HB 1723 2003
1	A bill to be entitled
2	An act relating to long-term care civil enforcement;
3	amending s. 400.023, F.S.; clarifying liability of nurses
4	employed by nursing homes; requiring a certificate of
5	counsel certifying compliance with the requirement to
6	serve a copy of a complaint alleging a violation of rights
7	under pt. II of ch. 400, F.S., with the Agency for Health
8	Care Administration; amending s. 400.0233, F.S.; providing
9	definitions; authorizing voluntary binding arbitration
10	under ss. 400.02341-400.02348, F.S., following presuit
11	investigation and mediation of claims for resident's
12	rights violation or negligence; creating s. 400.02341,
13	F.S.; providing legislative findings and intent; creating
14	s. 400.02342, F.S.; providing for voluntary binding
15	arbitration for certain claims for resident's rights
16	violation or negligence; exempting rights of action
17	pursuant to s. 768.28, F.S., from voluntary binding
18	arbitration; providing evidentiary standards for voluntary
19	binding arbitration; specifying the composition of the
20	arbitration panel; providing qualifications and
21	compensation of arbitrators; specifying terms and
22	conditions of entering into arbitration; authorizing
23	rules; creating s. 400.02343, F.S.; providing for
24	arbitration to allocate financial responsibility among
25	multiple defendants; specifying the composition of the
26	arbitration panel; providing for joint and several
27	liability; requiring defendants to pay their proportionate
28	share of the economic and noneconomic damages awarded by
29	the arbitration panel; providing a defendant paying
30	damages in action for contribution against any
31	nonarbitrating person whose negligence contributed to the
32	injury; creating s. 400.02344, F.S.; specifying effects of
33	failure to offer or accept voluntary binding arbitration;
34	creating s. 400.02345, F.S.; providing for a court to
35	determine whether a claim is subject to voluntary binding
36	arbitration; providing procedures if a plaintiff amends a
37	complaint to allege facts that render a claim subject to
38	arbitration; creating s. 400.02346, F.S.; providing for
39	dissolution of the arbitration panel if agreement cannot
40	be reached; providing for the appointment of new
41	arbitrators; creating s. 400.02347, F.S.; requiring
42	payment of the arbitration award by the defendant;
43	providing for accrual of interest beginning 90 days after
44	the award; creating s. 400.02348, F.S.; designating
45	arbitration awards and allocation of financial
46	responsibility as final agency action for purposes of s.
47	120.68, F.S.; providing for appeal to the district court;
48	limiting judicial review; providing for enforcement of
49	arbitration awards by the parties to the arbitration;
50	providing for applicability; providing an effective date.
51
52	Be It Enacted by the Legislature of the State of Florida:
53
54	Section 1. Subsections (4) and (6) of section 400.023,
55	Florida Statutes, are amended to read:
56	400.023 Civil enforcement.--
57	(4) A licensee shall be liable forInany claim for
58	resident's rights violation or negligence by a nurse licensed
59	under part I of chapter 464 and employed by the licensee. Nurses
60	providing nursing services, such nurseshall have the duty to
61	exercise care consistent with the prevailing professional
62	standard of care for nursesa nurse. The prevailing professional
63	standard of care for nursesa nurseshall be that level of care,
64	skill, and treatment which, in light of all relevant surrounding
65	circumstances, is recognized as acceptable and appropriate by
66	reasonably prudent similar nurses.
67	(6) The resident or the resident's legal representative
68	shall serve a copy of any complaint alleging in whole or in part
69	a violation of any rights specified in this part to the Agency
70	for Health Care Administration at the time of filing the initial
71	complaint with the clerk of the court for the county in which
72	the action is pursued. The initial complaint must contain a
73	certificate of counsel certifying compliance with this
74	subsection.The requirement of providing a copy of the complaint
75	to the agency and certifying compliance with this subsection
76	does not impair the resident's legal rights or ability to seek
77	relief for his or her claim.
78	Section 2. Subsections (1) and (11) of section 400.0233,
79	Florida Statutes, are amended to read:
80	400.0233 Presuit notice; investigation; notification of
81	violation of resident's rights or alleged negligence; claims
82	evaluation procedure; informal discovery; review; settlement
83	offer; mediation.--
84	(1) As used in this section and ss. 400.02341-400.02348,
85	the term:
86	(a) "Claim for resident's rights violation or negligence"
87	means a negligence claim alleging injury to or the death of a
88	resident arising out of an asserted violation of the rights of a
89	resident under s. 400.022 or an asserted deviation from the
90	applicable standard of care.
91	(b) "Collateral sources" means any payments made to the
92	claimant, or made on his or her behalf, by or pursuant to:
93	1. The United States Social Security Act; any federal,
94	state, or local income disability act; or any other public
95	programs providing medical expenses, disability payments, or
96	other similar benefits, except as prohibited by federal law.
97	2. Any health, sickness, or income disability insurance;
98	automobile accident insurance that provides health benefits or
99	income disability coverage; and any other similar insurance
100	benefits, except life insurance benefits available to the
101	claimant, whether purchased by him or her or provided by others.
102	3. Any contract or agreement of any group, organization,
103	partnership, or corporation to provide, pay for, or reimburse
104	the costs of hospital, medical, dental, or other health care
105	services.
106	4. Any contractual or voluntary wage continuation plan
107	provided by employers or by any other system intended to provide
108	wages during a period of disability.
109	(c) "Economic damages" means financial losses that would
110	not have occurred but for the injury giving rise to the cause of
111	action, including, but not limited to, past and future medical
112	expenses and 80 percent of wage loss and loss of earning
113	capacity.
114	(d) "Incident" means all conduct that is alleged in the
115	notice of claim or complaint to have caused the injury or
116	damages to the resident.
117	(e)(b)"Insurer" means any self-insurer authorized under
118	s. 627.357, liability insurance carrier, joint underwriting
119	association, or uninsured prospective defendant.
120	(f) "Noneconomic damages" means nonfinancial losses that
121	would not have occurred but for the injury giving rise to the
122	cause of action, including pain and suffering, inconvenience,
123	physical impairment, mental anguish, disfigurement, loss of
124	capacity for enjoyment of life, and other nonfinancial losses.
125	(11) Within 30 days after the claimant's receipt of the
126	defendant's response to the claim, the parties or their
127	designated representatives shall meet in mediation to discuss
128	the issues of liability and damages in accordance with the
129	mediation rules of practice and procedures adopted by the
130	Supreme Court. Upon stipulation of the parties, this 30-day
131	period may be extended and the statute of limitations is tolled
132	during the mediation and any such extension. At the conclusion
133	of mediation, the claimant shall have 60 days or the remainder
134	of the period of the statute of limitations, whichever is
135	greater, within which to enter into voluntary binding
136	arbitration under ss. 400.02341-400.02348 or tofile suit.
137	Section 3. Section 400.02341, Florida Statutes, is created
138	to read:
139	400.02341 Legislative findings and intent.--
140	(1) The Legislature makes the following findings:
141	(a) Liability insurance premiums for nursing homes have
142	increased dramatically in recent years, resulting in increased
143	nursing home care costs for most patients and functional
144	unavailability of liability insurance for most nursing home
145	facilities.
146	(b) The primary cause of increased liability insurance
147	premiums has been the substantial increase in loss payments to
148	claimants caused by tremendous increases in the amounts of paid
149	claims.
150	(c) The average cost of defending a nursing home liability
151	claim has escalated in the past decade to the point where it has
152	become imperative to control such cost in the interests of the
153	public need for quality nursing home care.
154	(d) The high cost of nursing home liability claims in the
155	state can be substantially alleviated by requiring early
156	determination of the merit of claims, by providing for early
157	arbitration of claims, thereby reducing delay and attorney's
158	fees, and by imposing reasonable limitations on damages, while
159	preserving the right of either party to have its case heard by a
160	jury.
161	(e) The recovery of 100 percent of economic losses
162	constitutes overcompensation because such recovery fails to
163	recognize that such awards are not subject to taxes on economic
164	damages.
165	(f) Excessive awards of noneconomic damages threaten the
166	ability of nursing home facilities to continue to provide
167	appropriate care for patients. A reasonable limitation on
168	noneconomic damages will reduce the high cost of claims without
169	jeopardizing the right of each party to be heard by a jury.
170	(2) It is the intent of the Legislature to provide a plan
171	for prompt resolution of nursing home liability claims. Such
172	plan shall consist of two separate components, presuit
173	investigation and arbitration. Presuit investigation shall be
174	mandatory and shall apply to all nursing home liability claims
175	and defenses. Arbitration shall be voluntary and shall be
176	available, except as specified.
177	(a) Presuit investigation shall include verifiable
178	requirements that reasonable investigation precede both nursing
179	home liability claims and defenses in order to eliminate
180	frivolous claims and defenses.
181	(b) Arbitration shall provide:
182	1. Substantial incentives for both claimants and
183	defendants to submit their cases to binding arbitration, thus
184	reducing attorney's fees, litigation costs, and delay.
185	2. A conditional limitation on noneconomic damages if the
186	defendant concedes willingness to pay economic damages and
187	reasonable attorney's fees.
188	3. Limitations on the noneconomic damages components of
189	large awards to provide increased predictability of outcome of
190	the claims resolution process in order for insurers to
191	anticipate losses and to facilitate early resolution of
192	negligence claims.
193	Section 4. Section 400.02342, Florida Statutes, is created
194	to read:
195	400.02342 Voluntary binding arbitration of claims for
196	resident's rights violation or negligence.--
197	(1) Voluntary binding arbitration pursuant to this section
198	and ss. 400.02343-400.02348 does not apply to rights of action
199	involving the state or its agencies or subdivisions, or the
200	officers, employees, or agents thereof, pursuant to s. 768.28.
201	(2) Upon the completion of mediation under s.
202	400.0233(11), the parties may elect, with respect only to claims
203	arising out of the rendering of, or the failure to render,
204	medical care or services, to have damages determined by an
205	arbitration panel. For purposes of arbitration under ss.
206	400.02342-400.02348, medical care or services includes:
207	(a) Skin care.
208	(b) Mobility and walking assistance.
209	(c) Nourishment.
210	(d) Hydration.
211	(e) Prevention of elopement.
212
213	Such election may be initiated by either party by serving a
214	request for voluntary binding arbitration of damages within 60
215	days after the conclusion of mediation or the remainder of the
216	period of the statute of limitations, whichever is greater. The
217	evidentiary standards for voluntary binding arbitration of
218	claims arising out of the rendering of, or the failure to
219	render, medical care or services shall be as provided in ss.
220	120.569(2)(g) and 120.57(1)(c).
221	(3) Upon receipt of a party's request for such
222	arbitration, the opposing party may accept the offer of
223	voluntary binding arbitration within 30 days. Such acceptance
224	within the time period provided by this subsection shall be a
225	binding commitment to comply with the decision of the
226	arbitration panel. The liability of any insurer shall be subject
227	to any applicable insurance policy limits.
228	(4) The arbitration panel shall be composed of three
229	arbitrators, one selected by the claimant, one selected by the
230	defendant, and one administrative law judge furnished by the
231	Division of Administrative Hearings who shall serve as the chief
232	arbitrator. In the event of multiple claimants or multiple
233	defendants, the arbitrator selected by the side with multiple
234	parties shall be the choice of those parties. If the multiple
235	parties cannot reach agreement as to their arbitrator, each of
236	the multiple parties shall submit a nominee, and the director of
237	the Division of Administrative Hearings shall appoint the
238	arbitrator from among such nominees.
239	(5) The arbitrators shall be independent of all parties,
240	witnesses, and legal counsel, and no officer, director,
241	affiliate, subsidiary, or employee of a party, witness, or legal
242	counsel may serve as an arbitrator in the proceeding.
243	(6) The rate of compensation for arbitrators other than
244	the administrative law judge shall be set by the chief judge of
245	the appropriate circuit court by schedule, providing for
246	compensation of not less than $250 per day nor more than $750
247	per day or as agreed by the parties. In setting the schedule,
248	the chief judge shall consider the prevailing rates charged for
249	the delivery of professional services in the community.
250	(7) Arbitration pursuant to this section shall preclude
251	recourse to any other remedy by the claimant against any
252	participating defendant, and shall be undertaken with the
253	understanding that:
254	(a) The defendant has made an offer of admission of
255	liability and for arbitration on the issue of damages. This
256	offer may be made contingent upon a limit of general damages.
257	(b) Net economic damages shall be awardable, including,
258	but not limited to, past and future medical expenses and 80
259	percent of wage loss and loss of earning capacity, offset by any
260	collateral source payments made prior to the arbitration award.
261	(c) Noneconomic damages shall be limited to a maximum of
262	$250,000 per incident. If the claimant's care has been provided
263	all or in part by Medicaid, the award shall first pay the
264	Medicaid program those amounts expended for the claimant's care
265	and the Medicaid program shall have a lien against the award for
266	any future payments that would be paid for by Medicaid.
267	(d) Punitive damages may not be awarded.
268	(e) The defendant shall be responsible for the payment of
269	interest on all accrued damages with respect to which interest
270	would be awarded at trial.
271	(f) The defendant shall pay the claimant's reasonable
272	attorney's fees and costs, as determined by the arbitration
273	panel, but in no event more than 15 percent of the award,
274	reduced to present value.
275	(g) The defendant shall pay all the costs of the
276	arbitration proceeding and the fees of all the arbitrators other
277	than the administrative law judge.
278	(h) Each defendant who submits to arbitration under this
279	section shall be jointly and severally liable for all damages
280	assessed pursuant to this section.
281	(i) The defendant's obligation to pay the claimant's
282	damages shall be for the purpose of arbitration under this
283	section only. A defendant's or claimant's offer to arbitrate
284	shall not be used in evidence or in argument during any
285	subsequent litigation of the claim following the rejection
286	thereof.
287	(j) The fact of making or accepting an offer to arbitrate
288	shall not be admissible as evidence of liability in any
289	collateral or subsequent proceeding on the claim.
290	(k) Any offer by a claimant to arbitrate must be made to
291	each defendant against whom the claimant has made a claim. Any
292	offer by a defendant to arbitrate must be made to each claimant.
293	A defendant who rejects a claimant's offer to arbitrate shall be
294	subject to the provisions of s. 400.02344(3). A claimant who
295	rejects a defendant's offer to arbitrate shall be subject to the
296	provisions of s. 400.02344(4).
297	(l) The hearing shall be conducted by all of the
298	arbitrators, but a majority may determine any question of fact
299	and render a final decision. The chief arbitrator shall decide
300	all evidentiary matters. The chief arbitrator shall file a copy
301	of the final decision with the clerk of the Agency for Health
302	Care Administration.
303
304	The provisions of this subsection shall not preclude settlement
305	at any time by mutual agreement of the parties.
306	(8) Any issue between the defendant and the defendant's
307	insurer or self-insurer as to who shall control the defense of
308	the claim and any responsibility for payment of an arbitration
309	award shall be determined under existing principles of law;
310	provided that the insurer or self-insurer shall not offer to
311	arbitrate or accept a claimant's offer to arbitrate without the
312	written consent of the defendant.
313	(9) The Division of Administrative Hearings may adopt
314	rules to effect the orderly and efficient processing of the
315	arbitration procedures of ss. 400.02342-400.02348.
316	(10) Rules adopted by the Division of Administrative
317	Hearings pursuant to this section, s. 120.54, or s. 120.65 may
318	authorize any reasonable sanctions except contempt for violation
319	of the rules of the division or failure to comply with a
320	reasonable order issued by an administrative law judge, which is
321	not under judicial review.
322	Section 5. Section 400.02343, Florida Statutes, is created
323	to read:
324	400.02343 Arbitration to allocate financial responsibility
325	among multiple defendants.--
326	(1) The provisions of this section shall apply when more
327	than one defendant has participated in voluntary binding
328	arbitration pursuant to s. 400.02342.
329	(2) Within 20 days after the determination of damages by
330	the arbitration panel in the first arbitration proceeding, those
331	defendants who have agreed to voluntary binding arbitration
332	shall submit any dispute among them regarding the apportionment
333	of financial responsibility to a separate binding arbitration
334	proceeding. Such proceeding shall be with a panel of three
335	arbitrators, which panel shall consist of the administrative law
336	judge who presided in the first arbitration proceeding, who
337	shall serve as the chief arbitrator, and two nursing home
338	administrators appointed by the defendants. In the event the
339	defendants cannot agree on their selection of arbitrators within
340	20 days after the determination of damages by the arbitration
341	panel in the first arbitration proceeding, a list of not more
342	than five nominees shall be submitted by each defendant to the
343	director of the Division of Administrative Hearings, who shall
344	select the other arbitrators but shall not select more than one
345	from the list of nominees of any defendant.
346	(3) The administrative law judge appointed to serve as the
347	chief arbitrator shall convene the arbitrators for the purpose
348	of determining allocation of responsibility among multiple
349	defendants within 65 days after the determination of damages by
350	the arbitration panel in the first arbitration proceeding.
351	(4) The arbitration panel shall allocate financial
352	responsibility among all defendants named in the notice of an
353	asserted violation of a resident's rights or deviation from the
354	standard of care, regardless of whether the defendant has
355	submitted to arbitration. The defendants in the arbitration
356	proceeding shall pay their proportionate share of the economic
357	and noneconomic damages awarded by the arbitration panel. All
358	defendants in the arbitration proceeding shall be jointly and
359	severally liable for any damages assessed in arbitration. The
360	determination of the percentage of fault of any defendant not in
361	the arbitration case shall not be binding against that
362	defendant, nor shall it be admissible in any subsequent legal
363	proceeding.
364	(5) Payment by the defendants of the damages awarded by
365	the arbitration panel in the first arbitration proceeding shall
366	extinguish those defendants' liability to the claimant and shall
367	also extinguish those defendants' liability for contribution to
368	any defendants who did not participate in arbitration.
369	(6) Any defendant paying damages assessed pursuant to this
370	section or s. 400.02342 shall have an action for contribution
371	against any nonarbitrating person whose negligence contributed
372	to the injury.
373	Section 6. Section 400.02344, Florida Statutes, is created
374	to read:
375	400.02344 Effects of failure to offer or accept voluntary
376	binding arbitration.--
377	(1) A proceeding for voluntary binding arbitration is an
378	alternative to jury trial and shall not supersede the right of
379	any party to a jury trial.
380	(2) If neither party requests or agrees to voluntary
381	binding arbitration, the claim shall proceed to trial or to any
382	available legal alternative such as offer of and demand for
383	judgment under s. 768.79 or offer of settlement under s. 45.061.
384	(3) If the defendant rejects a claimant's offer to enter
385	voluntary binding arbitration:
386	(a) The claim shall proceed to trial without limitation on
387	damages, and the claimant, upon proving violation of a
388	resident's rights or negligence, shall be entitled to recover
389	prejudgment interest and reasonable attorney's fees up to 25
390	percent of the award reduced to present value.
391	(b) The claimant's award at trial shall be reduced by any
392	damages recovered by the claimant from arbitrating codefendants
393	following arbitration.
394	(4) If the claimant rejects a defendant's offer to enter
395	voluntary binding arbitration:
396	(a) The damages awardable at trial shall be limited to net
397	economic damages, plus noneconomic damages not to exceed
398	$350,000 per incident. The Legislature expressly finds that
399	such conditional limit on noneconomic damages is warranted by
400	the claimant's refusal to accept arbitration, and represents an
401	appropriate balance between the interests of all residents who
402	ultimately pay for rights and negligence losses and the
403	interests of those residents who are injured as a result of
404	negligence and violations of rights.
405	(b) Net economic damages reduced to present value shall be
406	awardable, including, but not limited to, past and future
407	medical expenses and 80 percent of wage loss and loss of earning
408	capacity, offset by any collateral source payments.
409	(c) If the claimant's care has been provided in all or in
410	part by Medicaid, the award shall first pay the Medicaid program
411	those amounts expended for the claimant's care and the Medicaid
412	program shall have a lien against the award for any future
413	payments that would be paid for by Medicaid.
414	(5) Punitive damages may be awarded pursuant to ss.
415	400.0237 and 400.0238.
416	(6) Jury trial shall proceed in accordance with existing
417	principles of law.
418	Section 7. Section 400.02345, Florida Statutes, is created
419	to read:
420	400.02345 Determination of whether claim is subject to
421	arbitration.--
422	(1) In the event of a dispute, a court of competent
423	jurisdiction may determine whether the claim is subject to the
424	voluntary arbitration provisions of ss. 400.02342-400.02348.
425	(2) If a plaintiff, at any time, amends a complaint to
426	allege facts that render a claim subject to arbitration under
427	ss. 400.02342-400.02348, the parties shall have 30 days to
428	determine whether or not to voluntarily arbitrate that claim and
429	the procedural limitations imposed on the parties under ss.
430	400.02342-400.02348 shall apply if the case proceeds to trial.
431	Section 8. Section 400.02346, Florida Statutes, is created
432	to read:
433	400.02346 Misarbitration.--
434	(1) At any time during the course of voluntary binding
435	arbitration of a claim arising out of the rendering of, or the
436	failure to render, medical care or services pursuant to s.
437	400.02342, the administrative law judge serving as chief
438	arbitrator on the arbitration panel, if he or she determines
439	that agreement cannot be reached, may dissolve the arbitration
440	panel and request the director of the Division of Administrative
441	Hearings to appoint two new arbitrators from lists of three to
442	five names timely provided by each party to the arbitration.
443	Not more than one arbitrator shall be appointed from the list
444	provided by any party, unless only one list is timely filed.
445	(2) Upon appointment of the new arbitrators, arbitration
446	shall proceed at the direction of the chief arbitrator in
447	accordance with the provisions of ss. 400.02342-400.02348.
448	(3) At any time after the allocation arbitration hearing
449	under s. 400.02343 has concluded, the administrative law judge
450	serving as chief arbitrator on the arbitration panel may
451	dissolve the arbitration panel and declare the proceedings
452	concluded if he or she determines that agreement cannot be
453	reached.
454	Section 9. Section 400.02347, Florida Statutes, is created
455	to read:
456	400.02347 Payment of arbitration award; interest.--
457	(1) Within 20 days after the determination of damages by
458	the arbitration panel pursuant to s. 400.02342, the defendant
459	shall:
460	(a) Pay the arbitration award, including interest at the
461	legal rate, to the claimant; or
462	(b) Submit any dispute among multiple defendants to
463	arbitration pursuant to s. 400.02343.
464	(2) Commencing 90 days after the award rendered in the
465	arbitration procedure pursuant to s. 400.02342, such award shall
466	begin to accrue interest at the rate of 18 percent per year.
467	Section 10. Section 400.02348, Florida Statutes, is
468	created to read:
469	400.02348 Appeal of arbitration awards and allocations of
470	financial responsibility.--
471	(1) An arbitration award and an allocation of financial
472	responsibility are final agency action for purposes of s.
473	120.68. Any appeal shall be taken to the district court of
474	appeal for the district in which the arbitration took place,
475	shall be limited to review of the record, and shall otherwise
476	proceed in accordance with s. 120.68. The amount of an
477	arbitration award or an order allocating financial
478	responsibility, the evidence in support of either, and the
479	procedure by which either is determined are subject to judicial
480	scrutiny only in a proceeding instituted pursuant to this
481	subsection.
482	(2) No appeal shall operate to stay an arbitration award,
483	nor shall any arbitration panel, arbitration panel member, or
484	circuit court stay an arbitration award. The district court of
485	appeal may order a stay to prevent manifest injustice, but no
486	court shall abrogate the provisions of s. 400.02347(2).
487	(3) Any party to an arbitration proceeding may enforce an
488	arbitration award or an allocation of financial responsibility
489	by filing a petition in the circuit court for the circuit in
490	which the arbitration took place. A petition may not be granted
491	unless the time for appeal has expired. If an appeal has been
492	taken, a petition may not be granted with respect to an
493	arbitration award or an allocation of financial responsibility
494	that has been stayed.
495	(4) If the petitioner establishes the authenticity of the
496	arbitration award or of the allocation of financial
497	responsibility, shows that the time for appeal has expired, and
498	demonstrates that no stay is in place, the court shall enter
499	such orders and judgments as are required to carry out the terms
500	of the arbitration award or allocation of financial
501	responsibility. Such orders are enforceable by the contempt
502	powers of the court, and execution shall issue upon the request
503	of a party for such judgment.
504	Section 11. This act shall take effect July 1, 2003, and
505	shall apply to causes of action accruing on or after that date.