109th CONGRESS
2d Session
H. R. 4838
To improve patient access to health care services and provide improved
medical care by reducing the excessive burden the liability system places
on the health care delivery system.
IN THE HOUSE OF REPRESENTATIVES
March 1, 2006
Mr. SHAW introduced the following bill; which was referred to the Committee
on the Judiciary, and in addition to the Committee on Energy and Commerce,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
A BILL
To improve patient access to health care services and provide improved
medical care by reducing the excessive burden the liability system places
on the health care delivery system.
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 `Medical Malpractice Reform Act of 2006'.
SEC. 2. FINDINGS AND PURPOSE.
(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--
(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-
(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.
(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 entity required 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.
(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 law or provision that,
in regards to attorney contingency fees, mandates that a greater portion
of the damage recovery go to the claimant.
(3) 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 in a monetary amount that is lesser
than is provided for under this Act, notwithstanding section 4(a); or
(2) any State law in effect on or before the date of the enactment of
this Act that specifies the total amount of all compensatory damages (both
economic and noneconomic) that may be awarded in a health care lawsuit;
or
(3) 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.
END
