SYSTEMS

SEC. 101. GRANTS TO STATES.

    (a) In General.--The Secretary shall make grants to States for the 
implementation and evaluation of alternative dispute resolution 
systems.
    (b) Eligibility.--A State is eligible to receive a grant under this 
section if the State submits to the Secretary an application at such 
time, in such form, and containing such information and assurances as 
the Secretary may require, including--
            (1) a description of the alternative dispute resolution 
        system that the State intends to implement with amounts 
        received under the grant;
            (2) assurances that the State will comply with all data 
        gathering requirements promulgated by the Secretary under 
        section 102(a); and
            (3) any information and assurances necessary to enable the 
        Secretary to determine whether the State's alternative dispute 
        resolution system meets the qualification standards for such 
        systems developed by the Secretary under section 102(a).
    (c) Number of Grants.--
            (1) In general.--Except as provided in paragraph (2), the 
        Secretary shall award not less than 10 grants each fiscal year 
        under this section.
            (2) Exception.--Notwithstanding paragraph (1), the 
        Secretary may award less than 10 grants under this section in a 
        fiscal year if the Secretary determines that there are an 
        inadequate number of applications submitted that meet the 
        eligibility and approval requirements of this section in such 
        fiscal year.
    (d) Designation of Model States.--
            (1) In general.--The Secretary shall designate each State 
        receiving a grant under this section as a model alternative 
        dispute resolution State.
            (2) Extension of period of grant.--Upon application to the 
        Secretary, a State designated under paragraph (1) shall be 
        eligible for a 2-year extension of the grant received under 
        this section.
            (3) Dissemination of information to other states.--The 
        Secretary shall disseminate information on the alternative 
        dispute resolution systems implemented by the States designated 
        under paragraph (1) to other States, health care professionals, 
        health care providers, and other interested parties.

SEC. 102. ADMINISTRATION.

    (a) Standards and Regulations for Alternative Dispute Resolution 
Grant Program.--
            (1) In general.--In consultation with the Director of the 
        Agency for Health Care Policy and Research, the Secretary shall 
        develop and promulgate standards and regulations necessary to 
        carry out the grant program established under section 101, 
        including--
                    (A) qualification standards for alternative dispute 
                resolution systems that States must meet in order to 
                receive grants under such section; and
                    (B) regulations establishing data gathering 
                requirements for States receiving grants under such 
                section.
            (2) Criteria for programs.--In developing qualification 
        standards for alternative dispute resolution systems under 
        paragraph (1)(A), the Secretary shall take into account the 
        effectiveness of such systems in--
                    (A) supporting access to health care;
                    (B) encouraging improvements in the quality of 
                health care;
                    (C) enhancing and not impairing the physician-
                patient relationship;
                    (D) encouraging innovation that leads to an 
                improved level of health care;
                    (E) compensating for avoidable medical injury due 
                to provider fault and not compensating for injury which 
                is unavoidable by standard medical practice;
                    (F) resolving claims promptly and in amounts 
                proportional to the injury;
                    (G) providing predictable outcomes; and
                    (H) operating efficiently in terms of financial 
                costs, professional energies, and governmental 
                processes.
    (b) Technical Assistance.--The Secretary shall provide States with 
technical assistance to enable States to submit applications for grants 
under section 101, including information on the establishment and 
operation of alternative dispute resolution systems.
    (c) Evaluation of Alternative Dispute Resolution Systems.--Not 
later than 4 years after awarding the first grant to a State under 
section 101, the Secretary shall prepare and submit to Congress a 
report describing and evaluating the alternative dispute resolution 
systems implemented by States with funds provided under such grants, 
and shall include in the report--
            (1) information on--
                    (A) the effect of such systems on the cost of 
                health care within the State,
                    (B) the impact of such systems on the access of 
                individuals to health care within the State, and
                    (C) the effect of such systems on the quality of 
                health care provided within such State; and
            (2) an analysis of the feasibility and desirability of 
        establishing a national alternative dispute resolution system.

           TITLE II--UNIFORM STANDARDS FOR MALPRACTICE CLAIMS

SEC. 201. APPLICABILITY.

    Except as provided in section 209, this title shall apply to any 
health care liability action brought in a Federal or State court and to 
any medical malpractice claim or medical product liability claim 
subject to an alternative dispute resolution system.

SEC. 202. CALCULATION AND PAYMENT OF DAMAGES.

    (a) Periodic Payments for Future Losses.--No person may be required 
to pay more than $100,000 in a single payment in damages (whether for 
economic or noneconomic losses) 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 upon projections of when such expenses are likely to be incurred.
    (b) Limitation on Noneconomic Losses.--The total amount of damages 
that may be awarded to an individual and the family members of such 
individual for noneconomic losses resulting from an injury which is the 
subject of an action or claim may not exceed $250,000, regardless of 
the number of health care professionals, health care providers, and 
health care producers against whom the action or claim is brought or 
the number of actions or claims brought with respect to the injury.
    (c) Mandatory Offsets for Damages Paid by a Collateral Source.--
            (1) In general.--The total amount of damages received by an 
        individual shall be reduced (in accordance with paragraph (2)) 
        by any other payment that has been or will be made to the 
        individual to compensate the individual for the injury that was 
        the subject of the action or claim.
            (2) Amount of reduction.--The amount by which an award of 
        damages to an individual shall be reduced under paragraph (1) 
        shall be--
                    (A) the total amount of any payments (other than 
                such award) that have been made or that will be made to 
                the individual to compensate the individual for the 
                injury that was the subject of the action or claim; 
                minus
                    (B) the amount paid by the individual (or by the 
                spouse, parent, or legal guardian of the individual) to 
                secure the payments described in subparagraph (A).
    (d) Attorney's Fees.--A claimant's attorney's fees may not exceed--
            (1) 25 percent of the first $150,000 of any award or 
        settlement paid to the claimant; or
            (2) 15 percent of any additional amounts paid to the 
        claimant.
    (e) Limitation on Punitive Damages.--The total amount of punitive 
damages that may be assessed with respect to an action or claim may not 
exceed twice the total amount of the damages awarded to compensate the 
claimant for losses resulting from the injury which is the subject of 
the claim or action, regardless of the number of health care 
professionals, health care providers, and health care producers against 
whom the action or claim is brought or the number of actions or claims 
brought with respect to the injury.

SEC. 203. JOINT AND SEVERAL LIABILITY FOR NONECONOMIC LOSSES.

    The liability of each defendant for noneconomic losses shall be 
several only and shall not be joint, and each defendant shall be liable 
only for the amount of noneconomic losses allocated to the defendant in 
direct proportion to the defendant's percentage of responsibility (as 
determined by the trier of fact).

SEC. 204. UNIFORM STATUTE OF LIMITATIONS.

    (a) In General.--No medical malpractice claim or medical product 
liability claim may be initiated after the expiration of the 2-year 
period that begins on the earlier of the date which the alleged injury 
that is the subject of such action was discovered or the date on which 
such injury should reasonably have been discovered, but in no event 
after the expiration of the 4-year period that begins on the date the 
alleged injury occurred.
    (b) Exception for Minors.--In the case of an alleged injury 
suffered by a minor who has not attained 6 years of age, no medical 
malpractice liability claim or medical product liability claim may be 
brought after the expiration of the 2-year period that begins on the 
date the alleged injury that is the subject of the action should 
reasonably have been discovered, but in no event after the date on 
which the minor attains 10 years of age.

SEC. 205. SPECIAL PROVISION FOR CERTAIN OBSTETRIC SERVICES.

    (a) In General.--In the case of a medical malpractice claim or 
medical product liability claim relating to services provided during 
labor or the delivery of a baby, if the defendant health care 
professional did not previously treat the plaintiff for the pregnancy, 
the trier of fact may not find that the defendant committed malpractice 
and may not assess damages against the defendant unless the malpractice 
is proven by clear and convincing evidence.
    (b) Applicability to Group Practices or Agreements Among 
Providers.--For purposes of subsection (a), a health care professional 
shall be considered to have previously treated an individual for a 
pregnancy if the professional is a member of a group practice whose 
members previously treated the individual for the pregnancy or is 
providing services to the individual during labor or the delivery of a 
baby pursuant to an agreement with another professional.

SEC. 206. UNIFORM STANDARD FOR DETERMINING NEGLIGENCE.

    (a) Standard of Reasonableness.--Except as provided in subsection 
(b), a defendant may not be found to have committed malpractice unless 
the defendant's conduct at the time of providing the health care 
services that are the subject of the action was not reasonable.
    (b) Actions Brought Under Strict Liability.--Subsection (a) shall 
not apply to any action in which the claimant asserts that the 
defendant is liable under a theory of strict liability.

SEC. 207. RESTRICTIONS ON PUNITIVE DAMAGES RELATING TO MEDICAL PRODUCT 
              LIABILITY CLAIMS.

    (a) Restrictions for Approved Products or Devices.--
            (1) In general.--Punitive damages otherwise permitted by 
        applicable law shall not be awarded with respect to any medical 
        product liability claim alleged against a medical product 
        producer if--
                    (A) the drug or device that is the subject of such 
                claim--
                            (i) was subject to approval under section 
                        505 or premarket approval under section 515 of 
                        the Federal Food, Drug, and Cosmetic Act by the 
                        Food and Drug Administration with respect to--
                                    (I) the safety of the formulation 
                                or performance of the aspect of the 
                                drug or device; or
                                    (II) the adequacy of the packaging 
                                or labeling of the drug or device, and
                            (ii) was approved by the Food and Drug 
                        Administration; or
                    (B) the drug or device is generally recognized as 
                safe and effective pursuant to conditions established 
                by the Food and Drug Administration and applicable 
                regulations, including packaging and labeling 
                regulations.
            (2) Exception in case of withheld information, 
        misrepresentation, or illegal payment.--The provisions of 
        paragraph (1) shall not apply if it is determined on the basis 
        of clear and convincing evidence that the medical product 
        producer--
                    (A) withheld from or misrepresented to the Food and 
                Drug Administration information concerning such drug or 
                device that is required to be submitted under the 
                Federal Food, Drug, and Cosmetic Act or section 352 of 
                the Public Health Service Act that is material and 
                relevant to the action; or
                    (B) made an illegal payment to an official of the 
                Food and Drug Administration for the purpose of 
                securing approval of the drug or device.
    (b) Separate Proceeding To Determine Punitive Damages.--
            (1) Considerations.--At the request of a medical product 
        producer in a health care liability action in which a medical 
        product liability claim is alleged against the producer, the 
        trier of fact shall consider in a separate proceeding--
                    (A) whether punitive damages are to be awarded and 
                the amount of the award; or
                    (B) the amount of punitive damages following a 
                determination of punitive liability.
            (2) Evidence.--If a separate proceeding is requested in 
        accordance with paragraph (1), evidence relevant only to the 
        claim of punitive damages (as determined by applicable State 
        law) shall be inadmissible in any proceeding to determine 
        whether compensatory damages are to be awarded to the claimant.
    (c) Criteria for Determining Amount of Punitive Damages.--Subject 
to the limitation on punitive damages provided in section 202(e), all 
relevant evidence shall be considered in determining the amount of 
punitive damages assessed with respect to a medical product liability 
claim, including--
            (1) the financial condition of the medical product 
        producer;
            (2) the severity of the harm caused by the conduct of the 
        medical product producer;
            (3) the duration of the conduct or any concealment of the 
        conduct by the medical product producer;
            (4) the profitability of the conduct to the medical product 
        producer;
            (5) the number of products sold by the medical product 
        producer of the kind causing the harm complained of by the 
        claimant;
            (6) awards of punitive or exemplary damages to persons 
        similarly situated to the claimant;
            (7) prospective awards of compensatory damages to persons 
        similarly situated to the claimant;
            (8) any criminal penalties imposed on the medical product 
        producer as a result of the conduct complained of by the 
        claimant; and
            (9) the amount of any civil fines assessed against the 
        defendant as a result of the conduct complained of by the 
        claimant.

SEC. 208. JURISDICTION OF FEDERAL COURTS.

    The district courts of the United States shall not have 
jurisdiction of any health care liability action based on sections 1331 
or 1337 of title 28, United States Code.

SEC. 209. PREEMPTION.

    (a) In General.--This title supersedes any State law only to the 
extent that the State law permits the recovery by a claimant or the 
assessment against a defendant of a greater amount of damages, permits 
the awarding of a greater amount of attorneys' fees, establishes a 
longer period during which a medical malpractice claim or medical 
product liability claim may be initiated, or establishes a less strict 
standard of proof for determining whether a defendant has committed 
malpractice, than the provisions of this title.
    (b) Effect on Sovereign Immunity and Choice of Law or Venue.--
Nothing in this title 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 in inconvenient forum.

                                 

HR 1572 IH----2
HR 1572 IH----3
TABLE OF CONTENTS: 
     Title I:  Grants to States for Alternative Dispute 
          Resolution Systems 
     Title II:  Uniform Standards for Malpractice Claims 
Medical Care Injury Compensation Reform Act of 1993 - 
Title I: Grants to States for Alternative Dispute Resolution Systems
 - Directs the Secretary of Health and Human Services to make grants to States for the implementation and evaluation of alternative dispute resolution (ADR) systems. 
Requires the Secretary to:  (1) designate each State receiving such a grant as a model ADR State (making such State eligible for a two-year extension); and (2) disseminate information on the ADR systems implemented by such States to other States, health care professionals and providers, and other interested parties. 
Directs the Secretary to:  (1) develop and promulgate standards and regulations necessary to carry out the grant program, including qualification standards that States must meet to receive grants and regulations establishing State data gathering requirements; (2) take into account, in developing qualification standards, specified factors such as the effectiveness of such systems in supporting access to health care, encouraging improvements in the quality of care, resolving claims promptly, and providing predictable outcomes; (3) provide States with technical assistance; and (4) report to the Congress, within four years of the first grant, describing and evaluating the ADR systems implemented. 
Title II:  Uniform Standards for Malpractice Claims
 - Specifies that, with respect to any health care liability action brought in a Federal or State court and any medical malpractice or medical product liability claim subject to an ADR system:  (1) no person 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 periodic payments; (2) the total amount of damages that may be awarded to an individual and the family members of such individual for non-economic losses may not exceed $250,000; (3) the total amount of damages received by an individual shall be reduced by any other payment that has been or will be made to the individual to compensate such individual for the injury; (4) a claimant's attorney's fees may not exceed 25 percent of the first $150,000 of any award or settlement, or 15 percent of any additional amounts, paid to the claimant; (5) the total amount of punitive damages that may be assessed may not exceed twice the total amount of the damages awarded to compensate the claimant for losses resulting from the injury; and (6) the liability of each defendant for non-economic losses shall be several only and not joint, with each defendant liable only for non-economic losses allocated to the defendant in direct proportion to the defendant's percentage of responsibility. 
Establishes a two-year statute of limitations for medical malpractice and product liability claims, with an exception for minors under age six. 
Specifies that, in the case of a medical malpractice or product liability claim relating to services provided during labor or the delivery of a baby, if the defendant health care professional did not previously treat the plaintiff for the pregnancy, the trier of fact may not find that the defendant committed malpractice and assess damages against the defendant unless the malpractice is proven by clear and convincing evidence. 
Bars a defendant from being found to have committed malpractice unless the defendant's conduct at the time of providing the health care services was not reasonable, except where the claimant asserts that the defendant is liable under a strict liability theory. 
Bars the award of punitive damages with respect to any medical product liability claim alleged against a medical product producer if the drug or device that is the subject of the claim:  (1) was subject to approval or premarket approval under the Federal Food, Drug, and Cosmetic Act by the Food and Drug Administration (FDA) with respect to the safety or performance of the drug or device or the adequacy of the packaging or labeling; (2) was approved by FDA; or (3) is generally recognized as safe and effective pursuant to conditions established by FDA and applicable regulations. Makes an exception in the case of withheld information, misrepresentation, or illegal payment to an FDA official for purposes of securing approval of the drug or device.
Medical Care Injury Compensation Reform Act of 1993