Highlights 77th Texas Legislature - Senate

HEALTH AND HUMAN
SERVICES
Care
ERVICES/Long-Term
77 th Texas Legislature
Requires insurance carriers who are not admitted carriers in Texas, but who sell surplus lines in Texas, to
report requested data to the Texas Department of Insurance (TDI). The information will then be reported
by TDI to the legislature. Under current law, only insurance companies that are admitted carriers in Texas
are required to report claim and settlement data to TDI.
Opens the Joint Underwriting Association (JUA) to for-profit nursing homes. The JUA is currently only
available to health care professionals and nonprofit nursing homes. By statute, the JUA is not responsible
for paying exemplary damages.
Provides for the creation of a task force at TDI to develop “best practices” for risk management and loss
control in nursing homes. The task force will consist of nursing homes, insurance carriers, TDI, consumers,
JUA, and the Health and Human Services Commission (HHSC). These best practices do not establish
“standards of care” in a civil action against a nursing home.
Adds language to ensure the financial soundness of the stabilization fund at the JUA. The bill provides for a
bond package through the Texas Public Financing Authority to raise $75 million to ensure that the
stabilization fund can handle the volume. Additionally, a surcharge fee will be assessed against carriers to
pay the service debt on the bonds.
Provides that if the JUA is the insurer for a nursing home, the JUA is not liable for exemplary damages
awarded in a civil cause of action against the nursing home. The JUA would only be liable for
compensatory damages. If the insurance company receives a “Stowers” demand and does not settle the
claim at or under the policy limits, the JUA is still responsible for the cost of litigation, compensatory
damages up to the policy limits, and compensatory damages above the policy limits. If the jury, however,
awards the plaintiff exemplary damages, the nursing home is responsible for those damages, not the JUA.
This provision only applies to coverage under a policy for an occurrence between January 1, 2002, and
January 1, 2006. The provision is scheduled for sunset on January 1, 2007.
Provides that as a condition of licensure, nursing homes in Texas must carry mandatory liability insurance
coverage of $1,000,000 per occurrence and $3,000,000 aggregate per year. The insurance may be
purchased through the JUA, admitted carriers, or surplus lines. Insurance must be purchased by
September 1, 2003. The section limits the amount of insurance required for a facility owned and operated
by a governmental unit to the unit’s liability under the Civil Practice and Remedies Code, Section 101.023.
Requires certain basic education of surveyors to include 10 days of observation in a nursing home. In
addition, requires biannual joint education of surveyor and provider on one of the ten most commonly cited
deficiencies. Surveyors are also required to obtain a certain percentage of their continuing education
requirements in gerontology or cognitive or physical disabilities. Creates quality assurance monitors and a
rapid response team to improve the delivery of care. Finally, transfers the informal dispute resolution
process, required by federal law, from DHS to HHSC.
Senate Research Center 135