare provider for damages allegedly resulting from medical malpractice:
(a) the individual shall have served a claim for damages on the healthcare provider;
(b) a medical claims review panel must have reviewed and rendered an opinion on the claim within one hundred twenty days of service of the claim on the healthcare provider;
(c) sixty days must have elapsed since the claimant was served with the opinion of the medical claims review panel.
(2) If a claimant files an action against a healthcare provider before the requirements of subsection (A)(1) have been met, the court shall dismiss the action without prejudice, unless the applicable statute of limitations has elapsed. The claimant may not refile the action until the provisions of this chapter have been satisfied.
(B) The claim for damages must be served on the healthcare provider by certified mail, return receipt requested at the healthcare provider's primary place of practice or upon the healthcare provider's registered agent. The claim must describe the loss suffered, the circumstances that brought about the loss, the extent of the loss, the time and place the loss occurred, and the names and addresses of all persons involved, if known, and the amount of the loss sustained. Submitting a claim for damages constitutes a release authorizing the Medical Claims Review Office and the healthcare provider's medical malpractice insurance carrier to obtain the claimant's medical and hospital records only for the limited purposes provided for in this chapter.
(C) The service of the claim on the healthcare provider pursuant to subsection (B) tolls the statute of limitations which remains tolled one hundred and eighty days from the date service was effected on the healthcare provider or sixty days after the Medical Claims Review Office has served a final opinion on the claimant, whichever occurs first.
(D)(1) Within twenty days of receiving a claim for damages, the healthcare provider must serve the claim on the Medical Claims Review Office and to the healthcare provider's medical malpractice insurance carrier by certified mail, return receipt requested.
(2) Within thirty days of receiving a claim for damages, the healthcare provider shall serve a response to the claim on the Medical Claims Review Office, the healthcare provider's medical malpractice insurance carrier, and the claimant by certified mail, return receipt requested.
(3) A healthcare provider who fails to comply with subsection (D)(1) or (D)(2) is, after notice and an opportunity to be heard, subject to a fine of not less than five hundred dollars or more than one thousand dollars to be imposed by the Medical Claims Review Office.
Section 15-80-220. (A) Following receipt of a claim for damages, the Medical Claims Review Office shall convene a panel to review the claim. The office, in conjunction with healthcare provider licensing boards and the Department of Health and Environmental Control, shall develop procedures whereby individual healthcare providers and representatives of healthcare entities can register to volunteer to serve on medical claims review panels. Healthcare providers are strongly encouraged to volunteer to serve on review panels in order to minimize costs associated with convening these panels. The office shall develop medical claims review guidelines and training materials which must be provided to all healthcare providers who register.
(B)(1) Within twenty days of receiving a claim for damages from a healthcare provider, the Medical Claims Review Office shall appoint a panel comprised of three healthcare providers who have registered pursuant to subsection (A). All panel members must be licensed in the same discipline as the healthcare provider named in the claim; and one of the three healthcare providers must practice in the same medical specialty as the named healthcare provider. If a healthcare provider is a hospital, nursing home, or another legal entity, the panel members must be representative of a similar entity. If there are multiple healthcare providers named in a claim, the director of the Medical Claims Review Office shall determine if the healthcare providers are to be combined for review or reviewed by individual panels, and if combined, the director shall appoint a sufficient number of members to the panel so that all disciplines and specialties of the named healthcare providers are represented on the panel.
(2) Notwithstanding the provisions of subsection (B)(1), if a sufficient number of panel members are not available from the same medical specialty as a healthcare provider named in the claim, the director may appoint panel members from a related medical specialty.
(C) Members of the medical review panels may not receive compensation for serving on a panel, including mileage, per diem, and subsistence.
Section 15-80-230. The Medical Claims Review Office shall staff each panel and before providing claimant medical records and other information to the panel members for review, the office shall remove all claimant and healthcare provider identifying information.
Section 15-80-240. (A) In reviewing the claim for damages, the review panel shall consider the claim for damages statement submitted, the healthcare provider's response, and all medical records and other information related to the claim. The panel may obtain additional information by submitting questions and requests for information to the claimant and the healthcare provider in accordance with procedures developed by the Medical Claims Review Office, and if necessary, the director of the claims review office may compel responses to such inquiries and may subpoena records and documents only for the limited purposes provided for in this chapter.
(B) The panel shall render its opinion in writing and the Claims Review Office shall serve the claimant with the opinion by certified mail, return receipt requested, within one hundred twenty days from the date the claim for damages was served on the healthcare provider pursuant to Section 15-80-210(B).
(C) The panel shall determine whether the claim has merit or does not have merit and if meritorious, whether the conduct complained of resulted in harm to the claimant. If the panel finds that the conduct complained of resulted in harm to the claimant, the panel also shall include in its opinion:
(1) whether the healthcare provider has assumed any responsibility for the conduct complained of and whether anyone has been disciplined as a result of the conduct, and in multiple healthcare provider claims, the assignment and degree of responsibility if the healthcare providers have not assumed all or part of the responsibility;
(2) whether the healthcare provider has been available and responsive to the claimant; if the healthcare provider has not provided an adequate explanation to the claimant of what occurred, the panel must provide an explanation and the reason the healthcare provider did not provide an explanation;
(3) whether any standards of care, processes, or procedures involved in this claim have been revised, or are proposed to be revised, by the healthcare provider in an effort to prevent future occurrences, including enhanced or remedial training, and if no revisions have been made or are proposed to be made, recommendations, if any, for such revisions;
(4) whether any compensation has been offered and if so, what type of compensation was offered; whether the panel recommends compensation and if so, what type of compensation is recommended; for purposes of this item, 'type of compensation' includes, but is not limited to, future medicals, economic damages, pain and suffering, and other noneconomic damages; however, no specific monetary amounts for such damages may be recommended.
(D) All members of the panel shall sign the opinion and have the right to attach a separate concurring opinion or a dissenting opinion. The Medical Claims Review Office shall serve the panel's opinion by certified mail, return receipt requested on the claimant, the named healthcare provider, the healthcare provider's insurance carrier, and the licensing board or licensing entity for the healthcare provider. If multiple healthcare providers are combined for review, the office shall remove any identifying information not related to the recipient of the opinion before serving the opinion pursuant to this section.
(E) There is no review or appeal of the panel's opinion.
Section 15-80-250. Notwithstanding the provisions of Section 15-80-210, if an opinion is not served on the claimant by registered mail, return receipt requested within one hundred twenty days from the date the claim for damages was served on the healthcare provider pursuant to Section 15-80-220(B) and the parties have not agreed in writing to an extension, the panel has no further jurisdiction over the matter, and the claimant is considered to have complied with the provisions of this chapter. The claimant is no longer prohibited from filing an action, and the statute of limitations begins to run on the one hundred and twenty-first day.
Section 15-80-260. Within one hundred and eighty days of receiving an opinion from the Medical Claims Review Office pursuant to Section 15-80-240(D), the licensing board or licensing entity shall submit an interim report to the Claims Review Office and to the Department of Insurance stating any action the board or entity has taken in connection with a licensee who was a healthcare provider named in a claim for damages. No later than one year from receipt of the opinion, the board or entity shall submit a final report to the Claims Review Office and to the department stating the final disposition of the matter. Information provided by a licensing board or licensing entity pursuant to this section retains the same manner of confidentiality, if any, assigned to such information by the board or entity.
Section 15-80-270. (A)The Medical Claims Review Office shall maintain records of all proceedings, including a brief summary of each claim for damages submitted and the opinion of the panel on each claim.
(B) If the claimant files an action for damages based upon the conduct complained of in the claim for damages, the opinion of the Medical Claims Review Panel must be included in the pre-trial briefs required pursuant to South Carolina Rules of Civil Procedure.
(C) The proceedings of the review panel and any documents, reports and opinions of the review panels and of the claims review office are:
(1) privileged and not subject to discovery and are not admissible as evidence in a medical malpractice action pertaining to this matter;
(2) not subject to disclosure under the Freedom of Information Act.
Section 15-80-280. The Medical Claims Review Office and healthcare providers who serve on review panels convened by this office are immune from civil liability for all communications, findings, opinions, and conclusions made in the course and scope of their duties as prescribed by this chapter.
Section 15-80-290. (A) Revenue to fund the Medical Claims Review Office must be generated from fees assessed in accordance with this section.
(B) Annually the Department of Insurance shall determine what percentage of the Medical Claims Review Office budget is attributable to each health care profession based upon the staffing time and resources utilized by each. The department shall calculate the budget amount attributable to each healthcare licensing profession and submit this information annually to the Department of Labor, Licensing and Regulation which shall direct the licensing board of each profession to assess its licensees the budget amount attributable to that profession.
Section 15-80-310. (A) Upon receipt of a claim for damages from a healthcare provider pursuant to Section 15-80-210(D)(1), the healthcare provider's insurance carrier shall commence a full evaluation of the potential liability of each healthcare provider named in the claim and must be fair and diligent in evaluating and adjusting the claim. In evaluating these claims the carrier may utilize such information as it obtains including, but not limited to, the opinion of the Medical Claims Review Office provided pursuant to Section 15-80-240(D) and medical experts. When using medical experts, the carrier is encouraged to use experts licensed in this State.
Section 15-80-320. (A) The insurance carrier has one hundred and eighty days from the date the claim is submitted to the healthcare provider pursuant to Section 15-80-210(B) or sixty days after the Medical Claims Review Office has served an opinion on the claimant pursuant to Section 15-80-240(D), whichever occurs first, to make a final disposition of the claim by adjusting, compromising, settling, or rejecting the claim and submitting the final disposition to the healthcare provider, the Medical Claims Review Office, and the claimant by certified mail, return receipt requested.
(B) If the carrier fails to comply with this section, the Department of Insurance may impose sanctions upon the carrier as provided for in regulation.
Section 15-80-330. Upon concluding its evaluation and final disposition of the claim, the insurance carrier shall prepare a written report of its findings. This report and any other record, report, information, or documentation, relied upon by the insurance carrier in evaluating, adjusting, or disposing of the claim or in preparing its report, including information or any report provided to the carrier by an expert, are:
(1) privileged, not subject to discovery, and are not admissible as evidence in a medical malpractice action pertaining to this matter;
(2) not subject to disclosure under the Freedom of Information Act.
Section 15-80-340. If the claimant files an action for damages based upon the conduct complained of in the claim for damages, the insurance carrier must provide to the claimant a copy of the report prepared pursuant to Section 15-80-330, and the report and final offers of settlement made by all parties to the action must be included in the pre-trial briefs required pursuant to South Carolina Rules of Civil Procedure.
Section 15-80-410. (A) The Division of Health and Demographics in the Office of Research and Statistics, Budget and Control Board, in consultation with the Department of Insurance and the South Carolina Board of Medical Examiners, shall develop procedures for providing information to the:
(1) Board of Medical Examiners that identifies healthcare providers and their outcome data;
(2) Department of Insurance and the Department of Health and Environmental Control that identifies hospitals and their outcome data;
(3) public in a manner that is readily available and understandable that contains:
(a) nonidentifying healthcare provider outcome data;
(b) identifying hospital outcome data.
(B) Information provided pursuant to subsections (A) is:
(1) privileged, not subject to discovery, and not admissible as evidence in a medical malpractice action pertaining to this matter;
(2) not subject to disclosure under the Freedom of Information Act.
Section 15-80-510. At anytime before a medical malpractice action is brought to trial, including prior to the filing of such an action, the parties shall participate in mediation pursuant to procedures established in the South Carolina Court Circuit Court Alternative Dispute Resolution Rules in effect at the time for the State or any portion of the State. Parties may also agree to participate in binding arbitration.
Section 15-80-610. If a judge finds that an expert healthcare provider in a medical malpractice action in this State may have engaged in any unjustifiable conduct in connection with testifying as an expert in deposition or at trial, the judge shall report the expert to the state entity that licenses and regulates the profession of the expert or the type of healthcare entity represented by the expert. The state entity is authorized to investigate the reported conduct, hold hearings, and impose sanctions. By testifying as an expert in deposition or at trial an expert is deemed to have submitted to the jurisdiction of the state entity."
Section 15-80-710. (A) Compensation for pain and suffering may be awarded in a medical malpractice action in an amount not to exceed three hundred thousand dollars for each plaintiff, except as provided for in subsection (B). The jury shall determine and state the amount for pain and suffering separately from amounts for other damages. Such an award is the total compensation allowed for actual physical pain inflicted and for any continued physical suffering that results from the infliction of that pain. An award for pain and suffering does not include compensation for:
(1) permanent disability;
(2) disfigurement or scarring;
(4) loss of limb or any organ.
(B) At the end of each calendar year, the State Budget and Control Board, Board of Economic Advisors shall determine the increase or decrease in the ratio of the Consumer Price Index to the index as of the prior December 31, and the limitation on compensation for pain and suffering pursuant to subsection (A) must be increased or decreased accordingly. As soon as practicable after this adjustment is calculated, the Director of the Budget and Control Board shall submit the revised limitation on compensation to The State Register for publication pursuant to Section 1-23-40(2), and the revised limitation becomes effective upon publication of The State Register. For purposes of this subsection, 'Consumer Price Index' means the Consumer Price Index for Wage Earners and Clerical Workers as published by the United States Department of Labor, Bureau of Labor Statistics.
(C) This section must not be construed to effect the limitations on damages established in the South Carolina Torts Claims Act.
Section 15-80-810. In an action to recover damages for personal injury or wrongful death resulting from alleged medical malpractice, the liability of each defendant is based on percentage of fault, except as provided for in Section 15-80-820. Each defendant is liable only for the amount of damages allocated to that defendant in direct proportion to that defendant's percentage of fault, and a separate judgment must be rendered against the defendant for that amount. To determine the amount of judgment to be entered against each defendant, the jury, or the court in the absence of a jury, shall specify the percentage of fault attributable to each defendant, including persons who have settled or have been released. The court, with regard to each defendant, shall multiply the total amount of damages recoverable by the plaintiff by the percentage of each defendant's fault, and the amount calculated for each defendant is the maximum recoverable against that defendant, except as provided for in Section 15-80-820.
Section 15-80-820. (A) One year, but not later than two years, after judgment in a medical malpractice action becomes final through lapse of time or through exhaustion of appeal, whichever occurs later, a plaintiff who, through good faith efforts, has been unable to collect from a defendant against whom recovery was awarded may move to open the judgment filed and request that the uncollectible amount be reallocated among the other defendants. If the court finds that all or part of a defendant's share, as established pursuant to Section 15-80-810, of the recoverable damages is not collectible from that defendant, the court shall reallocate the uncollectible amount among the other defendants in accordance with provisions of this section.
(B)(1) The court shall order that the portion of the uncollectable amount which represents recoverable damages be reallocated among the other defendants according to their percentages of fault. The court shall reallocate to any such other defendant an amount equal to the uncollectible amount of recoverable damages multiplied by a fraction in which the numerator is such defendant's percentage of negligence and the denominator is the total of the percentages of negligence of all defendants, excluding any defendant whose liability is being reallocated.
(2) A defendant whose liability is reallocated is nonetheless subject to contribution pursuant to subsection (B)(3) and to any continuing liability to the claimant on the judgment.
(3) A right of contribution exists in parties who, pursuant to this section, are required to pay more than their share of a judgment, as established pursuant to Section 15-80-810. An action for contribution pursuant to this subsection must be brought within one year after the party seeking contribution has made the final payment in excess of that party's share of the judgment.
Section 15-80-830. (A) In a medical malpractice action where comparative fault is or becomes an issue, if a defendant named in an original complaint initiating a suit filed within the applicable statute of limitations, or named in an amended complaint filed within the applicable statute of limitations, alleges in an answer or amended answer to the original or amended complaint that a person not a party to the suit caused or contributed to the injury or damage for which the plaintiff seeks recovery, and if the plaintiff's cause or causes of action against such person would be barred by any applicable statute of limitations but for the operation of this section, the plaintiff may, within ninety days of the filing of the first answer or first amended answer alleging such person's fault, either:
(1) amend the complaint to add such person as a defendant pursuant to South Carolina Rules of Civil Procedure and effect service of process on that person; or
(2) institute a separate action against that person by filing a summons and complaint. If the plaintiff elects to proceed under this item by filing a separate action, the complaint so filed must not be considered an "original complaint initiating the suit" or "an amended complaint" for purposes of this subsection.
(B) A cause of action brought pursuant to subsection (A) must not be barred by any statute of limitations.
(C) This section does not shorten nor lengthen the applicable statute of limitations for any cause of action, other than as provided in subsection (A).
(D) This section does not limit the right of any defendant to allege in an answer or amended answer that a person not a party to the suit caused or contributed to the injury for which the plaintiff seeks recovery.
(E) For purposes of this section, "person" means any individual or legal entity.
(F) Notwithstanding any provision of law to the contrary, this section applies to suits involving governmental entities."
SECTION 2. Chapter 47, Title 40 of the 1976 Code is amended by adding:
"Section 40-47-290. The South Carolina Board of Medical Examiners shall establish licensure fees, and other fees that the board is authorized to impose, sufficient to generate revenue enabling the board to perform its duties and enhance its capabilities pursuant to its responsibilities under this chapter including, but not limited to, increasing investigative staff and conducting inquiries which result from opinions provided to the board by the Medical Claims Review Office pursuant to Section 15-80-240(D)."
SECTION 3. Chapter 79, Title 38 of the 1976 Code is amended by adding:
"Section 38-79-40. (A) An insurer issuing a policy of healthcare provider medical malpractice insurance shall offer, as a part of the policy or as an optional endorsement to the policy, deductibles and policy limits optional to the policyholder. Deductible amounts and policy limits offered must be disclosed fully to the prospective policyholder in writing in an amount to be established by the Department of Insurance in regulation for each compensable claim. The policyholder exercising the deductible or policy limits options, or both, shall choose only one deductible amount and one policy limit.
(B)(1) If the policyholder exercises the option and chooses:
(a) a deductible, the insured healthcare provider is liable for the amount of the deductible for benefits paid for each compensable claim of medical malpractice;
(b) a policy limit, the insured healthcare provider is liable for the amount awarded in excess of the policy limits for each compensable claim of medical malpractice.
(2) The insurer shall pay all or part of the deductible amount to the claimant entitled to the benefits and then seek reimbursement from the insured healthcare provider for the amount of the deductible paid. The payment or nonpayment of deductible by the insured healthcare provider to the insurer must be treated under the policy insuring the liability for medical malpractice in the same manner as payment or nonpayment of premiums.
(3) The insurer shall only pay that amount awarded to the claimant within the policy limits, and the insured healthcare provider shall pay any amount in excess of the policy limits.
(C) Optional deductibles and policy limits must be offered in each policy insuring liability for healthcare providers which is issued, delivered, issued for delivery, or renewed after June 30, 2004, unless an insured and insurer agree to renegotiate a medical malpractice insurance policy in effect on July 1, 2004, so as to include a provision allowing for a deductible and policy limits.
(D) Premium reduction for deductibles and policy limits must be determined before the application of any experience modification, premium surcharge, or premium discounts. To the extent that a healthcare provider's experience rating is based on benefits paid, money paid by the insured under a deductible as provided in this section must not be included as benefits paid so as to harm the experience rating of the insured.
(E) This section does not apply to healthcare providers who are approved to self-insure against liability for medical malpractice or group self-insurance funds for medical malpractice established pursuant to the laws of this State."
SECTION 4. Article 1, Chapter 79, Title 38 is amended by adding:
"Section 38-79-40. A person serving on the Board of the Joint Underwriting Association or the Board of Governors of the Patients' Compensation Fund is prohibited from being employed in any manner or compensated by the Joint Underwriting Association or the Patients' Compensation Fund, and this prohibition continues for one year after the person ceases to be a member of the board.
No provision of this section may be construed to prohibit an insurance agent from selling insurance products to the association."
SECTION 5. Section 15-36-10 of the 1976 Code is amended to read:
Any person who takes part in the procurement, initiation, continuation, or defense of any civil proceeding is subject to being assessed for payment of all or a portion of the attorney's fees and court costs of the other party if:
(1) he does so primarily for a purpose other than that of securing the proper discovery, joinder of parties, or adjudication of the claim upon which the proceedings are based; and
(2) the proceedings have terminated in favor of the person seeking an assessment of the fees and costs.
As used in this chapter, "person" is defined to mean any individual, corporation, company, association, firm, partnership, society, joint stock company, and any other entity, including any governmental entity or unincorporated association of persons.
(A)(1) Every document filed in a civil or administrative action on behalf of a party who is represented by an attorney must be signed by at least one attorney of record who is an active member of the South Carolina Bar and must include the address and telephone number of the attorney signing the document. Every document filed in a civil or administrative action by a party who is not represented by an attorney must be signed by the party and must include the party's address and telephone number.
(2) The signature of an attorney or a party constitutes a certificate to the court that the person:
(a) has read the document;
(b) that to the best of his knowledge, information, and belief there is good ground to support it; and
(c) that it is not frivolous, interposed for delay, or brought for any purpose other than securing proper discovery, joinder of parties, or adjudication of the claim upon which the proceedings are based.
(3) If a document is not signed or does not comply with this section, it must be stricken unless it is signed promptly after the omission is called to the attention of the attorney or the party. If a document is signed in violation of this section, the court, upon its own motion or the motion of a party or, or by petition in collateral proceedings, may impose an appropriate sanction upon the person who signed it.
(B)(1) A participant to a civil or administrative action may be sanctioned for filing a frivolous pleading, motion, or document, for making a frivolous argument, or for filing a pleading, motion, or other document in bad faith whether or not there is good ground to support it.
(2) Sanctions may include:
(a) an order to pay the reasonable costs and attorney's fees incurred by the party or parties defending against a frivolous pleading, motion, or document filed, a frivolous argument made, or a pleading, motion, or document filed in bad faith;
(b) a reasonable fine to be paid to the court;
(c) a directive of a nonmonetary nature designed to deter the person from engaging in future frivolous actions or actions made in bad faith; or
(d) an order for payment of a reasonable monetary penalty to the party or parties defending against a frivolous pleading, motion, or document filed, a frivolous argument made, or a pleading, motion, or document filed in bad faith.
(C) A person is entitled to notice and an opportunity to respond prior to the imposition of sanctions under this section. A court imposing sanctions under this section shall describe in its order the conduct determined to constitute a violation of this section, explain the basis for the sanction imposed, and enter judgment accordingly.
(D) The provisions of this section apply in addition to all other remedies available at law or in equity."
SECTION 6. Section 38-79-460 of the 1976 Code is amended to read:
"Section 38-79-460. The fund, and any income from it, must be
held in trust, deposited in the office of the State Treasurer and kept in a segregated account entitled "Patients' Compensation Fund", invested and reinvested by the State Treasurer in the same manner as provided by law for the investment of other state funds in interest-bearing investments and may not become a part of the general fund of the State. All expenses of collecting, protecting, and administering the Fund must be paid from the Fund managed by the board according to its plan of operation developed pursuant to Section 38-79-430."
SECTION 7. Section 38-79-470(1) of the 1976 Code is amended to read:
"(1) Monies may be withdrawn from the fund only upon the signature of the chairman of the Board of Governors or his designee
upon written warrants of the Comptroller General, drawn on the State Treasurer to the payee designated in the requisition."
SECTION 8. As of this act's effective date, the State Treasurer shall relinquish the management of funds in the Patient's Compensation Fund, created pursuant to Section 38-79-420 of the 1976 Code, to the Board of Governor's of the fund, and premiums paid on or after this act's effective date must be deposited with the Board of Governors of the fund. The fund must be fully transferred to the Board of Governors, and the State Treasurer may not hold any deposits of the fund as of ninety days after this act's effective date.
SECTION 9. Sections 15-36-20 through 15-36-50 of the 1976 Code are repealed.
SECTION 10. This act takes effect six months after approval by the Governor and applies to medical malpractice actions, as defined in Section 15-80-20, as added by Section 1 of this act, that are filed on or after this act's effective date.
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