Note: This article is an update to the article which appeared in the February newsletter regarding Arizona Legislative Actions 2018.

The 53^rd Arizona Legislature began its Second Regular Session on January 8, 2017, and within the first two weeks saw an introduction of more than 700 bills. This has been a busy legislative session. Indeed, as of February 9, 2018, more than 900 bills had yet to clear their first committee. The proposed bills covered subjects ranging from, in relevant part, vehicle liability insurance, obtaining medical records, judgment renewal, construction contracts, and confidentiality agreements involving sexual assault and harassment claims.

Vehicle Liability Insurance

For the second time, a bill has been introduced to the 53^rd Arizona Legislature raising the minimum limits for motor vehicle insurance policies. If approved, the bill would go into place after June 1, 2019. It would increase the minimum liability limits from $15,000/$30,000 to $25,000/$50,000.

A similar bill was introduced last session, but it failed because it did not receive a hearing. This session, a new lobbying team consisting of a coalition of plaintiff’s personal injury lawyers is pushing the bill. The bill was approved by the Senate Transportation and Technology Committee. It now goes in front of the Senate Rules Committee for approval.

Medical Records

Ciox Health, through its lobbyist, requested State Representative Heather Carter to introduce a bill establishing a fee schedule for searching, retrieving, and reproducing medical and billing records to third parties. As it stands today, under A.R.S. § 12-2295, a health care provider may charge a reasonable fee for the production of requested medical and payment records. Pursuant to the proposed bill, if approved, a fee schedule would go into place. The proposed fees were discussed by Ciox Health’s lobbyist and lobbyists for the Arizona Trial Lawyers and plaintiff’s personal injury attorneys. The proposed fees are as follows:

• $1.10 per page for the first 50 pages
• $0.80 per page for 51 to 100 pages
• $0.60 per page for more than 101 pages
• $300.00 for records kept and delivered in electronic format
• $1.75 per page for microfilm and microfiche format
• $50.00 for x-rays, files, etc., delivered by CD or DVD
• $10.00 per image for x-rays, films, etc.
• $30.00 for search and retrieval charge per search
• $15.00 certification charge
• $15.00 charge for certification no records exist

The proposed fees will significantly increase the cost in defending a claim. The reproduction cost of the medical records could potentially more than double the current costs. Also, the lack of clarification regarding the $300.00 charge for the production of records kept in electronic format might allow medical providers to charge $300.00 as a license charge any time electronic records are reproduced. There is also potential confusion whether the proposed bill would preempt other state laws and regulations which set limits on reproduction costs, such as limits established by the Industrial Commissions. These concerns were relayed to the lobbyist working on the specific bill.

The bill was assigned to the House Judiciary and Public Safety Committee and was awaiting a hearing. After learning of the concerns, it was determined the proposed bill would not be advancing further in the legislative sessions. The bill’s proponents intend to convene a stakeholder meetings after the legislative session to work through the concerns.

Judgment Renewal

Currently, a judgment expires after five years. A bill has been introduced to extend the judgment renewal deadline from five years to 10 years. The bill has the backing of the Arizona Creditors Bar Association and plaintiff’s personal injury attorneys. The House Judiciary and Public Safety Committee approved the bill. It is currently awaiting further action in the House.

Construction Contracts Indemnity of Contracting Agent

The proposed bill would only allow the contracting agent to be indemnified for the contractor’s negligence. Current Arizona law allows the contracting agent to require the contractor or subcontractor to indemnify the contracting agent for negligence so along as the contracting agent was not solely negligent. The proposed bill has the support of subcontractors, and it is opposed by homebuilders.

During the Senate Judiciary Committee hearing, an amendment was adopted which limits the bill to residential construction contracts only. The Senate Judiciary Committee approved the amended bill. While some reservation was expressed by Committee members in approving the bill, they affirmed the bill to keep it alive in the legislative process.

Confidentiality Agreements Involving Sexual Assault and Harassment Claims

A bill has been proposed which would make certain confidentiality agreements involving sexual assault and harassment claims void and unenforceable.  Specifically, if a confidentiality agreement restricts the disclosure of factual information which is against the state’s public safety and policy, the agreement would be considered void and unenforceable. The bill would prohibit an individual from entering a confidentiality agreement if the factual information is related to an allegation or attempted sexual harassment by an elected official.  The House Judiciary and Public Safety Committee approved the bill. It now awaits action in the House.

We will continue to monitor these bills and any new bills introduced relevant to the insurance defense industry. Should you have any questions or like to discuss, do not hesitate to contact our office. We will be happy to speak with you.

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