An Act concerning medical malpractice and revising parts of the statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) As used in this act:

"Health care provider" means any person licensed in this State to practice medicine and surgery, chiropractic, podiatry, dentistry, optometry, psychology, pharmacy, nursing, physical therapy or as a bioanalytical laboratory director, or a hospital or other health care facility.

"Medical malpractice" means a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that such services are within the scope of services for which the health care provider is licensed and which are not within any restriction imposed by the licensing board or licensed hospital.

2. (New section) a. A person shall not commence an action alleging medical malpractice against a health care provider, unless the person has given the health care provider written notice of that proposed action not less than 180 days before the action is filed. The notice of intent to file an action shall be mailed to the last known professional business address or residential address of the health care provider who is the subject of the claim. Proof of the mailing of the notice required pursuant to this subsection shall be prima facie evidence of compliance. If no professional business or residential address is known, notice may be mailed to the health care facility where the care that is the subject of the action was rendered.

b. Notwithstanding the provisions of subsection a. of this section, there shall be a 90-day notice period in any case in which (1) the claimant has previously filed the 180-day notice required in subsection a. against other health care providers; (2) the claimant has filed a complaint and commenced an action alleging medical malpractice against one or more of the health care providers in connection with the same claim; or (3) the claimant did not identify, and could not reasonably have identified, a health care provider to which notice is required to be sent pursuant to subsection a. of this section, as a potential party to the complaint.

c. After the initial notice is given to a health care provider under subsection a. of this section, no addition of any successive 180-day periods shall be permitted, notwithstanding the number of additional notices that may be filed in connection with the claim or the number of health care providers that may be notified.

3. (New section) Every notice given to a health care provider pursuant to section 2 of this act shall contain a statement of at least all of the following:

a. The factual basis for the claim;

b. The applicable standard of practice or care alleged by the claimant;

c. The manner in which it is claimed that the applicable standard of practice or care was breached by the health care provider;

d. The alleged action that should have been taken to achieve compliance with the alleged standard of practice or care;

e. The manner in which it is alleged that the breach of the standard of practice or care was the proximate cause of the injury that is the subject of the proposed action; and

f. The names of all health care providers that the claimant is notifying pursuant to section 2 of this act in connection with the alleged action.

4. (New section) a. Not later than 60 days after giving notice pursuant to section 2 of this act, the claimant shall allow the health care provider receiving the notice access to all of the medical records related to the claim that are in the claimant's control, and shall provide releases for any medical records related to the claim that are not in the claimant's control, but of which the claimant has knowledge.

b. Not later than 60 days after giving notice pursuant to subsection a. of this section, the health care provider shall allow the claimant access to all medical records in its possession that are related to the claim, provided that this shall not restrict a health care provider that receives notice of a claim from communicating with other health care providers and acquiring medical records as may be necessary or pertinent to the claim.

5. (New section) a. A person who has given notice pursuant to section 2 of this act or who has commenced an action alleging medical malpractice shall be deemed to have waived, for the purposes of that claim or action, any right of confidentiality with respect to any medical records relating to the claim or action as well as any other similar privilege established in law with respect to any person or entity who was involved in the acts, transactions, events, or occurrences that are the basis for the claim or action or who provided care or treatment to the claimant or plaintiff for the condition that is the subject of the claim or action or a condition related to the claim or action either before or after those acts, transactions, events, or occurrences, whether or not the person is a party to the claim or action.

b. Pursuant to subsection a. of this section, a person or entity: (1) who has received notice pursuant to section 2 of this act; or (2) who has been named as a defendant in an action alleging medical malpractice, or that person's or entity's attorney or authorized representative, may communicate with a health care provider, or any business entity of which the foregoing are a part, or any employee or agent thereof, in order to obtain all information relevant to the subject matter of the claim or action and to prepare the person's or entity's defense to the claim or action.

c. Any person who discloses or releases information pursuant to subsection b. of this section to a person who has received notice under section 2 of this act or to a person or entity who has been named as a defendant in an action alleging medical malpractice or to the person or entity's attorney or other authorized representative shall not be deemed to have violated any law regarding the privacy or confidentiality of records or any other similar duty or obligation to the claimant or plaintiff otherwise provided by law.

6. (New section) Not later than 120 days after receipt of the notice required pursuant to section 2 of this act, the health care provider against whom the claim is made shall furnish to the claimant or his authorized representative a written response that contains a statement of the following:

a. The factual basis for the defense of the claim;

b. The standard of practice or care that the health care provider claims to be applicable to the proposed action, and that the health care provider that is the subject of the claim complied with that standard;

c. The manner in which it is claimed by the health care provider that there was compliance with the applicable standard of practice or care;

d. The manner in which the health care provider contends that the alleged negligence was not the proximate cause of the claimant's alleged injury or damage.

7. (New section) a. If at any time during the applicable notice period or periods provided in sections 2, 4 and 6 of this act, a health care provider receiving notice informs the claimant in writing that it does not intend to settle the claim within the applicable notice period, the claimant may file an action alleging medical malpractice against the health care provider, as long as the claim is not barred by the applicable statute of limitations for the filing of such claims.

b. If a claimant does not receive the written response required pursuant to section 6 of this act within the required 120-day time period, the claimant may file an action alleging medical malpractice upon the expiration of that period.

8. (New section) a. Subject to the provisions of subsection b. of this section, in an action alleging medical malpractice, the plaintiff shall have the burden of proving that in light of the state of the art existing at the time of the alleged malpractice: (1) the defendant, if a general practitioner, failed to provide the plaintiff with the recognized standard of acceptable professional practice or care in the community in which the defendant practices or in a similar community, and that as a proximate result of the defendant failing to provide that standard, the plaintiff suffered an injury; or (2) the defendant, if a specialist, failed to provide the plaintiff with the recognized standard of practice or care within that specialty as reasonably applied in light of the facilities available in the community or other facilities reasonably available in the community or other facilities reasonably available under the circumstances, and as a proximate result of the defendant failing to provide that standard, the plaintiff suffered an injury.

b. In any action alleging medical malpractice, the plaintiff shall have the burden of proving that he suffered an injury that more probably than not was proximately caused by the negligence of the defendant or defendants.

c. In any action alleging medical malpractice, a plaintiff shall not recover for loss of an opportunity to survive or an opportunity to achieve a better result unless the opportunity is determined to be greater than 50%.

9. (New section) a. In any action alleging medical malpractice, the plaintiff shall file an affidavit pursuant to the provisions of P.L.1995, c.139 (C.2A:53A-26 et seq.); provided, however, that notwithstanding the provisions of that law to the contrary, the affidavit shall be filed by the plaintiff at the time of the filing of the complaint and the affidavit shall be submitted by a person who the plaintiff's attorney reasonably believes meets the requirements of an expert witness as set forth in section 10 of this act.

b. Within 21 days following the filing of an affidavit by the plaintiff in accordance with subsection a. of this section, the defendant shall file an answer. In addition, not later than 90 days following the filing of the affidavit, the defendant shall file an affidavit of meritorious defense signed by a person whom the defendant's attorney reasonably believes meets the qualifications for an expert witness as set forth in section 10 of this act. The affidavit of meritorious defense shall certify that the person providing the affidavit has reviewed the complaint and all medical records supplied to him by the defendant's attorney concerning the allegations contained in the complaint and shall contain a statement of each of the following:

(1) The factual basis for each defense to the claims made against the defendant in the complaint;

(2) The standard of practice or care that the health care provider named as a defendant in the complaint claims to be applicable to the action and that the defendant complied with that standard;

(3) The manner in which it is claimed by the defendant that there was compliance with the applicable standard of practice or care;

(4) The manner in which the defendant contends that the alleged injury or damage to the plaintiff is not related to the care and treatment rendered.

c. If the plaintiff in an action alleging medical malpractice fails to allow access to medical records as required pursuant to section 4 of this act, the affidavit of meritorious defense required pursuant to subsection b. of this section may be filed not later than 90 days after filing an answer to the complaint.

10. (New section) a. In an action alleging medical malpractice, a person shall not give expert testimony or execute an affidavit pursuant to section 9 of this act on the appropriate standard of practice or care unless the person is licensed as a physician or other health care professional licensed in this State and meets the following criteria:

(1) If the party against whom or on whose behalf the testimony is offered is a specialist, the person providing the testimony shall have specialized at the time of the occurrence that is the basis for the action in the same specialty as the party against whom or on whose behalf the testimony is offered, and if the person against whom or on whose behalf the testimony is being offered is board certified, the expert witness shall be a specialist who is board certified in the same specialty, and during the year immediately preceding the date of the occurrence that is the basis for the claim or action, shall have devoted a majority of his or her professional time to either: (a) the active clinical practice of the same health care profession in which the defendant is licensed, and if the defendant is a specialist, the active clinical practice of that specialty; or (b) the instruction of students in an accredited medical school, other accredited health professional school or accredited residency or clinical research program in the same health profession in which the defendant is licensed, and, if that party is a specialist, an accredited medical school, health professional school or accredited residency or clinical research program in the same specialty; or (c) both.

(2) If the party against whom or on whose behalf the testimony is offered is a general practitioner, the expert witness, during the year immediately preceding the date of the occurrence that is the basis for the claim or action shall have devoted a majority of his or her professional time to: (a) active clinical practice as a general practitioner; or (b) the instruction of students in an accredited medical school, health professional school, or accredited residency or clinical research program in the same health care profession in which the party against whom or on whose behalf the testimony is licensed; or (c) both.

b. In determining the qualifications of an expert witness in an action alleging medical malpractice, the court shall, at a minimum, evaluate all of the following: (1) the educational and professional training of the expert witness; (2) the area of specialization of the expert witness; (3) the length of time the expert witness has been engaged in the active clinical practice or instruction of the health care profession or specialty; and (4) the relevancy of the expert witness's testimony.

c. Nothing in this section shall limit the power of the trial court to disqualify an expert witness on grounds other than the qualifications set forth in this section.

d. In an action alleging medical malpractice, the following limitations shall apply to discovery conducted by opposing counsel to determine whether or not an expert witness is qualified: (1) tax returns of an expert witness are not discoverable; (2) family members of an expert witness shall not be deposed concerning the amount of time the expert witness spends engaged in the practice of his or her profession; and (3) a personal diary or calendar belonging to an expert witness is not discoverable. For the purposes of this paragraph (3), "personal diary or calendar" means a diary or calendar that does not include listings or records of professional activities.

e. In an action alleging medical malpractice, an expert witness shall not testify on a contingency fee basis. A person who violates this subsection is guilty of a crime of the fourth degree.

11. (New section) a. In an action alleging medical malpractice, a scientific opinion rendered by an otherwise qualified expert is not admissible unless the court determines that the opinion is reliable and will assist the trier of fact. In making that determination, the court shall examine the opinion and the basis for the opinion, which basis shall include the facts, technique, methodology, and reasoning relied up on by the expert, and shall consider all of the following factors:

(1) Whether the opinion and its basis have been subjected to scientific testing and replication;

(2) Whether the opinion and its basis have been subjected to peer review publication;

(3) The existence and maintenance of generally accepted standards governing the application and interpretation of a methodology or technique and whether the opinion and its basis are consistent with those standards;

(4) The known or potential error rate of the opinion and its basis;

(5) The degree to which the opinion and its basis are generally accepted within the relevant expert community. As used in this paragraph (5), "relevant expert community" means individuals who are knowledgeable in the field of study and are gainfully employed applying that knowledge on the free market;

(6) Whether the basis for the opinion is reliable and whether experts in that field would rely on the same basis to reach the type of opinion being proffered;

(7) Whether the opinion or methodology is relied upon by experts outside of the context of litigation.

b. A novel methodology or form of scientific evidence may be admitted into evidence only if its proponent establishes that it has achieved general scientific acceptance among impartial and disinterested experts in the field.

c. In an action alleging medical malpractice, the provisions of this section are in addition to, and do not otherwise affect, the criteria for expert testimony provided for in section 10 of this act.

12. (New section) a. In an action alleging medical malpractice, a party named as a defendant in the action may, instead of answering or otherwise pleading, file with the court an affidavit certifying that he was not involved, either directly or indirectly, in the occurrence alleged in the action. Unless the affidavit is opposed pursuant to subsection b. of this section, the court shall order the dismissal of the claim, without prejudice, against the party providing that certification.

b. Any party to a medical malpractice action may oppose the dismissal of any claim pursuant to the filing of an affidavit in accordance with subsection a. of this section or may move to vacate an order of dismissal and the court may reinstate as a party the person filing the affidavit if it can be shown that the party was involved in the occurrence alleged in the action. Reinstatement of a party pursuant to this subsection shall not be barred by any statute of limitations defense that was not valid at the time the original action was filed. The person opposing the dismissal of the claim pursuant to this subsection shall have standing to obtain discovery regarding the involvement or noninvolvement of the party filing the affidavit, which discovery shall be completed within 90 days after the affidavit is filed.

13. (New section) a. An action alleging medical malpractice shall be mediated pursuant to this act. The judge to whom an action alleging medical malpractice is assigned shall refer the action to mediation by written order not less than 90 days after the filing of the answer or answers required by sections 6 and 9 of this act.

b. An action referred to mediation pursuant to subsection a. of this section shall be heard by a panel of neutral mediators. A person serving as a neutral mediator shall comply with ethics standards established by the Supreme Court governing conflicts of interest, professional relationships, and such other issues as the Court may establish. A proposed neutral mediator shall be disqualified from service in any case in which a judge determines that the ethics standards established by the Court would preclude his service on the case, and a neutral mediator may disqualify himself if he determines an affiliation with any party to the dispute that would preclude his service under the ethics standards.

c. In any mediation required pursuant to subsection a. of this section, a panel of neutral mediators shall be selected in a manner determined by the court. Each panel shall be composed of five voting members, two of whom shall be attorneys admitted in this State, and two of whom shall be licensed health care providers licensed under the same licensing board as the defendant. If a defendant is a specialist, the health care providers on the panel shall specialize in the same, or related, relevant area of health care as the defendant. The fifth member shall be selected from a pool of active or retired Superior Court judges, active or retired administrative law judges, active or retired workers compensation judges, or other individuals as the Court may determine appropriate to qualify as neutral mediators. An active judge of the Superior Court may be selected as a member of a mediation panel but may not preside at the trial of any action in which he served as mediator. The grounds for disqualification of a neutral mediator in an action shall be the same as the grounds for the disqualification of a judge from an action.

14. (New section) a. The judge to whom the medical malpractice action has been assigned shall designate a person, who may be the clerk of the court, the assignment clerk, or another person, to serve as the mediation clerk. The mediation clerk shall set a time and place for the mediation hearing and send notice to the neutral mediators and the attorneys of record in the case at least 30 days before the date set for the mediation hearing. Adjournments of mediation hearings shall be granted only for good cause, in accordance with the Rules Governing the Courts of the State of New Jersey.

b. Not later than the 14 days following the mailing of the notice of the mediation hearing pursuant to subsection a. of this section, each party to the mediation shall pay a fee as prescribed by the court. If a claim is derivative of another claim, the claims shall be treated as a single claim, with one fee paid and a single award made by the neutral mediators.

c. Not later than seven days before the mediation hearing date, each party shall submit to the mediation clerk five copies of the documents relating to the issues to be mediated and five copies of a concise brief or summary that sets forth that party's factual or legal position on issues presented in the malpractice action. In addition, one copy of each shall be provided to each attorney of record in the case. Failure to submit the materials required by this subsection shall result in a fine to be determined by the judge to whom the medical malpractice action has been assigned.

15. (New section) a. A party to the case has the right, but is not required, to attend a mediation hearing. If scars, disfigurement or other pertinent conditions exist, they may be demonstrated to the mediation panel by a personal appearance of the party alleging malpractice, but testimony shall not be taken or permitted from any such party. The Rules of Evidence shall not apply in proceedings of the mediation panel but factual information having a bearing on damages or liability shall be supported by documentary evidence if possible or practicable.

b. Oral presentation shall be limited to fifteen minutes per side unless multiple parties or unusual circumstances warrant additional time, which may be granted by the mediation panel. The panel may request information on applicable insurance policy limits and may inquire about settlement negotiations unless objected to by any party. Statements by the attorneys during the hearing and the briefs or summaries presented pursuant to subsection c. of section 14 of this act shall not be admissible in any subsequent court or evidentiary hearing.

16. (New section) a. Except as otherwise provided in subsection b. of this section, not later than 14 days after the mediation hearing, the panel shall make an evaluation and notify the attorney for each party of its evaluation in writing. The evaluation shall include a specific finding on the standard of care provided. The mediation panel shall indicate in the evaluation if a determination or award of the panel is not unanimous.

b. If the mediation panel unanimously determines that a complete action or defense is frivolous as to any party, the panel shall state this to that party. If the action proceeds to trial, the party who has been determined to have a frivolous action or defense shall post a cash or surety bond, approved by the court, in the amount of $10,000 for each party against whom the action or defense was determined to be frivolous. If judgment is entered against the party who posted the bond, the bond shall be used to pay all reasonable costs incurred by the other party or parties in the frivolous action, as well as any costs allowed by law or by court rule, including court costs and reasonable attorneys' fees.

c. The evaluation of the mediation panel shall include a separate determination or award as to each cross-claim, counterclaim, or third-party claim that has been filed in the action.

17. (New section) a. Each party shall file a written acceptance or rejection of the mediation panel's evaluation with the mediation clerk not later than 30 days after service of the panel's evaluation. The failure to file a written acceptance or rejection within the time limit prescribed shall constitute acceptance of the evaluation. A party's acceptance or rejection of the panel's evaluation shall not be disclosed until the expiration of the time limit prescribed herein, at which time the mediation clerk shall send a notice indicating each party's acceptance or rejection of the panel's evaluation.

b. With respect to mediation involving multiple parties, the following rules shall apply:

(1) Each party shall have the option of accepting all of the determinations or awards covering the claims by or against that party or of accepting some and rejecting others; provided, however, that as to any particular opposing party, the party shall either accept or reject the evaluation in its entirety;

(2) A party who accepts all of the awards may specifically indicate that he or she intends the acceptance to be effective only if all opposing parties accept. If this limitation is not included in the acceptance, an accepting party shall be considered to have agreed to entry of judgment as to that party and those of the opposing parties who accept, with the action to continue between the accepting party and those opposing parties who reject;

(3) If a party makes a limited acceptance under paragraph (2) of this subsection and some of the opposing parties accept and others reject the evaluation, for the purposes of the cost provisions contained in section 18 of this act, the party who made the limited acceptance shall be considered to have rejected as to those opposing parties who accepted.

18. (New section) a. If all of the parties accept the mediation panel's evaluation, judgment shall be entered in that amount, which shall include all fees costs and interest to the date of judgment. In a case involving multiple parties, judgment shall be entered as to those opposing parties who have accepted the portions of the panel's evaluation that apply to them. Except as otherwise provided in this act with respect to cases involving multiple parties, if all or part of the evaluation of the mediation panel is rejected, the action shall proceed to trial.

b. The mediation clerk shall place a copy of the mediation evaluation and the parties' respective acceptances and rejections in a sealed envelope for filing with the clerk of the court. In a nonjury action, the envelope shall not be opened and the parties shall not reveal the amount of the evaluation until the judge has rendered judgment.

c. If a party has rejected an evaluation and the action proceeds to trial, that party shall pay the opposing party's actual costs unless the verdict is more favorable to the rejecting party than the mediation evaluation; provided, however, that if the opposing party has also rejected the evaluation, that party is entitled to costs only if the verdict is more favorable to that party than the mediation evaluation. For the purposes of this subsection, a verdict shall be adjusted by adding to it assessable costs and interest on the amount of the verdict from the filing of the complaint to the date of the mediation evaluation. Following this adjustment, the verdict shall be considered more favorable to a defendant if it is more than 10% below the evaluation, and is considered more favorable to the plaintiff if it is more than 10% above the evaluation. The judge shall determine the costs pursuant to this subsection, including reasonable fees for attorney services necessitated by the rejection of the mediation panel's evaluation. No costs shall be awarded if the mediation determination or award was not unanimous.

19. (New section) a. In any action for damages alleging medical malpractice by or against a health care provider, the total amount of damages for noneconomic loss recoverable by all plaintiffs, resulting from negligence of all defendants, shall not exceed $250,000, unless, as the result of the negligence of one or more of the defendants, one or more of the following exceptions exist, in which case damages for noneconomic loss shall not exceed $500,000: (1) the plaintiff is hemiplegic, paraplegic, or quadriplegic resulting in a total permanent functional loss of one or more limbs caused by injury to the brain or injury to the spinal cord, or both; (2) the plaintiff has permanently impaired cognitive capacity rendering him incapable of making independent, responsible life decisions and permanently incapable of independently performing the activities of normal, daily living; or (3) there has been permanent loss of or damage to a reproductive organ resulting in the inability to procreate.

b. In awarding damages in an action alleging medical malpractice, the trier of fact shall itemize damages into damages for economic loss and damages for noneconomic loss.

c. The Supreme Court shall adjust the limitation annually on damages for noneconomic loss provided for in subsection a. of this section by an amount determined by the Court to reflect the cumulative annual percentage change in the Consumer Price Index for All Urban Consumers issued by the United States Department of Labor.

20. (New section) a. A judge presiding over an action alleging medical malpractice shall review each verdict to determine if the judgment or settlement is in accordance with the provisions of section 19 of this act. If the verdict exceeds the limitations on noneconomic loss set forth in that section, the court shall set aside any amount of noneconomic damages in excess of the amounts provided therein.

b. A judge presiding over an action alleging medical malpractice shall review each verdict and shall: (1) concur with the award; (2) upon motion by any party, within 21 days of entry of the judgment of the court, grant a new trial to all or some of the parties, on all or some issues, whenever their substantial rights are materially affected because: (a) the judge determines a verdict to be clearly inadequate or excessive; (b) the judge determines excessive or inadequate damages to have been influenced by passion or prejudice; (c) the judge determines a verdict to have been against the great weight of the evidence or contrary to law; (d) the judge determines that there is newly discovered material evidence which with reasonable diligence could not have been discovered and produced at trial; or (e) the judge makes any other determination otherwise provided by law or court rule.

c. Within 21 days after entry of a judgment, the court on its own initiative may order a new trial for any of the reasons set forth in subsection b. of this section, which order shall specify the grounds upon which the order is based.

d. If the court finds that the only error in the trial is the inadequacy or excessiveness of the verdict, the court may grant a new trial unless, within 14 days, the nonmoving party consents in writing to the entry of judgment in an amount found by the court to be the lowest or highest amount the evidence will support. If the moving party appeals, the written consent provided for in this subsection shall in no way prejudice the nonmoving party's argument on appeal that the original verdict was correct. If the nonmoving party prevails on appeal, the original verdict may be reinstated by the Appellate Division.

21. (New section) If the plaintiff in an action alleging medical malpractice enters into a settlement agreement with a defendant concerning the action, whether or not the settlement agreement was entered into under court supervision, and the defendant was a health care provider licensed under Title 45 of the Revised Statutes, the plaintiff's attorney and the defendant's attorney or, if the plaintiff and defendant are not represented by attorneys, the plaintiff and defendant, shall jointly file a complete written copy of the settlement agreement with the professional board in the Division of Consumer Affairs in the Department of Law and Public Safety not later than 30 days after the settlement agreement is entered into. Any such information filed with a professional board shall be confidential except for use by the board, and shall not be subject to disclosure under the provisions of P.L.1963, c.73 (C.47:1A-1 et seq.).

22. (New section) a. A health care facility or health care agency shall not discharge or discipline, threaten to discharge or discipline, or otherwise discriminate against an employee regarding the employee's compensation, terms, conditions, location, or privileges of employment, or against the privileges of a person who is not an employee of a facility or agency because the employee, other person, or an individual acting on their behalf: (1) reports in good faith or intends to report, verbally or in writing, the medical malpractice of a health care provider; or (2) acts as an expert witness in a civil or administrative action involving medical malpractice.

b. A health care facility or health care agency that violates the provisions of subsection a. of this section shall be subject to a fine of not less than $5,000 nor more than $10,000 for each violation.

23. (New section) a. For the purposes of this section:

"Annuity" means an annuity issued by an insurer licensed or authorized to do business in this State which is a qualified assignment under section 130 of the Internal Revenue Code, 26 U.S.C. s. 130;

"Future damages" means damages for economic and noneconomic loss which may arise or be incurred after the date on which a judgment or settlement is entered into in an action involving medical malpractice, which shall include future medical treatment, care or custody, loss of earnings, loss of bodily function, or damages for noneconomic loss "Judgment creditor" means a plaintiff who is the recipient of an award for economic or noneconomic loss that is as the result of an action filed against a health care provider for medical malpractice, which award is subject to the provisions of subsection b. of this section;

"Judgment debtor" means a health care provider who, as a defendant in an action brought for medical malpractice, is required to pay the plaintiff an award that is subject to the provisions of subsection a. of this section;

"Plaintiff" means a person bringing an action against a health care provider for medical malpractice;

"Structured settlement" means an agreement made to settle a claim or lawsuit or respond to a judgment in a lawsuit brought for medical malpractice by an injured person whereby a series of periodic payments rather than a lump sum payment are made over time to a plaintiff, in accordance with the needs of the plaintiff or his family, either through the purchase of an annuity or the establishment of a trust fund, or by another means approved by the court.

b. In any judgment or settlement resulting from any medical malpractice action brought by a plaintiff for personal injury or death which is in excess of $250,000, the court shall enter a judgment ordering that money damages for economic and noneconomic loss, or its equivalent for future damages, shall be paid in the form of a structured settlement by any person, organization, group, or insurer that is contractually liable to pay the judgment or settlement. The sum of $250,000 as provided herein shall be adjusted annually by the Supreme Court to reflect the cumulative annual percentage change in the Consumer Price Index for All Urban Consumers issued by the United States Department of Labor.

c. The structured settlement agreement shall specify the recipient of the payments, the dollar amount of the payments, the interval between payments, the number of payments or the period of time over which payments are to be made and the persons to whom money damages are owed, if any, in the event of the judgment creditor's death.

d. In the event of the judgment creditor's death, the court that rendered the original judgment shall, upon application of any party in interest, modify the judgment to reduce the amount of payments required under the structured settlement agreement by any amounts attributable to the future medical treatment, care or custody, loss of bodily function, or pain and suffering of the deceased judgment creditor. Money damages awarded for loss of future earnings shall not be reduced, nor payments terminated, by reason of the death of the judgment creditor, but shall be paid to persons to whom the judgment creditor owed a duty of support, as provided by law, immediately prior to the judgment creditor's death, or if none, to the judgment creditor's estate.

e. Upon the purchase of an annuity, establishment of a trust, or approval of another arrangement for periodic payments by a court, any obligation of the judgment debtor with respect to the judgment or settlement shall cease.

24. (New section) a. Every insurer authorized to transact medical malpractice liability insurance in this State shall offer, to groups of 50 or more insureds, group medical malpractice liability insurance policies with a deductible, at the option of the insureds, in amounts of at least $50,000 per occurrence and up to $1,000,000 per occurrence.

b. Physicians, who may be in the same specialty or in different specialties, may purchase such policies jointly, whether or not they are members of the same practice group, and may elect to treat the deductible amount under the policy as a self-insured retention, in which claims filed under the policy are managed by either the insurer issuing the policy, on an administrative-services-only basis, or by an independent third party administrator approved by the commissioner and the insurer issuing the policy.

c. A physician group purchasing a policy issued pursuant to the provisions of this section shall do so pursuant to a written agreement, subscribed to by all of the participating physicians. The agreement shall include provisions regarding the selection of an administrator, allocation of contributions to the self-insured retention under the policy, procedures for investment and management of the contributions, allocation of the cost of the policy premium among physician members of the group, and such other matters as to the administration of the program as may be necessary.

d. Every insurer authorized to transact medical malpractice liability insurance in this State shall offer to individual physicians or practice groups such deductibles on those policies as they may require, for a commensurate reduction in premium, which deductibles shall be straight deductibles and shall not be treated as self-insured retention.

25. (New section) Notwithstanding any law or regulation to the contrary, no insurer authorized to transact medical malpractice liability insurance shall increase the premium of any medical malpractice liability insurance policy based on a claim of medical negligence or malpractice against the insured unless the claim results in a medical malpractice claim settlement, judgment or arbitration award against the insured.

26. N.J.S.2A:14-2 is amended to read as follows:

2A:14-2. [Every] a. Except as provided in subsection b. of this section, every action at law for an injury to the person caused by the wrongful act, neglect or default of any person within this state shall be commenced within 2 years next after the cause of any such action shall have accrued.

b. Every action at law for an injury to the person caused by the professional negligence of a health care provider within this State shall be commenced within three years after the cause of such action shall have accrued or one year after the injured person discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first, except that no such action shall be commenced after three years unless tolled upon proof of fraud, intentional concealment or the presence of a foreign body, which has no therapeutic or diagnostic purpose or effect, in the person of the injured person; and except that actions by a minor under the full age of two years shall be commenced within seven years, except that the time limit shall be tolled for these minors for any of the four previous reasons provided in this subsection and for any period during which the parent or guardian and the health care provider's insurer or health care provider have committed fraud or collision in failure to bring an action for professional negligence on behalf of the injured minor.

For purposes of this subsection:

"Professional negligence" means a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that those services are within the scope of services for which the health care provider is licensed and which are not within any restriction imposed by the licensing board or licensed hospital.

(cf: N.J.S.2A:14-2)

27. This act shall take effect on the 180th day following enactment, and shall apply to any cause of action arising on or after that date.

STATEMENT

This bill establishes procedures for the more expeditious discovery and disposition of medical malpractice claims in order to reduce the costs of litigation, and therefore ultimately, the premiums paid by physicians and other health care providers for medical malpractice liability insurance. Further, the bill establishes certain parameters with respect to proof and liability in medical malpractice actions, also in the interests of affordability and availability of malpractice insurance.

The bill requires a person contemplating commencement of an action alleging malpractice to give the health care provider who is alleged to have been negligent in the rendering of professional services written notice of the proposed action at least 180 days before the action is filed. The notice shall contain the factual basis for the claim, the applicable standard of care and the manner in which that standard was breached and all health care providers that the claimant is notifying. Within 60 days of the initial notice, the claimant must allow the health care providers involved access to all medical records related to the claim and in the claimant's control and, likewise, the health care providers must allow the claimant similar access. Not later than 120 days after receipt of the initial notice, the health care provider must respond to the notice stating the basis for the defense of the claim. If at any time during the applicable periods, a health care provider informs the claimant that it does not intend to settle the claim within the notice period, the claimant may immediately file an action alleging medical malpractice, so long as the claim is not otherwise barred by the applicable statute of limitations.

"Health care provider" is defined by the bill as any person licensed in this State to practice medicine and surgery, chiropractic, podiatry, dentistry, optometry, psychology, pharmacy, nursing, physical therapy or as a bioanalytical laboratory director, or a hospital or other health care facility or health care agency. "Medical malpractice" is defined as a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that such services are within the scope of services for which the health care provider is licensed and which are not within any restriction imposed by the licensing board or licensed hospital.

The bill defines the burdens of proof that the plaintiff in a medical malpractice action must meet; specifically that the defendant, if a general practitioner, failed to provide the plaintiff with the recognized standard of acceptable professional practice or care in the community in which the defendant practices or in a similar community, and that as a proximate result of the defendant failing to provide that standard, the plaintiff suffered an injury; or (2) the defendant, if a specialist, failed to provide the plaintiff with the recognized standard of practice within that specialty as reasonably applied in light of the facilities available in the community or other facilities reasonably available in the community or other facilities reasonably available under the circumstances, and as a proximate result of the defendant failing to provide that standard the plaintiff suffered an injury. In any action alleging medical malpractice, the plaintiff shall have the burden of proving that he suffered an injury that more probably than not was proximately caused by the negligence of the defendant. A plaintiff shall not recover for loss of an opportunity to survive or an opportunity to achieve a better result unless the opportunity is determined to be greater than 50%.

The bill requires the plaintiff in a medical malpractice action to file an affidavit of merit pursuant to P.L.1995, c.139 (C.2A:53A-26 et seq.) at the same time as the filing of the complaint, contrary to the provisions of that law generally. The defendant shall file an answer to the complaint within 21 days of the filing of the complaint and the affidavit of merit and, within 90 days from that filing date, shall file an affidavit of meritorious defense by a person who the defense believes meets the qualifications for an expert witness as established by the bill. Essentially, to qualify as an expert or execute an affidavit, the bill requires that the individual be in the same type of practice and possess the same certifications, as applicable, as the defendant. Other requirements for expert and scientific opinions are also spelled out in the bill.

Under the bill, all actions alleging malpractice must be mediated by a panel of five neutral mediators, which shall include two attorneys, two health care providers licensed by the same board as the defendant and an active or retired judge, selected in a manner determined by the Supreme Court. Procedures for the mediation of the complaint are enumerated in the bill. A party to the mediation is permitted, but not required, to attend. If scars or disfigurement exist, they may be demonstrated, but testimony shall not be taken. The Rules of Evidence will not apply and each side shall be limited to a 15 minute oral presentation. The panel's evaluation of the complaint shall be completed and submitted to the parties in writing within 14 days of the hearing. Each party must file an acceptance or rejection of the evaluation. If all of the parties accept the evaluation, judgment shall be entered in that amount. If any party rejects the evaluation, the action may proceed to trial. Costs and interest are also allocated under the bill according to the outcome of the mediation and evaluation process.

Noneconomic damages in medical malpractice actions are limited by the bill to $250,000, unless, as a result of the malpractice, the plaintiff is hemiplegic, paraplegic, or quadriplegic, the plaintiff has permanently impaired cognitive capacity rendering him incapable of independent daily living, or there has been a permanent loss of or damage to a reproductive organ resulting in the inability to procreate, in which case damages for noneconomic loss shall not exceed $500,000. The trier of fact must itemize damages into economic and noneconomic loss. The presiding judge must review each verdict or settlement and set aside any amount of noneconomic damages in excess of the limits specified by the bill. In cases in which the judgment or settlement exceeds $250,000, the bill requires structured settlement of money damages for economic and noneconomic loss. In the case of both this amount, and the limits on noneconomic damages, the Supreme Court shall adjust the amounts annually based on the Consumer Price Index.

The bill requires that, in any settled action, the plaintiff and defendant shall jointly file a copy of the settlement agreement with the appropriate professional board in the Division of Consumer Affairs within 30 days of the execution of the agreement. A provision prohibiting retaliation by a health care facility or agency against an employee who reports malpractice or acts as an expert witness in a malpractice action is also included.

The bill requires that medical malpractice liability insurers must offer groups of 50 or more physicians medical malpractice liability insurance policies with a deductible in amounts of at least $50,000 per occurrence and up to $1,000,000 per occurrence. The deductible amount may be treated as a self-insured retention, using a third party administrator approved by the commissioner, or using the medical malpractice liability insurer as a third party administrator on an administrative-services-only basis. The bill also requires that insurers offer deductibles to individual physicians and practice groups, with a commensurate reduction in premium.

The bill also prohibits a medical malpractice liability insurer from increasing the premium of an insured for a medical malpractice liability claim unless that claim results in a medical malpractice claim settlement, judgment or arbitration award against the insured.

The statute of limitations for medical malpractice actions under current law is two years. However, under the discovery rule, the statute is tolled and does not begin to run until the plaintiff knew or, through the exercise of reasonable due diligence should have known, of the injury. The result of this rule is that the tail for medical malpractice liability actions can be virtually infinite.

The bill creates two separate statutes of limitations, both of which must be satisfied if a plaintiff is to timely file a medical malpractice action. The action must be brought within one year after the injured party first suffered appreciable harm and suspected, or a reasonable person would have suspected, that someone had done something wrong. The bill also provides that no action may be brought more than three years after the plaintiff first suffered appreciable harm. Either period can be tolled by fraud, intentional concealment or the presence of a foreign object in the patient's body. However, if the injured party was less than two years old when appreciable harm was first suffered, the action must be brought within seven years after the harm. In addition to the other reasons the provisions of the bill may be tolled, the minor's limitations period is tolled if the parent or guardian and the health care provider or malpractice insurer have committed fraud or collusion.