Judiciary Committee - Senate

Let's get started. Or we're calling this meeting to order, whichever you prefer. First on the agenda is Senate Bill 5 is Senator King here? I don't see Senator King. Uh, so Senate Bill 6 is also Senator King. A house built 1071. is representative Richardson. Is that right? No one here to present. House Bill 1071. Then we're going to dive right into the fun. House Bill 1204. Representative view banks, Senator Irvin. If you all would introduce yourselves. Representative John Eubank's District 46. Good morning. Members of the committee, Senator Missy Ervin, District 24. Y'all are recognized to present your bill. Thank you, Mr. Chair. Thank you, members of the committee. Uh, I would also bring Justin Allen to the table if that's possible, sure. If you want to go ahead and state your name for the record. Good morning, Mr. Chairman and committee. My name is Justin Allen. I'm a partner with the law firm of Wright, Lindsey and Jennings. Thank you. All right, you may proceed. Thank you, Mr. Chair. Members of the committee. Perhaps the most ancient symbol associated with the law is also one of the most familiar, and those are the scales of justice. The scales of justice symbolize the impartial weighing of evidence and facts in a legal case representing the idea that justice should be balanced and fair. by considering both sides of a dispute equally. Essentially, it means that decisions should be made by carefully considering all the information without bias. Balance and fairness are the key components. The scales of justice represent the need to balance the evidence and arguments from both sides of a case to reach a just outcome. The language of this bill is simple and it's clear. It seeks to ensure that these scales are balanced based on facts and the exchange of actual damages incurred and paid. Rates are negotiated. Contracts for those rates are signed. That's how medical billing claims, payments from third-party payers function. It is unreasonable then to ignore this reality of negotiated payments, legal contracts, and actual receipts of bills paid with the ability to seek damages for a payment or claim that virtually never existed and doesn't exist. The scales of Justice are not balanced because there is nothing fair in seeking a monetary award that didn't truly exist and was never paid. For example, in Dale v. White, the plaintiffs claimed $8,937.95 in medical expenses for an emergency room visit, but the statement from the hospital showed an amount owed of $0. The plaintiff didn't make any payments toward that amount and testified that he had no intention of paying it. The Arkansas Court of Appeals rules that the plaintiffs should recover the $8,937.95 because of the ruling in the previous case of Montgomery Ward v. Anderson. So the actual loss to the hospital was $17,875.90 because they were never paid for the actual services rendered and then had to pay the medical expense that appeared on paper because of this flawed ruling in 1998. How is that fair? Currently, one side of the scales begins with added weight. When damages that were never paid are allowed to be considered for recovery. This bill simply rebalances these scales of justice to ensure fairness. The mathematical principle that equations must be equal is called the law of equality. It essentially states that both sides of the equation must always have the same value, represented by the equal sign. It's a mathematical principle that we all accept. That the equation on both sides of the formula must be equal. 5 equals 5. A equals A. That is the mathematical principle of equations. It's physically demonstrated by weights and scales. That's how we get the scales of justice. They're based and founded literally in a mathematical truth that we accept. And this is the exact principle that's represented in this bill. It is stating clearly that recovery of damages for past necessary medical care past necessary medical treatment are past necessary medical services received includes only those costs actually paid by or on behalf of the plaintiff or that remain unpaid and for which the plaintiff or any third party is legally responsible. There's so many reasons why I support this policy change. I have seen firsthand the effects of having no guardrails in place, and that effect it's had on rural healthcare, limiting women's ability to deliver their babies close to their homes. It is a fact. I've seen it and I've lived it for the past 30 years. It also jeopardizes jobs, thousands of jobs, when malpractice insurance companies pull out of the state of Arkansas, and that has happened before. I saw it, I witnessed it. My hospital was left without coverage and literally came within hours of having to ship their patients to other hospitals and closed the doors to their ER and to their hospital. It is personal for me, but it should be personal for all of us. And all we are asking today is simply For you to vote to rebalance those scales of justice. To restore the proper administration of justice in these very specific cases. It's really that simple, and I'm happy to answer any questions. Questions from the committee. stubblefield and then Senator Irvin, you said you've seen uh many malpractice cases pull out of your hospital. No, insurance company, we had a malpractice insurance company that actually pulled out of the state of Arkansas that left our hospital without any coverage, and they, the deadline was at midnight and they literally came within hours of having to ship their patients out and close the doors to the ER malpractice cases. That was their malpractice insurance carrier, right, and because of the nature of what was happening in the state of Arkansas, they pulled out of the state of Arkansas. They just weren't going to cover those those anymore. What was happening in the state of Arkansas. We had a lot of cases. There were all litigious nature of atmosphere when you don't have policies and you don't have any guardrails in place, like when we're asking for, then malpractice insurance companies. I think it's a liability to cover anybody in the state of Arkansas, and you're seeing the same thing happening right now with property and casualty insurance companies to be frank, large cases of doctors committing malpractice? No, sir, actually, no, no, it happened to my own husband who is a physician and he never had a case against him. They just, the whole, the company decided to pull out of the entire state of Arkansas. It didn't, it didn't matter individually. It's just that they hold The company decided they were not going to cover anybody in the state of Arkansas. And it happened. So it left us scrambling. It left the hospital scrambling. It left a lot of people scrambling. It happened. And so I think it's really, really critical that we have guardrails in place, policies in place that are reasonable, that are fair, and that speak to Like I said, a fairness and a balance of what is actually a damage that's actually paid and what can then be recovered. And how many states, how many states have passed similar legislation. Yes, sir, I do have that. We have many states that have passed legislation similar to this, this, this law that is before you, this bill that's before you as based on the Texas law, Montana in 2021, Florida in 2023, Iowa in 2020, Texas, which this, this is very based on the Texas law. Um, enacted a statute indicating that recovery of medical or healthcare expenses incurred is limited to the amount actually paid or incurred on by or on behalf of the claimant, um, Oklahoma is another state that has followed suit as well as Idaho, North Carolina, Louisiana, Michigan, and Connecticut. have insurance premiums, decreased in any of these states. That have Put this legislation into place. I don't have that information specific to those states, I can tell you as a rule of thumb, I don't think insurance premiums do arise. Has the overall economy improved in any of these states because of passing this legislation. For me, Senator Stubblefield, this legislation is about seeking fairness and balance. It is about seeking a the understanding that when you pay for something that is actually the services rendered, and that's the amount that was paid. And so being able to seek that is proper, but being able to see more than that is not proper. When it comes to actual damages. Yeah. Senator, right, I would like to chime in on that one, you know. One of the things that we look at when businesses, you know, decide to locate to a particular state as they look at the overall business climate and see how friendly it is to their operations, whether it's the rules and regs, tax policy, there's a whole host of reasons why businesses locate to a state and I would contend that even though Arkansas has a fairly good business climate. We have states surrounding us that have enacted these, these types of laws that it enhances their climate to the point that it could be a deciding factor whether a business or industry would locate in your state. So with the economy improve? Well, I would say that if you are attracting business to your state, then yes, your economy is improved. You have opportunities for your citizens, for employment. You have increased tax revenue. Now with regard to insurance premiums that was brought up when we presented this in the House committee. We all know that there's a lot of factors that go into why insurance premiums go up. I would contend that by doing nothing that that increase is going to be more than if we enact this legislation and that I believe that we should try to do everything possible to try to limit the increase of insurance premiums or the burden on small business in our state. Is this going to be a cure-all? Absolutely not, but I think we Just because we may not be able to measure exactly what that number is. I don't think that's a good enough reason not to do anything at all, especially when there's over half the states that have enacted similar legislation. There's a lot of things that we cannot put down in numbers as far as uh accurate, but Also, I understand that Most states, including our own, have a time-honored principal, uh, to take care of the least of these. Those are the least of our citizens, the ones that need the help the most. And I, and I in this bill seems to me, it appears the perception of this bill seems like it goes against that time-honored principle of taking care of the least disease just from the surface. The way, the way the average individual in my community would look at this if they read it. They would say, well, why are insurance rates, why am I having to pay an insurance company for the little insurance I've scraped up over the 40 years of my life. Why am I having to pay an insurance company that. When I'm barely getting by as it is. Because most people look at insurance companies as huge conglomerates. Big money. Big pharma. That's the way they're perceived. And a lot of people are going to perceive this bill in the same much the same manner. I think I would, I would take exception to the implication that you're suggesting that maybe I'm not for the little guy because I, I don't have any interest in this on one side or the other whether it supporting the insurance industry. I'm not a big fan personally, but I think that what this bill does, it does affect the little guy because by the information supplied by the National Federation of Independent Businesses and the state you US Chamber of Commerce that the burden on the average family in Arkansas because of this is about $3000. It was $2900 and 2942, I believe, and That varies across the states. But so that is a burden on individual families. Now when, when you talk, when you talk about how this may affect The small person, I assume you're talking about somebody that is injured and in a claim. All we're saying is that the medical side of the damages should be limited to what the actual payments were. That's it. The other damage is still stand. It's, we're not saying that they should be denied what they deserve. We're just saying as far as calculating the medical side of it, the medical damages side of this suit, it should be limited to what was actually agreed upon as full and final payment. If they deserve additional pain and suffering or whatever, then by all means. I believe they should get that and it should be covered under those other damages. I believe. I'll have some other questions. I'll let Senator Tucker. Thank you, Mr. Chair. Um, before I say anything, I don't think this is necessary, but I'm just going to say for I'm a lawyer. I'm a lawyer. I have handled personal injury cases, OK. I've handled personal injury cases and frankly I've defended more cases than I have prosecuted personal injury claims, so I've been on both sides of this really more on the more on my career on the defense side, but just for full disclosure. Um, so not everyone in the room is a lawyer, so I'd like to just start with the basics. My first question is, what is a tort? What is a tort? If I may, Mr. Chair, I'm trying to think back to Professor McClurg, Senator from my first year of law school, it is a a wrong that results in injury for which recovery can be had, something along those lines, fair enough, yeah, and every tort case, not 90% or 95% or 99%, there's a wrong. That's the first word you used in your definition. Well, that assumes liability, right? I mean, a plaintiff can make a lot of allegations that they were injured as a result of negligence that was that caused their injury, but of course you've got to clear that hurdle. And if you clear that hurdle and you've established, yes, there was a wrong, somebody else was at fault, and it caused you damage. You're entitled to recover. If one person wasn't at fault, there wouldn't be no liability. That's ultimately. So if there is liability, then the person who committed the tort, the wrongdoer, was at fault. Correct, and 100% of cases. Yes, if we're assuming, yes, and negligence and causation, and in 100% of cases there was an injury. Right? Presumably yes, but that's another thing you can fight and fuss about. Are they really injured? But again, if there were no injury, there would be no liability. Yes. Um, OK, and that injury is the fault of another person. It can be, yes, well, if it weren't, then there would be no liability, then there would be no claim. But yes, if we're assuming negligence, causation, and damage, yes, that person that was damaged is entitled to recover. And there are, let me ask, do y'all have any particular types of tort claims in mind when you pass this bill or just all tort claims? No particular type, because there are a variety of tort claims. Correct? Well, yeah, I mean, main example that comes to mind is what we call simple negligence, a car wreck, and then you think about medical malpractice. You can talk about legal malpractice, dental malpractice, veterinarian malpractice, so some of those professional clients, right? So I think, I think what most people think of, especially nonlawyers when they think of a tort claim, they think of a negligence claim and the most common example being a car wreck. There are also, there's a branch of tort liability that's strict liability claims. You mentioned some other professional liability claims. Those are also negligence claims, but there's also some strict liability claims for products liability, correct? Yes, so you might have a car and you don't have a wreck with somebody, but because of a defect in your product, the car catches fire and your family burns alive. That can happen. That can result in a claim for products liability, whether it's a defect or a defect in the design. That's a tort claim. There are also intentional torts. Yes, false imprisonment, an example of that might be kidnapping. Sure battery is an intentional tour, yes, I could go into someone's house and beat him, beat him with a baseball bat. That's a tort claim. Now there's, it's a crime, but uh, but there's also private civil tort liability for that, sure, and you better be ready to pay the punitive damage award too. That's right. You shoot someone, that's a tour. A child sexual abuse, that's a tour. It is human trafficking, that's a tour, yes, and this bill affects all of those claims. It does and you know we'll talk about the why, but as far as what it does, It shifts the balance on tort claims. In favor of the person who caused the injury and away from the person who was injured. That's what this bill does. We're respectfully disagree. OK. How so? Because this bill is limited to one silo of damages, and it says that silo of damages is what your past medical care and treatment is and what you should recover from that past medical care and treatment, and it simply says we're going to measure that by what was paid and accepted. I understand within that, so let me clarify within that silo. And I think we can talk about whether the language of the bill is clear as to other aspects of damages or not, but right now let's just talk about past medical expenses and within that silo. It shifts. The balance, the scales as Senator Ervin put it. Now I understand your position that the scales are not in balanced now. I understand that. But what this bill does is it shifts those scales in favor of the person who caused the injury within that silo of past medical expenses in favor of the person who calls the medical who caused the injury, and away from the person who suffered the injury. I will agree with you that what this bill will do is likely result in the recovery of less money in terms of damages within that silo, but I would take issue with you that that is done unfairly. I would say this is being done fairly to properly reflect that silo of damages, OK, and we'll talk about whether it's fair or unfair right now I'm just talking about what it does, but it does shift that balance, fair? No, I disagree. It does not shift the balance right now it is unbalanced. When you, when you are trying to claim A medical payment. that you didn't ever receive. That's not balanced. And so we are trying to make sure that what is actually paid within actually be recovered from medical damages. It's unfair to not accept the reality of rates that are negotiated contracts that are signed. You're, you're just ignoring that as part of the legal landscape that occurs in all healthcare settings, so that's why they are unbalanced. That's why additional White has been added. Because you're now to consider something that virtually never existed. When I, when I go and buy something at a store that's on sale, I don't get to return it for the full value. I only get to return it for what I paid for it. That's the same thing that's happening here. I, I don't get, I have a receipt. This is what I paid for it. It was on sale, 50% off. I only paid it 50% off. I didn't, I don't get to go to Dillard's or Target or Walmart and go, well, I'm sorry. You have to pay me full price. I don't get to do that. So it is unbalanced and that's exactly what we're talking about here, OK. I understand your position. My question is, you believe it's imbalanced now, right? And this bill seeks to change the balance. Seeks to make it fair, but it's changing it. It seeks to make it fair. That's what the scales of justice are supposed to reflect right, I know this conversation came up in the House committee, but I want to talk about the notion of subrogation. A Representative Hudson asked you, Mr. Allen, about segregation, and your answer was Um, that, well, let's just say what segregation is, OK, and this hypothetical that we're talking about where I'm injured. Um, I've got $100,000 worth of medical expenses. I've got a max annual out of pocket deductible of $5000. Um My insurance carrier can seek to recover some of the costs they paid for my healthcare from me or from the person who injured me. That legal right exists. That legal right exists in Arkansas and under the law today. It does, and your answer to Representative Hudson is that that's rarely, that rarely happens in practice because of the Mahole doctrine for private insurance, that's true, and I will, to the benefit or credit of some of the subsequent testimony in the House committee. I recognize the government plans are different and Tricare in particular, they're going to subrogate Medicare, Medicaid, there's often, but not always going to be subrogation. In the private insurance context is extremely difficult to subrogate based on my experience and based on anecdotal conversations with practitioners that because of the madehole doctrine it's very difficult to prove that the insured or slash plaintiff was made whole. Therefore, it is very rare that they are found made holes such that Blue Cross. Let's pick on Blue Cross. We'll be able to recover from the defendant what they paid in hospital bills. Does Ha, yeah, I'm sure it does happen, but in my experience, most private insurers don't even try to do it anymore because they have to file a whole brand new lawsuit against the plaintiff and the insurance company, and they have to prove that the defendant, I'm sorry, the insured was made whole, and if they fail at that, then they have to pay attorneys' fees on top of that. So not a whole lot of private insurance based on the information I have or seeking to subrogate. All right. Let's separate those into two categories. So first of all, the one you mean government pay Medicare or Medicaid. There is segregation in those cases. It's, I would say much more frequent and likely than it is for private insurance. So in those cases if if there is this imbalance, then that's at least an effort to at least part maybe in some cases partly in some cases entirely balance things back out. I'm not sure I'll follow you, Senator. I'm sorry. Well, the point is there's a, there's a recovery. The argument is that there's a kind of a windfall. Oh, certainly, if, if Applying an injured plaintiff's medical bills are paid by his or her insurer. And then they recover that amount, of course we're arguing over what that amount should be, but if they recover that amount from the defendant, if there's no subrogation, they had their medical bills paid, and then they get to put them out. They get from the defendant in their pocket. Right, but if there's subrogation, then that it balances that out. Well, if there's subrogation, it results in the injured plaintiff having to give the amount for the medical bills to their insurance company, but the plaintiff still never paid out of their own pocket for any of those medical medical care. Right, but they don't get the full recovery from the defendant who from the person who injured them because they've got to repay their their personal health insurance carrier is what you're saying. That's if there's subrogation, that's there's subrogation, so there's a method that exists. Sometimes it's used, sometimes it's not, but there's a method that exists in the law to prevent the same harm that you claim is. is happening that you're seeking to prevent. There is a method right now to prevent that from happening with subrogation. No, that's a poorly worded I would disagree. I think I know where you're headed. Um, OK, let's just move on from that. So let's talk about the madehole doctrine for a second. What that means is That I, so I get injured. My health insurance carrier can only recover from me. What I recovered from the person who injured me. If I am made whole. So, uh, What that means is And then if beyond under the law, I I understand people may not pursue these claims for whatever reason, but under the law beyond When I'm made whole. Then they can get back. from me or from the person who injured if that issue is teed up in a court determines the plaintiff, the injured party, was made whole, then that plaintiff can be required to pay some of that money back to the private insurer, yes, OK. So the reason why some So again, let's let's go the same hypothetical, right? I'm injured. Um My health care provider's $100,000 in expenses, my out of pocket cost is 5000. The reason why It'll take some work for me to get made whole as an injured person through no fault of my own is because there are other expenses that come along with litigation or being injured that I can't recover from the person who injured me. Sure, and to be clear, we're not attacking the made whole doctrine here. This has, this bill has nothing to do with the Mahole doctrine. It will remain in place. That's a conversation for, I would say, another day. So let's, let's say, yeah, so I hire a lawyer and I recover $100,000 and there's a contingency fee which is 33, it's a third, right? So I'm out $33,000 from the start. But there are other expenses that you can't recover for just from the, just from the nature of life. I'll give you an example. I was hit last year. I was not injured, right, but there was damage to my car. My car was in the shop for 3 or 4 weeks. The law in Arkansas says the only car that I'm allowed to get that that the wrongdoers insurance will pay for is A small car which does not, it's not, it's not what I have or satisfies my needs. So I've got to pay the difference in that daily rate. Can't recover that from the person who hit me. Also, the cost of the daily insurance for my rental. That's not covered. So in a in a tiny case where there was no injury and there was minor damage to my vehicle, which is in the car, which is in the shop for 3 weeks. I have like $2000 in out of pocket costs, which I can't recover from the person who hit me, so my point is, There are other costs that go along with being injured, right? There's all kinds of costs, of course, that I can't recover from the person who injured me. If you can prove that they were negligent and it caused you damage or that's personal injury, lost wages, property damages, yes, you're entitled to recover that from the defendant. OK, well, I don't want to argue about the example. You can't recover your attorneys' fees in Arkansas. No, not, not in a personal injury case discussion for another day if I interrupt just a second. I know you've got points to make that take a while. Can you find a breaking point? I don't want to mess you up. Could you find a breaking point here in a little bit so that we can go to others and be glad to come back to you, um, yes, yes, Mr. Chair, and I appreciate the uh accommodation. Um I, I just want the members to make sure that under the law as it exists today, Uh, can you acknowledge that there are other costs and fees that are not recoverable other than attorneys' fees and a lawsuit. They're just things that happen. If my car is totaled. OK, and I have to go buy another car. Maybe I have a better car, but I wasn't planning on spending $40,000 on a new car. They're just things that happen and so when a court is looking, so this this bill looks at every case across the board and treats them all the same. Right Yes, and when a court is looking at a case individually, and it's looking at whether the injured person has actually been compensated fully for the harm that was done to them. Once that, once they've made that determination. Uh Then they can reimburse my health insurance carrier if I'm the injured person with anything that I recover above and beyond that. Right, I don't, I'm sorry, Senator. I'm not following the question. I, I'll move along. I'll try to. I mean, I'll, I'll yield the floor and come back, and I'll try to try to phrase it more clearly. Yeah, be glad to come back to you, Senator Tucker. Senator Des. Thank you, Mr. Chair. Well, that was a that was a, a, a few lawyer classes for me they're trying to follow both of y'all back and forth and uh I, I need, I need probably some more simple answers on on my side, so when I, when I look at the bill and some of the questions I've been asked from constituents on this bill has been around the word damages, and so can I get some clarity because I think I've heard in the opening that this is only focused on medical damages. But I also have heard some of their conversation about workers' comp and and pain and suffering, and so maybe this is for the bill sponsors just for clarity when when we look back to the bill. Um, can you help me talk about what's in scope here. I believe it's just medical damages, but can we confirm that? Yes, thank you for the question, Senator Dees. Yes. We are only talking about the actual damages that were paid. That's what we're talking about. What this bill does not do, it does not impact any other category of damage, OK? It does nothing to impact a plaintiff's recovery of the following items. All future medical costs as established at trial. All lost wages past and future, all property damage, all non-economic damages including past and future pain and suffering, scars and disfigurement, a survivor's mental anguish, loss of life, or punitive damages. So the bill only seeks the medical damages that were paid on behalf of the plaintiff, and then recovered. I appreciate the clarity and maybe another follow up on that is maybe set another way whether this bill passes or fails. There will be in a in a case where a plaintiff there will be no changes to any of the pain and suffering, the the the nonmedical bills that side is not being touched, whether this passes or fails. Is that agreed? That's correct. And and that's the right thing to do in my opinion, I mean that that's absolutely the right thing to do because every case is different and then so further I I got a note from a constituent concerned about if this, if this bill is with this in any way or form encourage signal mandate, any health care provider to change the way that they bill or encourage a different billing structure or up and down. I don't think it does, but I want to make sure that's clear or not. No, not at all. And from what I have read to the point earlier about 25 states have adopted the same type of policy, very similar or the same. Some of it legislatively, some of it. ju dic ial but it would seem that business, it's business as usual in terms of hospitals as who we're talking about, and that's mostly the case, but it could be any health care provider, of course, and insurance companies, whether it's Medicaid, Medicare, private insurance continue to have been continuing to do business largely the same way, OK? That's, that's helpful to understand. And then my last question, Mr. Chair, is is just when I went back to research and I, I may need Mr. Allen from a legal perspective on this, this one. Um, When I look back at some of the communication around the Supreme Court ruling in Texas because I think a similar law was passed there, helped me understand the legal precedent and what was the response from the Supreme Court there. Sure. Um, This bill, it's not word for word the same, but it is based largely on a Texas law from 20 2003 Texas law and of course it was challenged by plaintiff in a personal injury case made its way up to the Texas Supreme Court and Texas Supreme Court upheld the law and one point I think it's important to point out is in upholding the law, the court found that that law, which this one's based on, did not. Abolish the traditional collateral source rule. The court said, of course, the collateral source rule continues to apply to such expenses, and the jury should not be told that they will be covered in whole or in part by insurance, nor should the jury be told that a health care provider adjusted its charges because of insurance, so you didn't directly ask that, but I think that's an important part of the Texas Supreme Court's ruling is if this passes in Arkansas, the collateral source rule will continue to apply, meaning there will be no reduction in the plaintiff's recovery because it was paid by insurance. Or a rich uncle and the jury will never know of the existence of the insurance or the rich uncle and the jury will not be told that the the amount that was paid resulted from a negotiation. Thank you. Thank you, Mr. Chair. Sent to Ross. Thank you, Mr. Allen, is what I just heard you say the jury would not know the original amount. That's a good, that's a good point. The courts are going to decide, so as you read this bill, this bill as it y'all's prerogative is to set the policy and the policy that was set here is that your recovery for past medical damages is what was paid and accepted. That's what was recovered. The courts and states that have adopted this have taken some varying approaches as how to handle the discovery of this evidence, the procedure, how to present it to the jury. Texas Supreme Court decided we're just going to let the jury know about what was actually paid because that's what's relevant evidence and so the court puts in place a procedure where they put in the bills that reflect what was paid and accepted. Other states, several of them like Maryland, the court says no, we're going to let the plaintiff put in all of the medical bills as originally listed. The jury will issue awards on interrogatories and say for this silo we're giving the of $100,000. If the bill was discounted and 50,000 was what it accepted after the trial, the judge will reduce that from 100,000 to 50,000. So we will have to see how the court. are starting with our circuit courts and then our court of appeals, and if this becomes law, we all know at some point, several years from now, 345, our Arkansas Supreme Court's going to look at this law and they're going to decide ultimately how this is going to play out in trial. Now another possibility is if this becomes law, the legal community could go to the Supreme Court and say, hey, you need to initiate some rulemaking on at whatever of 2025. That could be a way on the front end that we all get clarity as this is going to play out at trial. I hope that answers your question, Senator. Well, let me give you a little more stuff. And I watched the iron half debate in the House, and it was helpful. And I remember somebody, I think he said a couple of times, you know, this. This can go either way, as a business owner, I preach liability. Uh, to my employees all the time where we've become a much more litigious society. And I have to be concerned with that. And yet the other side is I could be the one or I could have a loved one that is facing that and I, and I am right now. So I get this bill. That's Saturday And it kind of rang true with some of the stuff I'm hearing is the bill for me for $22,812. The member discount $16,680. The plan paid just over $6000. And that's what we're talking about. What my concern is when I hear them talking about multipliers. Mine's not an injury case, OK, but what I'm hear them talking about multipliers in an injury case. If they're only able to see. That discounted rate. And I think I heard in testimony that the Normal Multiplier is up to 3, but normally around 2.5. You're totally changing the outcome. And I am, I am sympathetic to, to this. As This being medical only, what I can't Be assured of. Is if those scales of justice and I'm far equaling scales of justice. If that judge sitting there is going to have all the information. that they need on What amounts we're talking about and let me give you another little bit of a case. I've got a grandson. No fault of his own driving down the highway, 4 lane divided highway. As access is right out to the highway that's not controlled. Somebody comes out from the side. And hit him probably doing 60 mile an hour and never touches brake at the stop sign, just come. I just didn't see him, I guess. rolled his truck. His head broke the side glass out. had concussion. wasn't able to work for a while. had had the side effects of concussion. We're not a litigious family. Never sued anybody in her life. Hope we don't have to see anybody. It's not a settled case. But it really brought this case home to me. The person that did it, the state police didn't even check them for drugs or alcohol. Let them go 18 years old, let them go with their parents to the hospital to get checked out. I don't know if my grandson's gonna have long term stuff right now it doesn't look like it. But this is some of those things, even on the medical, once you sign that medical release. It's done. The medical, the pain and suffering, the physical damages, that's You're saying those are all separated, correct? OK. Is pain and suffering on these multipliers ever considered? In that is, yeah, your medical is only $6000. So is the pain and suffering. Considered at a discount too. So I would say no. I will acknowledge that it is common in the insurance and legal industry, especially early on in a case, whether it's a claim or it's a formal lawsuit for the insurance company or the defendant, potential defendant, to try and get a handle on what might this case be worth. Their businesses, they've got to set budgets. They've got to determine what could this cost me ultimately in the long run, so it has been done in those contexts to say, OK, the medical bills and the lost wages are X, let's say 3 times x to get us to the non-economic non-economic damage number that gives us that number, whatever that is, that happens in insurance and that happens with litigation that is not in rule. That is not in law. And what I would, it's, it's arbitrary and What I would say most importantly is if you go to trial, a jury is never told that they are to figure out the non-economic damages based on what the economic damages are. The Arkansas Supreme Court, where's the, uh I haven't. So the Supreme Court actually has held that pain and suffering may be inferred from the serious nature of the injury. That's Scott Bur Stors Corp versus Foster in 1938, and there is no definite and satisfactory rule to measure compensation for pain and suffering and the mount damages must depend on the circumstances of each particular case. That was the Hamby versus Haskins case in 1982, so a jury is never given a multiplier. They are given that instruction whatsoever, and that has been, that has been upheld by the Supreme Court in both of those cases and if a plaintiff and his or her attorney feel like that a multiplier is improperly being used and trying to settle a case, they say no, and they can go to trial and they'll make their argument to the jury as to what their non all their damages should be. So regardless of what's considered an industry standard that doesn't limit a jury or a judge. No, sir. OK, that is helpful. I, I hate, I hate to bring uh a case because it's not a case. I think it'll all be finally, but it brought a real thing to this bill for me and you and I discussed this, your grandson's injury and the head injury aspect of it, and what might that mean in the future? A good plaintiff. Good plaintiff's lawyer with a head injury case, has 3 years to file the lawsuit, and they, after you file your lawsuit, that could take years, and you consult your neurologist, you consult your, your neurosurgeons about what might this mean, and they're going to use their best judgment and if they are of the opinion that there could be some latent injury there. They can testify to that. You don't settle the case yet. You don't sign a release yet. You wait. Now I think those were the outlier situations. Most cases even with a head injury, the doctors are going to be able to tell you what's most likely going to happen and therefore you can put on evidence of I'm going to need surgery. I'm going to have deficits. I'm not going to be able to earn as much. This touches none of those factors you'd be able to calculate those as damages if that's unfortunate situation you're in. And again, I appreciate it's not not about me, but it's about other cases that we hear of and trying to be fair. So thank you for the information. Thank you, Mr. Senator Senator Rice, I'd also, if you happen to watch the House committee, Representative Matt Shepherd, who I think you would acknowledge is a very good attorney brought up the fact that when the multiplier issue was raised that he also stated that it's not in rural or statue anywhere that That's required to be used to assess what the other damages should be. But If I may, uh, It's not required to be used, but is it used? Yes. So it would reduce in those cases. It might. Well, it's certainly likely to reduce the initial offer. The insurance company hears from the plaintiff or the plaintiff's lawyer, and they're like, well, we've always used 3 times, we're still using 3 times, so if the medical bill is less than what was on the list price, then yeah, that's the position they're apt to take, but the plaintiff doesn't have to accept that. Um, yeah, we'll get back to that, uh. Center Gilmore, you recognize. Thank you, Mr. Chair. I think we've had some very healthy debate, and I just want to say to folks on the table, I've sat where you are, um, and had to take, taken quite a few hours of questions from my good friend Senator Tucker, who is a very skilled attorney, so kudos to y'all, um. So I sort of want to talk about litigious environment in the state of Arkansas. Um, Senator Irvin, I think you read through a list of all the enumerated damages that can be recovered. Would you mind reading that again? Again, plaintiffs' recovery, this, this bill does nothing to impact a plaintiff's recovery of the following items, all future medical costs as established at trial. All lost wages, past and future, all property damage, all non-economic damages, including past and future pain and suffering, scars and disfigurement, as survivors mental anguish, loss of life, and punitive damages. OK, so that's quite the list and so let's let's talk about maybe some real world. So Senator Irving, you chair of public health. And so you understand, I think, more than probably most the Environment and healthcare, um, with that, I think you understand the maternal health crisis, and I think you understand that one of the most litigious sectors of health care is related to um OBGYNs and the fact that there's a lot of complications that can arise with treating a mother and child, and so, you know, and we both represent very rural areas of the state where it's hard to get access to OBGYNs. Um, so I think what people may not understand, and maybe you can speak to it, is the amount of liability coverage that is associated with a physician, an OBGYN, and the and that coverage that follows them for years down the road and has an impact on trying to get people to go into that practice, trying to get people to treat patients, um, is certainly a troublesome. Is that not the case? Yes, thank you for the question. It absolutely is the case, and it's, we are at a maternal health crisis in the state of Arkansas. There's no doubt. There's a lot of factoring. There's a lot of factors that contribute to that, no doubt there's that hospitals are closing their labor and delivery units. Again, many factors that play into this, and I believe that the governor and this legislature's going to address many of those hopefully to try to start to make a difference there, but one of the biggest issues is the fact that delivering doctors, doctors that are there to deliver your babies, are liable up until that child is 12 years of age, and then 2 years beyond and so one of the problems is that then they have to because they have to pay for tail coverage to to cover that extended liability statute of limitations, they stopped delivering babies early in their careers, even though they're trained to be able to do it and they can still deliver it and they still may have a hospital nearby where they can deliver it, but they have to stop delivering those babies, and these are great people that you're just Completely taken out of the workforce, and yes, women suffer because of that. We're down to only 35, um, I think counties that offer labor and delivery in the state of Arkansas out of 75. That's just unbelievable and remarkable to me, and I've, you know, I, this is why I've been so passionate about this issue is because I have, you know, I am married to a man who's delivered over 500 babies, and he is a primary care doctor in Mountainvie. Arkansas. And we cannot afford to deliver those babies. He's trained to do it. We spent a, we're still paying for medical school debt, um, we're still paying for the training. He's delivered over he delivered all 4 of my babies, did a great job, but he can't, we can't afford the malpractice insurance. You have effectively taken my husband out of the workforce. You have removed his ability to actually practice medicine in the state of Arkansas. He can't deliver the babies of the patients that he has grown a relationship with. And trust, they trust him. In fact, he's had patients that have begged him, please, will you just please get, you know, privileges that this hospital in Newport, Arkansas, and then come with me and deliver my baby there and he would, he can do it on an emergency basis. But that's not appropriate, not for these women that live in these very rural areas of the state of Arkansas. They need to have prenatal care. They need to have OBs near them. They need hospitals. That can deliver babies. Hospitals won't deliver babies anymore because they cannot afford the malpractice insurance for delivering babies. That is the world we're living in. And so yes, this bill directly addresses that problem and that crisis in the state of Arkansas. There's no doubt, and I've seen it firsthand and it's wrong. Why does Arkansas have the highest mortality, infant mortality rate, one of the highest. Arkansas's nation. As a nation, we're 3rd highest in infant mortality rate. There's a problem here, folks. We're trying to fix it. This is a very, very small piece of it, but it's really, really, really critical and important, and I can go down all of the different statistics, and again, there's lots of different factors. I don't want to pretend that this is the only factor that contributes to the maternal health crisis that we're facing in the state of Arkansas. It's just not, but I'm just telling you, I would love for my husband to be able to deliver babies. He's so good at it. He's amazing. And If I got the standard of care. I want this person in Mountain View or Stone County or Cercy County to also have that same standard of care, but they can't. He can't afford the malpractice insurance. And it's because of our policies that we have. So, so thank you for that. I think that was, you know, like I think you have a unique circumstance that you can point to to speak to that. So I think you're 100% right. There's, there's multiple factors involved in that and I want to be really clear because I know there's some that have said this is, this is a bill that only benefits the insurance companies. Well, look, I, I have my own issues with insurance companies, OK? Don't, don't get me wrong, and I know that there's people in this room that represent insurance companies, and I've had conversations with them, all right, so let's just be really clear, um, you know, I have my own issues and and how they pay, how they reimburse, all those sorts of things, and I think that's a conversation that we need to have at some point but I think the reality is, if you're allowing people to recover something that was not actually paid. That's a problem. If someone has a hospital bill that's $145 but the actual cost was 130. They shouldn't get to make a profit. Absolutely, and all you have to do is actually what Senator Rice just went through that exercise on your explanation of benefits. Look at your EOBs, look at your explanation of benefits. You can actually see what was actually paid to the hospital versus what was actually a claim, and it's based on contracts that are signed, rates that are negotiated. That is the world we live in. Well, I think if we're really concerned about addressing the cost of health care, this has to be a factor. Thank you. Thank you. OK, y'all confuse me of all the conversations I've had on this bill, and trust me it's been a lot, uh. None of them initiated by me. delivering babies was not part of the discussion at all, and I'm trying to figure out How this bill as written with the cost of medical. is what I understand we're dealing with here. How this bill's going to change at all. Uh, the malpractice for delivering babies. I, I, it If I may, yes, OK, so it's part of the cost. So if a hospital is hit, like in the example that I gave. It's part of their whole economic situation. And so hospitals have to choose every day, and, and the fact of the matter is when you have a huge bill of covering, trying to provide for malpractice insurance because you're delivering babies at the hospital and you just, you can't afford it because you are now paying these, you know, damages that actually never were paid to you and you now have to pay them. That's part of the cost of doing business that's increased dramatically. And it also is part of, I'm not able to, I'm not able to make as much money doing this, so I, and That's one factor. So the second factor though is trying to find doctors. There are people are not going into medical school anymore. There's a lot of factors for that. But one of the main reasons why people do not go into OBGYN as a profession anymore is because of the extreme cost of malpractice insurance and because of the tail coverage that they have to carry, uh, later on after they are done delivering babies. And if I might, Senator, I'll drill down maybe and give you a factual example back in my previous life, as I call it, as a lawyer, I handled what we call labor and delivery cases. where at some point during labor and delivery, the child, the fetus suffered a hypoxic event, lost oxygen to his or her brain resulted in a permanent brain injury resulted in cerebral palsy, so that, that happens sometimes at the fault of physician, sometimes not, but that happens and when it inevitably that physicians are going to get sued, and those are high value cases because unfortunately that young child is going to need care for the rest of his or her life, but that young child will have spent some time likely in the hospital and other settings by the time you get to trial and how this bill will impact that is it will look at, OK, what did, what was paid for those those medical services you recover what was paid and accepted. But it won't impact any of those other categories of damages for that child and for that family and the cost of taking care of that child for the remainder of life, but that's why malpractice insurance premiums are so high for obstetricians because of these high risk cases with labor and delivery, OK, but, but we're not dealing with high risk cases of labor and delivery. We're dealing with the medical costs, and is that going to change it if in that case, by the time you get to trial, you look at, OK, what were the past medicals for taking care of that child. This bill will set that as what was paid and accepted. Yes sir, but it won't impact any of the other I'm still undecided on this issue. I hope to make a decision by the time we vote, but I will guarantee you that this will not make any impact. On On what we're dealing with with these doctors delivering babies and their high malpractice insurance and uh that. Uh, you know, that's one of those things as far as me. I'm going to take it and put it over there, and I can't tell the rest of the jury to disregard it, but uh I don't really think that's. Part of the discussion, Senator Johnson. I have to ask this question out of abundance of ignorance on my part. But what in the world is allowed now on these medical services treatments and and future medical. I mean, it, if I have a $10,000 bill, my insurance will pay 6000. And uh I have to pay 4 out of pocket. The, the total cost to me is 10,000. So Tell me what's allowed now and, and what this bill would cover, so Under current law for past medical expenses, you're entitled as a plaintiff to recover from the defendant. Whatever was on the initial invoice. So even if you paid something less, you're entitled to recover the initial invoice. So I mean, Whether it be government paying it or insurance payment. I mean, the doctor is billing say 3 times to recover what his Need is in that procedure, so Yeah. Right now the practice is to pay what he billed, not what he's needed. Not what he accepted. That's correct. That's the current practice. That's, that's, that's, that's what I, uh, my father-in-law used to work in engineering, and that's what they call cost plus. And you know, Senator, one way I've looked at this, it came to me the other day as people go to the hospital all the time because they're sick or injured through no fault of another party. And the hospital gives a bill. The insurance pays for it a lesser amount. We don't get to recover the difference between those two and put it in our pocket. So why are we doing that in this case? Yes, there's a third party who's at fault and caused the injury. Go pursue all those other categories of damages you're entitled to them. But when it comes to backward looking at your medical bills, recover what was paid and accepted, recover the real amount. So I'm not, if it's all right here. Go, go back to the OBGYN situation. Is there a time limit, you know, if there's a problem. with a child. Is there a time limit for, for bringing something, yeah, there's, that's gonna be a 3-year statute of limitations and then of course, a case like that, once you file a lawsuit, it's years before it even goes to trial, but it will be the outlier case that within those 3 years you may not know ultimately what it's going to cost, but those labor and delivery cases, those doctors, they're going to know what it's going to cost. They have life care plans they put into evidence. It's backed up by medical testimony of this is the life expectancy of this child, and these are all the things this child's going to need over his or her life, and this is what it's going to cost and all of that is recoverable. And they'll still be recoverable under this. This won't touch any of those every case of delivery is it, is there a presumption of liability. Is that why the uh the uh The cost of that. I, I wouldn't go so far as to say there's presumption, but it's clear that the child at some point Right before or usually during labor and delivery suffered a hypoxic event, so that puts that in and the nursing staff kind of in a bad spot to start with, but the plaintiff still has the burden of proving the physician should have noticed the child was at the fetus was in distress and performed a C-section. In some of those cases succeed and some don't, but it is a hard issue for the physician to tackle, and of course the damages in those cases are in the 10. of millions of dollars potentially and that's why the risk there is so much for those types of doctors. So do you think this would help? That medical Liability insurance. I think it makes common sense that it would help, but to the senator's point earlier, is it going to change it dramatically. No, probably not. It's part of the pie though, and I think again it gets back to it's a matter of fairness. This is the right policy. Plaintiffs are supposed to be made whole. They're not supposed to be made more than whole unless there's a punitive damages issue on the table. If, if the defendant is subject to punitive damages, so be it. But they're to be made whole and when we're looking at this silo of damages. What better way to make that plaintiff whole than to reimburse them for what was actually paid and accepted for the past medical treatment. Well, if I sell rice and it's below the Chicago board, I sure would like to, to get what's on the Chicago board, but I don't think that ought to be the practice. It, it ought to be up to my. decision and actual cost. Thank you. Sertraki. Thank you, Mr. Chairman. In your experience, Do the bills provided by the hospital. bear any resemblance to the actual costs that they incurred or are they in negotiating tool. I'm going to read you some, some quotes from some legal and healthcare journals as well as, um, from the Texas Supreme Court case discussed earlier, this is from a University of Mississippi Law Journal article listed rights for medical treatments are more a matter of internal billing practices unique to the health care system than a reflection of the reasonable value of medical services. A hospital's regular, and this is from the Haygood case, Texas. Hoss regularly. rates, full charges or list prices are generally at least double and maybe up to 8 times what the hospital will accept as payment in full for the same services for Medicare, Medicaid, HMOs or private insurers. The labels for these charges regular, full, or list are misleading because in fact they're actually paid by less than 5% of the patients nationally. There's a lot of that out there, so they present these numbers knowing that in almost every case, that's not the number they're going to be paid. That's my understanding. They know. that they're going to receive. discounted portion of that it's part of the contracts that you sign, so those numbers. They could pull them out of thin air. I mean, they may have a process by which they determine it, but that number doesn't really mean anything. Uh, based on what I have read, I think that could be argued. Yes, sir. OK, so if we're going to then base future damages on numbers that hospitals pick out of. I'm not going to say they pick about a thin air because I'm sure that they don't, but that seems, would you say that that would lead possibly to inflated prices across the board. Yes, yes. Thank you. Senator Stobelfield. Thank you, Mr. Chairman. Let's go back just briefly to the, uh, other states that passed these laws that are similar to this one. are the states that pass laws. Like this law, are they exactly like this law. Because I've read One of them certainly is more friendly to the The one who was hurt. The client Um, no, I wouldn't say that they're exactly exactly no, they're not exactly the same. They addressed the same premise of the recovery should be limited to what was paid and accepted as full full and final payment, I'd say the biggest variation of brown nose is how that plays out at trial and this bill doesn't speak to that when this hadn't come up yet, but I'll bring it up because there are limitations on what the General Assembly can do when it comes to matters of pleading practice and procedure and evidence. So if this bill were to be loaded up with a lot of dues. and downs for the court and how to play this out, we run into a potential constitutional issue. This just simply sets the policy and the court will decide how that will come into evidence, and it was like I discussed earlier the difference between, uh, how Texas does it and how Maryland does it. If I'm a plaintiff's lawyer and this bill becomes law, I'm going to prefer the Maryland way because the full list amount's going to come into evidence, and the jury will get to see that and that might result in an increased non-economic damage recovery, but the court Under our Constitution is the one that needs to determine how from an evidentiary and procedure standpoint to implement this if y'all enacted this law, OK in this room today. Uh, we have, we have doctors. Uh, we have a hospital represented here. Of all the people in this room today, who's this bill more important to the hospital, the doctors, or the insurance companies. I can't speak for that to that senator. I would say it's important across the board for business, industry, and healthcare, including small businesses, which is why the NFIB fully supports this bill. Does this bill in any way skirt the collateral sore throat? No, sir, in no way, sir. Let me give you a caveat. This bill is designed to address the Montgomery Ward case, a slip and fall where the hospital accepted half of the bill. This does not skirt the collateral source rule which says you get no reduction in recovery because your insurance, your rich uncle paid it, and the jury does not know that you had insurance or your rich uncle paid it. This does nothing to that, as the Texas Supreme Court ruled, and I read that. I'm sorry. Quote earlier And under this bill, the one at fault can argue that they don't have to pay because they injured the person's uh On insurance, Medicaid, Medicare. Has already been paid, has already paid the bill, or should pay the bill. So a person who gets in. Yes sir, I think I can. I think I understand what you're asking. A person, if this becomes law, a person who gets injured can sue the third party that they believe is at fault, you know, when it comes to past medical bills, they will be able to recover what was actually paid, and I would still be able to recover it even though a private insurance or again the rich uncle had already paid it. This will not change that. We're just saying you're recovery for this category of damages is what was paid and accepted. OK. You, you know, I noticed in one of the last reports of the Chamber of Commerce when they give their uh Annual business climate report, uh, showed that Arkansas was strong, never mentioned one of these recommendations, uh, as a means to improve it. Why was it? Which chamber was that Chamber of Commerce. Arkansas state chamber I don't know what you were reading, uh, but I know the chamber puts out a lot of publications and many of them are supportive of civil justice reform, and this would probably be the top priority and just to elaborate a little bit, you know, in representative Eubanks mentioned this in House committee, and this is from the US Chamber discussing the impact. It's got a study on all 15 states of tort liability on the state and he mentioned this earlier, is around $3000 per year per household on Arkansas, the total tort costs paid in Arkansas are over 3.5 billion. I don't know what time period. I'd have to find that out for you. 2.1% is the percentage of Arkansas's GDP that went to Torco costs and the average growth rate of tort costs in Arkansas from 2016 to 2022 or 3.7%. So there's data out there. to speak to that, but I can assure you that the Arkansas State Chamber of Commerce believes that this is an important issue. OK, so this bill will not decrease insurance premiums to help the Arkansas economy. It will not increase them, will not increase this bill certainly is not designed to result in insurance costs. That's I won't decrease. It will not decrease. I can't, I can't speak, guarantee that, Senator wouldn't even try. But again, I think it makes sense that it should at least mitigate the insurance costs and it makes sense that this would be good policy, and there's other measures that I think should be considered to help with those types of costs, but this is just one of them. All right, I'll, I'll come back. Senator Tucker. Thank you, Mr. Chair and thank you, thank you all for your patience. You've been got a lot of questions. My friend Senator Gilmore. I promised him when he ran the ProTECT Act last time they would ask no more than one question per page of the bill, and I have broken that rule on this bill. I will, I will admit, I wanna, I wanna start just by following up on a couple of things that my colleagues asked, um, there was a presumption in some of the questions that health care providers might inflate their bills. overbill a little bit. Senator U made disagree with that. That's my, my point though is this bill, I would just invite you to go and sit with hospital administration and negotiate a contract with Blue Cross Blue Shield or Centene or UnitedHealthcare, and I think it's a debatable point whether whether they're overbilled or not, but regardless of whether they are, this bill does not address in any way a health care, how much a health care provider bills for the services they provide. True, true. Now, to the point Senator Irvin just made, one reason why the healthcare provider accepts less payment. Then they char what is on the original invoice is because of a negotiated rate with an insurance company. Right? and The insurance company is funded by health insurance premiums paid by consumers, correct? Yes. So that lowered rate. That's actually paid is a direct result of the insurance premiums that consumers pay to the benefit of the insurance company, not the insured. Yes, OK. Um, and there's no Senator Johnson asked this. There is no presumption of liability. And that's why people have to hire lawyers. That's right and in most of these cases, not all tort cases, but in a lot of tort cases. Um, the fee arrangement between the lawyer and the client is a contingency case, yes. And not always, but in most cases, the reason for that is because the person who's hiring the lawyer doesn't have the money to be able to pay the lawyer out of pocket upfront. That's the theory, yes. OK, um, I wanna Uh, with my apologies, I'm going to go back to where I left off and I, Senator Johnson asked me to use some math. So I'm gonna use some math and I'm, I'm going to address this question that Senator Gilmore asked, and I think profit is is a good term. It's a clear term, OK? So I'm gonna go back to my example, but I'm going to use some, some real math. And I'll direct these to Mr. Allen, although of course Senator representing banks, I would love to hear from you all as well, but going back to my hypothetical example, My, my medical care costs, according to the provider, $100,000. My annual out of pocket max deductible is $5000. My attorneys' fees are $33,000 flat. Right? Follow, follow me so far. So that's $38,000 that I paid to The health care provider and my lawyer. Now, if a court finds that I am then Made whole But those by those amounts. Then the remaining $62,000 will go back to my health insurance carrier. Correct, assuming Yeah, but no court's going to find that you were made at all. OK, that's my next question. That's my next question. I don't want to talk about why, OK, I want to talk about why, but Under the law as it exists today, that's $62,000 if it's found that I made whole, we go back to my health insurance carrier, right? Well, you say your medical bills were 100,000. Yes, what about your other damages? I'm trying to keep this as simple as possible, Mr. Allen. It's not that simple though. I mean, you've recovered or you have the opportunity to recover all these other categories of damages other than just that hospital bill, and that goes into the calculation of whether you were made whole as well, all of it, including the fact that you have to kick 33% over to your attorney. OK. I want to make sure that members understand this, OK? The, the, the made whole doctrine stands for the proposition that It Once I am made whole, then I'm not entitled to anything beyond that, so I can't make a profit. That's right. That's it. So under the laws that exists now, I can't make a profit once I am made whole. Everything that I've collected from the person who injured me gets doled out to my health insurance carrier, the health care provider, whoever, whoever the case might be, if it's a medical lien or whatever. Yeah, no, the, the, the basic tenet of personal injury policy is that we put the planet, try to put the plaintiff back in his or her shoes as they existed before the accident and not to enrich them with a windfall, which is the whole point of this bill because we believe a windfall is occurring, yeah, but the way the law's written now. Once I'm made whole, then I'm not entitled to any more of the compensation, the recovery. No, you've been put back into the position you were before. And so then to your next point, the reason why courts rarely find that plaintiffs have been made whole is because there are all these other expenses that exist, including attorneys' fees as a prime example that I pay in the course of pursuing my recovery that make me less than whole, so I, I, the other money makes up for the fact for that. That's just a bonus payment, and that's the problem with how it works right now. I can't hear you. I'm sorry. What I'm saying is that is a pure windfall if we're saying that the difference between what was accepted by the hospital and what it charged is making up for other damages, that's a windfall. Your damages for your past medical care should be not according to the judges who look at an individual case, right? So again that goes back to the point I was making earlier. Right now we're making policy for every case for all time. Moving forward. Personal injury cases, yes. But now these judges are looking at an individual case and determining whether a windfall has happened. Under the laws that exists now, and we're taking that power away from the judges to look at on a case by case basis, and we're making that decision for all cases, for all completely. What better way to look at your damages for your past medical bills than what was paid and accepted, period. That's all we're talking about. This doesn't touch subrogation. This doesn't touch the mate whole doctrine. We're just saying for at the time of settlement, at the time of trial, how much should we pay, Senator Tucker, for his past medical bills. How about what the hospital was paid and accepted. That's what we're saying. OK. Alright, let's, so I'm glad you raised segregation. We'll go back to there. I'm going to move on, all right? Um, let's go back to my example. $100,000 in medical costs, $5000 out of pocket medicals, 33,000 in attorneys' fees. Are the laws that exist now, uh, my health insurance carrier, if I'm made whole, will get that $62,000 back. Assuming, assuming that's what they were paid and that's what you, uh, and you were dean made home but that totally disregards all the other I understand your point on that. I understand your point on that. If this bill passes, then Uh. My recovery is limited to $5000 on past medical expenses. If that was what was paid and accepted, yeah, so then the receipt of payment from the defendant for past medical bills is not to enrich the plaintiff. It's to help them pay for the past medical bills. It's not meant to be for them to put into their account and use as they say. I don't mean that in a way. It's not meant to be part of what the plaintiff recovers for his or herself. It's meant to help cover what they paid for their health care service. All right, I'll move on. It's a dead horse at this point. The madehole doctrine. allows it to go back under the laws that exists now, and I'll move on. And here's the good news. Senator Rice and Senator Clark already addressed a series of questions I had on the direct relationship between past medical costs and pain and suffering and other non-economic damages, so I'm going to skip those entirely. Um If this law passes, then you, and you're injured through no fault of your own. You can recover less if you have health insurance, then if you don't have health insurance, well, that assumes that people without health insurance are paying the full amount or if anything, um, here's another quote from a article in South Carolina nationally less than 5% of patients actually pay this, I'm sorry, where's my uninsured? While all uninsured patients are expected to pay the hospital's full charges. It appears that in fact less than 5% actually pay the full charge. I've got a piece from the American Hospital Association from 2021, where the American Hospital Association says the uninsured don't pay anything on their bills. The vast majority of the time. So that first assumes that the uninsured are having to pay the full amount of bill. I don't think that that's what happens. Secondly, what I would say is, hey, Mr. Uninsured, what did you pay? Nothing. Then you don't get anything for hospital bills because you didn't pay anything. I paid half of it. Well then you get half of it because you paid half of it, so let's let's follow up on that. So I've got that American Hospital Association report right in front of me here, um, and it says that in another section. Patients ineligible for financial assistance in patients whose whose care is paid for by other types of insurance, e.g., workers' comp, auto liability insurance, etc. are the only patients that may be billed full charges, so I just want to note that the that that report also says that, but to your other point, When you say uninsured folks pay 5% or less nationally. That's up to the healthcare provider in each instance. That's right. That's correct. And so they, they might charge 5%. They might charge 50. We don't know. In each instance, that's up to them, so Uh A person who is uninsured, certainly has the potential of paying more out of pocket than a person who is insured. If this becomes law, I mean, if they're going to pay, if they're going to pay any hospital bills that's going to be out of pocket. That's the case today. Yeah, but they'll be entitled to recover whatever they pay from the defendants so they can recover. They can recover more than someone who pays a copay they will recover what was paid, and if it could be If the hospital doesn't give them a discount, it will be more. Let's base it in reality, and that will differ from case to case. But if you're uninsured for various reasons. I mean, you're making an assumption that you're uninsured. For I'm not sure what reason. Sometimes that's a choice that people make. Right that And I think if this bill passes, more people will make that choice because there's a disincentive I would disagree with you. No, I would completely disagree with you, but I mean, you're also discounting the fact that you have charitable hospitals. Because I What they do. They, they treat people and you know that the federal and Ta allows do not allow a hospital to reject treatment of a patient. You know that whether they have insurance or not. They cannot turn somebody away from an emergency room. They have to treat them. So it's not whether they can pay or not, they have to provide care and treatment. That's the right thing to do, but we should acknowledge that we should understand that and that should be a calculation in any of these policies that we're presenting today, and, and, and I would argue it's a huge consideration. The amount you can recover if this bill passes will vary depending on the Whether you have insurance or the type of insurance, sure, and I don't know why we want to take two different plaintiffs who paid two different amounts for their past medical bills and have them recover the same. That's the whole point of this bill is an insurance premium an out of pocket expense? Sure, and in real life it is, yeah, but it's not as a result of a tort that you're paying it. You're paying it because you need to, and it's a responsible thing to do if you can afford it, but it does reduce the tortfeasor's liability. No, I disagree with that. Bill sets things in reality when it comes to that silo of damages we've been discussing. Let's use what's real, not some inflated number that's not paid. But you have your health insurance premium is not an inflated number that's not paid. I'm sorry, the health insurance premium premium is not an inflated number. That's a real number that I pay out of pocket, but the tortfeasor did not cause you to have to buy insurance and pay the premiums. That is not a but it does affect their liability. Who's liability? The tortfeasor. The fact that they have insurance, the plaintiff has insurance. It very well may impact what they recover for past medicals. yeah. But OK, we talk more about Really, you know, health care coverage today than I anticipated, and I'm just curious if you considered limiting limiting this bill to that area. To which area medical malpractice cases. No. Why would we treat it differently than any other case, plaintiffs and a medical malcra practice case recover something different than somebody in another negligence case. Again, what was paid and what was accepted. We think that's fair. OK, I just want to mention my colleagues here that 9% of all lawsuits in Arkansas are tort cases. 5% of the 9% are medical malpractice cases, so it's a very small percentage of cases, less than 5% of cases go to court, and the average jury award in Arkansas is under $5000. Do you have any reason to dispute any of that? I have no idea the source of that. Um, OK, um, I wish that I had those numbers again, Senator Tucker. Yes sir. 9% of lawsuits in Arkansas are tort cases. 5% of tort cases are medical malpractice cases, so 5% of 9%. Also less than 5% of cases go to trial. So again, that's less than 5% of the 9% and the average jury award in Arkansas is less than $5000. So to talk about, please. I would just like to know the statistics of those that set a lot of case, settle out of court and what the cost of that is, and it's a dramatic cost. I can tell you. I mean, you know, I know of individuals who have been sued because the doctor wouldn't prescribe opioids. To the patient So guess what? It The insurance company had to pay for the attorney to come and spend all day long. To represent that position. Who did exactly what they're supposed to have done. Still incurred a huge amount that was never recovered. The lost wages of that physician. was never Awarded damages for being away from their practice all day long and patients that they didn't see had to cancel. I mean, Not, there are so many instances where there's all these tertiary expenses. I agree, but it's for everybody. It's, it's, it's for everyone and so Again, this goes back to what a receipt shows of what was actually paid, and it's really that simple. OK, you, you just made me think of another example. Have we ever heard of a case in American history where a health insurance carrier denies coverage for a service? Does that happen? Sure, yeah, and so sometimes an insured has to sue their first party insurance carrier to get coverage for an expense, correct? Yes, and if they have to pay a lawyer to do that. And they won't be able to recover the attorneys' fees on that side either for suing the insurance company, I think they may have some penalties and maybe a fees if it's a bad faith case, yeah. But only in a bad faith case, yeah, OK, so I pulled the insurance numbers for Arkansas for private passenger auto and commercial auto for the last 5 years. So this is what we're talking about in terms of insurance companies in Arkansas. This is from the Arkansas Insurance Department. So in private passenger auto, I got 5 years here. Bear with me on the numbers 2019 premiums were 2.1 billion direct losses paid 1.278 billion for a profit of 63.89%. 2020 premiums collected 2.135 billion claims paid 1.202 billion profit 77%. 2021, premiums collected 2.2 billion claims paid 1.439 billion profit 53%. 2022. premiums collected 2.3 billion claims paid 1.9 billion profit 20%. 2023, 2.5 billion collected in premiums 1.977 billion paid profit 29%. Any reason to dispute any of those numbers? Senator Tucker, if you want to sit with me and file a bill about insurance companies and premiums and profits, I will happily co-sponsor a bill with you. You do a lot of those, I do a lot of that. In fact, I'm not the biggest fan. They're not my biggest fans, obviously. I have repeatedly I think that speaks to why I'm here sitting here with this bill. I have tread that ground. I understand that landscape. I have worked tirelessly for 14 years. To attack Prior authorization policy. I have, I know this. And I understand this. That is a completely separate argument, and I appreciate you're conflating the issue because you're good at that and you have a degree from Harvard. My degree is from Stone County, Arkansas. I'm just a rural girl from Arkansas. That's who I am. I know math. And I know what's equal and I know it's fair, and I know it's balanced. And so, I'm here to advocate for that principle, because that's the principle of the people that I represent understand and acknowledge. And that's what we're trying to do with the bill, but I will sit with you and I will co-sponsor a bill all day long to try to get under, under control, that whole entire landscape. It is absolutely impacting healthcare and all these different ways, but that's not what we're here today to discuss. We're discussing this bill that's very succinct, very balanced, very reasoned, very intentional and very needed. At the end of the day, like Representative Eubanks, when you talk about the cost to the average Arkansas household. Unless you're involved in a lawsuit. We're talking about indirect costs, not direct costs. And those indirect costs are really insurance premiums, are they not? And so the point of this is it's, it's the hope. that this bill will have impact. On insurance premiums in Arkansas, and I don't think there's any wrong with that. But that's the point. This this body passes laws all the time with intent to it but with hope to it that'll have the desired impact, and sometimes it does and sometimes it doesn't, but to Senator Irvin's point, this is also most basically a fundamental fairness issue in plaintiffs in Arkansas have been and are recovering amounts for past medical damages that don't exist, but we have no evidence in spite of all of the states that this has been passed in that costs are lower. No evidence. Any direct evidence. I don't, I don't have any. Do we have any commitment from insurance carriers that if this bill passes, they're going to lower rates. They're surely not going to lower rates if the current law stays in place. That's for sure. Yeah, and so, but that doesn't make the inverse true. Do we have a commitment from them that, OK. Um Senator Irvin mentioned property and casualty in 2023, according to the National Association of Insurance Commissioners the profit was a record $88 billion. I just think that needs to be part of the conversation. That's why the governor, Republican governor of Louisiana, vetoed this bill in Louisiana. Um, OK. Couple more questions and I'm wrapping, Mr. Chair. Let me remind you, and we've got others behind you, the chair still hasn't asked. Any questions yet and we're an hour and 40 minutes in and we have 5 witnesses, including Mr. Allen, this will be the extent of my, OK, so and I don't want to put them shorts through it, but again, I won't however long it takes, I want to get this thoroughly vetted. Thank you, Mr. Chair. Um Senator Irvin listed all the categories of damage. Did you consider, and this is only one. That that did you consider putting language in the bill to say this does not affect all the other categories of damage. Do you think that would be helpful, a helpful clarification. Um, no, I mean, it is clear, although I will point out that this same bill was filed 2 years ago, and at the request of Representatives Dalby and Shepherd. Change was made to put in the word past necessary medical care past necessary medical treatment or past necessary The services, it's all clearly limited to past medical care. OK, last question. Will you agree with me that the best way to avoid paying someone else's health care costs is to not injure them. Absolutely. 100%. Thank you. Senator Stubblefield. We've got, do you have any more questions, uh, it's, it's funny to me. I was looking at Texas. Texas state that we model this after. You mentioned earlier, uh, They have higher insurance rates than us. Does that have anything to do with this? I would submit to you, Senator, that if Texas did not have that law in place, their insurance rates would be even higher than they are now. That what that they would be even higher than they are now, really. That's speculation, idiot. One more question, um, let's let's say under this bill, a drunk driver who kills or injures a stay at home mom could use a mother's car insurance or health insurance to reduce what he has to pay to her or her family. Is that true or false? I would say that's false, that drunk driver is going to have to pay that mother the amount of all past medical bills that she incurred in the amount that was paid in recovered and that mother will be able to recover all the other categories of damages, including punitive damages, assuming that driver has any assets to meet that, but that's the reality of today and this bill won't change that. What if he has no? That's an unfortunate situation, and that's the can be the case today. and this bill won't change that, OK, a motel that aids our best sex trafficking, could use a trafficking victim's insurance policy to reduce what they have to pay for the victims' injuries. What I would say is in that horrible situation if the victim has passed medical bills as a result of the incident, the events that that that defendant, that bad actor is going to have to pay for every dollar of what was paid and accepted, and then we can only begin to imagine the amounts that would be awarded for mental anguish, pain, and suffering, and punitive damages and that type of case. And where would that come from? What it would come from the person that's engaging in the trafficking. Now the reality may be they have no assets, they have no money, they can't be found, but that would be the case today, and this is not going to change that. But Senator Selefield, we, I passed legislation on that very issue. I mean, there is liability now ascribed to exactly that case and one of the attorneys that is sitting here against this bill actually helped me with that piece of excellent legislation, and I think it's an appropriate piece of legislation and There's no way I would sit here in front of you today. Sponsoring a bill that would limit the mental anguish. Of somebody in that position. I would never do that. I'm I'm not going to do that. I would not do that. And You know, I have I know people in my life and friends that have suffered unbelievable. Thanks. As women. And you can't put a price on that, and, and I, I know that juries and judges and courts struggle every single day with, with trying to figure out what that is. This bill does not affect that ability of that jury or that judge or that you can't put a price on that, and, and I, I know that juries and judges and courts struggle every single day with, with trying to figure out what that is. This bill does not affect that ability of that jury or that judge or that well known you long enough to know that you would not do that. I appreciate that. Thank you, sir. I might have something later, OK. Um There will be. Points at it for brevity and points taken away for long answers. Uh, how long has current policy, current law been the case in Arkansas the way it works now. The Montgomery Ward case was in 1998 or 109, Senator. OK, so it's only existed 30 years. Yes. OK. And before that, the the question was unanswered. It hadn't gone up to the Supreme Court. OK, so. May have been the way it worked, but Correct. A circuit court might have handled one circuit court might have handled it one way and another 1 may have handled it a different way. Uh, how many states? Uh, out of 50. With 50 and if we had DC and Puerto Rico 52, uh, states and districts, how many handle it more similar to the way Arkansas does and how many have changed to something else. It looks like it's about 50 and 50, about 50.5, OK, so we can discount that uh The We all want Uh And the members of this committee, those presenting the bill, we want as low a premiums for Arkansans as we can get on our insurance. We also want to take care of victims adequately. Uh, so, uh, Representative Eubanks. Senator Tucker alluded to this. You made a statement about this affecting Arkansas families uh A $3000 a year and Senator Tucker may have clarified that a little bit because I was doing some math in my head about what I paid. for home insurance and cars and I know some of y'all have much nicer cars and larger homes than I do, but I was having a hard time coming to pay in $3000 much less savings. So this is what this is costing me when I buy milk. Could you repeat that last part? I'm saying if my total insurance is not $3000. It couldn't be there. So are you saying when I go to buy milk, it's, it's in the price of milk. I think it could be included in all our products because I think all industry and businesses are, are, are bearing part of this cost and consequently it gets passed down to the consumer. Will this bill remove that total burden? No. Where's that statistic come from? Uh, that was from the US Chamber of Commerce. OK. Uh, And you have no idea, I'm sure, as I would and how they calculated that. No, sir. OK. Uh, Mr. Allen, if I have to hire an attorney. Uh, and you've used the term a third, and I have found that seems to be the general thing cannot be made whole. Uh, and that's one of the points as to why I was so frequently no. OK. So, uh, we'll And can you, and I know that this is a calculation. But can you know future health damages, not for certain, but there are experts, life care planners, and when you go to trial about future health expenses who testify the court recognizes whether it's a treating physician of the plaintiff or a third party physician, yes, they within a degree, certain degree of certainty, the court allows them to testify as to what it's going to cost for future medical and the jury will ultimately determine if they buy that number or if they think it should be. something different because when I'm paying premiums, I'll like the insurance company would like to have a Here's what the cost is, OK, but when I'm the victim, you know, we've got a Senate colleague that visited with me this week that had an accident 4 years ago and Had a recovered damages, but didn't know that his back was still going to be hurting 4 years later and probably from now on, uh, I had a similar thing. Somebody hit me from behind. I was stopped behind a school bus. Their brakes went out, uh, and wasn't much damage to the pickup me if I had anything health wise, and I said no. Uh, I didn't think I did. Uh then after my neck had been hurting me for a year, I didn't think whiplash was real. I'm skeptical guy after my neck had been hurting me for a year, I went and got in my pickup and I didn't have a dual cab then and I've tried to Reach my head back to the window and I couldn't do it and I realized because I hit my head hard against the back window and again wasn't seeking anything, didn't want anything, but had no idea. That I was gonna have that pain and no treatment for the next two years, so that's not an uncommon thing, is it? For an injury to manifest other An incident to manifest other injuries or pain. No, it's probably not. And like you said, but we have a, we come in as we look at these different silos with a silo here and since we talked about silos. We have a thing here that those of us within the building know it's adequacy. It's how we, it's how we do education funding. And we on the education committee when I was on the education committee, we figure out for a school of 500 what it's going to cost for a principal, what it's going to cost for a nurse, what it's going to cost for librarian, what it's going to cost for curriculum, what it's going to cost for equipment, computers, maintenance, etc. but we our superintendents and school boards always remind us that it is a funding formula, not a spending formula. Uh, that however much we give for maintenance may or may not be may be less. more, however much we give for salaries, maybe less, maybe more, etc. Uh, and so. Coming back to this one silo if what Senator Tucker pointed out that a judge has never come to the conclusion that somebody has been more than made whole. Where you're the victims getting money. Uh, we are like we are, we are reducing adequacy where the where there might have been more over here because none of our calculations are are exact. But in this situation, the calculation is exact. We know exactly how much it was paid. Oh, and the same thing, and I make the argument all the time about transportation, small small school districts are getting the short end because they have all this rural area that they're traveling and that we could break that out, but I can't get this legislature to do anything about that, but yeah, there are some, there are some things that are hard and fast, uh, but when we If we do pull those out, we change the equation toward one side versus the other. Because if I could get them to do that, it would very definitely benefit small schools and take money away from large schools. Sure, and if I'm following you, I know enough, probably not even to be dangerous about adequacy, but your forecasting future costs when y'all are setting these adequacy reimbursements and that that would be, I think, a really good analogy to forecasting future medicals, but with regard to House Bill 1204, we're talking about things that happened in the past and we know precisely what was paid. Uh, what percentage of these cases settle? Personal injury cases. The vast majority, I think Senator Tucker does some mediating these days. He's probably got a better feel for that than I do, but the vast majority. So let me tell you one of the pet my pet peeves. Way before I was ever in politics anyway. Uh, about this whole system that I'm not involved in except for paying premiums. I do insurance companies just like paying trial attorneys. Dis dislike, no like paying trial attorneys and, and let me tell you why I asked if the trial attorney's getting a 3rd. OK, being a retailer, I know, I know just Automatically that that's a that that I've got to get 50% more. Pay the 3rd. So for me to go to a trial attorney, I've got to believe that I'm going to get at least 50% more. Than what I've been offered. And actually more than that because I need the money now. I've got these bills to pay. I'm injured, etc. And So the fact I'm trying to figure out why people have to go to attorneys. It seems like it'd be a lot cheaper to make a higher offer to begin with, and I would think a lot of people do do that, and I would expect in most minor incidents again, the automobile cases that the plaintiff, the injured party, ultimately settles without representation with the insurance company, whatever amount they arrive at. It's going to be the the the more significant cases where the injured party is going to most likely end up with counsel. And that always changes the discussion. The insurance company at that point brings in counsel, and then it's the two lawyers talking to one another, OK? And so, can I say, Sure, actually. Also it depends on the insurance company. I mean, I, I can tell you, USAA, I'm able to have USA insurance because of my dad's military service and um they actually do um they actually issue payments, um, before any claim is ever made in certain cases just to help with those. front end costs, so, um, you know, to where it never then to your point, they take care of that. So there are some out there, just wanted to mention that. So let me ask, you know, a large Retail chain that operates in the state. has a substantial Employee discount. Uh, at least they do in December for Christmas. Uh, that I was not aware of, but They frown. On their employees going in and buying something for me. Uh, on their employee discount. Uh, they would also frown on them buying something for their local insurance company. Uh, Or agent with their With their employee discount. So if we were going back and this wasn't medical expenses that because there's other expenses, uh, the whole idea is that this chain wants to provide a benefit. For their employees, not for an insurance company, not for anybody else out there, so, so is the argument we're making. Because on the on the top, I like it and seems to be a sensible argument, but the argument we're making is that if The The employee had made something large, let's say a boat. And the boat gets destroyed, then the insurance companies should only have to pay, not the book value. Which is what we normally go by, but because you work for this chain, you actually got a discount, so we should pay you less. For the value of the product. Uh-huh, yeah, that that's just a different assessment of damage, Senator, when you're talking about property damage as opposed to medical health and treatment, especially, is it? Yes. OK. And, but I'm also sitting here probably unusual in this group, not unusual in the general community that didn't have health insurance for many years. Uh Are y'all telling me? That When I went in with no insurance that I got the Medicaid rate. I, what I would tell you based on you because we're saying the rate isn't real. It seemed real to me, but I'm just Yeah, um, if you're uninsured, I'm telling you a great deal of literature says that the uninsured pays nothing for the health care, but I'm sure there are situations where the insured does reach into pocket and pay some amount, which they will then be able to recover from the defendant if they settle or get a verdict, but because one of the reasons I have health insurance now is I was sold on the fact. That the insurance company is going to get a discount. That's going to benefit me. So The person over here who's who sits and I'll use my son, for example. Who Tom struggles to pay rent. And it just trying to figure out how to carry medical insurance. If he's in an accident, We're going to go back and say, We want to pay what you, what the insurance pay. However, if he says I can barely pay rent. I'm going to drop my health insurance. We're going to go back and pay retail. Because he decided not to be responsible and carry health insurance. Mhm. So the person who is Responsible And trying to make sure everything's taken care of, really is the loser in this situation. It will depend on what the uninsured person ended up paying, but they're not the loser in the situation because number one, they had their health care paid for by the insurer because they paid their premiums, and number 2, if it's private insurance, they're probably not going to be any subrogation and they're going to get to recover from the defendant as well. But how is it different? How is that discount different because I chose to be responsible versus working for the retail chain. What I would say, Senator, is people make decisions personal and business, hospitals, insurance companies, individuals for a myriad of reasons. What we're saying here is if somebody calls you injury, one of your areas of damages is past medicals. You get to recover what was paid and accepted. And I said it earlier, I don't think that we want as a policy in the state to take two different plaintiffs. Who paid two different amounts for their past medical bills to recover the same amount. Each case is unique. Each case is different and should be evaluated and when it comes to past medical damages, do the math, plug in what was paid and accepted. And if the hospital held firm and said nope, you owe us every dime of that master charge bill, then that's what you get to recover from the defendant. OK. Committee, we have people who have come to testify. It is now noon. Uh, do you want to continue? Do you want, OK, everybody's, most of you are nodding yes. I shouldn't say everybody, uh, so any other questions from the committee? I would just pose that same question to the bill sponsors. They may, they may want a break. Well, I didn't pose it to the sponsors and, and I normally assume if I'm presenting a bill, I'd like to get it heard, so, uh, OK, no other think I probably will. Go back there. Feel free to take a break. The Uh, we're going to move on then see no other questions by the committee. We have 5 people signed up to speak. Uh, and Mike Boyd is first on the list. Speaking against. Mr. Boyd, you can see that we may have lots of questions or we may not. Uh, so I don't want to be unfair to you. You present what you need to present, but brevity will be appreciated. Thank you, Mr. Chair. is with some trepidation, I take this seat after watching those, all those questions, but I'll do my best and uh thank you to the committee. I appreciate you state your name? Yeah, my name is Mike Boyd, and I'm from Magnolia. I am an attorney. I've had a private practice for 25 years in South Arkansas, where I had the privilege of representing folks from all walks of life. A represented families in the worst of times, losses of loved ones, going through divorces. Um, I represented folks, workers that were injured on the job. I represented small businesses that were forming their businesses and walking them through the hurdles and challenges that they would see. I represented bigger businesses that were being harmed by even larger businesses. I represented folks that were harmed due to no fault of their own. I prosecuted criminals. I've defended a few alleged criminals. And I was city attorney for just over a decade in Magnolia. I say all these things not to apply for a job. I have one of those. I say that to convey to you that I know firsthand what it's like whenever a family suffers a harm when harm befalls them because of someone else's wrongdoing at a time that they least or don't expect it. So, uh, it puzzles me when I see a bill like this. I guess about one thing I do agree with Senator Ervin. This is a simple bill only in that it's 5 lines, but I assure you it has massive implications to your friends. Your neighbors, the folks you go to church with, the people you see at the ballgames. You'd be forgiven though for thinking how could this cause these five lines cause such a harm? Well, first, I would suggest to you with respect that any time a bill lands in your lap or these days more likely in your email inbox, and it starts with the proposition that someone who is harmed Not the one causing the harm, but someone who is harmed is getting a great deal that they shouldn't. That should probably raise a red flag to you. The second thing I would tell you is it's called the collateral source rule for a reason. It's collateral. It is not connected to the thing. It is independent of the defendant of the wrongdoer. It shouldn't be considered, and that has been the law for centuries. It is common law. It is, and what was followed by the state, and it was challenged and it was upheld. So don't be misled that this is new law that they're asking you to overturn. They are not. They're asking you to overturn long settled principles. I I would ask you to adjust your focus. And what I mean by that is respectfully, the drafters of this bill are asking you to look at this from the wrongdoer's perspective. They're asking you actually to look at it from the insurance company's perspective. And I would ask you, On behalf of all of the folks I've represented over the years and the people that I live around in South Arkansas and all my family is to look at it from the injured Arkansas worker. Their perspective, the Arkansan that gets up and goes to work every single day. The mill worker, the, the daycare owner, the school nurse, the bank teller, all those folks, the police officer that goes to work every day and in every paycheck, there's a deduction for their health insurance. And they pay it. I pay it every time. They pay it even if they have a car breakdown, they pay it even if the groceries go up. They pay it even if day care costs, expense goes up, or gas rises. They pay the bill. Why do they pay that bill? They pay it. Because they're concerned that they may get sick and need it. They are, in fact, they're betting that that could happen. The insurance company, the health insurance company, mine's Blue Cross Blue Shield. The insurance company is betting that they won't. Get sick. And by the way, as we all know, the health insurance company gets to set that wager. They get to set that price, not you. So keep that in mind and what that what neither of them is betting. Neither the health insurance company or your neighbor. Neither of them is betting on a third party running them over because they were texting and driving. Neither one of them. It's not part of that calculus, that health insurance premium that gets deducted every single time. As you've heard even from those that are promoting this bill, that's part of what in my instance, Blue Cross Blue Shield uses. To bargain for certain prices for medical treatment. And that does typically result in a reduction of the bill at the local doctor or the local hospital. So I would ask you to look at while you're looking at this from the working Arkansan from that perspective, ask yourself who does this help? Who who is so interested in this and why. Is it Is that the National Society of Wrongdoers? Is it the Association of Defendants who text and drive. Of course it's not. Let's just call it what it is. It's an automobile insurance company. It is out of state automobile insurance companies that are asking you for this gift. You know, and and as as Senator Tucker has Wonderfully pointed out, Those are the guys that are making massive profits. They've had, they've had a great run. And you know what, good for them. Have no problem with businesses making profits. have a big problem when they come back. To the trough to get something from an Arkansas worker. Are they doing this because they brought you proof here today. That this is going to lower premiums for Arkansans. This is going to help. It's going to cause X to occur. To, to benefit your neighbor and the people you sit in a pew with at church. Have they done that? Of course they haven't. Have they even said to you, this is going to definitely slow down the increase that we all see in our monthly statements on car insurance. Haven't done that either. And that's because they can't. Haven't shown you that because they can't. It doesn't exist. The states that have done this around us have seen their rates go up. You've heard. They would not tell you that this is going to help. Well then, who is it going to help? If it's not helping your constituents, if it's not helping my neighbor and your neighbor. And who is it helping? I would imagine that a body like this, you guys see, I know tons of paper, tons of bills, tons of things, but I would imagine that you would want that definitive proof. Before you made a change of this magnitude. I hope that you would. For every $1. That a hardworking Arkansan. That their medical bill is reduced. Every dollar that's reduced. From that person that's been paying their bill. The wrongdoer's insurance company is going to get that dollar. That's what this bill does. Surely that is not your intent. This bill is not about with with due respect to Senator Ervin. I know she's very passionate about the medical field. I can understand that. This has nothing to do with that. This has nothing to do with transparency. This has Really nothing to do with small business, frankly. Small businesses need their, their workers at work, not injured. This will not low low, lower, or slow any bills. So there are lots of consequences to this. There's been a lot of dust, in my opinion, a lot of dust thrown in the air, things that aren't related to this and don't have anything to do with what they're asking you to do, and I would ask you, to vote against this bill. I'll be glad to answer any questions. Questions, Senator Johnson first. So I mean in in all the analogies and debate that we've heard and I'm assuming you're a defense or Lawyer, I was, it's even worse. I'm a lawyer for a bank now, so yeah. So, uh, With this reduced, you know, possible medical cost in the in the total. Would that reduce the, uh, the dollar amount that someone who is trying to bring that case and the lawyer. Would that reduce his total award also. the harmed person reduce their award. No, I'm talking about you as a lawyer. If we just Strictly do the cost, you know, that affects the whole total, so will that affect what your recovery is in dollars, yes, because the percentage, the the attorneys generally working on the contingency fee that's a percentage. So yes, if the if the amount recovered is lower, the amount the logger gets is lower, but it does affect, it affects the victim twice as much. I understand, but you're, I mean, there's an interest on, on your part and the insurance part in this whole I don't because I don't even practice privately anymore, but I would tell you that again if if you're interested in in rolling back or trying to affect what attorneys are getting. This is the wrong way to do it because you're going to, you're going to, you're going to affect the harm person twice as much as the attorney. Senator Tucker. You really just said it, but if a case is on a contingency contract. By definition if the attorneys' fees go down, then the amount recovered by the injured person goes down by in most cases twice as much, right. So I'm going to assume that whatever this reduction in medical is is the person's going to get. 66% and the lawyer's going to get 33 or whatever is that pretty accurate, I guess I would, you know, add to that is there's been only because there's been some discussion of this is the whole, the multiplier matter and how cases get worked up and actually settled, and the reason why those get settled as opposed to going to trial, and so that what that actual medical is what that bill is that comes plays a large role in how that how the value that case is determined. Serge Tucker. Just for what it's worth, not for nothing, there are cases on that that where lawyers are paid on an hourly basis as well. Sure, many of those, yeah, and attorneys' fees in those cases will be totally have this bill will have zero impact on attorneys' fees and hourly cases one way or another, correct? Yeah, thanks. But I assume that whatever An insurance company and they're a victim and their lawyer. Settle Everyone assumes is a fair amount. Or they wouldn't have settled. Senator, as fair as they can get, right, so I learned a long time ago about the difficulty of the word fairness, and I heard that up here, um, I wouldn't say it's hard to say that it's fair. It's sometimes just the best result given because when you, when you have that that what what the adjuster has told you, well, this is our best offer. Um, well, then the next thing that happens, if that's not good enough, is, well, we have to file a lawsuit. And then you have to tell your client, listen, I'm going to file this lawsuit today for you or tomorrow, and it's going to be a minimum of a year before we see the inside of a courtroom. So yeah, there's a lot of extraneous factors that go into why people take that. I've got to, I've got to have something now or I need to finish this now. I can't have it because I've had cases last for more than 6 years, but if it goes to trial, yes, then I'm assuming that a jury thought. That what they whatever they came up with was a fair. Amount. Absolutely, but that of course is dependent upon the evidence that's allowed to be presented to them. I know what we're, I know what our issue is. So then, Someone's not coming to you then if they felt like they got a fair offer, correct. Correct. And I mean, so all of that could be eliminated. With a fair offer is assuming that that the much more we're getting is the fair amount. Absolutely yes if if insurance companies did better on the front end, they could help themselves. Tremendously and more more importantly, I'm not here because I'm worried about the insurance company, and I find it interesting that nobody here says that they're for an insurance company, although this bill is for an insurance company. Well, since you're first up against, do you get, you get to answer some questions. Mm Not even to make a profit, just to break even. Uh, I have run a small business most of my adult life, almost all of my adult life. And I've got to make payroll. And benefits. I got to figure out what all that's going to be. I've got to figure out what maintenance is going to be, what rent is going to be, uh, what fuel's going to be equipment's going to be, etc. and then I get to the two for me and I don't think I'm alone, the two most egregious expenses that I have. The first is taxes. Uh, and because, you know, because I never hesitate to think about and maybe other business people do this, but about how hard I'm working. And is it really worth it? To do all of this. And then to pay taxes and to pay insurance. And health care is really the most egregious insurance of all the insurances that I pay, because of the amount, not because of what it does, but because of the amount. So, And like I said, I don't think I'm alone in small businesses and large business too, I'm sure, but small business is saying. Insurance is enough that I don't know if I want to do this. So We've talked about taking care of victims. But low premiums. It is really important when you agree it's important to everybody where I'm from, so low premiums is really important and right now Arkansans. And I'm sure other states are the same, but we deal with Arkansas. Arkansans, when they get their new insurance rates. are screaming Because of the hailstorms, because of the tornadoes, and I've got bad news. With the fires in California. It's gonna get worse. And so is it even a fair argument to say that insurance rates Went up. In these other states because insurance because costs are we can talk about the profits they've made in the past, but, but here recently, I said in the meetings where where the insurance companies told us exactly what they had lost. And if they continue to lose, They can't stay in business. So Is it really a fair argument to say that even though The states that did this. The idea is to get a fair cost over on the people who are paying side. Uh, that they didn't get a better rate when these other factors are at play. Well, I, I think the point trying to be made on that is if I'm understanding your question is the claim is that well all these states around us are doing this. which is not completely accurate because there are, there are differences in what some of them endure in Louisiana, as you heard, actually their governor vetoed theirs. Um, but in, in each of these states, what you would have expected to hear. would have been the result. OK, you took an action that we're now being asked to take that you all are asked to take the government. And you would have expected to have heard, oh, we had a great result from that. And here's the evidence. I mean, you heard, they quoted to you all these other statistics about so-called tort burden costs and some of these other statistics and papers from Maryland and Mississippi and wherever, and I can understand them using those, but when you bear down on the issue when you say show me. Where this has worked to the benefit of an Arkansan or in that case a citizen of that state. They can't show you that, and that should, that should mean something in my book and the people that I'm around. OK. Any other questions from the committee, Senator Stupplefield? Uh, how many, how many attorneys would, do you think yeah victim would have to hire. In order to take care of one of these. Say that again. I'm sorry attorneys would a victim have to hire in order to get around one of these. To get around one of these cases. I'm I'm not sure I'm following the question you're talking about what would an injured person, how many attorneys would they need to hire, right? Well, you'd hope they wouldn't have to hire anybody. But to navigate it they generally do have to hire an attorney. I mean They wouldn't have to hire anybody to get justice. They shouldn't have to hire anyone to get justice. They shouldn't have to, but they do but they will, they will. And they do it on contingency fee because most people are not going to be able to pay, particularly while they're not working. They're not going to be able to pay an attorney to do what they need to do, need to get done, so these days, these days, the attorney's not just dealing with the insurance company. They're dealing also with the health insurance company. They're juggling a lot of those negotiations. So in order to get that justice, there's a possibility they would have to hire numerous lawyers. It's possible, but it depends. It depends on the on the scale of the case or who's who's refusing to do what, but no one, I can assure you, uh, that first of all, no one wants to file a lawsuit that's ever sitting in a chair in my office. And of the people that experienced it, never wanted to experience it again. Not pleasant. Do you know why the governor of Louisiana vetoed that bill because he said it was for, it was just a simple handout to the insurance companies, Mr. Chairman, that's all I have. Other questions from the committee. See none. Uh, thank you, Mr. Boyd. Thank you for your testimony. Mr. Allen. Just, uh, I just want to confirm because you're on the list because you are the you are for, so we'd go to fours after that and you're good, OK? So we're gonna go to uh Beth. Wyatt OK, thanks. Yeah. Could you give me my bottle of water, please out of there, right, OK. Thank you. Ms. Watt, would you state your, make sure your mic is on and state for the record your name, where you're from, and who you represent. Sure, thank you. My name is Elizabeth Wyatt. Call me Beth. I'm sitting up as tall as I can. I'm sorry. Um, I'm from Arkadelphia. OK, uh, you may proceed. Thank you. Thank you for being here. I'm a little bit nervous. I am a retired educator. And I've been sitting here all morning listening, and it's been very interesting. Um But I would like to give you A real scenario, real life. We heard a lot of what ifs. We heard a couple, and I'm sorry about your grandson's Rick. We've heard a couple of people, but I'm, I'm living it right now, so. Let's put this dog and pony show to work. I'm a retired educator working 16 years in Arkadelphia public schools or in Arkansas public schools. I worked 8 years at our um local education cooperative Dawson Co op. I worked one year as a literacy coach at Interamericano in Guatemala City, Guatemala, and my last position was as a professor of reading at Henderson State University. I am now a professor emeritus at Henderson State University. Still have an office. It's kind of nice. On July 5th, 2022. I was in a hit, hit in a head on. Excuse me. I was hit head on. A mile from my home. I was driving on Arkansas Highway 67. The young man Jesus Vasquez Garcia. was a recent graduate of Henderson State University on his way to turn in. He used textbooks. There were no drugs involved. It was 2:30 in the afternoon. Do you, can you bring the mic any closer? Is that good? Yes, I think so. Hm Um, He went Henderson to return his used library books or his used. straight away, no curves. Beautiful day. No texting involved. Was it just a simple accident? He spent a week in the hospital. And now He's at Hendrick. He's going to graduate soon with a master's in business. He was considered an excluded driver. Even though he paid the driving insurance. And I had to fight to get the $25,000 minimum. He also had to pay a fine of $315. It would have been More If I had died. But I was too stubborn. And it was 3:15. And it was that high because I refused to drop. The driving left of center charge. He's now done with this accident. Completely done with it. His journey is over. After the event. I ended up less than 50 ft from a fenced off. Power gas line. I was 50 ft off the road. Hugging a tree. My car was against a tree. I was trapped in my vehicle. While it was on fire. I was screaming at the bystanders. One of whom I'd gone to high school with. And he said he was terrified. Because he was watching his friend die. And I was screaming, please don't let me burn. The obvious injuries. On my loss of both legs. I had 2 amputations. On each leg. So that was 4. Um, they did above knee after the below kne failed. I've second degree and 3rd degree burns from my hairline down to my Where my knees should be. The loss of one eye. I have a TBI which includes two brain bleeds and a concussion. I have limited use of my left arm. Limited use of both hands. I've lost a spleen. I have recently found out that I have 3 chronic illnesses. Imputation. Burn And the loss of a spleen. Because I have to continually monitor. My progress with those three things. I have many internal injuries. I had pneumonia on both lungs twice. I had grafting 3 different times because the first two graphs failed. Fortunately Because I was a teacher in Arkansas. I have very good insurance. The insurance company. It was good and my lawyer of course fought very hard for me. However, I did have to fight to get my $25,000 from Texas Insurance. They are the insurance. That insured Jesus Vasquez Garcia. The truth is, if the insurance company had done the right thing, I wouldn't have needed my fabulous lawyer. I've never sued anyone. I didn't want to sue Jesus. The insurance company If they had done the right thing, I wouldn't have needed to bother with it. This wasn't some greedy lawyer that I hired. He didn't come to me. I came to him. I didn't want somebody who did this. Every day for a living necessarily. I wanted someone who would fight. And he did fight He fought against Texas, a multibillion dollar. Behemoth. Who didn't want to pay me. $25,000. They knew they owed me and all this time. I was fighting for my life. I had the option of continuing a lawsuit to help cover lost wages, much like your bill. is insinuating I will have to do. I had that option. But the Excuse me, but hey sus, best ways Garcia had nothing. He was a student. His mother Cooks on an outdoor. pit in the backyard. And at the time, honestly, I was more interested in Living. You see, when I went to the hospital, I had a blood pressure of 40. That's it. 40. I didn't need the hassle of having to fight another battle. One that I didn't cause. One that I didn't ask for. But one that severely. Changed my life and my family's life and my friends' lives. Like many other Arkansans, I was pretty powerless. Anyway, just having to accept the minimum amount of insurance, the faulty party carried. Again, once I signed over. Signed off on that $25,000. He was done. His journey is over. Mine continued. I was flown to UAMS where I spent 17 days in ICU, and the doctor's notes mentioned imminent demise. More than once. I was then transferred to Children's Hospital for 67 days. In the burn unit After which I moved to Baptist Health and rehabilitation for 14 more days. You see, I spent 67 days in an ICU setting. My bill from the 1st 48 hours was over half a million dollars. And about 1000 pages of doctor's notes. I had 19 surgeries before I went to Baptist rehab. 4 surgeries after rehab. Three sets of prosthetics. A manual wheelchair. An electric wheelchair. A shower bench. A new refrigerator. I had to get a side by side because I couldn't reach it here and I'm getting a new stove. Because the handles are all in the back. Things you don't think about when you're whole. We had to leave our home for an apartment. And I'm in the process of, again, purchasing the new stove. I had to take doors out of my closet so I could get into my closet. We even had to buy a chair. We didn't have to. I mean my husband could have been stronger backed. But as a paramedic, his back is shot. So he had to buy a chair that goes in my car and it turns and comes out and goes down to wheelchair level. So he doesn't have to pick me up to put me in the car. When I can't wear my legs. I tell you all of this not because this bill will impact me today, it won't. And I'm hoping you will understand the outcomes of someone doing the right thing. I worked for over 40 years. As a teacher And loved it. And I loved working at Henderson. Teaching pre-service teachers, how to teach reading. To see them look. At the child's eyes when they're Teaching them to read. For the first time and they're in my class and I'm watching them teach a child and the child's face lights up and their face lights up and my face lights up. I'm not doing it. 40 years of teaching. And following the laws. Except for one speeding ticket. Jesus Vasquez Garcia. Hit me and he had insurance. He was paying for himself, but his dad had him listed. is an excluded driver. He was 21 years of age, I believe, at the time. He had been excluded driver since he was 16. He had no idea that he was an excluded driver. He had gotten tickets. While being an excluded driver. He purchased his vehicle. He had to have proof of insurance. I hope I'm making this more real and understandable for you and for the people who aren't lawyers. When I heard about this bill, I started researching. It's not a new tort we need. It's insurance reform. Legislation doesn't work for this. Not anything that helps insurance companies while making it harder for me. Or you And all of your other constituents. Makes it harder. These battles are not easy to fight. It's an uphill battle. This bill makes it even harder on people who find themselves in horrible situations at no fault of their own. Kind of like me. Any personal injury can be horrendous no matter how it happens. But to have to face trying to get the other party to pay. is insulting and exhausting. That's what this bill is asking me to do. I use my hard earned money in insurance. To pay for my illness. The statute of limitations. On my case was 3 years. It's been 2.15. 10 months of those 2 years were taken up by Texas Insurance, using every kind of sophisticated delay tactic possible to get out of paying what we all knew they owed. It was enough to bring me and my family and my friends to tears. And at times insanity. It truly was adding insult to injury. But my story, my journey is still not done. Jesus is. He's ended 10 months after. Mine's still ongoing. I was in rehab for 2 years. I was not strong enough to have faced a trial. As you can see right now, I'm having trouble facing you all. And this isn't supposed to be stressful. I didn't have time to get a case together. This is exactly the scenario House Bill 1204 is proposing. As a survivor, You see, I'm not a victim. I refuse to be called a victim. I'm a survivor. I can tell you this is a huge problem. I have ongoing expenses and I will have for the rest of my life. They're all due to an incident that I had no control over. This bill punishes victims over and over again by making us go to court, whether it's one lawyer or 14. It's punishment. I promises the law exists now. It is hard enough on victims or survivor. This change truly hurts them even more. As I was listening, The insurance company kept talking about I could get reimbursed. You'll get reimbursed. For all of your expenses. I haven't been reimbursed for anything. 90 days that my husband drove up to Little Rock every single day. He couldn't stay with me. Because it was COVID. Every day he drove to the hospital. sat in the waiting room at UAMS. To find out if I was alive that day or not. Before I even left the hospital, I got a bill. I wasn't even awake to know it. I was lucky enough to have a husband. Someone to To help me You see, I was out for 40 days. If you're familiar with the Bible, 40 is a magic number. was for Noah 41 came. And I don't know why God chose me. But I want to do all I can to help the people. Like me. The Little man. Literally and figuratively. I want to help us, those of us who work hard. Who pay our taxes. Who pay extra for insurance in closing, I would like to thank all of you for listening. I've never been political. Except within our family. Or I've never testified for or against a bill. This is all new to me. And I likely never will again. But I'm here because I want to help you. She passed the lobbyists and the talking points of the real-life results of this legislation. All I heard this morning was That it would benefit doctors. Hospitals. An insurance companies. It would cause me to go to court. Many times over. See, my husband had to retire after this as well. He can't face He can't face being a paramedic anymore. I had to retire because of this. I lost wages. I can't run after my grandchildren. All my granddaughter asked for this year for her birthday was for me to wear my legs so I could run after her. We walked around the yard. See, my journey isn't over. It didn't end 10 months later with that $25,000 check. I'm just now able to get up in the morning and look in the mirror. And not think of Jesus Vasquez Garcia. I pray for him every night. I pray that he is successful and that he has a good life. And I pray that he stays healthy. It wasn't his fault this happened. But he should be the one held accountable. Texas should be the ones held accountable. Not me. Because I don't have, I'm not a billion dollar corporation. I'm a retired teacher who's married to a retired paramedic. Two people in this world, you cannot do without. I hope you remember me. And what I've said, And the real life results. And you'll think about me and the people back home. And your wife, your daughter. Your husband And I hope you trust. We can trust you to do what's right for us. The little people. Thank you. Do you have a question? Questions from the committee. I'm sorry, that was a teacher in me. Miss Wyatt, um. Do you know what your total health care costs have been up till now. close and 3434. Do you know whether that is And I understand if you don't know, do you know whether that is? Uh Retail or what insurance actually paid. That's the bills we've gotten. We, we, we are in charge of. I'm sorry, we're in charge of all of that now. We, yeah, it, it's. That's what we got on the bills, OK, but you but you have health insurance, right? Yes, I have very good health insurance. Yes, and so do you, do you know if that's what they paid or they paid less. I don't know what they paid. No, sir. OK, all right, thank you. Any other questions from the committee, Senator Stubblefield, thank you, Chairman Ma'am, you, you didn't want to sue. You didn't want to buy, hire an attorney. You are, you spent a whole year fighting insurance company for $25,000. That what I. Yes, sir. And part of your premium. Paid went for a discount for the boy that hit you. I have no idea. I don't know. I was not. I thought that was part of the Is that, is that true? I'm looking at my husband because I was Not mentally able to do it. OK. But part of Part of There was a discount paid to the boy that Because, OK, all right, that's all I want to know. Thank you, Chair, and out of the 25,000 you received, you paid your attorney. Yes, and Whatever else we, I mean, it didn't touch the bills, but we paid what we could, what little we could. OK. Any other questions from the committee? Thank you, Ms. Watt, for your testimony. Next we have Denise Haggard. Yes, everybody else is against. So it's just and Allen didn't testify. Everybody's. Let's testify. Miss Watt. What Denise is coming. I appreciate you being here today. I had other victims that contacted me and I asked them to come and they didn't to show us what can happen and how your life is regardless of money, how your life is disrupted and not just disrupted, totally changed, so thank you for being here. Ms. Haggard, would you like to and whether you like to or not, would you please give us your name, where you're from, and who you represent. Thank you. I'm Denise Haggard, and I have had the opportunity to read about your biographies and know you and some of you I know personally. You haven't had that opportunity to know about me. I am a lawyer for 41 years. I've represented both plaintiffs and defendants. I currently am employed at Rainwater Holton Sexton. I'm the past president of the Arkansas Bar Association. I'm also probably unique in this room, a member, former member of the State Bar of Texas Board of Trustees. I am a current licensed Texas lawyer. I have spent my career advocating. Or as my calling to speak for those who can't speak for themselves. So my role has been to speak for Beth, are people injured who don't have the ability to have a lobbying effort or hourly paid lawyers to speak for them, but they need a voice. And it's my responsibility to speak for them. With all my might. And to do that for their best interest, not mine. I want to tell you that when this bill was first filed. I was sitting bedside of my father, who was in the Baptist Spring Hill and kudos for the health care he received there. He was there for a post-surgery heart attack. We were able after several days to get him well enough to take him to the VA where he is now in a rehabilitation hospital and I get the pleasure of sitting with him bedside there. And I was struck when this bill was passed. By how different this would look for my father if he'd been injured by negligence. Which he wasn't. He got great care. He's a 92-year-old Vietnam veteran who served in Korea as well. What this bill would do is if he was injured by someone's negligence. It would mean. That the insurance company representing the wrongdoer would get the benefit of the fact that my father Has Medicare. He has a Medicare supplement. He pays for. He has Tricare, and he has access to the VA. That was because of his sacrifice that was because he put his life at risk for his country. And the benefit of the discount that he may have earned by making prudent prudent decisions and personal sacrifice. But they'd be transferred from him under this bill. As I sat there and looked. At my dad's circumstance and thought about clients. I thought about the average cases that come through. And Senator, rise to your point. An average case that I look at is about $20,000 in medical bills. So what happens in a negotiation now with the insurance company when there's $20,000 worth of medical bills. Well, if you used The multiplier that we heard at House Judiciary of 2.5% or 2.5 times that means that the amount of the value of that claim, Senator Rice, if you'd been hurt by someone either through their intentional or their negligent conduct would be $50,000. If However, you had private health insurance that you paid the freight for. The value of the case. Assuming $6000 was what was actually paid would be $15,000. And so if you had to hire an attorney. For $15,000 recovery. You would get 10,000. which restores you for your 6000, yes, and gives you A $4000. Pain and suffering and other expense recoup. It's all it gives you. And that's assuming that your insurance company paid $6000. If you look at Medicare, Then the likely amount that would have been paid is less, so it would have been 2000 or 1000. Medicaid, Medicare. Those numbers are going to be somewhere in that range. And so if we applied the same multiplier, which is what the insurance industry does. That is not affected by what you do here today, then your recovery. would have been Let's be generous and say 2000 times 2.5. And then you would owe back. The amount that was paid by Medicare on your behalf because subrogation is not a rarity. It is a legal right that Medicare has Medicaid, the VA, federal insurance, health insurance has ERISA employer plans have? Those things all have to be repaid out of what your ultimately able to recoup for a $20,000 case now, 20,000 in medical bills for which 1 or 2 or $6000 are paid. It may in fact be economically infeasible for you to hire a lawyer and go through the additional expense and time to await a fair determination. of your injuries by a jury. That's the reality of the practice. So whenever I was listening to Senator Irvin, who I've worked with on sex trafficking cases and have abundant respect for. She talked about the balance of the scales of justice, and she talked about that ancient symbol, and so I wanted to touch on that a little. If you put injured Arkansans on one side of that scale and the other side of that scale you're trying to balance. The insurance company by this. bill is putting their thumb. On that scale and tilting it more in their favor. Because whether they should or not, they make offers based on the medical expenses and if the medical expenses are discounted by Arkansans hard work and prudence and personal sacrifice. That insurance company is getting the benefit. So I look at that and say, you know, I can see who gets hurt by this bill. I can see Beth. I can see the others injured. Who gets helped? Where's the money go? It goes to the pockets of the insurance company. What do we get in exchange? We don't get anything. They were here today telling you, and they've told House Judiciary. I can't tell you it's going to reduce any Insurance rate at all. In fact, Senator Clark, you were concerned about the high cost of health insurance. This won't have any impact on the cost of health insurance. If anything in a macroeconomic setting, it might, they say, impact the overall cost of milk. It's not going to change the insurance rates. Now how did those insurance rates That are going to ultimately pay the bill for injuries. Gets set. There's not a standardized medical expense list that I can go to to tell you this is what an MRI ought to cost. But I can tell you that nationwide and by region and by state. Insurance companies calculate that because they set premiums that will result in them being profitable. It's the only way you get to an $88 billion profitable industry is if you properly rate. What it cost, so they have already calculated and baked into their rate. That 100% of what medical charges are because that's what is real and consistent. It's going to vary. About whether or not you've been prudent and whether or not you have benevolence extended to you. But the insurance company has considered it and factored it in at 100%. So out of that $20,000 medical expense. And we only paid 6. The 14,000 just went back into the insurance company's pocket, and they've already been paid the premium for it. They get a benefit I also listened about the timing on when this became the law that we could put in the full amount and um Mr. Allen talked about the Montgomery Ward case, and I think Senator Irving did as well, and I want to talk about the Montgomery Ward case, but also a little bit history before that. Because in fact this does start before that. This is a common law concept collateral source. It means that no one in setting the damages as a juror should consider what's available to pay those damages, whether it's the insurance company of the defendant or the health insurance that paid for the medical expenses. The collateral source rule says the jury's got to be kept in the dark about that. They don't get to know. And it is true that this bill won't change that the jury would get to know about insurance because I can tell you insurance companies do not want you to know as a juror that there's insurance available to pay the bill. The insurance company protects that information. What's going to happen is that the jury's going to see the number. Of just what was discounted. And that's what they're going to think is the seriousness of the injury. So if You got injured. Significantly, but your bills are almost nothing. Then the jury is going to be left with that impression. That you have a small injury. For which there is not much damage. So the Montgomery Ward case 1998, yes, I want to tell you what the court said in that case, because you haven't heard that. The court said if there is any windfall. And I've heard Mr. Allen talk about that windfall. It belongs to the credit of the injured person and not to the benefit of the wrongdoer. That's the policy behind the collateral source and behind the decision that was made in Montgomery Ward. We are reversing with this bill, the result that says wrongdoers should not get a benefit, and we're giving it to them. Now this doesn't just apply to car wreck. cases, it also applies to those types of cases where others are injured by criminal action or by negligence outside of a vehicle, a car vehicle wreck. One of those things that comes to mind is y'all passed a civil felony rule, so I can sue folks when they commit a rape or a violent crime, I can go get those damages and make my clients whole. Sex trafficking is the same way, and I share Senator Irvin's passion about those cases. I tried. I was on the trial team that tried the very first sex trafficking case in Arkansas to a jury, and I can tell you that there's a twofold purpose to the remedy of torts and the first one is to make the victim whole, the survivor whole, pay them back for what they were hurt. But there's also a deterrent effect. That the wrongdoer gets no benefit that he's held to full accountability and that others who see what happened, no to change their behaviors. Reducing the overall recovery for injury victims and sex trafficking survivors. Herts our ability to affect the deterrence that the law seeks to impose. We lose that. These are significant losses from the bill. That aren't talked about. I want to talk just briefly about Texas since I'm a Texas lawyer, I know that the impact of the bill that they passed is the most similar to the one being proposed here today and what it has caused is that there are more lawsuits. There are more trials. There are more expenses borne by the injured person. You heard about the life care plan. I just wrote a check for a life care plan that costs $22,000. I can't recover that $22,000 from my client. I don't get to list that as one of the costs, but it's the reality of what happens when this bill is passed. Injured people have to wait longer. They have to pay more and they get less and in exchange, you don't get what you hope for, which are lower rates. If we're going to change a bedrock or an ancient symbol or an ancient rule in law. Shouldn't we know by study, by data. By information that we can look at and trust that it'll make an impact in this case, we are giving up. Without getting thing in return, and it's going to hurt the injured person. It also hurts our ability to bargain with insurance companies. They don't come to the table because they want to pay me a lot of money. They want to try to find out how not to pay, Ms. Haggard. I hate to interrupt, but I need to recognize Senator Rice. Yes sir, Mr. Chair, I'm trying to be patient. We With the test, I think you said one more, we have to testify. I hate to cut them short, but we're we're abusing time a little bit, uh, we're gonna have to have time to vote and get into session at 1:30, so I would just ask the presenter to wrap up if possible. Yes, I will. Thank you. This is a Goliath and David's situation. In this case, the injured folks are David. We have very few tools to fight back against a behemoth. Insurance industry, and this takes away a tool that is important to us in being able to negotiate and get fair results for our clients without making them all go through a jury trial and spend the years and the money to do so. Thank you so much for your time, senators. Any questions from the committee? Miss Haggard, it is your opinion that the Texas law has hurt victims. Yes sir, a substantially. All right. Any other questions? Harry Nunn, thank you for your testimony. Courtney. Tell me how to pronounce the last name. Roll rolled in. That's what I would've guessed. Would you please, uh, Recognize yourself, uh. Your name where you're from and who you represent. My name is Courtney Roldan. I'm from Cabot and I represent myself and my kids. OK, you may proceed. I'm here today not as a lobbyist or someone with special interests, but as a parent and in Arkansan who believes in fairness that we've talked about. HB 1204 is a dangerous bill that protects those who cause harm while even innocent people like you and me and our families to pay the price. Right now if someone is injured due to negligence, they can hold the responsible party accountable. This bill changes that, letting businesses and individuals use your insurance against you to reduce what they owe. This bill allows a reckless driver a negligent nursing home, or an unsafe daycare to get off easy because you had insurance. That's not justice, that's a loophole. I won't claim to be an expert on tort reform, insurance, or lawsuits. I'm just a mom who stays home with two Um, so I don't know how many questions I can answer, but um just sitting here in this room, a couple of things have been made clear. One is that this bill is not representative of the people that you're elected to represent. This is for hospitals and insurance companies, and it may be the insurance company's billing practices or the hospital's billing practices that need the reform probably um. There's no doubt that HB 1204 puts profits over people, so I ask you please to vote no, and I know it's been asked about Texas and someone that's watching at home did send me this and it says that um the bill was passed in 2003 and between 2003 and 2004, health insurance premiums increased by 11.2% in Dallas homeowner's insurance premiums increased by 460% in the 10 years since they've passed this. Um, And also in Texas, the homeowners that premiums have increased by 50 or 54.5% over the last five years. So that's the answer on if the it's been affected by this bill, so thank you for allowing me to speak. Thank you. Any questions from the committee? Mr. Roldan, thank you for being here. Uh. That is the last of our witnesses. Mhm So the sponsors would like to return to the table. Are there any further questions from the committee for the sponsors before they close. See none, you, uh, Central urban Representative Eubanks y'all recognized or close for your bill. Thank you, Mr. Chair. Since you said that we get points for brevity. I'll be brief. OK, I hope I get points. Ms. Haggard actually said it very succinctly. Data and information that we can look at and we can trust is important. That's what the bill's about. It's about data and information that we can look at, verify, and trust. It's a receipt of what was paid. Which should be actual damages and then what is recovered. Again, I just go back to the simple principle of fairness and balance. Let's start there. And I would again say that all those other categories. are preserved as they should be. The bill simply, simply looks at actual damages. Actual medical damages that were incurred paid. The data and the information that we can trust is what's written and what actually was exchanged monetarily. That's what should be recovered under this one category. For damages. And with that, Mr. Chair, I want to thank you for your time. I want to thank the members of this committee for their time. I also want to thank all the people that testified. For and against this bill. It's been a long day, and I just asked for a good vote. Thank you. What are the wishes of the committee? Motion The pass motion by Senator Johnson, second by Senator Gilmore. Any discussion? Senator Tucker. Thank you, Mr. Chair. I took a lot of time. I'll be brief. Just a couple quick points. First point is if this bill passes, costs are not going down. It doesn't even pretend to address health care costs. Health insurance carriers are not going to pay less. This bill doesn't address that. The only even theory where costs might go down is on liability insurance carriers, and as I mentioned over the last 5 years in Arkansas, private passenger auto, they've collected $3.5 billion in profit, not in premiums, in profit, and then commercial auto. It's another. 900 million, 4.5 billion in Arkansas alone over the last 5 years were basically and the benefits to the people of Arkansas that they're talking about are only through these insurance costs if you're talking about the macro level, and if this bill passes, we're basically counting on the insurance carriers to operate like Ebenezer Scrooge after he sees the ghost of Christmas future. I mean, that's what we're counting on. That's what we're hoping for if this bill passes. I don't think it's realistic. Either that costs will go down or that they won't be raised by as much. I mean, think about who we're dealing with here. The second point is, I think it's glossed over. It's been made, but we're dealing with people who have done wrong. If they haven't done wrong, This bill does not affect paying someone else's health care coverage does not affect them in any way, and this bill, you can argue that the scales are in balance now, but unquestionably it changes away from people who have been injured through no fault of their own in favor of the people who injured them, and ultimately to the people who injured insurance carriers. That's, that's what the bill does, functionally. Now you can argue there's a good reason for that, and that's what the sponsors do, but that's what it does. And then the third and Final point is It's really a question of, you know, who do we represent. Is, is the real question for me. I don't begrudge Mr. Allen for coming to advocate for this bill. He's doing a job and he's good at it. He's very good at it. I like Mr. Allen a lot, but at the end of the day it's up to us to determine whether the people he's working for, whoever that that might be, they get the benefit of the laws that we pass or other people who don't have a, you know, a lobbyist here to advocate for them, and on the one hand you've got the liability insurance carriers, and on the other hand you have Beth Wyatt and people like her who live in every single one of our districts. So at the end of the day, the buck stops with us as to who the winners and losers of bills are, and for me it's going to be Beth Wyatt, so I'll be voting against. Anyone else? Uh, centuries. Thank you, Mr. Chair. I, I appreciate the discussion. This was healthy for me this, this is To me, I think when I'm listening. To both sides of this bill for and against. It was healthy for me to contemplate today and through the last week really and Uh Trying to put into words my my feeling or or the The description here and I think this, this bill, I mean, it's, it's 4 sentences long, and it describes how to think about the medical damages. And to me that seems pretty clear. I know that there's lots of conversations around it, making sure that it doesn't do some unintended consequences, um, but I think there's a larger debate that needs to be had around the multipliers and the the way we come to our decisions in the court system that have nothing to do with actually what this bill does, and I think we do need to address those at another time, but I think this highlights that there probably has been an issue. There's been an issue and I don't think calling it lazy is the right way to describe it, but there's just been a history tradition of how we come up with the damages and the The pain and suffering formulas, and I think that's, that's what we've been, that's been kind of the the air around this bill, but not necessarily about the bill itself, and so in a 4 sentence bill that's gotten a lot of discussion. I have no issues with with insurance companies making a profit. I think they should. And in fact, the ways that they don't make profits is because there's more accidents that they're paying out. We don't want them to be hurt in the profits. That means more accidents happening. In a lot of ways. And so to call that out as an issue, I, I stand against just like I would stand against, I don't think there's an issue with with lawyers providing great service to make profits as well, and so I think those are kind of mute, but what I find struggle with is the scare tactics that have been done about what this bill would do. And so after hearing all those things, I'm actually encouraged to understand that this is actually a pretty limited bill in the four sentences that it does, and it talks very clearly about damages only around build versus paid medical damages, and so I actually felt much better about the limiting scope of this bill, and I appreciate the discussion today. Thank you, Mr. Chair. Other discussion, Senator Johnson, you know, I learned something every time I said at this table or that chair and and uh You know, through this thing. It's not just, you know, this process, but I wish, I mean, truth and transparency and medical billing is is something that's hadn't been discussed and, you know, if, if you charge me $1 then that's what should be paid and not have to try to cover what, you know, what is needed by the physician or any other medical provider by uh by having, having to increase your bill to get covered what's needed and uh you know, that's that's totally not part of this, but I think it would solve, I mean this discrepancy that we're trying to fix is in this, in this deal, and I appreciate everybody that came, and I appreciate the discussion. Thank you, Mr. Chair. Other discussion? See none. We're going to vote. I'm not going to ask, I'm not asking you to vote extra loud. But I don't like to put my thumb on the scale, so I'm going to try to call it exactly as I hear it, so please vote loud enough that I can hear you, right? All those we have a motion of due pass on Bill House Bill 1204, all those in favor say aye. All those against. And the bill passes. Congratulations. Thank you, Mr. Chair. Thank you, members of the committee. I appreciate y'all. I know you'll eat at some point, but do without lunch, uh, I, we have some bills on the list, but I don't see any reason that we need to meet Monday, so we'll see you back here at 10 o'clock Wednesday next week. out