[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4791 Introduced in House (IH)]

<DOC>







103d CONGRESS
  2d Session
                                H. R. 4791

   To establish Federal standards for the resolution of health care 
              malpractice claims, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 19, 1994

    Mr. Grams (for himself, Mr. Gingrich, Mr. Armey, Mr. Delay, Mr. 
Solomon, Mr. Stenholm, Mr. Hastert, Mr. Deal, Mr. Stearns, Mr. Talent, 
 Mr. Dreier, Mr. Saxton, Mr. Knollenberg, Mr. Inhofe, Mr. Zimmer, Mr. 
  Calvert, Mr. Stump, Mr. Torkildsen, Mr. Hefley, Mr. Doolittle, Mr. 
  Baker of California, Mr. Horn, Mr. King, Mr. Lewis of Florida, Mrs. 
Fowler, Mr. Hancock, Mr. Linder, Mr. Barcia of Michigan, and Mr. Smith 
 of Oregon), introduced the following bill; which was referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
   To establish Federal standards for the resolution of health care 
              malpractice claims, and for other purposes.

    Be it enacted by the Senate and House of Representa<gr-thn-eq>tives 
of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medical 
Malpractice Fairness Act of 1994''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                      TITLE I--GENERAL PROVISIONS

Sec. 101. Findings.
Sec. 102. Definitions.
Sec. 103. Period of applicability.
          TITLE II--FEDERAL REFORM OF HEALTH CARE MALPRACTICE

Sec. 201. Requirement for initial resolution of action through 
                            alternative dispute resolution.
Sec. 202. Liability of multiple defendants several only.
Sec. 203. Treatment of noneconomic and punitive damages.
Sec. 204. General restrictions on payment of damages.
Sec. 205. Uniform statute of limitations.
Sec. 206. Treatment of attorney's fees and other costs.
Sec. 207. Qualifications for expert witnesses.
Sec. 208. Preemption; effect on sovereign immunity.
                    TITLE III--REQUIREMENTS FOR ADR

Sec. 301. Basic requirements for State alternative dispute resolution 
                            systems.
Sec. 302. Certification of State systems; applicability of alternative 
                            Federal system.

                      TITLE I--GENERAL PROVISIONS

SEC. 101. FINDINGS.

    Congress finds that--
            (1) the health care and insurance industries are industries 
        affecting interstate commerce and the health care malpractice 
        litigation systems existing throughout the United States affect 
        interstate commerce by contributing to the high cost of health 
        care and premiums for malpractice insurance purchased by health 
        care providers; and
            (2) the Federal Government has a major interest in health 
        care as a direct provider of health care and as a source of 
        payment for health care, and has a demonstrated interest in 
        assessing the quality of care, access to care, and the costs of 
        care through the evaluative activities of several Federal 
        agencies.

SEC. 102. DEFINITIONS.

    In this Act:
            (1) Alternative dispute resolution system; ADR.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means a 
        system established under this Act that provides for the 
        resolution of health care malpractice claims in a manner other 
        than through health care malpractice actions.
            (2) Claimant.--The term ``claimant'' means any person who 
        alleges a health care malpractice claim, and any person on 
        whose behalf such a claim is alleged, including the decedent in 
        the case of an action brought through or on behalf of an 
        estate.
            (3) Economic losses.--The term ``economic losses'' means 
        losses for hospital and medical expenses, lost wages, lost 
        employment, and other pecuniary losses.
            (4) Health care malpractice action.--The term ``health care 
        malpractice action'' means a civil action alleging a health 
        care malpractice claim against a health care provider or health 
        care professional or a manufacturer of a medical product.
            (5) Health care malpractice claim.--The term ``health care 
        malpractice claim'' means any claim relating to the provision 
        of (or the failure to provide) health care services or the use 
        of a medical product, if the claim is based on negligence or 
        gross negligence, breach of express or implied warranty or 
        contract, or failure to discharge a duty to warn or instruct to 
        obtain consent.
            (6) Health care professional.--The term ``health care 
        professional'' means any individual who provides health care 
        services in a State and who is required by State law or 
        regulation to be licensed or certified by the State to provide 
        such services in the State, including (but not limited to) a 
        physician, nurse, chiropractor, nurse midwife, physical 
        therapist, social worker, or physician assistant.
            (7) Health care provider.--The term ``health care 
        provider'' means any organization or institution that is 
        engaged in the delivery of health care services in a State and 
        that is required by State law or regulation to be licensed or 
        certified by the State to engage in the delivery of such 
        services in the State.
            (8) Injury.--The term ``injury'' means any injury, illness, 
        disease, or other harm that is the subject of a health care 
        malpractice claim.
            (9) Medical product.--
                    (A) In general.--The term ``medical product'' means 
                a drug (as defined in section 201(g)(1) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 321(g)(1)) or a 
                medical device (as defined in section 201(h) of the 
                Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h)) 
                if--
                            (i) such drug or device was subject to 
                        premarket approval under section 505, 507, or 
                        515 of the Federal Food, Drug, and Cosmetic Act 
                        (21 U.S.C. 355, 357, or 360e) or section 351 of 
                        the Public Health Service Act (42 U.S.C. 262) 
                        with respect to the safety of the formulation 
                        or performance of the aspect of such drug or 
                        device which is the subject of the claimant's 
                        allegation or the adequacy of the packaging or 
                        labeling of such drug or device, and such drug 
                        or device is approved by the Food and Drug 
                        Administration; or
                            (ii) the drug or device is generally 
                        recognized as safe and effective under 
                        regulations issued by the Secretary of Health 
                        and Human Services under section 201(p) of the 
                        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                        321(p)).
                    (B) Exception in case of misrepresentation or 
                fraud.--Notwithstanding subparagraph (A), the term 
                ``medical product'' shall not include any product 
                described in such subparagraph if it is shown that the 
                product is approved by the Food and Drug Administration 
                for marketing as a result of withheld information, 
                misrepresentation, or an illegal payment by the 
                manufacturer of the product.
            (10) Noneconomic damages.--The term ``noneconomic damages'' 
        means losses for physical and emotional pain, suffering, 
        inconvenience, physical impairment, mental anguish, 
        disfigurement, loss of enjoyment of life, and other 
        nonpecuniary losses, but does not include punitive or exemplary 
        damages.
            (11) Punitive damages; exemplary damages.--The terms 
        ``punitive damages'' and ``exemplary damages'' mean 
        compensation, in addition to compensation for actual harm 
        suffered, that is awarded for the purpose of punishing a person 
        for conduct deemed to be malicious, wanton, willful, or 
        excessively reckless.
            (12) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (13) State.--Except as otherwise provided, the term 
        ``State'' means each of the several States, the District of 
        Columbia, Puerto Rico, the Virgin Islands, Guam, American 
        Samoa, and the Northern Mariana Islands.

SEC. 103. PERIOD OF APPLICABILITY.

    The provisions of this Act shall apply to claims initiated during 
the 5-year period beginning upon the expiration of the 1-year period 
that begins on the date of the enactment of this Act.

          TITLE II--FEDERAL REFORM OF HEALTH CARE MALPRACTICE

SEC. 201. REQUIREMENT FOR INITIAL RESOLUTION OF ACTION THROUGH 
              ALTERNATIVE DISPUTE RESOLUTION.

    (a) In General.--
            (1) State cases.--A health care malpractice action may not 
        be brought in any State court during a calendar year unless the 
        health care malpractice claim that is the subject of the action 
        has been initially resolved under an alternative dispute 
        resolution system certified for the year by the Secretary under 
        section 302(a), or, in the case of a State in which such a 
        system is not in effect for the year, under the alternative 
        Federal system established under section 302(b).
            (2) Federal diversity actions.--A health care malpractice 
        action may not be brought in any Federal court under section 
        1332 of title 28, United States Code, during a calendar year 
        unless the health care malpractice claim that is the subject of 
        the action has been initially resolved under the alternative 
        dispute resolution system referred to in paragraph (1) that 
        applied in the State whose law applies in such action.
            (3) Claims against united states.--
                    (A) Establishment of process for claims.--The 
                Attorney General shall establish an alternative dispute 
                resolution process for the resolution of tort claims 
                consisting of health care malpractice claims brought 
                against the United States under chapter 171 of title 
                28, United States Code. Under such process, the 
                resolution of a claim shall occur after the completion 
                of the administrative claim process applicable to the 
                claim under section 2675 of such title.
                    (B) Requirement for initial resolution under 
                process.--A health care malpractice action based on a 
                health care malpractice claim described in subparagraph 
                (A) may not be brought in any Federal court unless the 
                claim has been initially resolved under the alternative 
                dispute resolution process established by the Attorney 
                General under such subparagraph.
    (b) Initial Resolution of Claims Under ADR.--For purposes of 
subsection (a), an action is ``initially resolved'' under an 
alternative dispute resolution system if--
                    (A) the ADR reaches a decision on whether the 
                defendant is liable to the plaintiff for damages; and
                    (B) if the ADR determines that the defendant is 
                liable, the ADR reaches a decision on the amount of 
                damages assessed against the defendant.
    (c) Procedures for Filing Actions.--
            (1) Notice of intent to contest decision.--Not later than 
        60 days after a decision is issued with respect to a health 
        care malpractice claim under an alternative dispute resolution 
        system, each party affected by the decision shall submit a 
        sealed statement to a court of competent jurisdiction 
        indicating whether or not the party intends to contest the 
        decision.
            (2) Deadline for filing action.--A health care malpractice 
        action may not be brought by a party unless--
                    (A) the party has filed the notice of intent 
                required by paragraph (1); and
                    (B) the party files the action in a court of 
                competent jurisdiction not later than 90 days after the 
                decision resolving the health care malpractice claim 
                that is the subject of the action is issued under the 
                applicable alternative dispute resolution system.
            (3) Court of competent jurisdiction.--For purposes of this 
        subsection, the term ``court of competent jurisdiction'' 
        means--
                    (A) with respect to actions filed in a State court, 
                the appropriate State trial court; and
                    (B) with respect to actions filed in a Federal 
                court, the appropriate United States district court.
    (d) Legal Effect of Uncontested ADR Decision.--The decision reached 
under an alternative dispute resolution system shall, for purposes of 
enforcement by a court of competent jurisdiction, have the same status 
in the court as the verdict of a health care malpractice action 
adjudicated in a State or Federal trial court. The previous sentence 
shall not apply to a decision that is contested by a party affected by 
the decision pursuant to subsection (c)(1).

SEC. 202. LIABILITY OF MULTIPLE DEFENDANTS SEVERAL ONLY.

    The liability of each defendant in a health care malpractice action 
shall be several only and shall not be joint, and each defendant's 
fault shall be determined on the basis of a percentage allocated to the 
defendant in direct proportion to the defendant's percentage of 
responsibility (as determined by the trier of fact).

SEC. 203. TREATMENT OF NONECONOMIC AND PUNITIVE DAMAGES.

    (a) Limitation on Amount of Noneconomic Damages.--The total amount 
of noneconomic damages that may be awarded to a claimant and the 
members of the claimant's family for losses resulting from the injury 
which is the subject of a health care malpractice action may not exceed 
$250,000, regardless of the number of parties against whom the action 
is brought or the number of actions brought with respect to the injury.
    (b) Treatment of Punitive Damages.--
            (1) Prohibiting punitive damages except in cases of gross 
        or criminal negligence.--No punitive or exemplary damages may 
        be awarded against any individual with respect to a health care 
        malpractice claim unless the claimant establishes by clear and 
        convincing evidence that the harm suffered by the claimant was 
        the result of conduct manifesting deliberate disregard for the 
        health and safety of the claimant or (in the case of a claim 
        arising from the use of a medical product) to the health and 
        safety of those persons who might be harmed by the medical 
        product.
            (2) Limitation concerning certain awards.--In the case of a 
        health care malpractice claim in which the plaintiff alleges an 
        injury resulting from the use of a medical product, no punitive 
        or exemplary damages may be awarded against the manufacturer or 
        seller of such product.
            (3) Payments to state for medical quality assurance 
        activities.--
                    (A) In general.--Any punitive damages awarded with 
                respect to a health care malpractice claim shall be 
                paid to the State in which the action is brought or, in 
                a case brought in Federal court, in the State in which 
                the health care services that caused the injury that is 
                the subject of the claim were provided.
                    (B) Activities described.--A State shall use 
                amounts paid pursuant to subparagraph (A) to carry out 
                activities to assure the safety and quality of health 
                care services provided in the State, including (but not 
                limited to)--
                            (i) licensing or certifying health care 
                        professionals and health care providers in the 
                        State;
                            (ii) operating alternative dispute 
                        resolution systems;
                            (iii) carrying out public education 
                        programs relating to health care malpractice 
                        and the availability of alternative dispute 
                        resolution systems in the State; and
                            (iv) carrying out programs to reduce 
                        malpractice-related costs for retired providers 
                        or other providers volunteering to provide 
                        services in medically underserved areas.
                    (C) Maintenance of effort.--A State shall use any 
                amounts paid pursuant to subparagraph (A) to supplement 
                and not to replace amounts spent by the State for the 
                activities described in subparagraph (B).

SEC. 204. GENERAL RESTRICTIONS ON PAYMENT OF DAMAGES.

    (a) Reductions for Contributions From Collateral Sources.--
            (1) In general.--The total amount of damages received by an 
        individual shall be reduced by any other payment which has been 
        made or which will be made to such individual to compensate 
        such individual for an injury, including payments under--
                    (A) Federal or State disability or sickness 
                programs;
                    (B) Federal, State, or private health insurance 
                programs;
                    (C) private disability insurance programs;
                    (D) employer wage continuation programs; and
                    (E) any other source of payment intended to 
                compensate such individual for such injury.
            (2) Admission as evidence.--The availability of a payment 
        described in paragraph (1) shall be made known to the trier of 
        fact.
    (b) Periodic Payment of Damages for Future Expenses.--No individual 
may be required to pay more than $100,000 in a single payment in 
damages for expenses to be incurred in the future, but shall be 
permitted to make such payments on a periodic basis. The periods for 
such payments shall be determined by the court, based on projections of 
when expenses are likely to be incurred.

SEC. 205. UNIFORM STATUTE OF LIMITATIONS.

    (a) In General.--Except as provided in subsection (b), no health 
care malpractice claim may be initiated after the expiration of the 2-
year period that begins on the date the alleged injury should 
reasonably have been discovered, or the expiration of the 4-year period 
that begins on the date the alleged injury occurred, whichever is 
later.
    (b) Exception for Minors Under Age 6.--In the case of an alleged 
injury suffered by a minor who has not attained 6 years of age, no 
health care malpractice claim may be initiated after the expiration of 
the 2-year period that begins on the date the alleged injury should 
reasonably have been discovered, but in no event later than 4 years 
after the date the alleged injury occurred or the date on which the 
minor attains 8 years of age, whichever is later.

SEC. 206. TREATMENT OF ATTORNEY'S FEES AND OTHER COSTS.

    (a) Limitation on Contingency Fees.--An attorney shall not contract 
for or collect a contingency fee for representing a claimant in the 
resolution of a health care malpractice claim in excess of the 
following:
            (1) 50 percent of the first $50,000 (or portion thereof) of 
        the amount recovered by the claimant.
            (2) 33\1/3\ percent of the next $50,000 (or portion 
        thereof) of the amount recovered by the claimant.
            (3) 25 percent of the next $100,000 (or portion thereof) of 
        the amount recovered by the claimant.
            (4) 10 percent of any additional amounts recovered by the 
        claimant in excess of $200,000.
    (b) Requiring Party Contesting ADR Ruling to Pay Attorney's Fees 
and Other Costs.--
            (1) In general.--The court in a health care malpractice 
        action shall require the party that (pursuant to section 
        201(c)(1)) contested the ruling of the alternative dispute 
        resolution system with respect to the health care malpractice 
        claim that is the subject of the action to pay to the opposing 
        party the costs incurred by the opposing party under the 
        action, including attorney's fees, fees paid to expert 
        witnesses, and other litigation expenses (but not including 
        court costs, filing fees, or other expenses paid directly by 
        the party to the court, or any fees or costs associated with 
        the resolution of the claim under the alternative dispute 
        resolution system), but only if--
                    (A) in the case of an action in which the party 
                that contested the ruling is the claimant, the amount 
                of damages awarded to the party under the action does 
                not exceed the amount of damages awarded to the party 
                under the ADR system by at least 15 percent; and
                    (B) in the case of an action in which the party 
                that contested the ruling is the defendant, the amount 
                of damages assessed against the party under the action 
                is not at least 15 percent less than the amount of 
                damages assessed under the ADR system.
            (2) Exceptions.--Paragraph (1) shall not apply if--
                    (A) the party contesting the ruling made under the 
                previous alternative dispute resolution system shows 
                that--
                            (i) the ruling was procured by corruption, 
                        fraud, or undue means,
                            (ii) there was partiality or corruption 
                        under the system,
                            (iii) there was other misconduct under the 
                        system that materially prejudiced the party's 
                        rights, or
                            (iv) the ruling was based on an error of 
                        law;
                    (B) the party contesting the ruling made under the 
                alternative dispute resolution system presents new 
                evidence before the trier of fact that was not 
                available for presentation under the ADR system;
                    (C) the health care malpractice action raised a 
                novel issue of law; or
                    (D) the court finds that the application of such 
                paragraph to a party would constitute an undue 
                hardship, and issues an order waiving or modifying the 
                application of such paragraph that specifies the 
                grounds for the court's decision.
            (3) Requirement for performance bond.--The court in a 
        health care malpractice action shall require the party that 
        (pursuant to section 201(c)(1)) contested the ruling of the 
        alternative dispute resolution system with respect to the 
        health care malpractice claim that is the subject of the action 
        to post a performance bond (in such amount and consisting of 
        such funds and assets as the court determines to be 
        appropriate), except that the court may waive the application 
        of such requirement to a party if the court determines that the 
        posting of such a bond is not necessary to ensure that the 
        party shall meet the requirements of this subsection to pay the 
        opposing party the costs incurred by the opposing party under 
        the action.
            (4) Limit on attorney's fees paid.--Attorneys' fees that 
        are required to be paid under paragraph (1) by the contesting 
        party shall not exceed the amount of the attorneys' fees 
        incurred by the contesting party in the action. If the 
        attorneys' fees of the contesting party are based on a 
        contingency fee agreement, the amount of attorneys' fees for 
        purposes of the preceding sentence shall not exceed the 
        reasonable value of those services.
            (5) Records.--In order to receive attorneys' fees under 
        paragraph (1), counsel of record in the health care malpractice 
        action involved shall maintain accurate, complete records of 
        hours worked on the action, regardless of the fee arrangement 
        with the client involved.
    (c) Contingency Fee Defined.--As used in this section, the term 
``contingency fee'' means any fee for professional services which is, 
in whole or in part, contingent upon the recovery of any amount of 
damages, whether through judgment or settlement.

SEC. 207. QUALIFICATIONS FOR EXPERT WITNESSES.

    (a) Medical Expertise.--No individual may testify as an expert 
witness with respect to a health care malpractice claim unless the 
individual has expertise in the relevant issues of medical practice 
involved in the claim.
    (b) Payment of Contingency Fee Prohibited.--The payment made to an 
expert witness for testimony with respect to a health care malpractice 
claim may not vary on the basis of the disposition of the claim.

SEC. 208. PREEMPTION; EFFECT ON SOVEREIGN IMMUNITY.

    (a) Preemption.--The standards established by this title shall 
supersede any State law only to the extent that State law establishes 
higher payment limits, permits the recovery of a greater amount of 
damages or the awarding of a greater amount of attorney's fees, or 
establishes a longer period during which a health care malpractice 
claim may be initiated.
    (b) Effect on Sovereign Immunity and Choice of Law or Venue.--
Nothing in this Act shall be construed to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any provision of law;
            (2) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (3) affect the applicability of any provision of the 
        Foreign Sovereign Immunities Act of 1976;
            (4) preempt State choice-of-law rules with respect to 
        claims brought by a foreign nation or a citizen of a foreign 
        nation; or
            (5) affect the right of any court to transfer venue or to 
        apply the law of a foreign nation or to dismiss a claim of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum.

                    TITLE III--REQUIREMENTS FOR ADR

SEC. 301. BASIC REQUIREMENTS FOR STATE ALTERNATIVE DISPUTE RESOLUTION 
              SYSTEMS.

    (a) In General.--A State's alternative dispute resolution system 
meets the requirements of this section if the system--
            (1) applies to all health care malpractice claims under the 
        jurisdiction of the courts of that State;
            (2) requires that a written opinion resolving the dispute 
        be issued not later than 6 months after the date by which each 
        party against whom the claim is filed has received notice of 
        the claim (other than in exceptional cases for which a longer 
        period is required for the issuance of such an opinion), and 
        that the opinion contain--
                    (A) findings of fact relating to the dispute, and
                    (B) a description of the costs incurred in 
                resolving the dispute under the system (including any 
                fees paid to the individuals hearing and resolving the 
                claim), together with an appropriate assessment of the 
                costs against any of the parties;
            (3) requires individuals who hear and resolve claims under 
        the system to meet such qualifications as the State may require 
        (in accordance with regulations of the Secretary);
            (4) is approved by the State or by local governments in the 
        State;
            (5) with respect to a State system that consists of 
        multiple dispute resolution procedures--
                    (A) permits the parties to a dispute to select the 
                procedure to be used for the resolution of the dispute 
                under the system, and
                    (B) if the parties do not agree on the procedure to 
                be used for the resolution of the dispute, assigns a 
                particular procedure to the parties;
            (6) provides for the transmittal to the State agency 
        responsible for monitoring or disciplining health care 
        professionals and health care providers of any findings made 
        under the system that such a professional or provider committed 
        malpractice, unless, during the 90-day period beginning on the 
        date the system resolves the claim against the professional or 
        provider, the professional or provider brings an action 
        contesting the decision made under the system; and
            (7) provides for the regular transmittal to the 
        Administrator for Health Care Policy and Research of 
        information on disputes resolved under the system, in a manner 
        that assures that the identity of the parties to a dispute 
        shall not be revealed.
    (b) Application of Standards to Alternative Dispute Resolution.--
The provisions of title II shall apply with respect to claims brought 
under a State alternative dispute resolution system or the alternative 
Federal system in the same manner as such provisions apply with respect 
to health care malpractice actions brought in the State.

SEC. 302. CERTIFICATION OF STATE SYSTEMS; APPLICABILITY OF ALTERNATIVE 
              FEDERAL SYSTEM.

    (a) Certification.--
            (1) In general.--Not later than 9 months after the date of 
        the enactment of this Act and periodically thereafter, the 
        Secretary, in consultation with the Attorney General, shall 
        determine whether a State's alternative dispute resolution 
        system meets the requirements of this part for the following 
        calendar year.
            (2) Basis for certification.--The Secretary shall certify a 
        State's alternative dispute resolution system under this 
        subsection for a calendar year if the Secretary determines 
        under paragraph (1) that the system meets the requirements of 
        section 301.
    (b) Applicability of Alternative Federal System.--
            (1) Establishment and applicability.--Not later than 9 
        months after the date of the enactment of this Act, the 
        Secretary, in consultation with the Attorney General, shall 
        establish by rule an alternative Federal ADR system for the 
        resolution of health care malpractice claims during a calendar 
        year in States that do not have in effect an alternative 
        dispute resolution system certified under subsection (a) for 
        the year.
            (2) Requirements for system.--Under the alternative Federal 
        ADR system established under paragraph (1)--
                    (A) paragraphs (1), (2), (6), and (7) of section 
                301(a) shall apply to claims brought under the system;
                    (B) if the system provides for the resolution of 
                claims through arbitration, the claims brought under 
                the system shall be heard and resolved by arbitrators 
                appointed by the Secretary in consultation with the 
                Attorney General; and
                    (C) with respect to a State in which the system is 
                in effect, the Secretary may (at the State's request) 
                modify the system to take into account the existence of 
                dispute resolution procedures in the State that affect 
                the resolution of health care malpractice claims.
            (3) Treatment of States with alternative system in 
        effect.--If the alternative Federal ADR system established 
        under this subsection is applied with respect to a State for a 
        calendar year--
                    (A) the State shall reimburse the United States (at 
                such time and in such manner as the Secretary may 
                require) for the costs incurred by the United States 
                during the year as a result of the application of the 
                system with respect to the State; and
                    (B) notwithstanding any other provision of law, no 
                funds may be paid to the State (or to any unit of local 
                government in the State) or to any entity in the State 
                pursuant to the Public Health Service Act.

                                 <all>

HR 4791 IH----2