[House Report 108-34]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-34
======================================================================
PROVIDING FOR CONSIDERATION OF H.R. 5, HELP EFFICIENT, ACCESSIBLE, LOW
COST, TIMELY HEALTHCARE (HEALTH) ACT OF 2003
_______
March 12, 2003.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Reynolds, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 139]
The Committee on Rules, having had under consideration
House Resolution 139, by a nonrecord vote, reports the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of H.R. 5, the
Help Efficient, Accessible, Low Cost, Timely Healthcare
(HEALTH) Act of 2003, under a closed rule. The rule provides
two hours of debate in the House, with 80 minutes equally
divided and controlled by the chairman and ranking minority
member of the Committee on the Judiciary and 40 minutes equally
divided and controlled by the chairman and ranking minority
member of the Committee on Energy and Commerce. The rule waives
all points of order against consideration of the bill.
The rule further provides that in lieu of the amendments
recommended by the Committees on the Judiciary and on Energy
and Commerce now printed in the bill, the amendment in the
nature of a substitute printed in this report shall be
considered as adopted. The rule provides one motion to recommit
with or without instructions. Finally, the rule provides that
House Resolution 126 is laid on the table.
The waiver of all points of order includes a waiver of
clause 4(a) of rule XIII (requiring a three-day layover of
committee reports) and of section 303 of the Congressional
Budget Act (prohibiting consideration of legislation, as
reported, providing new budget authority, change in revenues,
change in public debt, new entitlement authority, or new credit
authority for a fiscal year until the budget resolution for
that year has been agreed to). The waiver of clause 4(a) of
rule XIII is necessary because reports were not available until
Tuesday, March 11 and the bill may be considered by the House
as early as Thursday, March 13, 2003. The waiver of section 303
is necessary because a reduction of healthcare costs will
increase wages and result in increased revenues.
COMMITTEE VOTES
Pursuant to clause 3(b) of House rule XIII the results of
each record vote on an amendment or motion to report, together
with the names of those voting for and against, are printed
below:
Rules Committee record vote No. 16
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Frost.
Summary of motion: To report an open rule.
Results: Defeated 3 to 7.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay;
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea;
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 17
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Frost.
Summary of motion: To make in order the amendment in the
nature of a substitute offered by Representatives Conyers and
Dingell as modified.
Results: Defeated 3 to 7.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay;
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea;
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 18
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Frost.
Summary of motion: to make in order the amendment offered
by Representative Pallone which clarifies the definitions to
ensure that its liability protections do not apply to HMOs and
drug and device manufacturers.
Results: Defeated 3 to 7.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay;
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea;
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 19
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Frost.
Summary of motion: To make in order the amendment offered
Representative Sandlin which prohibits a carrier offering
medical malpractice insurance from charging a premium that
exceeds 80 percent of the amount of the premium charged during
calendar year 2001, but provides that carriers are permitted to
increase their premium rates on an annual basis in an amount no
greater than any increase in the Consumer Price Index plus 2
percent. Provides that the Secretary of Health and Human
Services may offer an adjustment to such limitation to a
carrier that satisfactorily demonstrates it would be unable to
earn a fair rate of return due to the imposed limitation,
provided, that the adjustment may not exceed the minimum amount
that the Secretary determines is required for the carrier to
realize a fair rate of return.
Results: Defeated 3 to 7.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay;
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea;
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 20
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Frost.
Summary of motion: To make in order the amendment offered
by Representative Sandlin which prohibits a carrier offering
medical malpractice insurance from charging a premium that
exceeds 80 percent of the amount of the premium charged during
calendar year 2001. Provides that the Secretary of Health and
Human Services may make an adjustment to such limitation to a
carrier that satisfactorily demonstrates it would be unable to
earn a fair rate of return due to the imposed limitation,
provided, that the adjustment may not exceed the minimum amount
that the Secretary determines is required for the carrier to
realize a fair rate of return.
Results: Defeated 3 to 7.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay;
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea;
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 21
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Frost.
Summary of motion: To make in order the amendment offered
by Representative Jackson-Lee which strikes the cap on punitive
damages.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 22
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Frost.
Summary of motion: To make in order the amendment in the
nature of a substitute offered by Representatives Conyers and
Dingell with the appropriate waivers.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 23
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. McGovern.
Summary of motion: To make in order the amendment offered
by Representative Delahunt which changes the $250,000 cap on
non-economic damages to $1,607,615 to reflect the increase in
the cost of medical care since California enacted its $250,000
cap in 1975.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 24
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. McGovern.
Summary of motion: To make in order the amendment offered
by Representative Delahunt which Bars health care lawsuits in
all cases unless the complaint is filed within 3 years after
date injury is or should have been discovered. Amendment also
tolls statute of limitations for minors until they come of age.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 25
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. McGovern.
Summary of motion: To make in order the amendment offered
by Representative Jackson-Lee which mandates the state agencies
regulating insurance create a State Impaired Physicians Fund to
provide services including drug and alcohol treatment
counseling for physicians and a Participating Physicians Fund
to provide training for physicians treating indigent
populations. Would require all medical malpractice insurers to
contribute 2 percent of their savings derived from the
provisions of this Act, to the State Impaired Physicians Fund.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 26
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. McGovern.
Summary of motion: To make in order the amendment offered
by Representative Hoeffel which allows for court to exceed
$250,000 damages cap in cases where it finds a severe or
permanent loss or impairment of a bodily function or
substantial disfigurement or other special circumstances. In
such cases, the cap could be exceeded if failing to do so would
deprive the claimant of just compensation for the injuries
sustained.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 27
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. McGovern.
Summary of motion: To make in order the amendment offered
by Representative Nadler which indexes the $250,000 cap on non-
economic and punitive damages in the bill for inflation.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 28
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. McGovern.
Summary of motion: To make in order the amendment offered
by Representative Nadler which prohibits secret settlements in
medical malpractice cases unless a judge finds that doing so
would not harm the public health and safety.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 29
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. McGovern.
Summary of motion: To make in order the amendment offered
by Representative Jackson-Lee which strikes the non-economic
damage cap.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 30
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. McGovern.
Summary of motion: To make in order the amendment offered
by Representative Jackson-Lee which prohibits any malpractice
insurer from increasing rates during the 12 months following
enactment of this Act.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 31
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Hastings of Florida.
Summary of motion: To make in order the amendment offered
by Representative Jackson-Lee which requires that all medical
malpractice insurers make a reasonable estimate of their annual
savings achieved as a result of this Act. Requires the insurers
to develop and implement a plan to dedicate at least 50 percent
of those savings to reduction of premiums for covered
physicians.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 32
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Hastings of Florida.
Summary of motion: To make in order the amendment offered
by Representative Stupak which adds a section removing the
antitrust exemption for health care liability insurance
companies.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 33
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Hastings of Florida.
Summary of motion: To make in order the amendment offered
by Representative Scott of Virginia which removes section 6
from the bill.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 34
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Hastings of Florida.
Summary of motion: To make in order the amendment offered
by Representative Scott of Virginia which deletes subsection
``(D)'' on page 20 of the bill, the so-called ``Fair Share
Rule.''
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 35
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Hastings of Florida.
Summary of motion: To make in order the amendment offered
by Representative Stupak which allows the non-economic damages
cap to rise with the rate of inflation.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 36
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Hastings of Florida.
Summary of motion: To make in order the amendment offered
by Representative Berkley which provides a Sense of the
Congress to express that medical malpractice liability reform
should be accompanied by insurance reform.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
Rules Committee record vote No. 37
Date: March 12, 2003.
Measure: H.R. 5.
Motion by: Mr. Frost.
Summary of motion: To make in order an en bloc amendment.
Results: Defeated 3 to 8.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.
SUMMARY OF AMENDMENT TO BE CONSIDERED AS ADOPTED
(Summary derived from information provided by the sponsor.)
Sensenbrenner/Tauzin: Amendment in the Nature of a
Substitute. Includes a 3 year statute of limitations with
certain exceptions for minors, fraud, intentional concealment
and the presence of a foreign body; a $250,000 cap on non-
economic damages and a ``fair share'' rule, by which damages
are allocated fairly, in direct proportion to fault; sliding
scale limits on the contingency fees lawyers can charge;
authorization for defendants to introduce evidence showing the
plaintiff received compensation for losses from outside sources
(to prevent double recoveries); guidelines for the award of
punitive damages, including guidelines for punitive damages
award not to exceed the greater of $250,000 or twice economic
damages; a safe harbor from punitive damages for products that
meet applicable FDA safety requirements, with exceptions for
cases in which information required to be given to the FDA was
withheld and cases in which illegal payments were made to the
FDA; protections of pharmacists and doctors from being named in
lawsuits for forum-shopping purposes; authorization for courts
to require periodic payments for future damages; except as
provided in the Act nothing in the Act shall affect any defense
available to a defendant in a health care lawsuit or action
under any other provision of federal law; a savings clause that
saves from preemption state laws that limit damages to specific
amounts.
TEXT OF AMENDMENT CONSIDERED AS ADOPTED
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Help Efficient, Accessible,
Low-cost, Timely Healthcare (HEALTH) Act of 2003''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--
(1) Effect on health care access and costs.--Congress
finds that our current civil justice system is
adversely affecting patient access to health care
services, better patient care, and cost-efficient
health care, in that the health care liability system
is a costly and ineffective mechanism for resolving
claims of health care liability and compensating
injured patients, and is a deterrent to the sharing of
information among health care professionals which
impedes efforts to improve patient safety and quality
of care.
(2) Effect on interstate commerce.--Congress finds
that the health care and insurance industries are
industries affecting interstate commerce and the health
care liability litigation systems existing throughout
the United States are activities that affect interstate
commerce by contributing to the high costs of health
care and premiums for health care liability insurance
purchased by health care system providers.
(3) Effect on federal spending.--Congress finds that
the health care liability litigation systems existing
throughout the United States have a significant effect
on the amount, distribution, and use of Federal funds
because of--
(A) the large number of individuals who
receive health care benefits under programs
operated or financed by the Federal Government;
(B) the large number of individuals who
benefit because of the exclusion from Federal
taxes of the amounts spent to provide them with
health insurance benefits; and
(C) the large number of health care providers
who provide items or services for which the
Federal Government makes payments.
(b) Purpose.--It is the purpose of this Act to implement
reasonable, comprehensive, and effective health care liability
reforms designed to--
(1) improve the availability of health care services
in cases in which health care liability actions have
been shown to be a factor in the decreased availability
of services;
(2) reduce the incidence of ``defensive medicine''
and lower the cost of health care liability insurance,
all of which contribute to the escalation of health
care costs;
(3) ensure that persons with meritorious health care
injury claims receive fair and adequate compensation,
including reasonable noneconomic damages;
(4) improve the fairness and cost-effectiveness of
our current health care liability system to resolve
disputes over, and provide compensation for, health
care liability by reducing uncertainty in the amount of
compensation provided to injured individuals; and
(5) provide an increased sharing of information in
the health care system which will reduce unintended
injury and improve patient care.
SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.
The time for the commencement of a health care lawsuit shall
be 3 years after the date of manifestation of injury or 1 year
after the claimant discovers, or through the use of reasonable
diligence should have discovered, the injury, whichever occurs
first. In no event shall the time for commencement of a health
care lawsuit exceed 3 years after the date of manifestation of
injury unless tolled for any of the following:
(1) Upon proof of fraud;
(2) Intentional concealment; or
(3) The presence of a foreign body, which has no
therapeutic or diagnostic purpose or effect, in the
person of the injured person.
Actions by a minor shall be commenced within 3 years from the
date of the alleged manifestation of injury except that actions
by a minor under the full age of 6 years shall be commenced
within 3 years of manifestation of injury or prior to the
minor's 8th birthday, whichever provides a longer period. Such
time limitation shall be tolled for minors for any period
during which a parent or guardian and a health care provider or
health care organization have committed fraud or collusion in
the failure to bring an action on behalf of the injured minor.
SEC. 4. COMPENSATING PATIENT INJURY.
(a) Unlimited Amount of Damages for Actual Economic Losses in
Health Care Lawsuits.--In any health care lawsuit, nothing in
this Act shall limit a claimant's recovery of the full amount
of the available economic damages, notwithstanding the
limitation in subsection (b).
(b) Additional Noneconomic Damages.--In any health care
lawsuit, the amount of noneconomic damages, if available, may
be as much as $250,000, regardless of the number of parties
against whom the action is brought or the number of separate
claims or actions brought with respect to the same injury.
(c) No Discount of Award for Noneconomic Damages.--For
purposes of applying the limitation in subsection (b), future
noneconomic damages shall not be discounted to present value.
The jury shall not be informed about the maximum award for
noneconomic damages. An award for noneconomic damages in excess
of $250,000 shall be reduced either before the entry of
judgment, or by amendment of the judgment after entry of
judgment, and such reduction shall be made before accounting
for any other reduction in damages required by law. If separate
awards are rendered for past and future noneconomic damages and
the combined awards exceed $250,000, the future noneconomic
damages shall be reduced first.
(d) Fair Share Rule.--In any health care lawsuit, each party
shall be liable for that party's several share of any damages
only and not for the share of any other person. Each party
shall be liable only for the amount of damages allocated to
such party in direct proportion to such party's percentage of
responsibility. Whenever a judgment of liability is rendered as
to any party, a separate judgment shall be rendered against
each such party for the amount allocated to such party. For
purposes of this section, the trier of fact shall determine the
proportion of responsibility of each party for the claimant's
harm.
SEC. 5. MAXIMIZING PATIENT RECOVERY.
(a) Court Supervision of Share of Damages Actually Paid to
Claimants.--In any health care lawsuit, the court shall
supervise the arrangements for payment of damages to protect
against conflicts of interest that may have the effect of
reducing the amount of damages awarded that are actually paid
to claimants. In particular, in any health care lawsuit in
which the attorney for a party claims a financial stake in the
outcome by virtue of a contingent fee, the court shall have the
power to restrict the payment of a claimant's damage recovery
to such attorney, and to redirect such damages to the claimant
based upon the interests of justice and principles of equity.
In no event shall the total of all contingent fees for
representing all claimants in a health care lawsuit exceed the
following limits:
(1) 40 percent of the first $50,000 recovered by the
claimant(s).
(2) 33\1/3\ percent of the next $50,000 recovered by
the claimant(s).
(3) 25 percent of the next $500,000 recovered by the
claimant(s).
(4) 15 percent of any amount by which the recovery by
the claimant(s) is in excess of $600,000.
(b) Applicability.--The limitations in this section shall
apply whether the recovery is by judgment, settlement,
mediation, arbitration, or any other form of alternative
dispute resolution. In a health care lawsuit involving a minor
or incompetent person, a court retains the authority to
authorize or approve a fee that is less than the maximum
permitted under this section. The requirement for court
supervision in the first two sentences of subsection (a)
applies only in civil actions.
SEC. 6. ADDITIONAL HEALTH BENEFITS.
In any health care lawsuit involving injury or wrongful
death, any party may introduce evidence of collateral source
benefits. If a party elects to introduce such evidence, any
opposing party may introduce evidence of any amount paid or
contributed or reasonably likely to be paid or contributed in
the future by or on behalf of the opposing party to secure the
right to such collateral source benefits. No provider of
collateral source benefits shall recover any amount against the
claimant or receive any lien or credit against the claimant's
recovery or be equitably or legally subrogated to the right of
the claimant in a health care lawsuit involving injury or
wrongful death. This section shall apply to any health care
lawsuit that is settled as well as a health care lawsuit that
is resolved by a fact finder. This section shall not apply to
section 1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42
U.S.C. 1396a(a)(25)) of the Social Security Act.
SEC. 7. PUNITIVE DAMAGES.
(a) In General.--Punitive damages may, if otherwise permitted
by applicable State or Federal law, be awarded against any
person in a health care lawsuit only if it is proven by clear
and convincing evidence that such person acted with malicious
intent to injure the claimant, or that such person deliberately
failed to avoid unnecessary injury that such person knew the
claimant was substantially certain to suffer. In any health
care lawsuit where no judgment for compensatory damages is
rendered against such person, no punitive damages may be
awarded with respect to the claim in such lawsuit. No demand
for punitive damages shall be included in a health care lawsuit
as initially filed. A court may allow a claimant to file an
amended pleading for punitive damages only upon a motion by the
claimant and after a finding by the court, upon review of
supporting and opposing affidavits or after a hearing, after
weighing the evidence, that the claimant has established by a
substantial probability that the claimant will prevail on the
claim for punitive damages. At the request of any party in a
health care lawsuit, the trier of fact shall consider in a
separate proceeding--
(1) whether punitive damages are to be awarded and
the amount of such award; and
(2) the amount of punitive damages following a
determination of punitive liability.
If a separate proceeding is requested, evidence relevant only
to the claim for punitive damages, as determined by applicable
State law, shall be inadmissible in any proceeding to determine
whether compensatory damages are to be awarded.
(b) Determining Amount of Punitive Damages.--
(1) Factors considered.--In determining the amount of
punitive damages, if awarded, in a health care lawsuit,
the trier of fact shall consider only the following:
(A) the severity of the harm caused by the
conduct of such party;
(B) the duration of the conduct or any
concealment of it by such party;
(C) the profitability of the conduct to such
party;
(D) the number of products sold or medical
procedures rendered for compensation, as the
case may be, by such party, of the kind causing
the harm complained of by the claimant;
(E) any criminal penalties imposed on such
party, as a result of the conduct complained of
by the claimant; and
(F) the amount of any civil fines assessed
against such party as a result of the conduct
complained of by the claimant.
(2) Maximum award.--The amount of punitive damages,
if awarded, in a health care lawsuit may be as much as
$250,000 or as much as two times the amount of economic
damages awarded, whichever is greater. The jury shall
not be informed of this limitation.
(c) No Punitive Damages for Products That Comply With FDA
Standards.--
(1) In general.--
(A) No punitive damages may be awarded
against the manufacturer or distributor of a
medical product, or a supplier of any component
or raw material of such medical product, based
on a claim that such product caused the
claimant's harm where--
(i)(I) such medical product was
subject to premarket approval,
clearance, or licensure by the Food and
Drug Administration with respect to the
safety of the formulation or
performance of the aspect of such
medical product which caused the
claimant's harm or the adequacy of the
packaging or labeling of such medical
product; and
(II) such medical product was so
approved, cleared, or licensed; or
(ii) such medical product is
generally recognized among qualified
experts as safe and effective pursuant
to conditions established by the Food
and Drug Administration and applicable
Food and Drug Administration
regulations, including without
limitation those related to packaging
and labeling, unless the Food and Drug
Administration has determined that such
medical product was not manufactured or
distributed in substantial compliance
with applicable Food and Drug
Administration statutes and
regulations.
(B) Rule of construction.--Subparagraph (A)
may not be construed as establishing the
obligation of the Food and Drug Administration
to demonstrate affirmatively that a
manufacturer, distributor, or supplier referred
to in such subparagraph meets any of the
conditions described in such subparagraph.
(2) Liability of health care providers.--A health
care provider who prescribes, or who dispenses pursuant
to a prescription, a medical product approved,
licensed, or cleared by the Food and Drug
Administration shall not be named as a party to a
product liability lawsuit involving such product and
shall not be liable to a claimant in a class action
lawsuit against the manufacturer, distributor, or
seller of such product. Nothing in this paragraph
prevents a court from consolidating cases involving
health care providers and cases involving products
liability claims against the manufacturer, distributor,
or product seller of such medical product.
(3) Packaging.--In a health care lawsuit for harm
which is alleged to relate to the adequacy of the
packaging or labeling of a drug which is required to
have tamper-resistant packaging under regulations of
the Secretary of Health and Human Services (including
labeling regulations related to such packaging), the
manufacturer or product seller of the drug shall not be
held liable for punitive damages unless such packaging
or labeling is found by the trier of fact by clear and
convincing evidence to be substantially out of
compliance with such regulations.
(4) Exception.--Paragraph (1) shall not apply in any
health care lawsuit in which--
(A) a person, before or after premarket
approval, clearance, or licensure of such
medical product, knowingly misrepresented to or
withheld from the Food and Drug Administration
information that is required to be submitted
under the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 301 et seq.) or section 351 of the
Public Health Service Act (42 U.S.C. 262) that
is material and is causally related to the harm
which the claimant allegedly suffered; or
(B) a person made an illegal payment to an
official of the Food and Drug Administration
for the purpose of either securing or
maintaining approval, clearance, or licensure
of such medical product.
SEC. 8. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN
HEALTH CARE LAWSUITS.
(a) In General.--In any health care lawsuit, if an award of
future damages, without reduction to present value, equaling or
exceeding $50,000 is made against a party with sufficient
insurance or other assets to fund a periodic payment of such a
judgment, the court shall, at the request of any party, enter a
judgment ordering that the future damages be paid by periodic
payments. In any health care lawsuit, the court may be guided
by the Uniform Periodic Payment of Judgments Act promulgated by
the National Conference of Commissioners on Uniform State Laws.
(b) Applicability.--This section applies to all actions which
have not been first set for trial or retrial before the
effective date of this Act.
SEC. 9. DEFINITIONS.
In this Act:
(1) Alternative dispute resolution system; adr.--The
term ``alternative dispute resolution system'' or
``ADR'' means a system that provides for the resolution
of health care lawsuits in a manner other than through
a civil action brought in a State or Federal court.
(2) Claimant.--The term ``claimant'' means any person
who brings a health care lawsuit, including a person
who asserts or claims a right to legal or equitable
contribution, indemnity or subrogation, arising out of
a health care liability claim or action, and any person
on whose behalf such a claim is asserted or such an
action is brought, whether deceased, incompetent, or a
minor.
(3) Collateral source benefits.--The term
``collateral source benefits'' means any amount paid or
reasonably likely to be paid in the future to or on
behalf of the claimant, or any service, product or
other benefit provided or reasonably likely to be
provided in the future to or on behalf of the claimant,
as a result of the injury or wrongful death, pursuant
to--
(A) any State or Federal health, sickness,
income-disability, accident, or workers'
compensation law;
(B) any health, sickness, income-disability,
or accident insurance that provides health
benefits or income-disability coverage;
(C) any contract or agreement of any group,
organization, partnership, or corporation to
provide, pay for, or reimburse the cost of
medical, hospital, dental, or income disability
benefits; and
(D) any other publicly or privately funded
program.
(4) Compensatory damages.--The term ``compensatory
damages'' means objectively verifiable monetary losses
incurred as a result of the provision of, use of, or
payment for (or failure to provide, use, or pay for)
health care services or medical products, such as past
and future medical expenses, loss of past and future
earnings, cost of obtaining domestic services, loss of
employment, and loss of business or employment
opportunities, damages for physical and emotional pain,
suffering, inconvenience, physical impairment, mental
anguish, disfigurement, loss of enjoyment of life, loss
of society and companionship, loss of consortium (other
than loss of domestic service), hedonic damages, injury
to reputation, and all other nonpecuniary losses of any
kind or nature. The term ``compensatory damages''
includes economic damages and noneconomic damages, as
such terms are defined in this section.
(5) Contingent fee.--The term ``contingent fee''
includes all compensation to any person or persons
which is payable only if a recovery is effected on
behalf of one or more claimants.
(6) Economic damages.--The term ``economic damages''
means objectively verifiable monetary losses incurred
as a result of the provision of, use of, or payment for
(or failure to provide, use, or pay for) health care
services or medical products, such as past and future
medical expenses, loss of past and future earnings,
cost of obtaining domestic services, loss of
employment, and loss of business or employment
opportunities.
(7) Health care lawsuit.--The term ``health care
lawsuit'' means any health care liability claim
concerning the provision of health care goods or
services or any medical product affecting interstate
commerce, or any health care liability action
concerning the provision of health care goods or
services or any medical product affecting interstate
commerce, brought in a State or Federal court or
pursuant to an alternative dispute resolution system,
against a health care provider, a health care
organization, or the manufacturer, distributor,
supplier, marketer, promoter, or seller of a medical
product, regardless of the theory of liability on which
the claim is based, or the number of claimants,
plaintiffs, defendants, or other parties, or the number
of claims or causes of action, in which the claimant
alleges a health care liability claim. Such term does
not include a claim or action which is based on
criminal liability; which seeks civil fines or
penalties paid to Federal, State, or local government;
or which is grounded in antitrust.
(8) Health care liability action.--The term ``health
care liability action'' means a civil action brought in
a State or Federal Court or pursuant to an alternative
dispute resolution system, against a health care
provider, a health care organization, or the
manufacturer, distributor, supplier, marketer,
promoter, or seller of a medical product, regardless of
the theory of liability on which the claim is based, or
the number of plaintiffs, defendants, or other parties,
or the number of causes of action, in which the
claimant alleges a health care liability claim.
(9) Health care liability claim.--The term ``health
care liability claim'' means a demand by any person,
whether or not pursuant to ADR, against a health care
provider, health care organization, or the
manufacturer, distributor, supplier, marketer,
promoter, or seller of a medical product, including,
but not limited to, third-party claims, cross-claims,
counter-claims, or contribution claims, which are based
upon the provision of, use of, or payment for (or the
failure to provide, use, or pay for) health care
services or medical products, regardless of the theory
of liability on which the claim is based, or the number
of plaintiffs, defendants, or other parties, or the
number of causes of action.
(10) Health care organization.--The term ``health
care organization'' means any person or entity which is
obligated to provide or pay for health benefits under
any health plan, including any person or entity acting
under a contract or arrangement with a health care
organization to provide or administer any health
benefit.
(11) Health care provider.--The term ``health care
provider'' means any person or entityrequired by State
or Federal laws or regulations to be licensed, registered, or certified
to provide health care services, and being either so licensed,
registered, or certified, or exempted from such requirement by other
statute or regulation.
(12) Health care goods or services.--The term
``health care goods or services'' means any goods or
services provided by a health care organization,
provider, or by any individual working under the
supervision of a health care provider, that relates to
the diagnosis, prevention, or treatment of any human
disease or impairment, or the assessment or care of the
health of human beings.
(13) Malicious intent to injure.--The term
``malicious intent to injure'' means intentionally
causing or attempting to cause physical injury other
than providing health care goods or services.
(14) Medical product.--The term ``medical product''
means a drug, device, or biological product intended
for humans, and the terms ``drug'', ``device'', and
``biological product'' have the meanings given such
terms in sections 201(g)(1) and 201(h) of the Federal
Food, Drug and Cosmetic Act (21 U.S.C. 321) and section
351(a) of the Public Health Service Act (42 U.S.C.
262(a)), respectively, including any component or raw
material used therein, but excluding health care
services.
(15) Noneconomic damages.--The term ``noneconomic
damages'' means damages for physical and emotional
pain, suffering, inconvenience, physical impairment,
mental anguish, disfigurement, loss of enjoyment of
life, loss of society and companionship, loss of
consortium (other than loss of domestic service),
hedonic damages, injury to reputation, and all other
nonpecuniary losses of any kind or nature.
(16) Punitive damages.--The term ``punitive damages''
means damages awarded, for the purpose of punishment or
deterrence, and not solely for compensatory purposes,
against a health care provider, health care
organization, or a manufacturer, distributor, or
supplier of a medical product. Punitive damages are
neither economic nor noneconomic damages.
(17) Recovery.--The term ``recovery'' means the net
sum recovered after deducting any disbursements or
costs incurred in connection with prosecution or
settlement of the claim, including all costs paid or
advanced by any person. Costs of health care incurred
by the plaintiff and the attorneys' office overhead
costs or charges for legal services are not deductible
disbursements or costs for such purpose.
(18) State.--The term ``State'' means each of the
several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Northern Mariana Islands, the Trust
Territory of the Pacific Islands, and any other
territory or possession of the United States, or any
political subdivision thereof.
SEC. 10. EFFECT ON OTHER LAWS.
(a) Vaccine Injury.--
(1) To the extent that title XXI of the Public Health
Service Act establishes a Federal rule of law
applicable to a civil action brought for a vaccine-
related injury or death--
(A) this Act does not affect the application
of the rule of law to such an action; and
(B) any rule of law prescribed by this Act in
conflict with a rule of law of such title XXI
shall not apply to such action.
(2) If there is an aspect of a civil action brought
for a vaccine-related injury or death to which a
Federal rule of law under title XXI of the Public
Health Service Act does not apply, then this Act or
otherwise applicable law (as determined under this Act)
will apply to such aspect of such action.
(b) Other Federal Law.--Except as provided in this section,
nothing in this Act shall be deemed to affect any defense
available to a defendant in a health care lawsuit or action
under any other provision of Federal law.
SEC. 11. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.
(a) Health Care Lawsuits.--The provisions governing health
care lawsuits set forth in this Act preempt, subject to
subsections (b) and (c), State law to the extent that State law
prevents the application of any provisions of law established
by or under this Act. The provisions governing health care
lawsuits set forth in this Act supersede chapter 171 of title
28, United States Code, to the extent that such chapter--
(1) provides for a greater amount of damages or
contingent fees, a longer period in which a health care
lawsuit may be commenced, or a reduced applicability or
scope of periodic payment of future damages, than
provided in this Act; or
(2) prohibits the introduction of evidence regarding
collateral source benefits, or mandates or permits
subrogation or a lien on collateral source benefits.
(b) Protection of States' Rights and Other Laws.--(1) Any
issue that is not governed by any provision of law established
by or under this Act (including State standards of negligence)
shall be governed by otherwise applicable State or Federal law.
(2) This Act shall not preempt or supersede any State or
Federal law that imposes greater procedural or substantive
protections for health care providers and health care
organizations from liability, loss, or damages than those
provided by this Act or create a cause of action.
(c) State Flexibility.--No provision of this Act shall be
construed to preempt--
(1) any State law (whether effective before, on, or
after the date of the enactment of this Act) that
specifies a particular monetary amount of compensatory
or punitive damages (or the total amount of damages)
that may be awarded in a health care lawsuit,
regardless of whether such monetary amount is greater
or lesser than is provided for under this Act,
notwithstanding section 4(a); or
(2) any defense available to a party in a health care
lawsuit under any other provision of State or Federal
law.
SEC. 12. APPLICABILITY; EFFECTIVE DATE.
This Act shall apply to any health care lawsuit brought in a
Federal or State court, or subject to an alternative dispute
resolution system, that is initiated on or after the date of
the enactment of this Act, except that any health care lawsuit
arising from an injury occurring prior to the date of the
enactment of this Act shall be governed by the applicable
statute of limitations provisions in effect at the time the
injury occurred.
SEC. 13. SENSE OF CONGRESS.
It is the sense of Congress that a health insurer should be
liable for damages for harm caused when it makes a decision as
to what care is medically necessary and appropriate.