[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4791 Introduced in House (IH)]
<DOC>
103d CONGRESS
2d Session
H. R. 4791
To establish Federal standards for the resolution of health care
malpractice claims, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 19, 1994
Mr. Grams (for himself, Mr. Gingrich, Mr. Armey, Mr. Delay, Mr.
Solomon, Mr. Stenholm, Mr. Hastert, Mr. Deal, Mr. Stearns, Mr. Talent,
Mr. Dreier, Mr. Saxton, Mr. Knollenberg, Mr. Inhofe, Mr. Zimmer, Mr.
Calvert, Mr. Stump, Mr. Torkildsen, Mr. Hefley, Mr. Doolittle, Mr.
Baker of California, Mr. Horn, Mr. King, Mr. Lewis of Florida, Mrs.
Fowler, Mr. Hancock, Mr. Linder, Mr. Barcia of Michigan, and Mr. Smith
of Oregon), introduced the following bill; which was referred to the
Committee on the Judiciary
_______________________________________________________________________
A BILL
To establish Federal standards for the resolution of health care
malpractice claims, and for other purposes.
Be it enacted by the Senate and House of Representa<gr-thn-eq>tives
of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medical
Malpractice Fairness Act of 1994''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--GENERAL PROVISIONS
Sec. 101. Findings.
Sec. 102. Definitions.
Sec. 103. Period of applicability.
TITLE II--FEDERAL REFORM OF HEALTH CARE MALPRACTICE
Sec. 201. Requirement for initial resolution of action through
alternative dispute resolution.
Sec. 202. Liability of multiple defendants several only.
Sec. 203. Treatment of noneconomic and punitive damages.
Sec. 204. General restrictions on payment of damages.
Sec. 205. Uniform statute of limitations.
Sec. 206. Treatment of attorney's fees and other costs.
Sec. 207. Qualifications for expert witnesses.
Sec. 208. Preemption; effect on sovereign immunity.
TITLE III--REQUIREMENTS FOR ADR
Sec. 301. Basic requirements for State alternative dispute resolution
systems.
Sec. 302. Certification of State systems; applicability of alternative
Federal system.
TITLE I--GENERAL PROVISIONS
SEC. 101. FINDINGS.
Congress finds that--
(1) the health care and insurance industries are industries
affecting interstate commerce and the health care malpractice
litigation systems existing throughout the United States affect
interstate commerce by contributing to the high cost of health
care and premiums for malpractice insurance purchased by health
care providers; and
(2) the Federal Government has a major interest in health
care as a direct provider of health care and as a source of
payment for health care, and has a demonstrated interest in
assessing the quality of care, access to care, and the costs of
care through the evaluative activities of several Federal
agencies.
SEC. 102. DEFINITIONS.
In this Act:
(1) Alternative dispute resolution system; ADR.--The term
``alternative dispute resolution system'' or ``ADR'' means a
system established under this Act that provides for the
resolution of health care malpractice claims in a manner other
than through health care malpractice actions.
(2) Claimant.--The term ``claimant'' means any person who
alleges a health care malpractice claim, and any person on
whose behalf such a claim is alleged, including the decedent in
the case of an action brought through or on behalf of an
estate.
(3) Economic losses.--The term ``economic losses'' means
losses for hospital and medical expenses, lost wages, lost
employment, and other pecuniary losses.
(4) Health care malpractice action.--The term ``health care
malpractice action'' means a civil action alleging a health
care malpractice claim against a health care provider or health
care professional or a manufacturer of a medical product.
(5) Health care malpractice claim.--The term ``health care
malpractice claim'' means any claim relating to the provision
of (or the failure to provide) health care services or the use
of a medical product, if the claim is based on negligence or
gross negligence, breach of express or implied warranty or
contract, or failure to discharge a duty to warn or instruct to
obtain consent.
(6) Health care professional.--The term ``health care
professional'' means any individual who provides health care
services in a State and who is required by State law or
regulation to be licensed or certified by the State to provide
such services in the State, including (but not limited to) a
physician, nurse, chiropractor, nurse midwife, physical
therapist, social worker, or physician assistant.
(7) Health care provider.--The term ``health care
provider'' means any organization or institution that is
engaged in the delivery of health care services in a State and
that is required by State law or regulation to be licensed or
certified by the State to engage in the delivery of such
services in the State.
(8) Injury.--The term ``injury'' means any injury, illness,
disease, or other harm that is the subject of a health care
malpractice claim.
(9) Medical product.--
(A) In general.--The term ``medical product'' means
a drug (as defined in section 201(g)(1) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321(g)(1)) or a
medical device (as defined in section 201(h) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h))
if--
(i) such drug or device was subject to
premarket approval under section 505, 507, or
515 of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355, 357, or 360e) or section 351 of
the Public Health Service Act (42 U.S.C. 262)
with respect to the safety of the formulation
or performance of the aspect of such drug or
device which is the subject of the claimant's
allegation or the adequacy of the packaging or
labeling of such drug or device, and such drug
or device is approved by the Food and Drug
Administration; or
(ii) the drug or device is generally
recognized as safe and effective under
regulations issued by the Secretary of Health
and Human Services under section 201(p) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C.
321(p)).
(B) Exception in case of misrepresentation or
fraud.--Notwithstanding subparagraph (A), the term
``medical product'' shall not include any product
described in such subparagraph if it is shown that the
product is approved by the Food and Drug Administration
for marketing as a result of withheld information,
misrepresentation, or an illegal payment by the
manufacturer of the product.
(10) Noneconomic damages.--The term ``noneconomic damages''
means losses for physical and emotional pain, suffering,
inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, and other
nonpecuniary losses, but does not include punitive or exemplary
damages.
(11) Punitive damages; exemplary damages.--The terms
``punitive damages'' and ``exemplary damages'' mean
compensation, in addition to compensation for actual harm
suffered, that is awarded for the purpose of punishing a person
for conduct deemed to be malicious, wanton, willful, or
excessively reckless.
(12) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(13) State.--Except as otherwise provided, the term
``State'' means each of the several States, the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.
SEC. 103. PERIOD OF APPLICABILITY.
The provisions of this Act shall apply to claims initiated during
the 5-year period beginning upon the expiration of the 1-year period
that begins on the date of the enactment of this Act.
TITLE II--FEDERAL REFORM OF HEALTH CARE MALPRACTICE
SEC. 201. REQUIREMENT FOR INITIAL RESOLUTION OF ACTION THROUGH
ALTERNATIVE DISPUTE RESOLUTION.
(a) In General.--
(1) State cases.--A health care malpractice action may not
be brought in any State court during a calendar year unless the
health care malpractice claim that is the subject of the action
has been initially resolved under an alternative dispute
resolution system certified for the year by the Secretary under
section 302(a), or, in the case of a State in which such a
system is not in effect for the year, under the alternative
Federal system established under section 302(b).
(2) Federal diversity actions.--A health care malpractice
action may not be brought in any Federal court under section
1332 of title 28, United States Code, during a calendar year
unless the health care malpractice claim that is the subject of
the action has been initially resolved under the alternative
dispute resolution system referred to in paragraph (1) that
applied in the State whose law applies in such action.
(3) Claims against united states.--
(A) Establishment of process for claims.--The
Attorney General shall establish an alternative dispute
resolution process for the resolution of tort claims
consisting of health care malpractice claims brought
against the United States under chapter 171 of title
28, United States Code. Under such process, the
resolution of a claim shall occur after the completion
of the administrative claim process applicable to the
claim under section 2675 of such title.
(B) Requirement for initial resolution under
process.--A health care malpractice action based on a
health care malpractice claim described in subparagraph
(A) may not be brought in any Federal court unless the
claim has been initially resolved under the alternative
dispute resolution process established by the Attorney
General under such subparagraph.
(b) Initial Resolution of Claims Under ADR.--For purposes of
subsection (a), an action is ``initially resolved'' under an
alternative dispute resolution system if--
(A) the ADR reaches a decision on whether the
defendant is liable to the plaintiff for damages; and
(B) if the ADR determines that the defendant is
liable, the ADR reaches a decision on the amount of
damages assessed against the defendant.
(c) Procedures for Filing Actions.--
(1) Notice of intent to contest decision.--Not later than
60 days after a decision is issued with respect to a health
care malpractice claim under an alternative dispute resolution
system, each party affected by the decision shall submit a
sealed statement to a court of competent jurisdiction
indicating whether or not the party intends to contest the
decision.
(2) Deadline for filing action.--A health care malpractice
action may not be brought by a party unless--
(A) the party has filed the notice of intent
required by paragraph (1); and
(B) the party files the action in a court of
competent jurisdiction not later than 90 days after the
decision resolving the health care malpractice claim
that is the subject of the action is issued under the
applicable alternative dispute resolution system.
(3) Court of competent jurisdiction.--For purposes of this
subsection, the term ``court of competent jurisdiction''
means--
(A) with respect to actions filed in a State court,
the appropriate State trial court; and
(B) with respect to actions filed in a Federal
court, the appropriate United States district court.
(d) Legal Effect of Uncontested ADR Decision.--The decision reached
under an alternative dispute resolution system shall, for purposes of
enforcement by a court of competent jurisdiction, have the same status
in the court as the verdict of a health care malpractice action
adjudicated in a State or Federal trial court. The previous sentence
shall not apply to a decision that is contested by a party affected by
the decision pursuant to subsection (c)(1).
SEC. 202. LIABILITY OF MULTIPLE DEFENDANTS SEVERAL ONLY.
The liability of each defendant in a health care malpractice action
shall be several only and shall not be joint, and each defendant's
fault shall be determined on the basis of a percentage allocated to the
defendant in direct proportion to the defendant's percentage of
responsibility (as determined by the trier of fact).
SEC. 203. TREATMENT OF NONECONOMIC AND PUNITIVE DAMAGES.
(a) Limitation on Amount of Noneconomic Damages.--The total amount
of noneconomic damages that may be awarded to a claimant and the
members of the claimant's family for losses resulting from the injury
which is the subject of a health care malpractice action may not exceed
$250,000, regardless of the number of parties against whom the action
is brought or the number of actions brought with respect to the injury.
(b) Treatment of Punitive Damages.--
(1) Prohibiting punitive damages except in cases of gross
or criminal negligence.--No punitive or exemplary damages may
be awarded against any individual with respect to a health care
malpractice claim unless the claimant establishes by clear and
convincing evidence that the harm suffered by the claimant was
the result of conduct manifesting deliberate disregard for the
health and safety of the claimant or (in the case of a claim
arising from the use of a medical product) to the health and
safety of those persons who might be harmed by the medical
product.
(2) Limitation concerning certain awards.--In the case of a
health care malpractice claim in which the plaintiff alleges an
injury resulting from the use of a medical product, no punitive
or exemplary damages may be awarded against the manufacturer or
seller of such product.
(3) Payments to state for medical quality assurance
activities.--
(A) In general.--Any punitive damages awarded with
respect to a health care malpractice claim shall be
paid to the State in which the action is brought or, in
a case brought in Federal court, in the State in which
the health care services that caused the injury that is
the subject of the claim were provided.
(B) Activities described.--A State shall use
amounts paid pursuant to subparagraph (A) to carry out
activities to assure the safety and quality of health
care services provided in the State, including (but not
limited to)--
(i) licensing or certifying health care
professionals and health care providers in the
State;
(ii) operating alternative dispute
resolution systems;
(iii) carrying out public education
programs relating to health care malpractice
and the availability of alternative dispute
resolution systems in the State; and
(iv) carrying out programs to reduce
malpractice-related costs for retired providers
or other providers volunteering to provide
services in medically underserved areas.
(C) Maintenance of effort.--A State shall use any
amounts paid pursuant to subparagraph (A) to supplement
and not to replace amounts spent by the State for the
activities described in subparagraph (B).
SEC. 204. GENERAL RESTRICTIONS ON PAYMENT OF DAMAGES.
(a) Reductions for Contributions From Collateral Sources.--
(1) In general.--The total amount of damages received by an
individual shall be reduced by any other payment which has been
made or which will be made to such individual to compensate
such individual for an injury, including payments under--
(A) Federal or State disability or sickness
programs;
(B) Federal, State, or private health insurance
programs;
(C) private disability insurance programs;
(D) employer wage continuation programs; and
(E) any other source of payment intended to
compensate such individual for such injury.
(2) Admission as evidence.--The availability of a payment
described in paragraph (1) shall be made known to the trier of
fact.
(b) Periodic Payment of Damages for Future Expenses.--No individual
may be required to pay more than $100,000 in a single payment in
damages for expenses to be incurred in the future, but shall be
permitted to make such payments on a periodic basis. The periods for
such payments shall be determined by the court, based on projections of
when expenses are likely to be incurred.
SEC. 205. UNIFORM STATUTE OF LIMITATIONS.
(a) In General.--Except as provided in subsection (b), no health
care malpractice claim may be initiated after the expiration of the 2-
year period that begins on the date the alleged injury should
reasonably have been discovered, or the expiration of the 4-year period
that begins on the date the alleged injury occurred, whichever is
later.
(b) Exception for Minors Under Age 6.--In the case of an alleged
injury suffered by a minor who has not attained 6 years of age, no
health care malpractice claim may be initiated after the expiration of
the 2-year period that begins on the date the alleged injury should
reasonably have been discovered, but in no event later than 4 years
after the date the alleged injury occurred or the date on which the
minor attains 8 years of age, whichever is later.
SEC. 206. TREATMENT OF ATTORNEY'S FEES AND OTHER COSTS.
(a) Limitation on Contingency Fees.--An attorney shall not contract
for or collect a contingency fee for representing a claimant in the
resolution of a health care malpractice claim in excess of the
following:
(1) 50 percent of the first $50,000 (or portion thereof) of
the amount recovered by the claimant.
(2) 33\1/3\ percent of the next $50,000 (or portion
thereof) of the amount recovered by the claimant.
(3) 25 percent of the next $100,000 (or portion thereof) of
the amount recovered by the claimant.
(4) 10 percent of any additional amounts recovered by the
claimant in excess of $200,000.
(b) Requiring Party Contesting ADR Ruling to Pay Attorney's Fees
and Other Costs.--
(1) In general.--The court in a health care malpractice
action shall require the party that (pursuant to section
201(c)(1)) contested the ruling of the alternative dispute
resolution system with respect to the health care malpractice
claim that is the subject of the action to pay to the opposing
party the costs incurred by the opposing party under the
action, including attorney's fees, fees paid to expert
witnesses, and other litigation expenses (but not including
court costs, filing fees, or other expenses paid directly by
the party to the court, or any fees or costs associated with
the resolution of the claim under the alternative dispute
resolution system), but only if--
(A) in the case of an action in which the party
that contested the ruling is the claimant, the amount
of damages awarded to the party under the action does
not exceed the amount of damages awarded to the party
under the ADR system by at least 15 percent; and
(B) in the case of an action in which the party
that contested the ruling is the defendant, the amount
of damages assessed against the party under the action
is not at least 15 percent less than the amount of
damages assessed under the ADR system.
(2) Exceptions.--Paragraph (1) shall not apply if--
(A) the party contesting the ruling made under the
previous alternative dispute resolution system shows
that--
(i) the ruling was procured by corruption,
fraud, or undue means,
(ii) there was partiality or corruption
under the system,
(iii) there was other misconduct under the
system that materially prejudiced the party's
rights, or
(iv) the ruling was based on an error of
law;
(B) the party contesting the ruling made under the
alternative dispute resolution system presents new
evidence before the trier of fact that was not
available for presentation under the ADR system;
(C) the health care malpractice action raised a
novel issue of law; or
(D) the court finds that the application of such
paragraph to a party would constitute an undue
hardship, and issues an order waiving or modifying the
application of such paragraph that specifies the
grounds for the court's decision.
(3) Requirement for performance bond.--The court in a
health care malpractice action shall require the party that
(pursuant to section 201(c)(1)) contested the ruling of the
alternative dispute resolution system with respect to the
health care malpractice claim that is the subject of the action
to post a performance bond (in such amount and consisting of
such funds and assets as the court determines to be
appropriate), except that the court may waive the application
of such requirement to a party if the court determines that the
posting of such a bond is not necessary to ensure that the
party shall meet the requirements of this subsection to pay the
opposing party the costs incurred by the opposing party under
the action.
(4) Limit on attorney's fees paid.--Attorneys' fees that
are required to be paid under paragraph (1) by the contesting
party shall not exceed the amount of the attorneys' fees
incurred by the contesting party in the action. If the
attorneys' fees of the contesting party are based on a
contingency fee agreement, the amount of attorneys' fees for
purposes of the preceding sentence shall not exceed the
reasonable value of those services.
(5) Records.--In order to receive attorneys' fees under
paragraph (1), counsel of record in the health care malpractice
action involved shall maintain accurate, complete records of
hours worked on the action, regardless of the fee arrangement
with the client involved.
(c) Contingency Fee Defined.--As used in this section, the term
``contingency fee'' means any fee for professional services which is,
in whole or in part, contingent upon the recovery of any amount of
damages, whether through judgment or settlement.
SEC. 207. QUALIFICATIONS FOR EXPERT WITNESSES.
(a) Medical Expertise.--No individual may testify as an expert
witness with respect to a health care malpractice claim unless the
individual has expertise in the relevant issues of medical practice
involved in the claim.
(b) Payment of Contingency Fee Prohibited.--The payment made to an
expert witness for testimony with respect to a health care malpractice
claim may not vary on the basis of the disposition of the claim.
SEC. 208. PREEMPTION; EFFECT ON SOVEREIGN IMMUNITY.
(a) Preemption.--The standards established by this title shall
supersede any State law only to the extent that State law establishes
higher payment limits, permits the recovery of a greater amount of
damages or the awarding of a greater amount of attorney's fees, or
establishes a longer period during which a health care malpractice
claim may be initiated.
(b) Effect on Sovereign Immunity and Choice of Law or Venue.--
Nothing in this Act shall be construed to--
(1) waive or affect any defense of sovereign immunity
asserted by any State under any provision of law;
(2) waive or affect any defense of sovereign immunity
asserted by the United States;
(3) affect the applicability of any provision of the
Foreign Sovereign Immunities Act of 1976;
(4) preempt State choice-of-law rules with respect to
claims brought by a foreign nation or a citizen of a foreign
nation; or
(5) affect the right of any court to transfer venue or to
apply the law of a foreign nation or to dismiss a claim of a
foreign nation or of a citizen of a foreign nation on the
ground of inconvenient forum.
TITLE III--REQUIREMENTS FOR ADR
SEC. 301. BASIC REQUIREMENTS FOR STATE ALTERNATIVE DISPUTE RESOLUTION
SYSTEMS.
(a) In General.--A State's alternative dispute resolution system
meets the requirements of this section if the system--
(1) applies to all health care malpractice claims under the
jurisdiction of the courts of that State;
(2) requires that a written opinion resolving the dispute
be issued not later than 6 months after the date by which each
party against whom the claim is filed has received notice of
the claim (other than in exceptional cases for which a longer
period is required for the issuance of such an opinion), and
that the opinion contain--
(A) findings of fact relating to the dispute, and
(B) a description of the costs incurred in
resolving the dispute under the system (including any
fees paid to the individuals hearing and resolving the
claim), together with an appropriate assessment of the
costs against any of the parties;
(3) requires individuals who hear and resolve claims under
the system to meet such qualifications as the State may require
(in accordance with regulations of the Secretary);
(4) is approved by the State or by local governments in the
State;
(5) with respect to a State system that consists of
multiple dispute resolution procedures--
(A) permits the parties to a dispute to select the
procedure to be used for the resolution of the dispute
under the system, and
(B) if the parties do not agree on the procedure to
be used for the resolution of the dispute, assigns a
particular procedure to the parties;
(6) provides for the transmittal to the State agency
responsible for monitoring or disciplining health care
professionals and health care providers of any findings made
under the system that such a professional or provider committed
malpractice, unless, during the 90-day period beginning on the
date the system resolves the claim against the professional or
provider, the professional or provider brings an action
contesting the decision made under the system; and
(7) provides for the regular transmittal to the
Administrator for Health Care Policy and Research of
information on disputes resolved under the system, in a manner
that assures that the identity of the parties to a dispute
shall not be revealed.
(b) Application of Standards to Alternative Dispute Resolution.--
The provisions of title II shall apply with respect to claims brought
under a State alternative dispute resolution system or the alternative
Federal system in the same manner as such provisions apply with respect
to health care malpractice actions brought in the State.
SEC. 302. CERTIFICATION OF STATE SYSTEMS; APPLICABILITY OF ALTERNATIVE
FEDERAL SYSTEM.
(a) Certification.--
(1) In general.--Not later than 9 months after the date of
the enactment of this Act and periodically thereafter, the
Secretary, in consultation with the Attorney General, shall
determine whether a State's alternative dispute resolution
system meets the requirements of this part for the following
calendar year.
(2) Basis for certification.--The Secretary shall certify a
State's alternative dispute resolution system under this
subsection for a calendar year if the Secretary determines
under paragraph (1) that the system meets the requirements of
section 301.
(b) Applicability of Alternative Federal System.--
(1) Establishment and applicability.--Not later than 9
months after the date of the enactment of this Act, the
Secretary, in consultation with the Attorney General, shall
establish by rule an alternative Federal ADR system for the
resolution of health care malpractice claims during a calendar
year in States that do not have in effect an alternative
dispute resolution system certified under subsection (a) for
the year.
(2) Requirements for system.--Under the alternative Federal
ADR system established under paragraph (1)--
(A) paragraphs (1), (2), (6), and (7) of section
301(a) shall apply to claims brought under the system;
(B) if the system provides for the resolution of
claims through arbitration, the claims brought under
the system shall be heard and resolved by arbitrators
appointed by the Secretary in consultation with the
Attorney General; and
(C) with respect to a State in which the system is
in effect, the Secretary may (at the State's request)
modify the system to take into account the existence of
dispute resolution procedures in the State that affect
the resolution of health care malpractice claims.
(3) Treatment of States with alternative system in
effect.--If the alternative Federal ADR system established
under this subsection is applied with respect to a State for a
calendar year--
(A) the State shall reimburse the United States (at
such time and in such manner as the Secretary may
require) for the costs incurred by the United States
during the year as a result of the application of the
system with respect to the State; and
(B) notwithstanding any other provision of law, no
funds may be paid to the State (or to any unit of local
government in the State) or to any entity in the State
pursuant to the Public Health Service Act.
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HR 4791 IH----2