LB351 LB351
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 351
Introduced by Wayne, 13.
Read first time January 12, 2023
Committee: Judiciary
1 A BILL FOR AN ACT relating to the Nebraska Hospital-Medical Liability
2 Act; to amend sections 44-2824, 44-2825, 44-2827, 44-2829, 44-2830,
3 44-2831, 44-2831.01, 44-2832, and 44-2833, Reissue Revised Statutes
4 of Nebraska; to increase and eliminate limits on medical malpractice
5 liability; to change provisions relating to proof of financial
6 responsibility and the Excess Liability Fund; to provide for
7 applicability; to harmonize provisions; and to repeal the original
8 sections.
9 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 44-2824, Reissue Revised Statutes of Nebraska, is
2 amended to read:
3 44-2824 (1) To be qualified under the Nebraska Hospital-Medical
4 Liability Act, a health care provider or such health care provider's
5 employer, employee, partner, or limited liability company member shall:
6 (a) File with the director proof of financial responsibility,
7 pursuant to section 44-2827 or 44-2827.01, in the amount of ten million
8 five hundred thousand dollars for each occurrence. In the case of
9 physicians or certified registered nurse anesthetists and their
10 employers, employees, partners, or limited liability company members an
11 aggregate liability amount of twenty one million dollars for all
12 occurrences or claims made in any policy year for each named insured
13 shall be provided. In the case of hospitals and their employees, an
14 aggregate liability amount of thirty three million dollars for all
15 occurrences or claims made in any policy year or risk-loss trust year
16 shall be provided. Such policy may be written on either an occurrence or
17 a claims-made basis. Any risk-loss trust shall be established and
18 maintained only on an occurrence basis. Such qualification shall remain
19 effective only as long as insurance coverage or risk-loss trust coverage
20 as required remains effective; and
21 (b) Pay the surcharge and any special surcharge levied on all health
22 care providers pursuant to sections 44-2829 to 44-2831.
23 (2) Subject to the requirements in subsections (1) and (4) of this
24 section, the qualification of a health care provider shall be either on
25 an occurrence or claims-made basis and shall be the same as the insurance
26 coverage provided by the insured's policy.
27 (3) The director shall have authority to permit qualification of
28 health care providers who have retired or ceased doing business if such
29 health care providers have primary insurance coverage under subsection
30 (1) of this section.
31 (4) A health care provider who is not qualified under the act at the
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1 time of the alleged occurrence giving rise to a claim shall not, for
2 purposes of that claim, qualify under the act notwithstanding subsequent
3 filing of proof of financial responsibility and payment of a required
4 surcharge.
5 (5) Qualification of a health care provider under the Nebraska
6 Hospital-Medical Liability Act shall continue only as long as the health
7 care provider meets the requirements for qualification. A health care
8 provider who has once qualified under the act and who fails to renew or
9 continue his or her qualification in the manner provided by law and by
10 the rules and regulations of the Department of Insurance shall cease to
11 be qualified under the act.
12 Sec. 2. Section 44-2825, Reissue Revised Statutes of Nebraska, is
13 amended to read:
14 44-2825 (1)(a) (1) The total amount recoverable under the Nebraska
15 Hospital-Medical Liability Act from any and all health care providers and
16 the Excess Liability Fund for any occurrence resulting in any injury or
17 death of a patient may not exceed (a) five hundred thousand dollars for
18 any occurrence on or before December 31, 1984, (b) one million dollars
19 for any occurrence after December 31, 1984, and on or before December 31,
20 1992, (c) one million two hundred fifty thousand dollars for any
21 occurrence after December 31, 1992, and on or before December 31, 2003,
22 (d) one million seven hundred fifty thousand dollars for any occurrence
23 after December 31, 2003, and on or before December 31, 2014, and (e) two
24 million two hundred fifty thousand dollars for any occurrence after
25 December 31, 2014, and on or before December 31, 2023.
26 (b) There is no limit to the total amount recoverable under the
27 Nebraska Hospital-Medical Liability Act from the Excess Liability Fund
28 for any occurrence resulting in any catastrophic injury or death of a
29 patient for any occurrence after December 31, 2023.
30 (2) For any claim or cause of action arising from any occurrence
31 during the period that the act is effective with reference to a patient
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1 who is covered by the act, a health care provider qualified under the act
2 shall not be liable to such patient or such patient's representative for
3 an amount in excess of the following limits: A health care provider
4 qualified under the act shall not be liable to any patient or his or her
5 representative who is covered by the act for an amount in excess of five
6 hundred thousand dollars for all claims or causes of action arising from
7 any occurrence during the period that the act is effective with reference
8 to such patient.
9 (a) For claims or occurrences on or before December 31, 2023, five
10 hundred thousand dollars; and
11 (b) For claims or occurrences after December 31, 2023, ten million
12 dollars.
13 (3) Subject to the overall limits from all sources as provided in
14 subsection (1) of this section, any amount due from a judgment or
15 settlement which is in excess of the total liability of all liable health
16 care providers shall be paid from the Excess Liability Fund pursuant to
17 sections 44-2831 to 44-2833.
18 Sec. 3. Section 44-2827, Reissue Revised Statutes of Nebraska, is
19 amended to read:
20 44-2827 Financial responsibility of a health care provider may be
21 established only by filing with the director proof that the health care
22 provider is insured pursuant to sections 44-2837 to 44-2839 or by a
23 policy of professional liability insurance in a company authorized to do
24 business in Nebraska. Such insurance shall be in the amount of ten
25 million five hundred thousand dollars per occurrence and, in cases
26 involving physicians or certified registered nurse anesthetists, but not
27 with respect to hospitals, an aggregate liability of at least twenty one
28 million dollars for all occurrences or claims made in any policy year
29 shall be provided. In the case of hospitals and their employees, an
30 aggregate liability amount of thirty three million dollars for all
31 occurrences or claims made in any policy year shall be provided. The
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1 filing shall state the premium charged for the policy of insurance.
2 Sec. 4. Section 44-2829, Reissue Revised Statutes of Nebraska, is
3 amended to read:
4 44-2829 (1) There is hereby created an Excess Liability Fund to be
5 collected and received by the director for the exclusive use and purposes
6 stated in the Nebraska Hospital-Medical Liability Act. Such fund and any
7 income from it shall be held by the State Treasurer in trust, deposited
8 in a separate account, and invested and reinvested pursuant to law.
9 (2) To create the fund, an annual surcharge shall be levied on all
10 health care providers in Nebraska who have qualified under sections
11 44-2824 and 44-2827. The surcharge for each health care provider shall be
12 determined by the director subject to the following limitations:
13 (a) The annual surcharge shall not exceed fifty percent of the
14 annual premium paid by such health care provider for maintenance of
15 current financial responsibility as provided in sections 44-2827 and
16 44-2837 to 44-2839; and
17 (b) The charge shall not exceed the amount necessary to maintain the
18 fund in the amount stated in section 44-2830.
19 (3) Such surcharge and any primary insurance premiums due under
20 sections 44-2837 to 44-2839 shall be due and payable within thirty days
21 after the health care provider has qualified in Nebraska pursuant to
22 section 44-2824 and shall be payable annually thereafter in such amounts
23 as may be determined by the director insofar as the surcharge is
24 concerned and by the risk manager insofar as primary liability coverage
25 is concerned.
26 (4) The net premiums payable for primary insurance provided by the
27 risk manager pursuant to sections 44-2837 to 44-2839 shall be deposited
28 in the fund at least annually by the risk manager.
29 (5) If the annual premium surcharge or premiums for primary
30 insurance under sections 44-2837 to 44-2839 are not paid within the time
31 specified in subsection (3) of this section, the qualification of the
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1 health care provider under section 44-2824 shall be suspended until the
2 annual premiums are paid. Such suspension shall not be effective as to
3 patients claiming against the health care provider unless, at least
4 thirty days before the effective date of the suspension, a written notice
5 giving the date upon which the suspension becomes effective has been
6 provided by the director to the health care provider.
7 (6) The director Director of Insurance, as administrator of the
8 fund, shall be responsible for legal defense of the fund. The director,
9 using money from the fund as deemed necessary, appropriate, or desirable,
10 may purchase the services of persons, firms, and corporations to aid in
11 protecting the fund against claims. The Department of Justice shall not
12 be responsible for legal defense of the fund. All expenses of collecting,
13 protecting, and administering the fund shall be paid from the fund.
14 Sec. 5. Section 44-2830, Reissue Revised Statutes of Nebraska, is
15 amended to read:
16 44-2830 If the fund shall exceed the sum of fifty four million five
17 hundred thousand dollars at the end of any calendar year after the
18 payment of all claims and expenses and after adding all reversions to the
19 fund, and if no reinsurance is involved, the director shall reduce the
20 surcharge required by section 44-2829 in order to maintain the fund at an
21 approximate level of sixty five million dollars. Beginning on January 1,
22 1985, and on January 1 of each succeeding year, the director shall adjust
23 the amount of the surcharge to maintain the fund at a level which is
24 sufficient to pay all anticipated claims for the next year, including
25 claims carried forward from previous years, and to maintain an adequate
26 reserve for future claims. Prior to making such an adjustment, the
27 director shall conduct a public hearing concerning the proposed
28 adjustment and shall give due regard to the size of the existing fund,
29 the number and size of potential claims against the fund, the number of
30 participating providers, changes in the cost of living, and sound
31 actuarial principles. If the fund is reinsured, the director shall
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1 determine a lesser level at which the fund shall be maintained because of
2 the reinsurance carried and may reduce the surcharge to provide for the
3 reinsurance and maintain the fund at the lesser level determined by him
4 or her to be reasonable under the circumstances.
5 Sec. 6. Section 44-2831, Reissue Revised Statutes of Nebraska, is
6 amended to read:
7 44-2831 (1)(a) This subsection applies to claims and causes of
8 action arising from any occurrence after December 31, 2023.
9 (b) For any calendar year, the total amount paid from the Excess
10 Liability Fund for all claims shall not exceed thirty million dollars.
11 (c) Claims that are to be paid from the Excess Liability Fund shall
12 be paid in the order in which they are received. If there is not
13 sufficient money in the fund to pay a claim or if the limit described in
14 subdivision (1)(b) of this section has been or will be reached:
15 (i) Subject to such limit, the available money in the fund shall be
16 paid to the claimant;
17 (ii) The unsatisfied amount of the claim shall carry forward to
18 subsequent calendar years until such claim is satisfied; and
19 (iii) Available money in the fund shall be paid from the fund to the
20 claimant at the beginning of each month or as soon after as is
21 administratively possible until such claim is satisfied.
22 (2) (1) The director may, at any time, analyze the fund to determine
23 if the amount in such fund is inadequate to pay in full all claims
24 allowed or to be allowed during the calendar year. Upon such
25 determination, the director shall have the power to levy a special
26 surcharge on all health care providers who have qualified under the
27 Nebraska Hospital-Medical Liability Act, which special surcharge shall be
28 an amount sufficient to permit full payment of all claims allowed against
29 the fund during a calendar year. The special surcharge shall be levied
30 against all health care providers who have qualified under the Nebraska
31 Hospital-Medical Liability Act on the date of the special surcharge or at
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1 any time during the preceding twelve months and shall be in an amount
2 proportionate to the surcharge each health care provider has paid to the
3 fund. Such special surcharge shall be due and payable within thirty days
4 after the same is levied.
5 (3) (2) The director shall have authority to cause all or any part
6 of the potential liability of the Excess Liability Fund to be reinsured,
7 if such reinsurance is available, on a fair and reasonable basis. The
8 cost of such reinsurance shall be paid by the fund and the fact of the
9 reinsurance shall be taken into account in determining the surcharge as
10 provided in sections 44-2829 and 44-2830, but in no event shall the
11 surcharge exceed fifty percent of the annual premium paid by a health
12 care provider for maintenance of current financial responsibility.
13 Sec. 7. Section 44-2831.01, Reissue Revised Statutes of Nebraska, is
14 amended to read:
15 44-2831.01 (1)(a) (1) Any health care provider who has furnished
16 proof of financial responsibility prior to January 1, 2005, under
17 sections 44-2824 and 44-2827 shall be qualified under section 44-2824 for
18 the remainder of the policy year or risk-loss trust year.
19 (b) (2) The increases in coverage requirements made by Laws 2004, LB
20 998, in sections 44-2824 and 44-2827 shall apply to policies issued or
21 renewed and risk-loss trust years which commence after January 1, 2005.
22 (c) (3) The changes made to sections 44-2825, 44-2832, and 44-2833
23 by Laws 2004, LB 998, apply commencing with policies issued or renewed
24 and risk-loss trust years which commen