ASSEMBLY COMMITTEE ON MEDICAL MALPRACTICE ISSUES

MINUTES OF THE meeting

of the

ASSEMBLY Committee on Medical Malpractice ISSUES

Eighteenth Special Session

July 31, 2002

The Committee on Medical Malpractice Issues was called to order at 1:20 p.m., on Wednesday, July 31, 2002. Chairman Bernie Anderson presided in Room 4100 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to Room 4401 of the Grant Sawyer Office Building in Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. Bernie Anderson, Chairman

Ms. Barbara Buckley, Vice Chairman

Mr. Bob Beers

Mr. David Brown

Mrs. Barbara Cegavske

Mr. Joseph Dini, Jr.

Mr. Lynn Hettrick

Mrs. Ellen Koivisto

Ms. Sheila Leslie

Mr. Mark Manendo

Mr. John Marvel

Mr. John Oceguera

Ms. Genie Ohrenschall

Ms. Bonnie Parnell

Mr. Richard D. Perkins

COMMITTEE MEMBERS ABSENT:

None

GUEST LEGISLATORS PRESENT:

Assemblyman Doug Bache, District 11

Assemblyman John Carpenter, District 33

Assemblywoman Vivian Freeman, District 24

Assemblyman David Humke, District 26

Assemblywoman Kathy McClain, District 15

Assemblywoman Kathy Martin, District 20

Assemblyman Bob Price, District 17

Assemblywoman Sandra Tiffany, District 21

STAFF MEMBERS PRESENT:

Nicolas Anthony, Senior Research Analyst

Risa Lang, Principal Deputy Legislative Counsel

Allison Combs, Principal Research Analyst

Cindy Clampiitt, Committee Secretary

June Rigsby, Committee Secretary

Linda Smith, Committee Secretary

OTHERS PRESENT:

Dr. Denise Selleck Davis, Executive Director, Nevada Osteopathic Medical Association

Jason Geddes

Robert Roshall, LVMPD

Gus Flangas, Physician’s Task Force

Dr. John Haller, General and Vascular Associates

Dr. Michael Daubs, Nevada Orthopedic Society, Concerned Physicians of Nevada

Dr. Robert McBeath, Nevada Medical Liability Physicians Task Force, COPN

Dr. Dan McBride, Physicians Task Force and President of the American College of Surgeons

Stan Olsen, LVMPD

Dr. James Tate, General Surgeon, President of the West-Crear Medical Society

Jim Wadhams, American Insurance Association (AIA), Nevada Hospital Association (NHA), Nevada Independent Insurance Association (NIIA)

Brian Hock

Bill Welch, Nevada Hospital Association (NHA)

Gerald Gillock, Nevada Trial Lawyers Association (NTLA)

Dr. Don Havins, Clark County Medical Society

Dr. Michael Fischer, Ophthalmologist

Robert Barengo, representative for Sunrise Hospital

The roll was called, and Chairman Anderson declared a quorum was present. It was announced that Assemblywoman Koivisto and Assemblywoman Leslie were testifying in the Senate and were excused. Speaker Perkins and Assemblywoman Buckley were working on Assembly matters and were excused. Assemblyman Dini was expected to arrive shortly. Chairman Anderson addressed the audience and asked if representatives of the medical community were present.

Chairman Bernie Anderson announced the first order of business would be a review of S.B. 2. He requested Risa Lang, Principal Deputy Legislative Counsel, to present a comparison between A.B. 1 and S.B. 2.

Risa Lang, Principal Deputy Legislative, called the committee’s attention to the document “Comparison of Assembly Bill No. 1 (First Reprint) and Senate Bill No. 2 (Proposed First Reprint with Amendment No. 2)” (Exhibit C) and commenced testimony. She reminded the committee that they had already reviewed A.B. 1, and she would focus on the differences with S.B. 2.

Senate Bill 2: Makes various changes related to medical and dental malpractice.

(BDR 3-13)

Section 1 of A.B. 1 corresponded to Section 1 of S.B. 2. That section provided for the $50,000 cap for hospitals and employees of either a governmental hospital or a nonprofit hospital. Subsection 2 provided for the limitation to apply to for-profit organizations that rendered care to a patient in an acute life-threatening situation. Subsection 1 contained clarification of language designed to resemble the language contained in the sovereign immunity statute. The purpose was to ensure that case law applied to the sovereign immunity statute would be carried forward for interpretation purposes.

Assemblyman Dini interjected with a request to review the bill language by citing specific lines.

Ms. Lang resumed testimony and clarified she was referring to a copy of S.B. 2 itself, and she was not reading from the amendment document (Exhibit C). The amended language was contained on page 2, lines 36 and 37, and read “exclusive of interest computed from the date of judgment, to or for the benefit of any claimant arising out of any act or omission.” That language was taken from the Nevada Revised Statutes (NRS) 41.035, the sovereign immunity statute.

Chairman Anderson requested clarification of the extension of sovereign immunity to for-profit institutions. Ms. Lang stated it was not an extension of sovereign immunity, rather it was merely language borrowed from the sovereign immunity statute. Case law would be applied in a similar manner in reading those words under subsection 1.

Subsection 2 was described as new language in the Senate bill that was not included in the Assembly bill. It extended the same limited liability of $50,000 to for-profit hospitals or those hospitals that were not covered by subsection 1 in situations where they provided assistance in an acute life-threatening medical condition.

Chairman Anderson asked for the specific location of the language “acute life-threatening situation.” Ms. Lang clarified it was on page 3, line 2, of S.B. 2.

Assemblywoman Parnell summarized by stating the language greatly expanded the population of people who would be covered by the $50,000. Ms. Lang concurred with her statement and explained it would include hospitals that would not have been previously covered. In reference to that population added in the Senate bill, Assemblywoman Parnell asked how those doctors were currently covered. Ms. Lang explained they would be operating under the cap of $350,000 noneconomic damages and under no cap for economic damages. Assemblywoman Parnell restated her question with an emphasis on the word “currently.” Ms. Lang clarified that currently there were no caps. Section 1 included designated trauma centers, and, in Nevada, there were three centers, UMC, Washoe, and Churchill. The proposed language would extend coverage, and she illustrated her point with the example of an acute life-threatening event in Carson City.

Assemblywoman Cegavske requested clarification of the language in both bills and asked if an anesthesiologist fit under the guidelines and definition of a physician. Ms. Lang replied in the affirmative and added that the anesthesiologist would have to be licensed under NRS 630 or NRS 633. If the anesthesiologist rendered care in one of the identified institutions under a trauma situation, he would be covered.

Chairman Anderson asked if the words “demanding immediate medical attention” was a bill drafter’s usage or if the language needed to be modified to add language such as “caused by.” Ms. Lang explained the language was modeled after a statute in another state. She was unsure if it required further modification. She clarified the language was also contained in A.B. 1.

Assemblyman Dini summarized by saying it covered “any emergency room in the state.” Ms. Lang agreed; however, in subsection 2 there was language that required it be an “acute life-threatening situation.” Referring to subsection 1, lines 33 and 34 of S.B. 2, Ms. Lang cited the language “serious medical condition” and explained that was the standard to be applied for nonprofits and governmental hospitals. For others, including for-profit hospitals, in subsection 2 on page 3, line 2, it required it be an “acute life-threatening medical condition.” Ms. Lang stated it was a slightly more serious standard to be met compared to subsection 1. It would not apply in as many situations.

Assemblyman Dini voiced confusion regarding the differences between “serious medical condition” and “acute life-threatening condition.” He asked if it amounted to a different standard. Ms. Lang acknowledged there was a difference in standards depending on whether it involved a nonprofit, governmental organization, or a for-profit hospital under subsection 2. In order to be covered under the new limited liability, the doctors in a for-profit hospital would have to be providing care in an “acute life-threatening condition.” If you provided care in a nonprofit or governmental institution, it would apply to situations that were deemed to be a “serious medical condition.”

Assemblyman Dini reiterated his confusion and illustrated his question with a hypothetical situation of an emergency room in Lovelock. If the patient was very sick but judged to not be in an “acute life-threatening situation,” and he arrived at the emergency room, he would not be covered. He asked how the determination of coverage would be made in a consistent manner.

Ms. Lang admitted she did not know the reason for choosing that standard in the proposed legislation. Initially it had only applied to nonprofit and governmental entities and their physicians. When the Senate made the decision to extend coverage to other hospitals in Nevada, they chose to limit the medical situations in which it would be applicable. If the doctor was not covered by the $50,000 limit, it would go to the other limits that were provided in the bill.

Assemblyman Dini added that he did not necessarily disagree with the concept, but it appeared to be confusing. Chairman Anderson interjected it would be advisable to bring in a witness who advocated for that position on the Senate side.

Assemblywoman Parnell stated the universal coverage was acceptable, but she voiced some discomfort over situations where a determination had to be made about the status of the patient and whether the coverage applied in that case.

Chairman Anderson summarized the committee’s need for a witness to clarify Section 1 and subsections 2 and 3 of the bill, especially the language governing emergency room situations. Assemblywoman Parnell concurred and requested the witness be able to clarify who would render the decision regarding the patient’s status.

Assemblyman Beers offered to address the philosophy of the issue. Chairman Anderson stated it was essential to allow Ms. Lang to continue her review of the bill without interruption.

Risa Lang resumed testimony and offered to clarify Assemblywoman Parnell’s concerns. The decision of the patient’s status would most likely be decided in court. It would be a factual determination for the jury.

Returning to the bill, Ms. Lang explained the Senate had added a new subsection 4 which provided a “rebuttable presumption” provision concerning follow-up medical care. In response to Chairman Anderson’s confusion about the line number, Ms. Lang clarified she was in subsection 4, page 3, line 20 of S.B. 2 (First Reprint). The $50,000 cap would continue to apply under the presumption the patient’s condition related to his initial medical event. Chairman Anderson requested clarification on time limits. He illustrated his question with the example of a physician who provided follow-up care for a heart attack victim. The patient had been initially treated in an emergency room and, at that time, the $50,000 cap was in effect because it was a life-threatening situation. In the aftercare situation, at what point did that patient’s status change?

Ms. Lang called the Chairman’s attention to paragraph b of subsection 4 on line 24. The follow-up care had to be related to the original medical condition that brought the patient to the emergency room. Chairman Anderson continued with his example and asked at what point the $50,000 cap expired. Ms. Lang clarified it was just a “rebuttable presumption.” It did not say follow-up care would definitely be an extension of the original care. As such, the presumption could be overcome as time passed; however, the language stated it was related to the original medical condition, was provided during the course of follow-up care, and the malpractice action was the result of something that happened during the follow-up care. If determined to be a closely related medical situation, then it would be judged to be a rebuttable presumption. It followed from the original care, and coverage was in place under that cap.

Assemblyman Marvel asked at what point the $50,000 cap would expire; Ms. Lang explained that, under the current language of the Senate bill and the Assembly bill, the cap would “go away” when the patient became stable. That language was contained in subsection 3 on page 3. If the physician began to provide additional care that was unrelated to the original emergency event, the cap would no longer apply.

In response to Assemblyman Marvel’s question about who made the determination after the patient was stabilized, Ms. Lang explained it would be a factual issue to be determined during the course of litigation. The definition in the bill was “stabilized and is capable of receiving medical treatment as a nonemergency patient.” Assemblyman Marvel asked if the initial treating physician made that determination. Ms. Lang was unsure of specific hospital procedures; however, it was directly tied to the point when the patient was no longer considered an emergency. An exception would be surgery that was required as a result of the emergency. That language was the same in both bills. The difference between the two bills was the Senate’s version had added language on the subject of “for-profit.” Additionally, subsection 4 contained the provision of “rebuttable presumption” for follow-up care. Ms. Lang continued her summary of differences by referencing subsections 2 and 4 and the cleanup language that tied the bill more closely to NRS 41.035.

Assemblyman Brown called attention to subsection 4C, the “rebuttable presumption” provision that he interpreted as tying the second medical condition to the first event. At lines 28 and 29, the language appeared unusual to Assemblyman Brown. There was a rebuttable presumption that the second medical condition was caused by the care or assistance rendered pursuant to subsection 1 or 2. It seemed to suggest the causation for the medical condition was the physician’s efforts, but not that it was a spillover from the initial medical condition. The presumption appeared to be the second condition arose from the first and not from the physician’s care.

Chairman Anderson reminded the committee there would be witnesses who would clarify and debate those points. Ms. Lang’s duty was to review the language of the bill.

Ms. Lang resumed testimony and agreed the language might need to be tightened on those issues. She summarized by stating that she had covered the “differences between S.B. 2 and S.B. 1 for that Section.” Chairman Anderson asked if there were any additional questions regarding Section 1 of S.B. 2.

Ms. Lang called the committee’s attention to Section 2 and the next major difference between the Senate and Assembly bills. The Senate bill added a new subsection 5 on page 3 of S.B. 2. That section amended NRS 41.505 that contained “Good Samaritan” provisions. The next addition to S.B. 2 was subsection 5 on page 5 of the bill that would give total immunity to medical doctors, osteopathic physicians, and dentists who, in good faith, provided medical care to a patient free of charge at a nonprofit or governmental health care facility.

Assemblyman Marvel asked if that language was the “Good Samaritan” statute. Ms. Lang confirmed it was contained in the Good Samaritan statute.

Ms. Lang called the committee’s attention to Section 2 of S.B. 2, when Chairman Anderson announced that the Ways and Means Committee would be meeting at 2:30 p.m., and that required a recess of his committee at 2:15 p.m. Chairman Anderson called new witnesses to the table and summarized the current discussion centered on S.B. 2. He explained there were committee concerns regarding the language on page 2 and the expansion of emergency room coverage to additional hospitals. Chairman Anderson asked the witnesses to clarify the intent of the language.

Gus Flangas, an attorney representing the Physicians Task Force, introduced his colleagues, Dr. Robert McBeath (to his left) and Dr. Michael Daubs (to his right).

Assemblywoman Parnell voiced concern about the addition of a new population of doctors and the clear standard to be met for the $50,000 liability coverage. If a clear standard was established, her second concern was that the determination would not be made until the matter reached a court of law. She asked for clarification on that process.

Before addressing Assemblywoman Parnell’s concerns, Mr. Flangas offered to review the background information that led to insertion of the language. The University Medical Center (UMC) Trauma Center in Las Vegas was extremely vital to Clark County and areas of Arizona and California. The UMC Trauma Center closed its doors in July for 10 days. The impact was devastating to the community and was foretelling of events to come in northern Nevada. Mr. Flangas explained that UMC was a state facility, and it fell under the $50,000 limitation. The employees of UMC also fell under that limitation. The reason for the bill was to help the independent doctors who worked at UMC, but, in fact, were not employees of the UMC Trauma Center. Those doctors were paid $40 per hour to work on a voluntary basis. When they listed the UMC Trauma Center on their malpractice insurance applications, their premiums increased significantly. In Mr. Flangas’ judgment, those doctors needed protection.

Mr. Flangas illustrated his point with an example of an independent doctor treating a patient at the UMC Trauma Center. That patient became his patient (i.e., professionally bound to continue with the care and treatment of that patient). The language that was inserted was somewhat designed to add more protection because of that obligation to perform follow-up work on that patient, regardless of location or time. Mr. Flangas explained the previous draft of the bill had no provision for follow-up work, and that caused great concern. It exposed the physician to the loss of the $50,000 coverage as originally drafted. The new language remedied that situation with the “rebuttable presumption” language. If there was an injury to the patient, it would be presumed to have occurred during the course of treatment for that trauma.

Chairman Anderson interrupted and reminded the witnesses that time was running out for questions from the committee. Mr. Flangas acknowledged the concern and summarized the issue of “rebuttable presumption.”

Assemblywoman Parnell interrupted to clarify for the witness that her concern was not that section of the bill. She stated emphatically that there was not one person who would argue the need to protect the trauma doctors in Nevada. Assemblywoman Parnell voiced her concern over language in S.B. 2 that added a new population of doctors who, with special circumstances, would have that same $50,000 liability protection. She voiced additional concern over a clear definition of when the coverage would be applicable and who would make that determination.

Dr. Michael Daubs, an orthopedic surgeon, offered to respond. There existed clear definitions in the Nevada Administrative Code that defined a “trauma patient.” If a patient qualified under that definition and was treated at a facility that was not a designated trauma center, the doctor would be protected by the proposed legislation.

Assemblywoman Cegavske reiterated an earlier question regarding the terminology “a physician” and asked if that included anesthesiologists in the treatment of trauma patients. Mr. Flangas replied in the affirmative.

Assemblyman Dini asked if coverage included nurse anesthesiologists. Mr. Flangas replied a nurse anesthetist would not be covered under that language. Chairman Anderson requested clarification from the Committee Legal Counsel. Ms. Lang called the committee’s attention to subsection 1, page 2, line 17, where it read “an employee of a hospital who renders care.” Ms. Lang explained it referred back to the nonprofit hospitals and centers. In regard to a for-profit facility, the same language was provided in subsection 2.

Following Chairman Anderson’s clarification, Ms. Lang continued with her testimony and stated it applied to employees of a hospital. It was provided under both subsection 1 and subsection 2. In governmental hospitals, employees were already covered under the sovereign immunity statute. As such, they were not included in that part of the bill, but they did have coverage nonetheless.

Assemblyman Brown, addressing Assemblyman Dini’s concern of nurse anesthetists, stated he believed that group had to carry their own professional insurance and were not necessarily classified as employees of hospitals.

In way of clarification, Dr. Michael Daubs stated it was his understanding nurse anesthetists were employed by hospitals.

Assemblyman Dini reiterated his comparison between lines 32-39 on page 2 (i.e., “serious medical condition requiring immediate medical attention”) versus the language on line 2 of page 3 where it stated “acute life-threatening medical conditions.” He observed there was a difference in standards between the two cited areas of S.B. 2.

Gus Flangas offered to respond and stated there was no clear answer to that concern. He suspected it happened in the drafting of the bill, and he was unsure if there was any actual distinction in the language. Chairman Anderson predicted that upcoming testimony from the hospital administrators and their attorney would resolve that issue.

Assemblyman Marvel asked when the $50,000 protective cap expired for a patient judged to be stabilized and who made that determination. Dr. Daubs offered to respond, and he acknowledged the issue of stabilization was a difficult one in the medical community. The language was added because the doctor’s initial contact with a patient was usually the first of several appointments. From his standpoint, a patient was stabilized if he was discharged from the clinic; the condition had been treated and he did not have to return to the clinic.

Assemblyman Marvel summarized by saying the $50,000 cap might be in place for a period of time. Dr. Daubs replied in the affirmative and, for many injuries, stated it could be 6-12 weeks.

Dr. Robert McBeath clarified that attempting to place a definite time limit on the $50,000 was not recommended. The intent was tied to the actual relationship between the doctor and patient as well as the nature of the injury. That relationship commenced when the doctor first treated the patient at the trauma center. The doctor’s judgment that the patient could be discharged from his care was the essential point.

Assemblyman Marvel asked if, as a matter of formality, the physician waived his liability at the point the patient was stabilized. Was the doctor required to sign-off; Mr. Flangas replied that would not be feasible under the law to have the doctor waive his rights for personal injury, especially in a trauma situation. As far as the issue of time limit expiration, Mr. Flangas stated that if a charge of malpractice was raised during treatment, it would be essential to prove that the malpractice actually occurred during that treatment. That was the essence of the bill. If it could be demonstrated that the malpractice occurred in the follow-up treatment, the presumption no longer was in place. It would become a malpractice action based on events during follow-up actions.

Chairman Anderson illustrated the issue with an example of a patient who showed signs of cardiac arrest and went to the emergency room of a rural hospital. After the patient was stabilized, he was sent home with the expectation that his treatment would continue with his personal physician. Chairman Anderson asked if there was a point in time when the $50,000 coverage no longer applied in that case. He added that previous testimony indicated the question would become an arguable point in court proceedings.

Mr. Flangas replied that theoretically the $50,000 cap would continue as a presumption. In the hypothetical case posed by Chairman Anderson, Mr. Flangas took the example a step further. Several months passed uneventfully and then the patient had symptoms that caused him to see his doctor. The patient was erroneously told he had indigestion and not a heart attack. That case would be considered malpractice due to subsequent events outside of the trauma center, and the $50,000 cap no longer applied.

Chairman Anderson modified his hypothetical case and stated the patient showed up at the emergency room convinced he was having a heart attack. The attending physician diagnosed the condition as indigestion and sent the patient home. The patient died of a massive coronary attack in the hospital parking lot. Chairman Anderson asked if the $50,000 cap covered the physician and could be recovered by the patient’s family.

Mr. Flangas requested clarification if the hypothetical patient had presented to the emergency room at the UMC Trauma Center. Chairman Anderson replied the patient was in Carson City. Dr. Daubs stated a heart attack was not considered a trauma and therefore would not be covered.

Dr. McBeath acknowledged there was some confusion in the language. The testimony in the Senate had centered on the example of the trauma victim being seen at another facility, not necessarily at UMC. During the Senate hearing, Dr. McBride illustrated the point with a case of a gunshot wound being handled at a community hospital.

Chairman Anderson voiced confusion and was still attempting to fully understand his hypothetical case. Because Nevada only had three designated trauma centers (i.e., Las Vegas, Reno, and Fallon), the likelihood of being seen in an emergency room of a hospital was very high for many Nevada citizens.

Dr. Daubs requested clarification if the hypothetical scenario was the example of a patient who was judged to be a trauma patient, but was not seen at a designated trauma center. Chairman Anderson read from lines 35-37 on page 2 of the bill “enters a hospital through its emergency room or trauma center may not be held liable for more than $50,000 in civil damages exclusive of interest computed from the date of judgment.” Dr. Daubs responded the heart attack would not fall under the trauma criteria.

Risa Lang, Committee Legal Counsel, asked if the witness was referring to the way they defined the situation, for example, going into a designated trauma center. She voiced confusion over why a heart attack would not be judged as a serious medical situation for a person in an emergency room or a trauma center. She called attention to subsection 2 that did not refer to designated trauma centers, but specifically addressed hospitals. In the example given, it would be an acute life-threatening medical condition, and she was unsure why a heart attack did not fall into that category.

Dr. Dan McBride, a member of the Physicians Task Force and President of the American College of Surgeons, approached the witness table and offered to clarify the issue. In testimony before the Senate, the discussion centered on limiting the coverage to patients with traumatic injuries. It was never the intent to extend blanket coverage to all emergency room patients, such as heart attacks. It was designed to extend the same liability coverage of physicians in the trauma center to physicians treating trauma cases in other facilities and hospitals.

Chairman Anderson emphasized the need for language that was sufficiently narrow for interpretation purposes.

Gus Flangas asked Dr. Daubs to address the issue. Dr. Daubs echoed the testimony of Dr. McBride and stated it was never the intent to include all medical cases, such as heart attacks. Dr. McBeath declared the core of the issue was in the definition of a trauma patient, and there were statutory definitions in place. He advised the statutory definitions would provide guidance for the bill language.

Chairman Anderson thanked the witnesses for their testimony and called representatives of the hospital association to the witness table. Robert Barengo, representing Sunrise Hospital, commenced testimony and explained the bill had been sponsored by the physicians. The heart of the issue was the treatment of trauma cases in all medical facilities. All hospitals received trauma patients. Physicians had a major concern that by treating a trauma patient in an emergency room, their liability might differ from what they would have had at a designated trauma center. Mr. Barengo described the bill as an attempt to have the designation of “trauma” follow the patient to whatever facility he entered for treatment.

Mr. Barengo described Section 1 as addressing the trauma centers, whereas Section 2 attempted to bring in all hospitals that treated trauma. Line 2 of page 3 included the language “acute life-threatening,” and he viewed that as an attempt to define “trauma.” A more refined definition of trauma was located in NRS 450B.105. Mr. Barengo suggested the addition of that definition to solve the problem. A physician treating any patient in any facility who met the definition of traumatic condition would be under the cap.

Assemblyman Oceguera voiced his opinion that because the language was so overly broad, it would invite unintended interpretations. He agreed there were established definitions of “trauma” in the NRS 450B.105 that would solve the issue.

In response to Assemblyman Oceguera, Mr. Barengo reminded the committee the use of that definition of trauma would bring into play the Nevada Administrative Codes (i.e., NAC 450B.798 and 450B.770) that dealt with the trauma issue.

Chairman Anderson called a committee recess with a request to reconvene at 4:30 p.m.

The Committee on Medical Malpractice Issues was called back to order at 4:47 p.m. Chairman Anderson announced the first order of business would be the continuation of testimony from Risa Lang, Committee Legal Counsel.

Ms. Lang offered to clarify the follow-up care provision of Section 1 of S.B. 2. The matter of “rebuttable presumption” was designed to assume that, in cases of medical malpractice, the event that caused the condition occurred during the initial treatment. The $50,000 cap would not apply if it was due to an event that occurred during follow-up care. The burden would be on the plaintiff to prove otherwise.

Chairman Anderson summarized and used an example to illustrate. A patient was treated at the emergency room of a hospital and then admitted to the hospital to be stabilized. After 10 days of treatment, the patient was released to the care of his physician. In the course of being treated by his physician, he suffered a severe or permanent loss. As a result he hired an attorney. Chairman Anderson posed the question “Who has the burden to prove that his loss was not part of the original trauma and treatment?”

Risa Lang stated it created a “rebuttable presumption” that the medical condition was caused by the initial care. As such, the victim would be encumbered to then prove that it did not happen in the hospital, but rather it occurred in the physician’s office during follow-up care. Ms. Lang called attention to line 27 and the language “a condition that arises during the follow-up care.” As such, it was not that the condition arose during the course of the follow-up care, but the presumption would be the actual event that caused the condition happened at the time of initial treatment. The presumption would have to be overcome.

Chairman Anderson commented that Mr. Brower had dealt with the bill drafter and not with the hospital or administrators.

Assemblyman Brown asked if the language could cause the opposite situation and create a rebuttable presumption suggesting the physician caused the secondary condition. Ms. Lang responded the rebuttable presumption related to when the event occurred and not to the physician. Assemblyman Brown acknowledged that point; however, in his judgment, the language “the medical condition was caused by the care or assistance rendered” led him to believe it was the act of a physician. Ms. Lang clarified it was pursuant to subsection 1 or 2 and, as such, it would still have to be during the course of those events covered by those two subsections.

Assemblyman Brown reiterated “it did not go to the condition but to the actions of the physician or caregiver.” Ms. Lang summarized by stating “the understanding was the condition that was causing the malpractice action was the cause of the caregiver assistance that took place while the physician was still covered under the cap. That is the correlation.” Assemblyman Brown was uncertain if his question had been fully addressed. Ms. Lang agreed that she was unsure if her answer was adequate. Assemblyman Brown reiterated his concern that the language as drafted “the medical condition was caused by the care or assistance” might be saying it was the result of an action of a caregiver. It was his understanding the intent of the provision was to say “there is a rebuttable presumption that the secondary condition is really almost part of the first or result of the first condition – rather than the result of the care given by the physician.”

Ms. Lang disagreed and stated it did go back to the physician. The rebuttable presumption arose when malpractice on the part of the physician could be demonstrated. Determining where in the course of events the malpractice occurred was a key point. In Ms. Lang’s words “did it take place while the physician was entitled to the limited immunity or did it take place after that time when he was no longer covered under that $50,000 limited liability.”

Assemblyman Oceguera concurred the language was subject to differing interpretation, especially in regard to the follow-up care. He recommended the intent be clear. Ms. Lang agreed that ambiguous language should be clarified. Chairman Anderson suggested Assemblyman Brown or Assemblyman Oceguera assist with the language in order to clarify intent. In his opinion, the intent was not to establish an indefinite time period.

Chairman Anderson returned to a hypothetical example of a patient who reported symptoms to his physician on a weekend. The physician advised him to report to the emergency room where the patient was subsequently treated and stabilized. Chairman Anderson asked if the $50,000 state sovereign immunity cap applied to that situation. Ms. Lang replied the cap applied anytime the conditions of subsection 1 or 2 were met. Under subsection 1, a patient with a “serious medical condition” who reported to a trauma center or an emergency room would be covered. Subsection 2 addressed the for-profit hospitals, and coverage depended upon whether or not it was an “acute life-threatening medical condition.” The $50,000 cap did not automatically cover follow-up care.

Continuing, Ms. Lang called the committee’s attention to the language of subsection 4 that specified several conditions had to be met. The physician provided follow-up care, that care was directly related to the original medical condition, and the patient filed an action for malpractice based on the medical condition that arose during the course of the follow-up care. The provision of “rebuttable presumption” required the condition was caused by the care or assistance that was rendered under subsections 1 and 2. In summary, Ms. Lang stated it had to be connected to original treatment and not to unrelated subsequent events.

Chairman Anderson requested clarification on the subject of sovereign immunity. Conceptually, was the purpose to protect the state, the entity of government, and its citizens as a whole and not the individual citizen. Ms. Lang concurred. Chairman Anderson continued by stating it was designed to protect the “treasury of the people” and to ensure the stability of government. He added it was the reason for the low cap. He asked if the proposed legislation would “expand the protection of the people’s treasury to private treasury.” As such, it would raise the issue of constitutionality.

Ms. Lang replied there was no extension of sovereign immunity, but merely the use of similar language in the statute that waived sovereign immunity and allowed the government to be sued up to $50,000. The intent was not to create sovereign immunity for the named entities. It was designed to extend similar liability status. Chairman Anderson acknowledged the clarification and added the issues of sovereign immunity and constitutionality were always of concern.

Ms. Lang resumed testimony and addressed Sections 2-5 of S.B. 2, language that dealt with the caps on noneconomic damages. Section 2 was directory language and was identical in both S.B. 2 and A.B. 1. Section 3 defined economic damages, and the language was identical in both bills. Section 4 defined noneconomic damages, and the language was the same in both bills. Section 5 provided a $350,000 cap on noneconomic damages, and the language was amended by the Senate. In A.B. 1 there had been eight exceptions to the cap, whereas in S.B. 2 the list was reduced to two exceptions. Those exceptions were listed as gross malpractice and the situation when the court determined “by clear and convincing evidence at trial that an award in excess of $350,000 for noneconomic damages is justified because of exceptional circumstances.” Ms. Lang clarified those two circumstances remained in the amended bill, however, the other six circumstances were eliminated.

In response to Chairman Anderson, Ms. Lang cited Section 5, page 5, lines 32 – 38. Referring to A.B. 1, Chairman Anderson asked if the removal of “death” and the “ability to have children” from the list of exceptions was appropriate. Were they not significant enough to be noted.

Ms. Lang declared that was a policy choice for the committee. In A.B. 1 there was a list of eight specific injuries determined to be significant in nature. In S.B. 2, the Senate chose to limit coverage to circumstances that related more to the actual act of gross malpractice or to judgments of the court. The latter provided for more court discretion.

Assemblyman Dini offered to explain the Senate’s rationale for reducing the list. It was his understanding the Senate felt subsection 2(b) (i.e., court judgments) would cover all situations.

Chairman Anderson welcomed the next witnesses, Gerald Gillock, representing the Nevada Trial Lawyers Association (NTLA), and Dr. James Tate, a Las Vegas trauma surgeon.

Mr. Gillock stated he was present in the Senate when the language had been amended and passed. In his judgment, the elimination of specific exceptions invited questions and prolonged litigation in front of a court. It had been his experience the claims involving “death” and “loss of reproductive organs” were issues of high importance in the eyes of the jury as well as in the eyes of the person suffering the loss. Those cases often involved no large amount of economic loss; however, there was compelling need to compensate. The removal of the $350,000 cap in those cases was clearly not enough to compensate some victims. Mr. Gillock quoted the language “in no event will the cap exceed the amount of their liability insurance so long as they carry $1 million in malpractice insurance coverage.” For the remaining exceptions, such as organic brain damage, economic losses would be so large that the $1 million policy would be exceeded. It was conceivable there would be a better chance of convincing a judge “by clear and convincing evidence” that the individual was entitled to have the cap lifted. If the medical bills were $900,000, for example, the $100,000 remaining in the policy could be awarded by the judge. That would serve to keep the “exposure of the doctors down to their $1 million limit for noneconomic losses.” Mr. Gillock emphasized it was important to understand that, in those instances, if the economic losses exceeded the $1 million policy limit, there would be no award for noneconomic losses.

In summary, Mr. Gillock stated when the bill was discussed and negotiated in the Senate, agreement was reached that the standard of “clear and convincing evidence” could be inserted; however, when the other exceptions were removed, it became onerous. He voiced concern that malpractice suits involving death or loss of reproductive organs would be subject to the whim of a judge who might be less than sympathetic to the losses. Awards could become very inconsistent across courtrooms. In his view, the amended legislation removed the discretion to award nonecomomic damages from the fact finder (i.e., the jury) and removed the matter from the arena of the courtroom. He encouraged the committee to seriously reconsider the elimination of the individual exceptions. The NTLA viewed it as jeopardizing the rights of citizens, especially in situations involving death and procreation.

Chairman Anderson added that his concern rested with the large, substantial part of the population.

Dr. James Tate, a trauma surgeon from Las Vegas and President of the West-Crear Medical Society, commenced testimony. He reflected on the examples of malpractice given in previous testimony and commented those were exactly the reasons behind most malpractice suits. Dr. Tate stated emphatically “If you are going to remove these injuries from the cap, there is no cap.” In reviewing the list of specific exceptions in A.B. 1, Dr. Tate said the most onerous was 2c, “death of a parent, spouse, or child.” In his view, the list of exceptions made no sense because most of those events were common and expected in the course of operating a trauma center. They were not outside the cap that was being created.

In response to a comment made by Mr. Gillock, Dr. Tate said it was not true that a case would only go to the policy limits. In actuality, a case would go to the policy limits and then the attorney could seek other assets from the accused. He cautioned the committee to be careful with exceptions (i.e., “giving something and then taking it all back”).

Chairman Anderson requested clarification if the witness was opposed to all of the eight exceptions originally listed in A.B. 1 as well as the two exceptions listed in S.B. 2. Dr. Tate admitted he was reviewing the list contained in the Assembly bill. Chairman Anderson cautioned the witness that A.B. 1 was history, and he directed the witness to the Senate bill, page 5, lines 3 32 – 34. He reiterated his question as to why significant events, such as death and loss of reproductive ability, would not remain in the list.

Dr. Tate believed all of the circumstances would be covered under the umbrella of “gross malpractice.” Chairman Anderson commented that it was an arguable question.

In reaction to a comment from Dr. Tate, Gerald Gillock interrupted the dialogue and asserted that he never saw gross malpractice or alleged negligence in 99.9 percent of his cases. Dr. Tate accepted the correction and continued with his testimony. Dr. Tate restated his opinion the issue was adequately covered by the language of the amended bill without making the list overly specific. Because of its inherent complexity, not all aspects of medicine could be legislated. Certain issues were subjective, such as the loss of reproductive ability, and might be judged to be less significant by some people.

Chairman Anderson summarized by saying that once a list was created it might never end.

Assemblywoman Parnell asked what the harm would be to include more specific cases in the list, for example, death. Dr. Tate posed a question. “Under what circumstances would you sue? If you lift the cap over death, you might as well not have a cap in the trauma center. It doesn’t make any sense because a lot of people will die in the trauma center.”

Assemblywoman Parnell responded there appeared to be agreement that malpractice cases often dealt with issues not involving a death. She felt it was essential to be able to establish differences in circumstances that led to malpractice.

Assemblyman Manendo inquired about the frequency of lawsuits against the trauma center that were not based on genuine malpractice. Dr. Tate emphatically stated it happened too often, and he illustrated his point with an example. The case involved a reckless young man whose life was heroically saved by the trauma center surgeons. The victim suffered three cardiac arrests and ultimately overcame all odds for survival; however, he suffered renal failure and the loss of his legs, and he filed a lawsuit against everybody. Dr. Tate declared those situations happened all too frequently.

Chairman Anderson summarized and stated it appeared the case cited would not apply in the new situation because it would be a trauma. The exceptions would not apply to that scenario. Mr. Gillock interjected that the case would fall under the $50,000 cap. He was intimately familiar with that case, and it did not proceed against the doctors, but only against the market. In response to Chairman Anderson he stated “under the new statute, that definitely is true.”

Dr. Don Havins, a physician and an attorney, commenced testimony and reflected on the proceedings in the Senate. He recalled the intent was to trust and empower the judge to make decisions based on clear and convincing evidence. That was preferred to a list enumerating specific medical conditions. Chairman Anderson acknowledged the insight.

Assemblyman Oceguera referred to the subsection covering “gross negligence” and voiced his agreement with the language in subsection 2(b) “clear and convincing evidence.” He raised a question about “gross malpractice” and asked if the exceptions rose to the level of gross malpractice. Mr. Gillock responded “no” and explained, “the gross malpractice goes to the act and not the consequences of the act.” Gross negligence was defined as a complete absence of any care. In his view, it was an almost impossible standard to meet. It was seldom seen in malpractice litigation. The issue was what the doctor did or did not do as opposed to what happened.

Assemblyman Brown commented if a judgment was rendered, any cap would be applied in the course of a courtroom verdict and judgment. In the examples of death or infertility, he asked if it was possible for the jury to make an award, and later the judge rendered a decision that the event was too significant to apply the cap. Mr. Gillock replied in the affirmative and stated in the given example, there would be no reminder to the jury that a cap did apply. The jury would be unaware of that fact when they rendered a decision. If a jury awarded, for example, $2.5 million in noneconomic damages, counter motions would be filed. The defense would file to invoke the cap of $350,000. A motion by the plaintiff would be filed to have the court determine there were extraordinary circumstances that warranted lifting of the cap. It would be argued under the standard of “clear and convincing evidence” as opposed to the normal standard of “a preponderance of the evidence.” Mr. Gillock concluded by saying that was the procedure he anticipated under the new statute.

Chairman Anderson addressed Dr. James Tate and reminded him that his written testimony (Exhibit D) would be submitted for the record.

Dr. James Tate continued testimony and reviewed the highlights of his written testimony (Exhibit D). The West-Crear Medical Society was described as the county branch of the National Medical Association, a professional organization of African-American medical doctors. Dr. Tate revealed his organization had not been included in the negotiating team, despite letters expressing their interest and telephone calls offering to be included. Osteopaths were not included. Regarding the proposed legislation, Dr. Tate took exception to the phrase “what the doctors wanted” and declared “it was what a certain group of doctors wanted.” He observed that no testimony had been received from trauma surgeons during the course of the current committee hearing.

Dr. Tate declared there were major problems with the bill. Regarding the issue of circumstances under which trial lawyers would accept limits, Dr. Tate explained his experience had been that trial lawyers would threaten to put a physician’s personal assets at risk. He warned the committee to “either have a cap or do not have a cap.” Too many exceptions would render the law meaningless.

Reflecting on testimony that suggested concern for the civil rights of plaintiffs, Dr. Tate commented if that were the case, there would be more trial lawyers taking police brutality cases and discrimination suits.

On the issue of the $50,000 cap at the UMC Trauma Center, Dr. Tate concluded it had been handled adequately. He offered to clarify several points from earlier testimony. The definition of a trauma patient was “intentional or unintentional wounding of a patient.” In terms of how long the cap should apply, Dr. Tate suggested the language include “it applies until the patient has gone through his rehabilitative phase and is now discharged from further care.” After that point, the patient should be on his own.

Regarding the list of medical conditions, Dr. Tate opined there were just too many variables in the practice of medicine, and not all situations could be legislated. On the subject of the $1 million—$3 million insurance liability requirement, Dr. Tate stated that would put a lot of the estimated 115 African- American doctors out of business in Nevada. Many had office-based practices, they seldom utilized hospital facilities, and therefore had little exposure to lawsuits; however, the trauma surgeons, in contrast, got sued often. If the bill was passed, Dr. Tate predicted a “monster had been created.” His liability insurance premium was estimated to reach $160,000 if he was required to carry the $1 million—$3 million level of insurance coverage. His license to practice medicine was at stake for failure to comply under the proposed bill. Dr. Tate reminded the committee the bill language was the work of a very select group of physicians and did not represent the opinions of all doctors in Nevada.

Chairman Anderson commented the actions of the St. Paul Insurance Company had precipitated the crisis in Nevada. Some topics were long-standing issues in Nevada and were rightfully presented to the Nevada Legislature in previous sessions. On the topic of tort reform, Chairman Anderson characterized it as a familiar issue that traditionally lacked support in past legislative sessions. He admitted the pendulum was unlikely to swing widely to the other side, especially given the tests of constitutionality that would be invited. The worst kind of legislation, according to Chairman Anderson, was the kind that happened “under the gun.” Indeed, the 120-day requirement for the legislative session created that working atmosphere. He admitted to being frustrated by the pressures of time limits. Chairman Anderson gratefully acknowledged the past input, personal sacrifice, and efforts of Dr. Tate, and stated that it had not gone unnoticed.

Dr. Michael Fischer approached the witness table to testify. Chairman Anderson explained he was calling witnesses in order of sign-in, and he would be called.

Dr. Denise Selleck Davis, representing the Nevada Osteopathic Medical Association (NOMA), read from written testimony. No copy was submitted for the record as requested by Chairman Anderson. Dr. Davis commenced her discussion with Section 18 of S.B. 2, language that specified “not less than $1 million of insurance per occurrence and not less than $3 million in the aggregate.” In her view, that insurance obligation became a “licensure requirement.”

Her association represented 200 of the 350 osteopathic physicians (DO’s) practicing in Nevada. She echoed the testimony of Dr. Tate and stated osteopathic physicians were not invited to participate in the task force. Dr. Davis explained the primary specialty of her group was family practice, and many osteopaths practiced in rural areas. Through the years there had been an obvious trend by family practitioners to avoid hospital-based work because of the significant impact to their insurance premiums.

Dr. Davis voiced her objection to the inequity of requiring the same liability coverage for an invasive cardiac physician as for a one-doctor rural office. She cited the example of an elderly physician, Dr. Thomas McCleary of Reno, who operated a medical practice from his home. The new requirement for $1 million—$3 million liability insurance would force the closure of his practice and require he surrender his license to practice medicine.

Dr. Davis explained that osteopathic physicians practiced under NRS 633. There was only one professional status in Nevada. “Either you were a full-fledged licensed physician or you were not.” There were no categories for retired, disabled, inactive, or part-time practitioners. The burden of the insurance was predicted to force many of her associates out of practice. She illustrated her point with the example of a part-time physician at the Veterans Administration Hospital in Boulder City. He would be forced to give up his career. She reminded the committee the intent of the bill was to ensure that citizens had access to medical care and physicians. Dr. Davis called the proposal for uniform liability insurance “unreasonable,” and the careers of many medical professionals were at risk.

Dr. Davis concluded her testimony by saying she had not met even one physician who was willing to practice without carrying liability insurance. It was not a viable option. Her fellow professionals deserved the right to practice.

Chairman Anderson requested the witness submit her written testimony to the secretary for inclusion in the record.

Assemblyman Brown asked if there was a median amount of insurance coverage for osteopaths (DO), especially in the rural areas. Dr. Davis explained that osteopaths practiced in a wide range of specialties, including family practice, anesthesiology, and psychiatry. Many of the trauma and emergency room physicians were DO’s. As such, an estimate of a median amount was difficult.

Assemblywoman Ohrenschall shared a personal account of her family physician who was informed by his insurance company that his rates were being increased because he had not had any malpractice suits filed against him in recent years. As such, the actuarial tables predicted he was overdue for a malpractice event, and that made him high risk. She asked the witness if osteopaths were faced with that dilemma. Dr. Davis replied she had never had a physician complain about not being sued.

Chairman Anderson addressed the audience and invited any witness to come forward whose issues had not been covered.

Dr. Michael Fischer, ophthalmologist, offered to make a simple suggestion regarding insurance limits. “If a physician is covered at $1 million—$3 million, then he is protected by the cap. If the physician elects not to choose that kind of coverage, then he is not protected by the cap and therefore would not be tied to licensure.” Dr. Fischer viewed it as a reasonable compromise.

The second issue raised by Dr. Fischer related to the list of exceptions to the cap. The condition of total blindness was not referenced anywhere in the language. He further suggested the condition first required a good definition, which historically was based in legal terminology. Dr. Fischer’s final point was illustrated with an example of retinal surgeons whose patients sought treatment for retinal detachment. Dr. Fischer stated that, by definition, many of those patients were already legally blind (i.e., 20-200 vision or worse). If the surgeon elected not to repair the detachment, the eye usually became completely blind (i.e., no light). Inserting language into the law for “total blindness” without adequate definition could intimidate surgeons and interfere with decisions regarding surgery options. Chairman Anderson requested clarification if the witness was advocating an expansion of the list of medical exceptions. Dr. Fischer replied he was not in favor of expanding that list to include “total blindness.” Chairman Anderson responded, “You want it limited on the back side.” Dr. Fischer agreed.

Chairman Anderson acknowledged the input of the witness. The next order of business was Assemblyman Dini’s earlier request for information on the general medical malpractice insurance rates for policies in the $500,000—$1.5 million range. He asked Mr. Anthony to comment.

Nicolas Anthony, Senior Research Analyst, shared some general information obtained from representatives of the insurance industry. A policy with liability limits of $500,000 and $1.5 million in the aggregate was generally 14 to 18 percent lower than the $1 million—$3 million coverage. For a general surgeon, Mr. Anthony stated the premium for a $1 million—$3 million policy was estimated at $84,000. A policy with $500,000—$1.5 million coverage was estimated at $68,000.

Chairman Anderson called for questions from his committee. He advised the committee of the floor meeting set for 7:00 p.m. Rather than adjourn the committee hearing, Chairman Anderson declared a recess and determined the committee could reconvene at the call of the Chair. In response to Assemblyman Marvel, Chairman Anderson explained the Senate had processed another piece of legislation that dealt with Ways and Means issues.

Chairman Anderson thanked all participants in the hearing. The meeting was recessed at 5:55 p.m.

Dr. John Haller, representing General and Vascular Associates, submitted handwritten testimony (Exhibit E) after the hearing had been recessed. The following was his verbatim testimony.

“Thank you, Mr. Chairman, for allowing me to voice my concerns. My name is John Haller. I am a general surgeon. I have practiced in Reno and Sparks for the past 14 years. These are my concerns:

#1 The news media has portrayed the current malpractice problem as a predominantly southern Nevada problem. It is not.

#2 I understand that testimony from trial lawyers yesterday indicated that Nevada’s medical community is a ‘C-minus’ group. It is not.

#3 My malpractice premium has risen from $21,000 a year for 2 million—5 million coverage with no deductible to $57,000 a year for 1 million—3 million coverage and a $50,000 deductible.

#4 I have a new associate who has indicated to me that she may return to the Midwest if premiums remain high. In addition, 2 Reno obstetricians have quit delivering children over the past week and 1 gastroenterologist told me he would leave Nevada if current prices remain in effect and no tort reform is passed.

#5 My office has dismissed five employees to diminish overhead expenses due to our increased insurance costs.

#6 In the current climate of rising insurance premiums, declining reimbursement for surgical services from insurance companies and diminishing support from some hospitals, there will certainly be loss of access to health care by our indigent population.

#7 Requiring all licensed physicians in Nevada to have 1 million—3 million coverage will cause those semi-retired and retired physicians who provide assistance in surgery and who work as volunteers in senior care clinics, etc. to cease their valuable work.

#8 Institution of MICRA-like legislation and really meaningful tort reform is absolutely necessary. Any exceptions to a ‘cap’ will render that cap meaningless.

#9 The medical-legal screening panel should be retained to screen cases without merit.

Thank you. John L. Haller, M.D., FACS”

RESPECTFULLY SUBMITTED:

June Rigsby

Transcribing Secretary

APPROVED BY:

Assemblyman Bernie Anderson, Chairman

DATE: