House Study Bill 160 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON HEALTH AND HUMAN SERVICES BILL BY CHAIRPERSON MEYER) A BILL FOR An Act relating to compensation discussions regarding adverse 1 health care incidents. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2138YC (3) 90 cm/ns

H.F. _____ Section 1. NEW SECTION . 135P.5 Demand for policy limits —— 1 prima facie evidence of bad faith. 2 1. If a health care provider or health facility makes an 3 offer of compensation under section 135P.3, subsection 3, 4 paragraph “d” , subparagraph (2), the health care provider or 5 health facility shall provide the patient with the contents 6 of any insurance agreement under which any person carrying on 7 an insurance business may be liable to satisfy part or all 8 of a judgment which may be entered in any civil action or 9 to indemnify or reimburse for payments made to satisfy any 10 judgment entered in any civil action filed by the patient 11 against the health care provider or health facility, including 12 a copy of any insurance declaration page showing the limits of 13 insurance that may be available to the patient to satisfy any 14 settlement or judgment relating to the patient’s injuries and 15 damages. The health care provider or health facility shall 16 also include a copy of any declarations page providing primary 17 professional liability coverage as well as any applicable 18 umbrella coverages. 19 2. If, at the end of the compensation discussion, the 20 patient has made a demand for an amount that is less than or 21 equal to the applicable policy limits, and the health care 22 provider or health facility consents in writing to the payment 23 by the insurance carrier of the demand, then the insurance 24 carrier identified in any insurance agreement or declarations 25 page produced under subsection 1 shall respond in writing to 26 the patient’s demand within thirty days of receipt. If the 27 insurance carrier refuses to pay the demand and the patient 28 subsequently receives a verdict or judgment against the health 29 care provider or health facility in an amount exceeding the 30 applicable policy limits, then notwithstanding section 135P.2, 31 the patient’s demand for an amount that was less than or equal 32 to the applicable policy limits, the health care provider or 33 health facility’s consent, and the insurance carrier’s refusal 34 to pay shall be discoverable and admissible in any subsequent 35 -1- LSB 2138YC (3) 90 cm/ns 1/ 3

H.F. _____ action against the insurance carrier for bad faith. 1 3. If the requirements of subsections 1 and 2 have been met 2 and if a bad-faith action is filed against an insurance carrier 3 for failure to pay a demand under subsection 2, then there 4 shall be a rebuttable presumption of bad faith against the 5 insurance carrier and in favor of the health care provider or 6 health facility. Any subsequent verdict amount entered against 7 an insurance carrier for bad faith under this subsection shall 8 not be used by the insurance carrier to increase premiums 9 charged to the insured health care provider, the insured health 10 facility, or the health care industry as a whole. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill relates to compensation discussions regarding 15 adverse health care incidents. 16 Under Code chapter 135P, a health care provider, a health 17 facility, or a health care provider jointly with a health 18 facility, may engage in an open, confidential discussion with a 19 patient related to an adverse health care incident. 20 The bill provides that if a health care provider or health 21 facility makes an offer of compensation, the health care 22 provider or health facility shall provide the patient with the 23 contents of any insurance agreement under which any person 24 carrying on an insurance business may be liable to satisfy 25 a judgment. If at the end of the discussion, the patient 26 and health care provider or health facility have reached an 27 agreement for an amount equal to or less than that of the 28 insurance policy limits, then the insurance carrier has 30 29 days to respond in writing to the agreed-upon demand. If the 30 insurance carrier refuses to pay and the patient receives a 31 subsequent verdict or judgment against the health care provider 32 or health facility that exceeds the policy limits, then the 33 health care provider or health facility’s consent and insurance 34 carrier’s refusal is discoverable and admissible in any 35 -2- LSB 2138YC (3) 90 cm/ns 2/ 3

H.F. _____ subsequent action against the insurance carrier for bad faith. 1 The bill provides that if the discussion contents become 2 discoverable, there shall be a rebuttable presumption of bad 3 faith against the insurance carrier and in favor of the health 4 care provider or health facility. Any subsequent verdict 5 amount against the insurance carrier for bad faith cannot 6 be used to increase the premium charged to the health care 7 provider, health facility, or health care industry as a whole. 8 -3- LSB 2138YC (3) 90 cm/ns 3/ 3