Florida Senate - 2008 SB 1420
By Senator Jones
13-02879-08 20081420__
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A bill to be entitled
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An act relating to financial responsibility of physicians
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and osteopathic physicians; amending s. 395.0191, F.S.;
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requiring each licensed facility to ensure that certain
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physicians and osteopathic physicians are in compliance
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with financial responsibility requirements; requiring the
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licensed facility to be responsible for fulfilling the
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financial responsibility requirements of a physician or
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osteopathic physician under certain circumstances;
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requiring a physician or osteopathic physician to
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indemnify a licensed facility for any liabilities incurred
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by the facility in satisfaction of the physician's or
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osteopathic physician's financial responsibility
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requirements; creating s. 627.41496, F.S.; providing that
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it is contrary to public policy for an insurer to issue
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legal defense coverage for medical malpractice under
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certain circumstances; providing exceptions; requiring
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that financial responsibility be maintained at the time
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any legal defense coverage is issued by the insurer or
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invoked by the physician or osteopathic physician;
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providing that legal defense coverage is void if a
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physician or osteopathic physician fails to maintain
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financial responsibility; requiring that a physician or
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osteopathic physician demonstrate proof of financial
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responsibility before an insurer may issue legal defense
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coverage or provide legal defense services; prohibiting an
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insurer from issuing or providing legal defense coverage
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to a physician or osteopathic physician contrary to the
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act; providing that the issuance of professional liability
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coverage for medical malpractice or medical negligence
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which includes legal defense coverage in conjunction with
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indemnity is not prohibited; providing that the issuance
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of legal defense coverage for the purpose of defense of
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certain actions by a regulatory board or agency or public
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or private entity is not prohibited; providing an
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effective date.
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Be It Enacted by the Legislature of the State of Florida:
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Section 1. Subsection (11) is added to section
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395.0191, Florida Statutes, to read::
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395.0191 Staff membership and clinical privileges.--
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(11) Each licensed facility is responsible for
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ensuring that each doctor of medicine licensed under chapter
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458, or doctor of osteopathic medicine licensed under chapter
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459, who is on the facility staff or who has been granted
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clinical privileges at the facility complies with the
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financial responsibility requirements applicable to such
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licensed professional at all times while the licensed
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professional is a member of the staff or has clinical
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privileges in effect at the facility. In the event of a claim
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against a licensed professional to whom this subsection
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applies who is a member of the staff or who has been granted
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clinical privileges at the facility where the claim arises
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out of the rendering of, or the failure to render,
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professional care or services, if the licensed professional
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is not in compliance with the financial responsibility
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requirements with respect to the claim, the facility is
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responsible for meeting the licensed professional's financial
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responsibility requirements as set forth in the respective
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licensing provisions. A licensed professional to whom this
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subsection applies shall indemnify a licensed facility for
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any judgments, settlements, or other liabilities incurred by
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the licensed facility pursuant to this subsection in
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satisfaction of the licensed professional's financial
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responsibility requirements.
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Section 2. Section 627.41496, Florida Statutes, is
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created to read:
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627.41496 Medical malpractice legal defense coverage;
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prohibited issue.--
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(1) It is contrary to public policy in this state for
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any insurer to issue legal defense coverage for the purpose
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of providing legal defense services in conjunction with a
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claim for medical negligence or medical malpractice under any
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theory of law, unless such coverage is issued to a physician
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licensed under chapter 458, or an osteopathic physician
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licensed under chapter 459, who has in effect at the time
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such coverage is issued financial responsibility in
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accordance with one of the following methods in the per-claim
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amount applicable to such physician or osteopathic physician:
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(a) Establishing and maintaining an escrow account in
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(1)(a) or (2)(a);
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(b) Maintaining professional liability coverage in
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accordance with s. 458.320(1)(b) or (2)(b) or s.
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459.0085(1)(b) or (2)(b); or
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(c) Obtaining and maintaining an unexpired,
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irrevocable letter of credit in accordance with s.
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unless such physician or osteopathic physician is otherwise
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exempt from the financial responsibility requirements as
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stated under s. 458.320(5)(a), (b), (c), or (e) or s.
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459.0085(5)(a), (b), (c), or (e).
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(2) The required financial responsibility must be in
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effect at the time any legal defense coverage is issued by
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the insurer or invoked by the physician or osteopathic
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physician and must remain in effect throughout the period of
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legal representation provided under such legal defense
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coverage.
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(3) If a physician or osteopathic physician fails to
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maintain financial responsibility as required by this section
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for purposes of purchasing legal defense coverage, such
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coverage shall be null and void and such insurer is not
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liable for providing legal defense services.
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(4) Any insurer issuing legal defense coverage in
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accordance with this section shall require a physician or
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osteopathic physician to show proof that he or she maintains
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financial responsibility in accordance with subsection (1)
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before any coverage is issued to such physician or
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osteopathic physician. The physician or osteopathic physician
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shall also notify the insurer of any change in the status of
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his or her financial responsibility.
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(5) Any insurer who has issued legal defense coverage
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in accordance with this section shall require a physician or
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osteopathic physician to show proof that he or she maintains
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financial responsibility before providing legal defense
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services.
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(6) An insurer may not issue or provide legal defense
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coverage to any physician or osteopathic physician licensed
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in this state in contravention of this section.
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(7) This section does not prohibit the issuance of
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professional liability coverage for medical malpractice or
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medical negligence which includes legal defense coverage in
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conjunction with indemnity.
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(8) This section does not prohibit the issuance of
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legal defense coverage to any physician or osteopathic
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physician for purposes of the defense of any disciplinary,
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administrative, contractual, or criminal action brought by
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any federal or state regulatory board or agency, or public or
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private entity, including, but not limited to, any health
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care provider, health plan, or health insurer.
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Section 3. This act shall take effect upon becoming a law
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and applies to contracts entered into, issued, or renewed on or
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after that date.
CODING: Words stricken are deletions; words underlined are additions.