[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 144 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 144
To reform the health care system by restoring the full tax
deductibility of medical expenses; eliminating incentives for abusive
litigation against hospitals, doctors, nurses, and health care
providers; abolishing noneconomic damages in medical care liability
actions; and redirecting punitive damages to community hospitals that
care for the indigent.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 5, 1993
Mr. Cox introduced the following bill; which was referred jointly to
the Committees on Ways and Means, the Judiciary, and Energy and
Commerce
June 2, 1993
Additional sponsors: Mr. Rohrabacher, Mr. Baker of Louisiana, Mr.
Doolittle, Mr. Gallegly, Mr. Dornan, Mr. Cunningham, Mr. Hancock, Mr.
Blute, Mr. Armey, Mr. Herger, Mr. Zimmer, and Mr. DeLay
_______________________________________________________________________
A BILL
To reform the health care system by restoring the full tax
deductibility of medical expenses; eliminating incentives for abusive
litigation against hospitals, doctors, nurses, and health care
providers; abolishing noneconomic damages in medical care liability
actions; and redirecting punitive damages to community hospitals that
care for the indigent.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Health Care Cost Containment Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) The intolerably high number of Americans without
adequate health insurance has resulted in major part from the
high cost of health insurance premiums.
(2) By eliminating the full tax deductibility of most
medical expenses, the Federal Government has effectively
increased the cost of health insurance. This same misguided
policy has increased the cost of regular maintenance of one's
own health through regular physician visits. This policy of the
Federal Government, therefore, has both discouraged the
purchase of health insurance and exposed taxpayers to greater
expense because individuals are more likely to develop chronic
illnesses and more likely to go without insurance to pay for
critical care.
(3) Excessive, wasteful, and abusive litigation in medical
care liability suits throughout the United States has also
significantly contributed to the high cost of health care in
America. The enormous sums and valuable time that hospitals and
physicians lose because of needless litigation amount to a huge
tax on health care for all Americans. Even more expensive is
the huge and thoroughly unnecessary cost of so-called
``defensive medicine''. Because of the ubiquitous threat of
lawsuits, doctors and other health care providers all too often
prescribe unnecessary tests, studies, and procedures simply to
protect themselves--not their patients. Reforming the abuses of
our civil litigation system in medical cases is therefore an
essential step in controlling health care costs.
(4) Noneconomic damages in medical cases should be
eliminated. Payment of huge money damages for conceptually
elusive measure of loss such as ``pain and suffering'' and
``inconvenience'' has proven to be unworkable. Our society
simply cannot afford it. Money damages should be limited to
repayment of actual monetary losses such as medical expenses,
out-of-pocket costs, lost future earnings, and other
traditional measures of actual damages.
(5) Punitive damages in medical care liability suits are
meant to punish malefactors rather than provide a windfall to
attorneys and random litigants. The existence of this potential
windfall (always unrelated to the actual damages suffered in
any case) creates a perverse incentive for even more litigation
against ``deep pockets'' doctors, hospitals, and health care
providers. Punitive damages should, therefore, be paid over to
community hospitals to offset the cost of indigent care. This
will end one of the most significant incentives for abusive and
unnecessary litigation that drives up medical costs. Even more
importantly, it will reduce the cost of health care for the
poor and taxpayers alike.
(6) Medical care liability suits should be decided on their
merits. But in recent years, the vast majority of medical care
liability suits have been decided without a single day of
trial, when parties realize that they cannot afford the
lawyers' costs and other expenses of obtaining their day in
court. This has led all too often to economic blackmail, in
which innocent parties--hospitals, physicians, nurses, other
health care workers--are forced to settle for large amounts
even though they should, in fact, be held harmless by our legal
system. Patients with meritorious medical malpractice cases
find their recoveries substantially reduced by attorneys' fees.
Health care providers victimized by groundless litigation must
often pay enormous fees simply to prove they are blameless. To
redress this inequity, the loser in a medical case should pay
the costs and attorneys' fees of the winner. This will end
another perverse incentive in the present system for
unnecessary litigation that drives up health care costs.
(7) By reducing the cost of health care and by making
health insurance more affordable, millions more Americans will
be able to obtain needed health coverage. This, in turn, will
increase the size of insurance risk pools, further reducing the
cost of necessary insurance for all Americans.
SEC. 3. RESTORATION OF THE FULL DEDUCTIBILITY OF MEDICAL EXPENSES.
Section 213(a) of the Internal Revenue Code of 1986 (relating to
the treatment of medical and dental expenses) is amended to read as
follows:
``(a) Allowance of Deduction.--There shall be allowed as a
deduction the expenses paid during the taxable year, not compensated
for by insurance or otherwise, for medical care of the taxpayer, the
taxpayer's spouse, or a dependent (as defined in section 152).''.
SEC. 4. ATTORNEYS' FEES IN MEDICAL CARE LIABILITY SUITS.
(a) Awarding Attorneys' Fees and Other Costs to Prevailing Party.--
The nonprevailing party in a medical care liability suit shall pay to
the prevailing party in such suit its litigation expenses under the
action (including attorneys' fees and fees paid to expert witnesses,
but not including court fees, filing fees, or other expenses paid
directly to the court). The amount to be paid for such litigation
expenses shall not exceed the litigation expenses of the nonprevailing
party in such medical care liability suit. If the nonprevailing party
receives attorney services under a contingent fee agreement, the amount
of the attorneys' fees paid under this subsection shall not exceed the
reasonable value of those services, determined without regard to the
contingent nature of the fee arrangement.
(b) Definition of Prevailing Party.--The term `prevailing party'
means a party to a medical care liability suit who obtains a favorable
final judgment (other than by settlement) on all or a portion of the
claims asserted in the action.
SEC. 5. ELIMINATION OF NONECONOMIC DAMAGES IN MEDICAL CARE LIABILITY
SUITS.
(a) Scope of Prohibition.--Noneconomic damages may not be imposed
in a medical care liability suit. Compensatory damages may be awarded
as in any other type of action.
(b) Definition of Noneconomic Damages.--The term `noneconomic
damages' means damages for pain, suffering, inconvenience, or any other
nonpecuniary loss, but does not include punitive damages.
SEC. 6. PUNITIVE DAMAGES TO BE REDIRECTED TO COMMUNITY HOSPITALS TO PAY
FOR INDIGENT CARE.
(a) Local Government to Receive Moneys on Behalf of Hospitals.--Any
punitive damages imposed in a medical care liability suit shall be paid
to the county, parish, or comparable unit of local government in which
the action is brought and which has primary responsibility for payment
for indigent health services in its jurisdiction.
(b) Use of Moneys.--A county, parish, or comparable unit of local
government which receives moneys under subsection (a) shall use it
toward payment of its unreimbursed expenses incurred in providing
health care to individuals entitled to medical assistance under titles
XVIII and XIX of the Social Security Act.
SEC. 7. APPLICABILITY.
(a) Applicability.--This Act shall apply with respect to any
medical care liability suit brought in any State or Federal court,
except that this Act shall not apply to a claim or action for damages
arising from a vaccine-related injury or death to the extent that title
XXI of the Public Health Service Act applies to the action.
(b) Effect on State Law.--This Act supersedes State law only to the
extent that State law differs from any provision of law established by
or under this Act. Any issue that is not governed by any provision of
law established by or under this Act shall be governed by otherwise
applicable State or Federal law.
(c) Federal Court Jurisdiction Not Established on Federal Question
Grounds.--Nothing in this Act shall be construed to establish any
jurisdiction in the district courts of the United States over medical
care liability suits on the basis of sections 1331 or 1337 of title 28,
United States Code.
(d) Definition of Medical Care Liability Suit.--The term `medical
care liability suit' means an action for damages arising out of the
provision of (or the failure to provide) health care services.
SEC. 8. EFFECTIVE DATE.
This Act shall apply with respect to claims accruing or suits
brought on or after the first day of January of the calendar year
following the date of the enactment of this Act.
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