Purpose:
Provides certain medical staff and students with professional medical
liability indemnity from and against medical liability claims
Date Approved:
August
12, 2004
Background:
The Plan for Professional Medical
Malpractice Self-Insurance was approved by the Board of Regents on
April 15, 1977. Authority for
the Plan had been granted to the Board of Regents by Senate Bill 391, Acts
of the 65th Legislature, effective March 10, 1977 (later codified as Texas
Education Code Section 59.01 et seq).
Since
the Plan was first approved, it has been amended on March 29, 1979;
February 29, 1980; June 12, 1981; April 8, 1982;
August 11, 1983; December 7, 1989;
February 8, 1990; June 14, 1990; June 11, 1992
and October 9, 1992. The name
was changed to the Plan for Professional Medical Liability Self-Insurance in
conjunction with rate changes made at the February 11, 1988 meeting. In order to incorporate changes in
THE
Professional
medical liability benefit plan
(Effective
September 1, 2004)
PURPOSE
The
purpose of The University of Texas System Professional Medical Liability Plan
(“Plan”) is to provide certain health care providers and students of The
University of Texas System (“System”) with professional liability indemnity
from and against medical and dental liability claims pursuant to the authority
granted to the Board of Regents of The University of Texas System by Texas
Education Code Section 59.01 et seq.
DEFINITIONS
Unless otherwise required by the context, the following
definitions shall control:
A. Plan
Participant shall mean:
1. Staff physicians and dentists who are
medical doctors, oral surgeons, oral pathologists, dentists, doctors of
osteopathy, or podiatrists appointed to the full-time faculty of a medical or
dental school or hospital of the System, medical doctors employed in health
services at and by a general academic institution of the System;
2. Residents and fellows enrolled in a
residency program or fellowship at a System medical or dental school who are
duly licensed, credentialed, and registered to practice their profession;
3. Medical doctors, oral surgeons, oral
pathologists, dentists, doctors of osteopathy, and podiatrists appointed to the
faculty of a medical school or hospital of the System on a part-time or
volunteer basis, and who either devote their total professional service to such
appointments or provide services to patients by assignment from the department
Chairman. For purposes of the Plan, such
persons are “Plan Participants” only when providing services to patients in
conjunction with supervision of medical or dental students or residents by
assignment from the department Chairman and shall become Participants in the
Plan only as provided in Article IV, Section 2; and
4. Medical
or dental students of a medical or dental school of the System and only when
participating (with prior approval of such medical or dental school) in a
patient-care program of a duly accredited medical or dental school under the
direct supervision of a faculty member of the school conducting such
program.
B. Liability
Claim means a claim,
lawsuit or cause of action based upon treatment or lack of treatment within the
United States of America, its territories or possessions, or Canada that
departs from accepted standards of medical or dental care which proximately
results in injury to or death of a patient, whether the claim or cause of
action sounds in tort or contract, subject to the exclusions described in
Article V, Section 4, below.
C. Disciplinary
and Licensing Actions means any disciplinary, licensing, or similar
administrative proceeding brought against a Participant by the Texas State
Board of Medical Examiners or Texas State Board of Dental Examiners that arises
from professional services, except those excluded pursuant to Article V,
Section 4.
D. System means The University of Texas System.
E. Board means the Board of Regents of The
University of Texas System.
F. Fund means the Professional Medical Liability Fund established by the Board.
G. Administrator means the Vice Chancellor and General
Counsel of The University of Texas System.
H. Damages mean all damages, including damages for death, which are payable because of
injury to which the Plan applies, but does not include exemplary or punitive
damages.
I. Coverage means the liability indemnity and legal representation afforded Participants by
this Plan.
J. Annual
Enrollment period begins on the date the Participant has a System
appointment and meets the conditions for participation under Article IV below
and ends on August 31st after enrollment begins.
K. Certificate
of Coverage means that
document issued to the Plan Participant by the System specifying the enrollment
period and limits of coverage.
L. Professional
services means medical,
dental or health care and treatment.
M. Plan year means the twelve-month
period beginning on September 1 and ending on August 31 of each year.
The coverage afforded by this Plan is subject to the
particular terms, conditions, and limitations (including, but not limited to
limits of liability) of this Plan and the interpretation thereby by the Board
or the Plan Administrator. Notwithstanding any other language of the Plan, the coverage afforded by
the Plan applies only to Liability Claims and Disciplinary and Licensing
Actions arising out of incidents, transactions or events occurring on or after
CONDITIONS FOR PARTICIPATION
Section 1
Each Participant on the effective date of the Plan, and each
person who becomes a Participant thereafter, as long as this Plan remains in
effect, shall participate in the Plan provided, that
A. Each medical or dental student, as an
additional condition of participation, must pay into the Fund a fee in such
amount or amounts, and at such time or times, as may be required by the Board;
and
B. A medical doctor employed in health
services at and by a general academic institution of the System shall not
become a participant unless and until
1. Such institution files with the
Administrator a written application, on behalf of such medical doctors, for
participation in the Plan, and
2. Such application is approved and accepted
by the Administrator.
Section
2
Plan Participants as defined in Article IIA.3 above shall
become participants in the Plan upon written designation by the president of
the health care institution with the approval of the Administrator and the
Executive Vice Chancellor for Health Affairs.
Section 3
Residents
and fellows who work additional hours for additional compensation at a System
health facility or facility affiliated with the System, will be provided
coverage as long as it meets the requirements of the Accreditation Council for
Graduate Medical Education (including requirements of supervision and
restrictions on allowable number of work hours), and the work has previously
been identified as part of the resident’s or fellow’s general training program
and fees generated for professional services are deposited in a System health
component practice plan, trust or affiliated foundation or certified
not-for-profit corporation as approved by the Board.
Section 1 -- Payments on Behalf
of Participants
A. Except as otherwise provided herein, the
System will pay on behalf of each Participant, from monies in the Fund, all
sums which the Participant shall become legally obligated to pay as damages
because of a Liability Claim arising from the exercise of the Participant's
employment, duties or training with the System as a Plan Participant performed
in the practice of the Participant’s profession, including service by the
Participant as a member of a formal accreditation or similar professional board
or committee of a hospital or professional society with respect to medical
staff privileges, accreditation or disciplinary matters related to competency.
B. Coverage for Plan Participants as defined
in Article IIA. 3 above shall be limited to claims arising from assigned
teaching activities and supervision of medical or dental students, residents
and fellows performed within the course and scope of the Participants' assignments.
C. Peer review performed at the request of a credentialing body or a professional society for the
purpose of determining quality of care is covered provided that any funds
generated from the review are deposited into the practice plan as required by
the practice plan bylaws.
D. Coverage for Plan Participants for Disciplinary and Licensing Actions shall be limited to
legal representation of the Plan Participant by an attorney in a proceeding
brought against the Plan Participant by the Texas State Board of Medical
Examiners or Texas State Board of Dental Examiners that arises from a covered
activity, subject to the limitation in Section 3 D below and
exclusions set forth in Section 4 below.
Section 2 -- Defense of Lawsuits
The System shall have the right and duty to defend any claim
or lawsuit against a Participant seeking damages because of such injury even if
any of the allegations of the claim or lawsuit are groundless, false or
fraudulent. The System may make such
investigation and settlement of any claim or lawsuit, as it deems
appropriate. The System shall not be
obligated to pay any claim or judgment or to defend any suit after the
applicable limit of the System's liability has been exhausted by payment of
judgments or settlements, or monies in the Fund have been exhausted. The System has no duty to defend any claims
not covered by the Plan.
Section 3 -- Supplementary
Payments
The System will pay from the Fund, in
addition to the applicable limit of liability:
A. All expenses incurred by the System in
investigating and defending any lawsuit, all costs taxed against the
Participant in any suit defended by the System, and all interest on the entire
amount of any judgment therein which accrues after entry of the judgment and before
the System has paid or tendered or deposited in court that part of the judgment
which does not exceed the limit of the System's liability thereon;
B. Premiums on appeal bonds required in any
such suit, premiums on bonds to release attachments in any such lawsuit for an
amount not in excess of the applicable limit of liability of this Plan, but the
System shall have no obligation to apply for or furnish any such bonds.
C. Reasonable, personal expenses incurred by
a Participant at the System's request in assisting the System in the
investigation or defense of any claim or lawsuit.
D. Costs and expenses incurred in connection
with the investigation and defense of a disciplinary and licensing action
brought against the Participant; however the Plan will not pay more than $25,000
in costs and expenses on behalf of a Participant for any single
proceeding. Furthermore, the Plan will
not pay more than $100,000 for costs and expenses on behalf of a Participant
for all such proceedings during an annual enrollment period.
Section 4 -- Exclusions
The System will not defend or indemnify
a Participant for:
A. Injury arising out of the performance by
the Participant of any illegal, dishonest, fraudulent, criminal or malicious
act or omission by the Participant unless Participant had no reasonable cause
to believe his conduct was unlawful or illegal;
B. Any claims or lawsuits alleging violation
of state or federal laws relating to antitrust, fraud and abuse, anti-kickback,
and illegal remuneration;
C. Injury arising out of any sexual conduct
of the Participant, including but not limited to sexual harassment and sexual
relations, and including, without limitation, when intentionally or negligently
done in connection with any professional service, act or omission, and
regardless of whether such conduct is alleged to constitute negligence;
D. Any injury caused while Participant is
acting under the influence of alcohol or controlled substances or as a result
of excessive use of therapeutic drugs;
E. Any use, administration or prescription of
any drug or pharmaceutical disapproved or not yet approved by the United States
Food and Drug Administration for treatment for human beings; unless such use,
administration or prescription has been approved by the Institutional Review
Board of the health care institution where such drug or pharmaceutical was
used, administered or prescribed;
F. Any liability arising out of any
professional or licensed service, act or omission outside the scope of
Participant's employment with System;
G. Injury for which the Participant may be
held liable as a proprietor, stockholder, owner, member of the board of
directors, governors or trustees, superintendent, executive officer, department
head or medical director of any non-System owned or managed hospital,
sanitarium, laboratory, clinic with bed and board facilities, infirmary,
nursing home, foundation, surgical center, blood bank, commercial or any other
business enterprise whether or not related to patient care and/or treatment; but,
this exclusion shall not be applied to responsibilities which require the
special expertise or training of a physician or surgeon and which are not
principally executive or administrative in nature;
H. Injury arising out of the rendering of or
failure to render professional services by any other person for whose acts or
omissions the Participant may be held liable as a member, partner, officer,
director or stockholder of any professional partnership, association or
corporation;
I. Injury to any employee of the Participant
arising out of and in the course of that person's employment by the
Participant;
J. Any obligation for which the Participant
or any carrier acting as insurer may be liable under any workers' compensation,
unemployment compensation or disability benefits law, or under any similar law;
K. Any liability or indemnity obligation
assumed by the Participant under contract or agreement, except to the extent
endorsed hereto;
L. Injury to any employee (past or present)
or applicant for employment or patient of the Participant based upon actual or
alleged discrimination based on race, religion, color, sex, national origin,
age, veteran status, or disability;
M. Damage to property:
1. owned, occupied or rented by a
Participant;
2. used by a Participant;
3. in any Participant's care, custody or
control; or
4. over which a Participant is exercising
physical control for any reason;
N. Any fines, penalties, the return or
withdrawal of fees or government payments, including any fines, penalties or
costs assessed against a Participant by the Texas State Board of Medical
Examiners or Texas State Board of Dental Examiners as a result of a
Disciplinary and Licensing Action;
O. Any award of punitive or exemplary
damages, treble or multiple damages;
P. Any claim arising out of professional
services which occurred prior to the date of this Plan;
Q. Any claim arising out of professional
services which occurred after the termination of faculty appointment, residency
or student status with the System;
R. Any claim arising out of professional
services where the professional services were billed for by the Participant and
were not deposited in a System health component practice plan trust or
affiliated foundation or certified not-for-profit corporation as approved by
the Board;
S. Any claim arising out of professional
services performed for professional fees, salaries or other compensation by a
Plan Participant that is not part of the Plan Participant’s employment with the
System or training program; and
T. Legal representation of a Plan Participant before
the Texas State Board of Medical Examiners or Texas State Board of Dental
Examiners in a Disciplinary and Licensing Action arising out of any activity
that is excluded under this Plan.
ARTICLE VI
PARTICIPANTS' OBLIGATIONS
Section 1 -- Notice of Claim,
Suit or Disciplinary and Licensing Action
The Participant shall give written
notice to the System as soon as practicable of any claim made against the
Participant. The notice shall identify
the Participant and contain reasonably obtainable information with respect to
the time, place and circumstances of the injury, including the names and
addresses of the patient and of available witnesses. If a claim is made or a lawsuit is brought
against the Participant, the Participant shall immediately forward to the
Administrator every demand, notice, summons, or other process received by the
Participant in accordance with administrative procedures prescribed or approved
by the Administrator.
The Participant shall give written
notice to the System as soon as practicable of any disciplinary and licensing
action taken against the Participant for which the Participant seeks
coverage.
Section 2 -- Cooperation by Participant
The
Participant shall cooperate with the System and, upon the System's request,
respond to discovery requests, attend meetings with Plan representatives or
defense counsel, and attend mediations and trials. Further, the Participant shall cooperate with
the System in enforcing any right of contribution or indemnity against any
person or organization who may be liable to the Participant because of injury
or damage with respect to which coverage is afforded under this Plan. The Participant shall attend hearings and
trials and assist in securing and giving evidence and obtaining the attendance
of witnesses. The Participant shall not,
except at Participant's own cost, and after informing the Administrator in
writing, voluntarily make any payment, assume any obligation or incur any expense. The Participant shall not take any
affirmative act or omission which may reasonably prejudice the defense of the
claim or lawsuit. The taking of any
affirmative act or omission which prejudices the defense of the claim or
lawsuit shall entitle the System, but not obligate the System, to deny
indemnity for any or all claims or lawsuit so prejudiced.
Section
3 -- Nonassignability of Interest in Plan
The Participant's interest under this
Plan is nonassignable. If any
Participant shall die or be adjudged incompetent, this Plan shall thereupon
terminate automatically as to such Participant, but shall indemnify and defend
the legal representative of such Participant's estate as a Participant with
respect to liability previously incurred and covered by this Plan.
ARTICLE VII
The Plan’s liability shall not exceed the
limits of liability stated below, and such stated limits shall be applied as
follows:
1. A single “per claim” limit of liability shall be applicable to a Liability Claim regardless of the number
of claimants or Plan Participants involved.
a. A single “per claim” limit of liability shall apply to claims
involving injuries to more than one patient such as in obstetrical services to
the mother and fetus/child or children, a single “per claim” limit of liability
shall be applicable for all such claims and resulting lawsuits.
b. A single “per claim” limit of liability shall apply to all
claims by both the patient and by the family members or the heirs or estate of such
patient, including derivative claims, claims for loss of consortium, claims of
beneficiaries under the Texas Wrongful Death Statute and claims for mental
anguish and related injuries associated with bystander perception or reaction
to the injuries sustained by the patient.
c. Plan coverage limits of liability will not be stacked, added or
combined in any manner to increase liability under this Plan even though
multiple claimants, multiple claims or injuries, multiple lawsuits, or annual
periods may be involved within a Liability Claim.
2. The “annual aggregate for
all claims for all Participants" is the maximum amount of money the Plan
will pay to indemnify all Participants for all Liability Claims arising during
any one Plan year.
Limits of Liability Schedule
The following limits shall apply unless
lower liability limits are set by law, in which case the lower limits shall
apply:
Staff Physician - $500,000.00 per
Liability Claim (up to $1,500,000.00 for all Liability Claims during any one
enrollment period)
Resident and Fellows - $100,000.00 per
Liability Claim (up to $300,000.00 for all Liability Claims during any one
enrollment period)
Medical or Dental Student - $25,000.00
per Liability Claim (up to $75,000.00 for all Liability Claims during any one
enrollment period)
Annual Aggregate - $30,000,000.00 for
all Liability Claims for all Participants during any one Plan year
Per Claim Limitation - Plan liability
shall be limited to $2,000,000.00 per claim regardless of the number of the
claimants or Plan Participants involved in an incident.
Section 1 -- Coverage
When the Participant has other professional liability
coverage which is stated to be applicable to the loss on an excess or contingent
basis, the amount of the System's liability under this Plan shall not be
reduced by the existence of such insurance.
Section
2 -- Insurance
When both this Plan and insurance apply to the loss on the
same basis, whether primary, excess or contingent, the System shall not be
liable under this Plan for a greater proportion of the loss than that stated in
the applicable contribution provision below:
A. Contribution
by Equal Shares. If all such valid and collectible insurance provides for contribution by
equal shares, the System shall not be liable for a greater proportion of such
loss than would be payable if each such insurer contributes an equal share
until the share of each insurer or the Plan equals the lowest applicable limit
of liability under any one policy or the Plan or the full amount of loss is
paid, and with respect to any amount of loss not so paid, the remaining
insurers or the Plan then continue to contribute equal shares of the remaining
amount of the loss until each such insurer or the Plan has paid its limit in
full or the full amount of the loss is paid.
B. Contribution
by Limits. If any of such insurance
does not provide for contribution by equal shares, the System shall not be
liable for a greater proportion of such loss than the applicable limit of
liability under this Plan for such loss bears to the total applicable limit of
liability of all valid and collectible insurance and the Plan against such
loss.
ARTICLE IX
Section
1 -- Rights of Participants
The Board may terminate the Plan at any time or from time to
time, may amend, alter or suspend the Plan in whole or in part, as to all
persons eligible to participate hereunder, or any class or groups of such
persons, provided such action shall not impair any rights accrued prior to the
effective date of such termination, amendments, alterations or suspension. Any such termination, amendments, alterations
or suspension shall be effective on the date of the Board action unless a later
date is specified by the Board. The
Administrator shall promptly give notice of any such termination, amendment,
alteration or suspension to all Participants affected thereby.
Section
2 -- Termination in Event of Mandatory Participation in Other Indemnity or
Insurance Programs
It is an express condition of the Plan
that if the System is required by law, or by a collective bargaining or other
agreement, to contribute toward another plan, program or scheme providing
professional liability insurance or indemnity benefits for a class or group of
Plan Participants, this Plan will terminate forthwith as to such class or group
of Plan Participants.
Section 3 -- Termination of
Plan Participation
This Plan shall apply to a Participant
only so long as such Participant remains qualified to participate in this Plan,
provided that cessation of such participation shall not impair any rights
accrued under this Plan prior to the effective date of such cessation of
qualification.
Section
4 -- Benefits Terminable
All coverage of a Participant under this Plan shall cease at
once if the Participant engages in any business or performs any act which in
the sole judgment of the Board is prejudicial to the interest of the System.
ARTICLE X
ACTION AGAINST SYSTEM
Section
1 -- Conditions Precedent
No action shall lie against the System
unless, as a condition precedent thereto, there shall have been full compliance
with all of the terms of this Plan, nor until the amount of the Participant's
obligation to pay shall have been finally determined either by judgment against
the Participant after actual trial, or by written agreement of the claimant and
the Administrator.
Section
2 -- Third-party Actions
Any person or organization, or the legal representative
thereof, who has secured such judgment or written agreement, shall thereafter
be entitled to recover under this Plan to the extent of the coverage afforded
by this Plan. No person or organization
shall have any right under this Plan to join the System as a party to any
action against the Participant to determine the Participant's liability, nor
shall the System be impleaded by the Participant or the Participant’s legal
representative. Bankruptcy or insolvency
of the Participant or the Participant's estate shall not relieve the System of
any of its obligation hereunder.
ARTICLE XI
ADMINISTRATION OF PLAN
Section
1 -- Administration
The Plan shall be administered by the
Administrator under direction of the Board.
Section
2 -- Administrative Regulations
The Administrator may from time to time
prescribe regulations for the administration of this Plan provided that such
regulations shall, in the opinion of the Administrator, be consistent with the
provisions of this Plan as it may be amended from time to time pursuant to Article
IX of this Plan. Pursuant to The
University of Texas System Regents' Rules and Regulations, the
Administrator may delegate in writing certain administrative, accounting, and
investment functions of the Plan.
Section
3 -- Legal Interpretation
The text of this Plan shall control and
the headings to the Articles, Sections and Paragraphs are for reference
purposes only, and do not limit or extend the meaning of any of the Plan's
provisions. The Plan shall be governed
by and construed in accordance with the laws of the State of
Section
4 -- Counsel and Settlement Authority
Authority to employ counsel, approve attorney fees and
expenses, and approve settlement of all claims, including litigation, shall
rest with the Administrator, or the Administrator’s delegate, subject to any
additional approval required by the Board of Regents of the System pursuant to
any applicable policies of the System.
ARTICLE
XII
GENERAL
PROVISIONS
Section 1 -- Subrogation
In
the event of any payment under this Plan, the System shall be subrogated to all
of the Participant's rights of recovery thereof against any person or
organization and the participant shall execute and deliver instruments and
papers and do whatever else is necessary to secure such rights. The Participant shall do nothing after loss
to prejudice such rights.
Section
2 -- Changes
Notice to any agent or knowledge
possessed by any agent or by any other person shall not affect a waiver or a
change in any part of this Plan, or estop the System from asserting any right
under the terms of this Plan; nor shall the terms of this Plan be waived or
changed, except by written waiver or amendment duly approved by the Board.
Section
3 -- Entirety of Agreement
This Plan embodies all agreements existing between any and
all persons and the System or any of its agents relating to this Plan and the
coverage afforded hereunder.
Section
4 -- Employment Noncontractual
The System may terminate the appointment,
internship, residency, fellowship, or student-school relationship of any
Participant as freely and with the same effect as if this Plan were not in
operation.
Section
5 -- Actions Against Participant
This Plan or its operations shall not
in any way affect any claim or cause of action by the System against a
Participant for indemnity or contribution arising out of or incident to any
Liability Claim.
Section
6 -- Communications
All notices, reports and statements
given, made, delivered or transmitted to a Participant shall be deemed duly
given, made, delivered or transmitted when delivered to the Participant, or when mailed by first-class mail, postage
prepaid, and addressed to the Participant at the address last appearing on the books of the System. A Participant who changes address shall
forthwith give written notice to the System of such change. Written directions, notices and other
communications from participants to the System shall be mailed by first-class
mail, postage prepaid, or delivered as follows:
The
Office of General Counsel
Ashbel Smith Hall
Attention: Vice Chancellor and General Counsel
Section
7 -- Use of Pronouns
Whenever used in this Plan, masculine
pronouns shall include both men and women unless the context indicates
otherwise.
Section
8 -- Effective Date
The revised Plan shall be effective
September 1, 2004.
Last reviewed November 2004
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