To restore reliability to the medical justice system by fostering alternatives to current medical tort litigation, and for other purposes.

July 31 (legislative day, JULY 21), 2003

Mr. ENZI introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

To restore reliability to the medical justice system by fostering alternatives to current medical tort litigation, and for other purposes.

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 `Reliable Medical Justice Act'.

SEC. 2. PURPOSES.

The purposes of this Act are--

(1) to restore reliability to the medical justice system by fostering alternatives to current medical tort litigation that promote early disclosure of health care errors and provide prompt, fair, and reasonable compensation to patients who are injured by health care errors; and

(2) to support and assist States in developing such alternatives.

SEC. 3. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO CURRENT MEDICAL TORT LITIGATION.

Part P of title III of the Public Health Service Act (42 U.S.C. 280g et seq.) is amended by adding at the end the following:

`SEC. 3990. STATE DEMONSTRATION PROGRAM TO EVALUATE ALTERNATIVES TO CURRENT MEDICAL TORT LITIGATION.

`(a) IN GENERAL- The Secretary is authorized to award demonstration grants to States for the development, implementation, and evaluation of alternatives to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations.

`(b) DURATION- The Secretary may award up to 7 grants under subsection (a) and each grant awarded under such subsection may not exceed a period of 10 years.

`(c) CONDITIONS FOR DEMONSTRATION GRANTS-

`(1) REQUIREMENTS- Each State desiring a grant under subsection (a) shall--

`(A) develop an alternative to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations that may be 1 of the models described in subsection (d); and

`(B) establish procedures to allow for patient safety data related to disputes resolved under subparagraph (A) to be collected and analyzed by organizations that engage in voluntary efforts to improve patient safety and the quality of health care delivery, in accordance with guidelines established by the Secretary.

`(2) ALTERNATIVE TO CURRENT TORT LITIGATION- Each State desiring a grant under subsection (a) shall demonstrate how the proposed alternative described in paragraph (1)(A)--

`(A) makes the medical liability system more reliable;

`(B) enhances patient safety; and

`(C) maintains access to liability insurance.

`(3) SOURCES OF COMPENSATION- Each State desiring a grant under subsection (a) shall identify the sources from and methods by which compensation would be paid for claims resolved under the proposed alternative to current tort litigation, which may include public or private funding sources, or a combination of such sources. Funding methods may provide financial incentives for activities that improve patient safety.

`(4) SCOPE- Each State desiring a grant under subsection (a) may establish a scope of jurisdiction (such as a designated geographic region or a designated area of health care practice) for the proposed alternative to current tort litigation that is sufficient to evaluate the effects of the alternative.

`(d) MODELS-

`(1) IN GENERAL- Any State desiring a grant under subsection (a) that proposes an alternative described in paragraph (2), (3), or (4) shall be deemed to meet the criteria under subsection (c)(2).

`(2) EARLY DISCLOSURE AND COMPENSATION MODEL- In the early disclosure and compensation model, the State shall--

`(A) provide immunity from tort liability (except in cases of fraud, or in cases of criminal or intentional harm) to any health care provider or health care organization that enters into an agreement to pay compensation to a patient for an injury;

`(B) set a limited time period during which a health care provider or health care organization may make an offer of compensation benefits under subparagraph (A), with consideration for instances where prompt recognition of an injury is unlikely or impossible;

`(C) require that the compensation provided under subparagraph (A) include--

`(i) payment for the net economic loss of the patient, on a periodic basis, reduced by any payments received by the patient under--

`(I) any health or accident insurance;

`(II) any wage or salary continuation plan; or

`(III) any disability income insurance;

`(ii) payment for the patient's pain and suffering, if appropriate for the injury, based on a capped payment schedule developed by the State in consultation with relevant experts; and

`(iii) reasonable attorney's fees;

`(D) not abridge the right of an injured patient to seek redress through the State tort system if a health care provider does not enter into a compensation agreement with the patient in accordance with subparagraph (A);

`(E) prohibit a patient who accepts compensation benefits in accordance with subparagraph (A) from filing a health care lawsuit against other health care providers or health care organizations for the same injury; and

`(F) permit a health care provider or health care organization that enters into an agreement to pay compensation benefits to an individual under subparagraph (A) to join in the payment of the compensation benefits of any health care provider or health care organization that is potentially liable, in whole or in part, for the injury.

`(3) ADMINISTRATIVE DETERMINATION OF COMPENSATION MODEL-

`(A) IN GENERAL- In the administrative determination of compensation model--

`(i) the State shall--

`(I) designate an administrative entity (in this paragraph referred to as the `Board') that shall include representatives of--

`(aa) relevant State licensing boards;

`(bb) patient advocacy groups;

`(cc) health care providers and health care organizations; and

`(dd) attorneys in relevant practice areas;

`(II) set up classes of avoidable injuries that will be used by the Board to determine compensation under clause (ii)(II) and, in setting such classes, may consider 1 or more factors, including--

`(aa) the severity of the disability arising from the injury;

`(bb) the cause of injury;

`(cc) the length of time the patient will be affected by the injury;

`(dd) the degree of fault of the health care provider or health care organization; and

`(ee) standards of care that the State may adopt and their breach;

`(III) modify tort liability, through statute or contract, to bar negligence claims in court against health care providers and health care organizations for the classes of injuries established under subclause (II), except in cases of fraud, or in cases of criminal or intentional harm;

`(IV) outline a procedure for informing patients about the modified liability system described in this paragraph and, in systems where participation by the health care provider, health care organization, or patient is voluntary, allow for the decision by the provider, organization, or patient of whether to participate to be made prior to the provision of, use of, or payment for the health care service;

`(V) provide for an appeals process to allow for a review of decisions; and

`(VI) establish procedures to coordinate settlement payments with other sources of payment;

`(ii) the Board shall--

`(I) resolve health care liability claims for certain classes of avoidable injuries as determined by the State and determine compensation for such claims; and

`(II) develop a schedule of compensation to be used in making such determinations that includes--

`(aa) payment for the net economic loss of the patient, on a periodic basis, reduced by any payments received by the patient under any health or accident insurance, any wage or salary continuation plan, or any disability income insurance;

`(bb) payment for the patient's pain and suffering, if appropriate for the injury, based on a capped payment schedule developed by the State in consultation with relevant experts; and

`(cc) reasonable attorney's fees; and

`(iii) the Board may--

`(I) develop guidelines relating to--

`(aa) the standard of care; and

`(bb) the credentialing and disciplining of doctors; and

`(II) develop a plan for updating the schedule under clause (ii)(II) on a regular basis.

`(B) APPEALS- The State, in establishing the appeals process described in subparagraph (A)(i)(V), may choose whether to allow for de novo review, review with deference, or some opportunity for parties to reject determinations by the Board and elect to file a civil action after such rejection. Any State desiring to adopt the model described in this paragraph shall indicate

how such review method meets the criteria under subsection (c)(2).

`(C) TIMELINESS- Any claim handled under the system described in this paragraph shall provide for adjudication that is more timely and expedited than adjudication in a traditional tort system.

`(4) SPECIAL HEALTH CARE COURT MODEL- In the special health care court model, the State shall--

`(A) establish a special court for adjudication of disputes over injuries allegedly caused by health care providers or health care organizations;

`(B) ensure that such court is presided over by judges with expertise in and an understanding of health care;

`(C) provide authority to such judges to make binding rulings on causation, compensation, standards of care, and related issues;

`(D) provide for an appeals process to allow for a review of decisions; and

`(E) at its option, establish an administrative entity similar to the entity described in paragraph (3)(a)(i)(I) to provide advice and guidance to the special court.

`(e) APPLICATION- Each State desiring a grant under subsection (a) shall submit to the Secretary an application, at such time, in such manner, and containing such information as the Secretary may require.

`(f) REPORT- Each State receiving a grant under subsection (a) shall submit to the Secretary a report evaluating the effectiveness of activities funded with grants awarded under such subsection at such time and in such manner as the Secretary may require.

`(g) TECHNICAL ASSISTANCE- The Secretary shall provide technical assistance to the States awarded grants under subsection (a). Such technical assistance shall include the development, in consultation with States, of common definitions, formats, and data collection infrastructure for States receiving grants under this section to use in reporting to facilitate aggregation and analysis of data both within and between States. States not receiving grants under this section may also use such common definitions, formats, and data collection infrastructure.

`(h) EVALUATION-

`(1) IN GENERAL- The Secretary shall enter into a contract with an appropriate research organization to conduct an overall evaluation of the effectiveness of grants awarded under subsection (a) and to annually prepare and submit a report to the appropriate committees of Congress. Such an evaluation shall begin not later than 18 months following the date of implementation of the first program funded by a grant under subsection (a).

`(2) CONTENTS- The evaluation under paragraph (1) shall include--

`(A) an analysis of the effect of the grants awarded under subsection (a) on the number, nature, and costs of health care liability claims;

`(B) a comparison of the claim and cost information of each State receiving a grant under subsection (a); and

`(C) a comparison between States receiving a grant under this section and States that did not receive such a grant, matched to ensure similar legal and health care environments, and to determine the effects of the grants and subsequent reforms on--

`(i) the liability environment;

`(ii) health care quality; and

`(iii) patient safety.

`(i) OPTION TO PROVIDE FOR INITIAL PLANNING GRANTS- Of the funds appropriated pursuant to subsection (k), the Secretary may use a portion not to exceed $500,000 per State to provide planning grants to such States for the development of demonstration proposals meeting the criteria described in subsection (c). In selecting States to receive such planning grants, the Secretary shall give preference to those States in which current law would not prohibit the adoption of an alternative to current tort litigation.

`(j) DEFINITIONS- In this section:

`(1) HEALTH CARE SERVICES- The term `health care services' means any services provided by a health care provider, or by any individual working under the supervision of a health care provider, that relate to--

`(A) the diagnosis, prevention, or treatment of any human disease or impairment; or

`(B) the assessment of the health of human beings.

`(2) HEALTH CARE ORGANIZATION- The term `health care organization' means any individual or entity which is obligated to provide, pay for, or administer health benefits under any health plan.

`(3) HEALTH CARE PROVIDER- The term `health care provider' means any individual or entity--

`(A) licensed, registered, or certified under Federal or State laws or regulations to provide health care services; or

`(B) required to be so licensed, registered, or certified but that is exempted by other statute or regulation.

`(4) NET ECONOMIC LOSS- The term `net economic loss' means--

`(A) reasonable expenses incurred for products, services, and accommodations needed for health care, training, and other remedial treatment and care of an injured individual;

`(B) reasonable and appropriate expenses for rehabilitation treatment and occupational training;

`(C) 100 percent of the loss of income from work that an injured individual would have performed if not injured, reduced by any income from substitute work actually performed; and

`(D) reasonable expenses incurred in obtaining ordinary and necessary services to replace services an injured individual would have performed for the benefit of the individual or the family of such individual if the individual had not been injured.

`(k) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section such sums as may be necessary. Amounts appropriated pursuant to this subsection shall remain available until expended.'.

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