SENATE BILL 321
51st legislature - STATE OF NEW MEXICO - second session, 2014
INTRODUCED BY
Howie C. Morales
AN ACT
RELATING TO TORTS; ESTABLISHING A CLAIMS RESOLUTION FRAMEWORK TO SETTLE AND COMPROMISE CERTAIN CLAIMS MADE BY ELIGIBLE CLAIMANTS FOR ALLEGED VIOLATIONS OF RIGHTS, PRIVILEGES OR IMMUNITIES SECURED BY THE CONSTITUTION AND LAWS OF THE UNITED STATES OR THE CONSTITUTION AND LAWS OF NEW MEXICO AGAINST THE STATE AND PUBLIC EMPLOYEES ARISING OUT OF THE 2013 AUDIT OF FIFTEEN BEHAVIORAL HEALTH PROVIDERS; PROVIDING PENALTIES; WAIVING IMMUNITY; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Behavioral Health Provider Compensation Act".
SECTION 2. [NEW MATERIAL] PURPOSE.--The purpose of the Behavioral Health Provider Compensation Act is to cost- effectively, expeditiously and globally resolve claims of alleged violations of rights, privileges or immunities secured by the constitution and laws of the United States or the constitution and laws of New Mexico brought by eligible claimants against the state and public employees arising out of the 2013 audit of fifteen behavioral health providers.
SECTION 3. [NEW MATERIAL] DEFINITIONS.--As used in the Behavioral Health Provider Compensation Act:
A. "audit" means the 2013 audit of claims submitted for payment by fifteen behavioral health providers that resulted in the June 24, 2013 suspension of payments, based upon a determination of credible allegation of fraud as to each such provider by the human services department and the subsequent referral of such providers by the human services department to the office of the attorney general for investigation. "Audit" includes the events leading up to the audit and subsequent actions taken or statements made by public employees after the referral that are alleged to have proximately caused loss or injury to a claimant through June 24, 2014;
B. "claim" means a demand for compensation from the state;
C. "claimant" means a person filing a claim;
D. "collateral source compensation" means the proceeds of:
(1) any health or commercial insurance; or
(2) a compromise and settlement of claims for damages or injuries allegedly suffered as a result of the audit other than a compromise and settlement under the Behavioral Health Provider Compensation Act;
E. "economic loss" does not include suspended payments due and owing to a behavioral health provider pursuant to contract but means any pecuniary loss allegedly suffered as a result of alleged violations of the constitutional rights of eligible claimants by public employees arising out of the audit, including:
(1) the loss of past or future earnings or other benefits related to employment;
(2) the loss of past or future business or employment opportunities;
(3) damages related to the forced sale and liquidation of assets;
(4) damage to creditworthiness;
(5) loss of savings and retirement funds;
(6) out-of-pocket expenses;
(7) interest and penalties;
(8) loss of business goodwill;
(9) legal and accounting fees;
(10) uninsured business losses;
(11) losses due to business interruption;
(12) expenses of relocation, storage or moving;
(13) increased insurance expense; and
(14) other expenses, indebtedness or pecuniary losses;
F. "eligible claimant" means a person determined to be eligible for compensation;
G. "fifteen behavioral health providers" means the behavioral health providers that were the subject of the audit:
(1) border area mental health services, incorporated;
(2) counseling associates, incorporated;
(3) the counseling center, incorporated; (4) Easter seals el Mirador;
(5) families and youth, incorporated;
(6) Hogares, incorporated;
(7) partners in wellness, incorporated; (8) pathways, incorporated;
(9) Presbyterian medical services, incorporated;
(10) service organization for youth, incorporated;
(11) southern New Mexico human development, incorporated;
(12) southwest counseling center, incorporated;
(13) teambuilders counseling services, incorporated;
(14) Valencia counseling services, incorporated; and
(15) youth development, incorporated;
H. "noneconomic loss" means injury, such as physical and emotional pain, suffering, inconvenience, mental anguish, injury to reputation, loss of consortium and all other nonpecuniary losses;
I. "notice" means written notice of a compensable claim or injury related to the audit in accordance with the requirements of the Tort Claims Act;
J. "proximately caused" means an act or omission that contributed to bringing about a harm or injury that would not have occurred in the absence of such an act or omission;
K. "public employee" means an officer or employee of the state, excluding independent contractors, and including elected or appointed officials;
L. "settling eligible claimant" means an eligible claimant that has agreed to settle and compromise its claim and that has executed a required release of claim and such other documents as required by the attorney general to consummate a settlement of its claim; and
M. "special master" means a licensed attorney experienced in litigation and in the management and resolution of mass claims.
SECTION 4. [NEW MATERIAL] ELIGIBILITY FOR COMPENSATION.--
A. A claimant is eligible for compensation under the Behavioral Health Provider Compensation Act if the claimant:
(1) was an independent contractor, employee, officer, director, owner, partner or shareholder of any of the fifteen behavioral health providers at any time during the twelve months preceding June 24, 2013;
(2) suffered economic or noneconomic losses proximately caused by an act or omission of a public employee acting in the course and scope of employment arising out of the audit;
(3) gave notice as required by the Tort Claims Act on or before January 1, 2014;
(4) has not previously settled or compromised or received compensation for the matters included in the claimant's claim against the state and for which the claimant seeks compensation; and
(5) or the behavioral health provider of which the claimant was an independent contractor, employee, officer, director, owner, partner or shareholder has not been charged with civil or criminal fraud arising out of the audit as of the date when the claimant finally compromises and settles the claimant's claims against the state.
B. A party to a civil action in any state or federal court against the state or its public employees for damages, excluding amounts due and owing for suspended payments, sustained as a result of the audit shall not submit a claim for compensation under the Behavioral Health Provider Compensation Act.
C. In the case of a decedent who qualifies as an eligible claimant, the personal representative of the decedent may file a claim on behalf of the decedent.
SECTION 5. [NEW MATERIAL] DUTIES AND RESPONSIBILITIES OF THE ATTORNEY GENERAL AND THE RISK MANAGEMENT DIVISION OF THE GENERAL SERVICES DEPARTMENT.--
A. By August 1, 2014, the attorney general shall, through competitive procurement, contract for a special master to:
(1) determine the eligibility of claimants;
(2) review and evaluate claims;
(3) make a determination regarding compensation to be paid or denied to each claimant; and
(4) administer the process of consummating a global settlement with settling eligible claimants, including the:
(a) execution of releases of claims and such other documents as required by the attorney general; and
(b) the tender of state warrants to settling eligible claimants.
B. The attorney general shall:
(1) promulgate all procedural and substantive rules for the settlement and compromise of claims in accordance with the requirements of the Behavioral Health Provider Compensation Act;
(2) employ and supervise administrative personnel to assist the special master in the performance of the special master's duties;
(3) pay such sums as may be necessary for administrative and support costs for the special master in carrying out the special master's duties;
(4) approve and authorize periodic payment to the special master;
(5) prepare releases and other settlement documentation as the attorney general deems necessary that reflect the determination of the special master regarding the amount of compensation due each eligible claimant and the terms and conditions of compromise and settlement as set forth in the Behavioral Health Provider Compensation Act; and
(6) within ten days of receipt of the special master's report, approve payment and authorize the risk management division of the general services department to pay each settling eligible claimant through the special master.
C. Costs of the special master and administrative personnel to assist the special master in the performance of the special master's duties shall be recouped from the human services department pursuant to Section 8-5-4 NMSA 1978.
D. Within thirty days of receipt of authorization from the attorney general to pay claims under the Behavioral Health Provider Compensation Act and copies of executed releases of settling eligible claimants from the special master, the risk management division of the general services department shall pay each settling eligible claimant through the special master.
E. No discovery of any eligible claimant related to the audit shall be conducted by the state, or of the state by any eligible claimant, during the pendency of proceedings under the Behavioral Health Provider Compensation Act.
SECTION 6. [NEW MATERIAL] POWERS AND DUTIES OF SPECIAL MASTER.--
A. The special master shall regulate all proceedings before the special master and do all acts and take all measures necessary and proper for the efficient performance of the special master's duties in accordance with the Behavioral Health Provider Compensation Act. The special master may require the production of evidence relating to:
(1) claimant eligibility for compensation from the public liability fund; and
(2) damages and injury claimed by an eligible claimant.
B. The special master may rule upon the authenticity and weight of the evidence and has the authority to place witnesses under oath and may examine them under oath.
C. The special master shall prepare a written global report on:
(1) the special master's determination of each claimant's eligibility for compensation;
(2) the special master's determination of the amount of compensation due each eligible claimant and indicate any adjustment made pursuant to Section 9 of the Behavioral Health Provider Compensation Act; and
(3) the aggregate amount of compensation due eligible claimants pursuant to the special master's determinations.
D. The report required by Subsection C of this section shall be presented to the attorney general, the risk management division of the general services department, the legislative finance committee and the interim legislative health and human services committee on or before August 1, 2015.
E. The special master shall be responsible for ensuring proper execution of releases and such other documents as required by the attorney general by each settling eligible claimant before any tender of payment and shall be responsible for the distribution of state warrants to all settling eligible claimants.
F. The special master shall provide two copies of each set of executed releases and such other documents as required by the attorney general for each settling eligible claimant to the attorney general and the risk management division of the general services department not later than September 1, 2015.
SECTION 7. [NEW MATERIAL] REQUIRED CLAIM FORM.--
A. The special master shall:
(1) develop a claim form that a claimant shall use when submitting a claim for compensation under the Behavioral Health Provider Compensation Act; and
(2) ensure that the claim form and any supporting documentation can be filed electronically, at the election of the claimant.
B. The claim form shall contain a request for:
(1) a true and correct copy of the claimant's notice of compensable claim or injury under the Tort Claims Act, served on or before January 1, 2014;
(2) a detailed sworn statement from the claimant describing the harm that the claimant alleges to have suffered as a result of the audit;
(3) a detailed sworn statement and documentation from the claimant to support or substantiate economic or noneconomic damages allegedly suffered as a result of the audit;
(4) a sworn statement regarding whether the claimant has received or is entitled to receive compensation from collateral sources for economic or noneconomic damages for which the claimant seeks compensation;
(5) a sworn statement from the claimant averring that it has not previously settled or compromised its claim against the state for which it seeks compensation under the Behavioral Health Provider Compensation Act; and
(6) a sworn statement from the claimant that neither the claimant nor the behavioral health provider of which the claimant was an independent contractor, employee, officer, director, owner, partner or shareholder has been charged with civil or criminal fraud arising out of the audit as of the date of service of its claim upon the attorney general.
C. The special master and administrative staff or hearing officers assisting the special master shall:
(1) keep claim forms and supporting documentation submitted by a claimant to effectuate a compromise and settlement of a disputed claim under the Behavioral Health Provider Compensation Act confidential; and
(2) not disclose such documents or the contents of such documents to third parties, including the state, in the absence of a court order.
D. Any person who reveals records protected pursuant to Subsection C of this section to another person in violation of this section is guilty of a misdemeanor and shall, upon conviction, be fined not more than one thousand dollars ($1,000). The state shall not employ any person so convicted for a period of five years after the date of conviction.
SECTION 8. [NEW MATERIAL] REQUIREMENTS OF CLAIMANTS.--
A. A claimant shall file a claim for compensation under the Behavioral Health Provider Compensation Act with the special master by serving a copy of the claim form developed by the special master upon the attorney general.
B. A claim for compensation shall be served upon the attorney general by September 1, 2014.
C. A claimant shall be required to submit all sworn statements and information required by the claim form. Failure to provide all required information shall be grounds for the special master to deny a claim in whole or in part.
D. Not more than one claim may be filed by a claimant.
E. Upon submission of a claim for compensation, a claimant waives the right to file a civil action in any federal or state court against the state or public employees for damages, excluding amounts due and owing for suspended payments, sustained as a result of the audit; provided that a claimant may withdraw its submission of claim at any time, whereupon limitations shall no longer be tolled.
F. As a condition precedent to settlement, an eligible claimant shall execute a release of claims and such other documents as required by the attorney general by the deadline established by the special master to effectuate a global resolution of claims of all settling eligible claimants.
SECTION 9. [NEW MATERIAL] REVIEW AND DETERMINATION BY SPECIAL MASTER.--
A. The special master shall review a claim and determine:
(1) whether the claimant is an eligible claimant pursuant to Section 4 of the Behavioral Health Provider Compensation Act; and
(2) with respect to each claimant determined to be an eligible claimant:
(a) the extent of harm arising from the audit suffered by the eligible claimant, including economic and noneconomic losses; and
(b) the amount of compensation to which the eligible claimant is entitled, based upon the harm to the eligible claimant, the facts of the claim and the individual circumstances of the eligible claimant.
B. The special master shall determine, based upon the greater weight of evidence, whether each of the various economic and noneconomic losses for which the eligible claimant seeks compensation were proximately caused by an act or omission of a public employee acting in the course and scope of employment.
C. As to the eligible claimant, the special master shall not consider fault or any other theory of liability in its determination regarding the amount of an eligible claimant's compensation.
D. In making the determination regarding compensation, the special master shall not include:
(1) amounts for punitive damages;
(2) amounts due and owing to a behavioral health provider from the state pursuant to contract as a result of suspended payments; or
(3) prejudgment interest on the compensation awarded by the special master.
E. The special master shall reduce the amount of compensation by the amount of collateral source compensation the eligible claimant has received or is entitled to receive as a result of the audit.
F. No later than January 1, 2015, the special master shall notify each claimant in writing of the special master's determination regarding eligibility for compensation.
G. No later than July 1, 2015, the special master shall complete the special master's review of all claims of eligible claimants and shall have made a determination as to each eligible claimant's compensable damages.
H. The special master's determination regarding eligibility for compensation and each eligible claimant's compensable damages shall be final and not subject to revision by any state agency or to judicial review.
SECTION 10. [NEW MATERIAL] MAXIMUM LIABILITY.--
A. Unless limited by Subsection B of this section, compensation awarded to an eligible claimant for its claim against the state or a public employee as provided in the Behavioral Health Provider Compensation Act shall not exceed:
(1) two hundred thousand dollars ($200,000) for damage to or destruction of real property;
(2) three hundred thousand dollars ($300,000) for all past and future medical and medically related expenses; and
(3) four hundred thousand dollars ($400,000) per claim for all damages other than damages specified in Paragraphs (1) and (2) of this subsection.
B. The total liability for each claim pursuant to Paragraphs (1) and (3) of Subsection A of this section shall not exceed seven hundred fifty thousand dollars ($750,000).
SECTION 11. [NEW MATERIAL] RIGHTS OF CLAIMANTS.--A claimant shall have the right to:
A. be represented by an attorney;
B. present evidence, including the presentation of witnesses and documents, subject to the authority granted to the special master to regulate all proceedings before the special master and the deadlines set forth in the act to effectuate a timely and global resolution of claims of all settling eligible claimants;
C. withdraw the claimant's claim submission from consideration for compensation at any time; and
D. refuse to compromise and settle its claim.
SECTION 12. [NEW MATERIAL] TOLLING.--
A. The filing of a claim for compensation by an eligible claimant pursuant to the Behavioral Health Provider Compensation Act shall toll the limitations period for claims made against the state or a public employee pursuant to the Tort Claims Act for alleged violations of constitutional rights.
B. Tolling of limitations shall cease upon:
(1) a claimant's receipt of notification from the special master that the claimant is not eligible for compensation as provided in the Behavioral Health Provider Compensation Act;
(2) a claimant's or eligible claimant's withdrawal of its claim submission from consideration for compensation; or
(3) an eligible claimant's refusal to compromise and settle its claim for the compensation as determined by the special master in accordance with Sections 9 and 10 of the Behavioral Health Provider Compensation Act and in accordance with the deadline set by the special master to globally resolve all claims.
SECTION 13. [NEW MATERIAL] CLAIMS--EXCEPTIONS.--Claims compromised and settled pursuant to the Behavioral Health Provider Compensation Act shall not include:
A. claims against contractors hired by the state or against subcontractors of contractors hired by the state related to the audit; or
B. claims for amounts due and owing to any of the fifteen behavioral health providers pursuant to contract as a result of the human services department's suspension of payments for services rendered to medicaid recipients or to other behavioral health consumers.
SECTION 14. [NEW MATERIAL] SPECIFIC WAIVER OF IMMUNITY.-- The state waives its defense of sovereign immunity in connection with any claims made pursuant to the Behavioral Health Provider Compensation Act. This is a limited waiver and does not waive the state's immunity from suit or liability for any other purpose.
SECTION 15. APPROPRIATION.--Four hundred thousand dollars ($400,000) is appropriated from the general fund to the office of the attorney general for expenditure in fiscal year 2015 to hire a special master and support staff and to pay other expenses of the special master under the provisions of the Behavioral Health Provider Compensation Act. Any unexpended or unencumbered balance remaining at the end of fiscal year 2015 shall revert to the general fund.
SECTION 16. DELAYED REPEAL.--This act is repealed effective January 1, 2016.
SECTION 17. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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