[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 454 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                 S. 454

  To reform the health care liability system and improve health care 
 quality through the establishment of quality assurance programs, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            February 16 (legislative day, January 30), 1995

    Mr. McConnell (for himself, Mr. Lieberman, and Mrs. Kassebaum) 
introduced the following bill; which was read twice and referred to the 
                 Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL


 
  To reform the health care liability system and improve health care 
 quality through the establishment of quality assurance programs, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Care 
Liability Reform and Quality Assurance Act of 1995''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title; table of contents.
                 TITLE I--HEALTH CARE LIABILITY REFORM

                      Subtitle A--Liability Reform

Sec. 101. Findings and purpose.
Sec. 102. Definitions.
Sec. 103. Applicability.
Sec. 104. Statute of limitations.
Sec. 105. Reform of punitive damages.
Sec. 106. Periodic payments.
Sec. 107. Scope of liability.
Sec. 108. Mandatory offsets for damages paid by a collateral source.
Sec. 109. Treatment of attorneys' fees and other costs.
Sec. 110. Obstetric cases.
Sec. 111. State-based alternative dispute resolution mechanisms.
Sec. 112. Requirement of certificate of merit.
               Subtitle B--Biomaterials Access Assurance

Sec. 121. Short title.
Sec. 122. Findings.
Sec. 123. Definitions.
Sec. 124. General requirements; applicability; preemption.
Sec. 125. Liability of biomaterials suppliers.
Sec. 126. Procedures for dismissal of civil actions against 
                            biomaterials suppliers.
                       Subtitle C--Applicability

Sec. 131. Applicability.
       TITLE II--PROTECTION OF THE HEALTH AND SAFETY OF PATIENTS

Sec. 201. Health care quality assurance program.
Sec. 202. Risk management programs.
Sec. 203. National practitioner data bank.
                        TITLE III--SEVERABILITY

Sec. 301. Severability.

                 TITLE I--HEALTH CARE LIABILITY REFORM

                      Subtitle A--Liability Reform

SEC. 101. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) Effect on health care access and costs.--That the civil 
        justice system of the United States is a costly and inefficient 
        mechanism for resolving claims of health care liability and 
        compensating injured patients and that the problems associated 
        with the current system are having an adverse impact on the 
        availability of, and access to, health care services and the 
        cost of health care in this country.
            (2) Effect on interstate commerce.--That the health care 
        and insurance industries are industries affecting interstate 
        commerce and the health care liability litigation systems 
        existing throughout the United States affect interstate 
        commerce by contributing to the high cost of health care and 
        premiums for health care liability insurance purchased by 
        participants in the health care system.
            (3) Effect on federal spending.--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 reform 
that is designed to--
            (1) ensure that individuals with meritorious health care 
        injury claims receive fair and adequate compensation, including 
        reasonable non-economic damages;
            (2) improve the availability of health care service in 
        cases in which health care liability actions have been shown to 
        be a factor in the decreased availability of services; and
            (3) 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 and unpredictability in the amount of compensation 
        provided to injured individuals.

SEC. 102. DEFINITIONS.

    As used in this subtitle:
            (1) Claimant.--The term ``claimant'' means any person who 
        commences a health care liability action, and any person on 
        whose behalf such an action is commenced, including the 
        decedent in the case of an action brought through or on behalf 
        of an estate.
            (2) Clear and convincing evidence.--The term ``clear and 
        convincing evidence'' is that measure or degree of proof that 
        will produce in the mind of the trier of fact a firm belief or 
        conviction as to the truth of the allegations sought to be 
        established, except that such measure or degree of proof is 
        more than that required under preponderance of the evidence, 
        but less than that required for proof beyond a reasonable 
        doubt.
            (3) Health care liability action.--The term ``health care 
        liability action'' means a civil action in a State or Federal 
        court--
                    (A) against a health care provider, health care 
                professional, or other defendant joined in the action 
                (regardless of the theory of liability on which the 
                action is based) in which the claimant alleges injury 
                related to the provision of, or the failure to provide, 
                health care services; or
                    (B) against a health care payor, a health 
                maintenance organization, insurance company, or any 
                other individual, organization, or entity that provides 
                payment for health care benefits in which the claimant 
                alleges that injury was caused by the payment for, or 
                the failure to make payment for, health care benefits, 
                except to the extent such actions are subject to the 
                Employee Retirement Income Security Act of 1974.
            (4) Health care professional.--The term ``health care 
        professional'' means any individual who provides health care 
        services in a State and who is required by Federal or State 
        laws or regulations to be licensed, registered or certified to 
        provide such services or who is certified to provide health 
        care services pursuant to a program of education, training and 
        examination by an accredited institution, professional board, 
        or professional organization.
            (5) Health care provider.--The term ``health care 
        provider'' means any organization or institution that is 
        engaged in the delivery of health care items or services in a 
        State and that is required by Federal or State laws or 
        regulations to be licensed, registered or certified to engage 
        in the delivery of such items or services.
            (6) Health care services.--The term ``health care 
        services'' means any services provided by a health care 
        professional or health care provider, or any individual working 
        under the supervision of a health care professional, that 
        relate to the diagnosis, prevention, or treatment of any 
        disease or impairment, or the assessment of the health of human 
        beings.
            (7) Injury.--The term ``injury'' means any illness, 
        disease, or other harm that is the subject of a health care 
        liability action.
            (8) Noneconomic losses.--The term ``noneconomic losses'' 
        means losses for physical and emotional pain, suffering, 
        inconvenience, physical impairment, mental anguish, 
        disfigurement, loss of enjoyment of life, loss of consortium, 
        and other nonpecuniary losses incurred by an individual with 
        respect to which a health care liability action is brought.
            (9) Punitive damages.--The term ``punitive damages'' means 
        damages awarded, for the purpose of punishment or deterrence, 
        and not for compensatory purposes, against a health care 
        provider, health care organization, or other defendant in a 
        health care liability action. Punitive damages are neither 
        economic nor noneconomic damages.
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 103. APPLICABILITY.

    (a) In General.--Except as provided in subsection (c), this 
subtitle shall apply with respect to any health care liability action 
brought in any Federal or State court, except that this section shall 
not apply to an action for damages arising from a vaccine-related 
injury or death to the extent that title XXI of the Public Health 
Service Act applies to the action.
    (b) Preemption.--The provisions of this subtitle shall preempt any 
State law to the extent such law is inconsistent with the limitations 
contained in such provisions. The provisions of this subtitle shall not 
preempt any State law that--
            (1) provides for defenses in addition to those contained in 
        this subtitle, places greater limitations on the amount of 
        attorneys' fees that can be collected, or otherwise imposes 
        greater restrictions on non-economic or punitive damages than 
        those provided in this subtitle;
            (2) permits State officials to commence health care 
        liability actions as a representative of an individual; or
            (3) permits provider-based dispute resolution.
    (c) Effect on Sovereign Immunity and Choice of Law or Venue.--
Nothing in this subtitle 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 
        actions 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 an action of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum.
    (d) Federal Court Jurisdiction Not Established on Federal Question 
Grounds.--Nothing in this subtitle shall be construed to establish any 
jurisdiction in the district courts of the United States over health 
care liability actions on the basis of sections 1331 or 1337 of title 
28, United States Code.

SEC. 104. STATUTE OF LIMITATIONS.

    A health care liability action that is subject to this Act may not 
be initiated unless a complaint with respect to such action is filed 
within the 2-year period beginning on the date on which the claimant 
discovered or, in the exercise of reasonable care, should have 
discovered the harm and its cause, except that such an action relating 
to a claimant under legal disability may be filed within 2 years after 
the date on which the disability ceases. If the commencement of a 
health care liability action is stayed or enjoined, the running of the 
statute of limitations under this section shall be suspended for the 
period of the stay or injunction.

SEC. 105. REFORM OF PUNITIVE DAMAGES.

    (a) Limitation.--With respect to a health care liability action, an 
award for punitive damages may only be made, if otherwise permitted by 
applicable law, if it is proven by clear and convincing evidence that 
the defendant--
            (1) intended to injure the claimant for a reason unrelated 
        to the provision of health care services;
            (2) understood the claimant was substantially certain to 
        suffer unnecessary injury, and in providing or failing to 
        provide health care services, the defendant deliberately failed 
        to avoid such injury; or
            (3) acted with a conscious disregard of a substantial and 
        unjustifiable risk of unnecessary injury which the defendant 
        failed to avoid in a manner which constitutes a gross deviation 
        from the normal standard of conduct in such circumstances.
    (b) Punitive Damages Not Permitted.--Notwithstanding the provisions 
of subsection (a), punitive damages may not be awarded against a 
defendant with respect to any health care liability action if no 
judgment for compensatory damages, including nominal damages (under 
$500), is rendered against the defendant.
    (c) Requirements for Pleading of Punitive Damages.--
            (1) In general.--No demand for punitive damages shall be 
        included in a health care liability action as initially filed.
            (2) Amended pleading.--A court may allow a claimant to file 
        an amended complaint or pleading for punitive damages in a 
        health care liability action if--
                    (A) the claimant submits a motion to amend the 
                complaint or pleading within the earlier of--
                            (i) 2 years after the complaint or initial 
                        pleading is filed, or
                            (ii) 9 months before the date the matter is 
                        first set for trial; and
                    (B) after a finding by a court upon review of 
                supporting and opposing affidavits or after a hearing, 
                that after weighing the evidence the claimant has 
                established by a substantial probability that the 
                claimant will prevail on the claim for punitive 
                damages.
    (d) Separate Proceeding.--
            (1) In general.--At the request of any defendant in a 
        health care liability action, the trier of fact shall consider 
        in a separate proceeding--
                    (A) whether punitive damages are to be awarded and 
                the amount of such award, or
                    (B) the amount of punitive damages following a 
                determination of punitive liability.
            (2) Only relevant evidence admissible.--If a defendant 
        requests a separate proceeding under paragraph (1), evidence 
        relevant only to the claim of punitive damages in a health care 
        liability action, as determined by applicable State law, shall 
        be inadmissible in any proceeding to determine whether 
        compensatory damages are to be awarded.
    (e) Determining Amount of Punitive Damages.--In determining the 
amount of punitive damages in a health care liability action, the trier 
of fact shall consider only the following:
            (1) The severity of the harm caused by the conduct of the 
        defendant.
            (2) The duration of the conduct or any concealment of it by 
        the defendant.
            (3) The profitability of the conduct of the defendant.
            (4) The number of products sold or medical procedures 
        rendered for compensation, as the case may be, by the defendant 
        of the kind causing the harm complained of by the claimant.
            (5) Awards of punitive or exemplary damages to persons 
        similarly situated to the claimant, when offered by the 
        defendant.
            (6) Prospective awards of compensatory damages to persons 
        similarly situated to the claimant.
            (7) Any criminal penalties imposed on the defendant as a 
        result of the conduct complained of by the claimant, when 
        offered by the defendant.
            (8) The amount of any civil fines assessed against the 
        defendant as a result of the conduct complained of by the 
        claimant, when offered by the defendant.
    (f) Limitation Amount.--The amount of damages that may be awarded 
as punitive damages in any health care liability action shall not 
exceed 3 times the amount awarded to the claimant for the economic 
injury on which such claim is based, or $250,000, whichever is greater. 
This subsection shall be applied by the court and shall not be 
disclosed to the jury.
    (g) Restrictions Permitted.--Nothing in this section shall be 
construed to imply a right to seek punitive damages where none exists 
under Federal or State law.

SEC. 106. PERIODIC PAYMENTS.

    With respect to a health care liability action, no person may be 
required to pay more than $100,000 for future damages in a single 
payment of a damages award, but a person shall be permitted to make 
such payments of the award on a periodic basis. The periods for such 
payments shall be determined by the adjudicating body, based upon 
projections of future losses and shall be reduced to present value. The 
adjudicating body may waive the requirements of this section if such 
body determines that such a waiver is in the interests of justice.

SEC. 107. SCOPE OF LIABILITY.

    (a) In General.--With respect to punitive and noneconomic damages, 
the liability of each defendant in a health care liability action shall 
be several only and may not be joint. Such a defendant shall be liable 
only for the amount of punitive or noneconomic damages allocated to the 
defendant in direct proportion to such defendant's percentage of fault 
or responsibility for the injury suffered by the claimant.
    (b) Determination of Percentage of Liability.--The trier of fact in 
a health care liability action shall determine the extent of each 
defendant's fault or responsibility for injury suffered by the 
claimant, and shall assign a percentage of responsibility for such 
injury to each such defendant.
    (c) Prohibition on Vicarious Liability.--A defendant in a health 
care liability action may not be held vicariously liable for the direct 
actions or omissions of other individuals.

SEC. 108. MANDATORY OFFSETS FOR DAMAGES PAID BY A COLLATERAL SOURCE.

    (a) In General.--With respect to a health care liability action, 
the total amount of damages received by an individual under such action 
shall be reduced, in accordance with subsection (b), by any other 
payment that has been, or will be, made to an individual to compensate 
such individual for the injury that was the subject of such action.
    (b) Amount of Reduction.--The amount by which an award of damages 
to an individual for an injury shall be reduced under subsection (a) 
shall be--
            (1) the total amount of any payments (other than such 
        award) that have been made or that will be made to such 
        individual to pay costs of or compensate such individual for 
        the injury that was the subject of the action; minus
            (2) the amount paid by such individual (or by the spouse, 
        parent, or legal guardian of such individual) to secure the 
        payments described in paragraph (1).
    (c) Pretrial Determination of Amounts From Collateral Services.--
The reductions required under subsection (b)(2) shall be determined by 
the court in a pretrial proceeding. At such proceeding--
            (1) no evidence shall be admitted as to the amount of any 
        charge, payments, or damage for which a claimant--
                    (A) has received payment from a collateral source 
                or the obligation for which has been assured by a third 
                party; or
                    (B) is, or with reasonable certainty, will be 
                eligible to receive payment from a collateral source of 
                the obligation which will, with reasonable certainty be 
                assumed by a third party; and
            (2) the jury, if any, shall be advised that--
                    (A) except for damages as to which the court 
                permits the introduction of evidence, the claimant's 
                medical expenses and lost income have been or will be 
                paid by a collateral source or third party; and
                    (B) the claimant shall receive no award for any 
                damages that have been or will be paid by a collateral 
                source or third party.

SEC. 109. TREATMENT OF ATTORNEYS' FEES AND OTHER COSTS.

    (a) Limitation on Amount of Contingency Fees.--
            (1) In general.--An attorney who represents, on a 
        contingency fee basis, a claimant in a health care liability 
        action may not charge, demand, receive, or collect for services 
        rendered in connection with such action in excess of the 
        following amount recovered by judgment or settlement under such 
        action:
                    (A) 33\1/3\ percent of the first $150,000 (or 
                portion thereof) recovered, based on after-tax 
                recovery, plus
                    (B) 25 percent of any amount in excess of $150,000 
                recovered, based on after-tax recovery.
            (2) Calculation of periodic payments.--In the event that a 
        judgment or settlement includes periodic or future payments of 
        damages, the amount recovered for purposes of computing the 
        limitation on the contingency fee under paragraph (1) shall be 
        based on the cost of the annuity or trust established to make 
        the payments. In any case in which an annuity or trust is not 
        established to make such payments, such amount shall be based 
        on the present value of the payments.
    (b) Contingency Fee Defined.--As used in this section, the term 
``contingency fee'' means any fee for professional legal services which 
is, in whole or in part, contingent upon the recovery of any amount of 
damages, whether through judgment or settlement.

SEC. 110. OBSTETRIC CASES.

    With respect to a health care liability action relating to services 
provided during labor or the delivery of a baby, if the health care 
professional against whom the action is brought did not previously 
treat the pregnant woman for the pregnancy, the trier of fact may not 
find that the defendant committed malpractice and may not assess 
damages against the health care professional unless the malpractice is 
proven by clear and convincing evidence.

SEC. 111. STATE-BASED ALTERNATIVE DISPUTE RESOLUTION MECHANISMS.

    (a) Application to Health Care Liability Claims under Health 
Plans.--Prior to or immediately following the commencement of any 
health care liability action, the parties shall participate in the 
alternative dispute resolution system administered by the State under 
subsection (b). Such participation shall be in lieu of any other 
provision of Federal or State law applicable to the parties prior to 
the commencement of the health care liability action.
    (b) Adoption of Mechanism by State.--Each State shall--
            (1) maintain or adopt at least one of the alternative 
        dispute resolution methods satisfying the requirements 
        specified under subsection (c) and (d) for the resolution of 
        health care liability claims arising from the provision of (or 
        failure to provide) health care services to individuals 
        enrolled in a health plan; and
            (2) clearly disclose to enrollees in health plans (and 
        potential enrollees) the availability and procedures for 
        consumer grievances, including a description of the alternative 
        dispute resolution method or methods adopted under this 
        subsection.
    (c) Specification of Permissible Alternative Dispute Resolution 
Methods.--
            (1) In general.--The Attorney General, in consultation with 
        the Secretary and the Administrative Conference of the United 
        States, shall, by regulation, develop alternative dispute 
        resolution methods for the use by States in resolving health 
        care liability claims under subsection (a). Such methods shall 
        include at least the following:
                    (A) Arbitration.--The use of arbitration, a nonjury 
                adversarial dispute resolution process which may, 
                subject to subsection (d), result in a final decision 
                as to facts, law, liability or damages. The parties may 
                elect binding arbitration.
                    (B) Mediation.--The use of mediation, a settlement 
                process coordinated by a neutral third party without 
                the ultimate rendering of a formal opinion as to 
                factual or legal findings.
                    (C) Early neutral evaluation.--The use of early 
                neutral evaluation, in which the parties make a 
                presentation to a neutral attorney or other neutral 
                evaluator for an assessment of the merits, to encourage 
                settlement. If the parties do not settle as a result of 
                assessment and proceed to trial, the neutral 
                evaluator's opinion shall be kept confidential.
                    (D) Early offer and recovery mechanism.--
                            (i) In general.--The use of early offer and 
                        recovery mechanisms under which a health care 
                        provider, health care organization, or any 
                        other alleged responsible defendant may offer 
                        to compensate a claimant for his or her 
                        reasonable economic damages, including future 
                        economic damages, less amounts available from 
                        collateral sources.
                            (ii) Binding arbitration.--If, after an 
                        offer is made under clause (i), the claimant 
                        alleges that payment of economic damages under 
                        the offer has not been reasonably made, or the 
                        participants in the offer dispute their 
                        relative contributions to the payments to be 
                        made to the claimant, such disputes shall be 
                        resolved through binding arbitration in 
                        accordance with applicable rules and procedures 
                        established by the State involved.
            (2) Standards for establishing methods.--In developing 
        alternative dispute resolution methods under paragraph (1), the 
        Attorney General shall assure that the methods promote the 
        resolution of health care liability claims in a manner that--
                    (A) is affordable for the parties involved;
                    (B) provides for timely resolution of claims;
                    (C) provides for the consistent and fair resolution 
                of claims; and
                    (D) provides for reasonably convenient access to 
                dispute resolution for individuals enrolled in plans.
            (3) Waiver authority.--Upon application of a State, the 
        Attorney General, in consultation with the Secretary, may grant 
        the State the authority to fulfill the requirement of 
        subsection (b) by adopting a mechanism other than a mechanism 
        established by the Attorney General pursuant to this 
        subsection, except that such mechanism must meet the standards 
        set forth in paragraph (2).
    (d) Further Redress.--Except with respect to the claimant-requested 
binding arbitration method set forth in subsection (c)(1)(A), a 
claimant who is dissatisfied with the determination reached as a result 
of an alternative dispute resolution method applied under this section 
may, after the final resolution of the claimant's claim under the 
method, initiate or resume a cause of action to seek damages or other 
redress with respect to the claim to the extent otherwise permitted 
under State law. State law shall govern the admissibility of results of 
any alternative dispute resolution procedure and all statements, 
offers, and other communications made during such procedures, at any 
subsequent trial. An individual who initiates or resumes a health care 
liability action shall only prevail if such individual proves each 
element of the action beyond a reasonable doubt, including proving that 
the defendant was grossly negligent or intentionally caused injury.

SEC. 112. REQUIREMENT OF CERTIFICATE OF MERIT.

    (a) Requiring Submission with Complaint.--Except as provided in 
subsection (b) and subject to the penalties of subsection (d), no 
health care liability action may be brought by any individual unless, 
at the time the individual commences such action, the individual or the 
individual's attorney submits an affidavit declaring that--
            (1) the individual (or the individual's attorney) has 
        consulted and reviewed the facts of the claim with a qualified 
        specialist (as defined in subsection (c));
            (2) the individual or the individual's attorney has 
        obtained a written report by a qualified specialist that 
        clearly identifies the individual and that includes the 
        specialist's determination that, based upon a review of the 
        available medical record and other relevant material, a 
        reasonable medical interpretation of the facts supports a 
        finding that the claim against the defendant is meritorious and 
        based on good cause; and
            (3) on the basis of the qualified specialist's review and 
        consultation, the individual, and if represented, the 
        individual's attorney, have concluded that the claim is 
        meritorious and based on good cause.
    (b) Extension in Certain Instances.--
            (1) In general.--Subject to paragraph (2), subsection (a) 
        shall not apply with respect to an individual who brings a 
        health care liability action without submitting an affidavit 
described in such subsection if--
                    (A) despite good faith efforts, the individual is 
                unable to obtain the written report before the 
                expiration of the applicable statute of limitations;
                    (B) despite good faith efforts, at the time the 
                individual commences the action, the individual has 
                been unable to obtain medical records or other 
                information necessary, pursuant to any applicable law, 
                to prepare the written report requested; or
                    (C) the court of competent jurisdiction determines 
                that the affidavit requirement shall be extended upon a 
                showing of good cause.
            (2) Deadline for submission where extension applies.--In 
        the case of an individual who brings an action to which 
        paragraph (1) applies, the action shall be dismissed unless the 
        individual submits the affidavit described in subsection (a) 
        not later than--
                    (A) in the case of an action to which subparagraph 
                (A) of paragraph (1) applies, 90 days after commencing 
                the action; or
                    (B) in the case of an action to which subparagraph 
                (B) of paragraph (1) applies, 90 days after obtaining 
                the information described in such subparagraph or when 
                good cause for an extension no longer exists.
    (c) Qualified Specialist Defined.--
            (1) In general.--As used in subsection (a), the term 
        ``qualified specialist'' means, with respect to a health care 
        liability action, a health care professional who has expertise 
        in the same or substantially similar area of practice to that 
        involved in the action.
            (2) Evidence of expertise.--For purposes of paragraph (1), 
        evidence of required expertise may include evidence that the 
        individual--
                    (A) practices (or has practiced) or teaches (or has 
                taught) in the same or substantially similar area of 
                health care or medicine to that involved in the action; 
                or
                    (B) is otherwise qualified by experience or 
                demonstrated competence in the relevant practice area.
    (d) Sanctions for Submitting False Affidavit.--Upon the motion of 
any party or on its own initiative, the court in a health care 
liability action may impose a sanction on a party, the party's 
attorney, or both, for--
            (1) any knowingly false statement made in an affidavit 
        described in subsection (a);
            (2) making any false representations in order to obtain a 
        qualified specialist's report; or
            (3) failing to have the qualified specialist's written 
        report in his or her custody and control;
and may require that the sanctioned party reimburse the other party to 
the action for costs and reasonable attorney's fees.

               Subtitle B--Biomaterials Access Assurance

SEC. 121. SHORT TITLE.

    This subtitle may be cited as the ``Biomaterials Access Assurance 
Act of 1995''.

SEC. 122. FINDINGS.

    Congress finds that--
            (1) each year millions of citizens of the United States 
        depend on the availability of lifesaving or life-enhancing 
        medical devices, many of which are permanently implantable 
        within the human body;
            (2) a continued supply of raw materials and component parts 
        is necessary for the invention, development, improvement, and 
        maintenance of the supply of the devices;
            (3) most of the medical devices are made with raw materials 
        and component parts that--
                    (A) are not designed or manufactured specifically 
                for use in medical devices; and
                    (B) come in contact with internal human tissue;
            (4) the raw materials and component parts also are used in 
        a variety of nonmedical products;
            (5) because small quantities of the raw materials and 
        component parts are used for medical devices, sales of raw 
        materials and component parts for medical devices constitute an 
        extremely small portion of the overall market for the raw 
        materials and medical devices;
            (6) under the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 301 et seq.), manufacturers of medical devices are 
        required to demonstrate that the medical devices are safe and 
        effective, including demonstrating that the products are 
        properly designed and have adequate warnings or instructions;
            (7) notwithstanding the fact that raw materials and 
        component parts suppliers do not design, produce, or test a 
        final medical device, the suppliers have been the subject of 
actions alleging inadequate--
                    (A) design and testing of medical devices 
                manufactured with materials or parts supplied by the 
                suppliers; or
                    (B) warnings related to the use of such medical 
                devices;
            (8) even though suppliers of raw materials and component 
        parts have very rarely been held liable in such actions, such 
        suppliers have ceased supplying certain raw materials and 
        component parts for use in medical devices because the costs 
        associated with litigation in order to ensure a favorable 
        judgment for the suppliers far exceeds the total potential 
        sales revenues from sales by such suppliers to the medical 
        device industry;
            (9) unless alternate sources of supply can be found, the 
        unavailability of raw materials and component parts for medical 
        devices will lead to unavailability of lifesaving and life-
        enhancing medical devices;
            (10) because other suppliers of the raw materials and 
        component parts in foreign nations are refusing to sell raw 
        materials or component parts for use in manufacturing certain 
        medical devices in the United States, the prospects for 
        development of new sources of supply for the full range of 
        threatened raw materials and component parts for medical 
        devices are remote;
            (11) it is unlikely that the small market for such raw 
        materials and component parts in the United States could 
        support the large investment needed to develop new suppliers of 
        such raw materials and component parts;
            (12) attempts to develop such new suppliers would raise the 
        cost of medical devices;
            (13) courts that have considered the duties of the 
        suppliers of the raw materials and component parts have 
        generally found that the suppliers do not have a duty--
                    (A) to evaluate the safety and efficacy of the use 
                of a raw material or component part in a medical 
                device; and
                    (B) to warn consumers concerning the safety and 
                effectiveness of a medical device;
            (14) attempts to impose the duties referred to in 
        subparagraphs (A) and (B) of paragraph (13) on suppliers of the 
        raw materials and component parts would cause more harm than 
        good by driving the suppliers to cease supplying manufacturers 
        of medical devices; and
            (15) in order to safeguard the availability of a wide 
        variety of lifesaving and life-enhancing medical devices, 
        immediate action is needed--
                    (A) to clarify the permissible bases of liability 
                for suppliers of raw materials and component parts for 
                medical devices; and
                    (B) to provide expeditious procedures to dispose of 
                unwarranted suits against the suppliers in such manner 
                as to minimize litigation costs.

SEC. 123. DEFINITIONS.

    As used in this subtitle:
            (1) Biomaterials supplier.--
                    (A) In general.--The term ``biomaterials supplier'' 
                means an entity that directly or indirectly supplies a 
                component part or raw material for use in the 
                manufacture of an implant.
                    (B) Persons included.--Such term includes any 
                person who--
                            (i) has submitted master files to the 
                        Secretary for purposes of premarket approval of 
                        a medical device; or
                            (ii) licenses a biomaterials supplier to 
                        produce component parts or raw materials.
            (2) Claimant.--
                    (A) In general.--The term ``claimant'' means any 
                person who brings a civil action, or on whose behalf a 
                civil action is brought, arising from harm allegedly 
                caused directly or indirectly by an implant, including 
                a person other than the individual into whose body, or 
                in contact with whose blood or tissue, the implant is 
                placed, who claims to have suffered harm as a result of 
                the implant.
                    (B) Action brought on behalf of an estate.--With 
                respect to an action brought on behalf or through the 
                estate of an individual into whose body, or in contact 
                with whose blood or tissue the implant is placed, such 
                term includes the decedent that is the subject of the 
                action.
                    (C) Action brought on behalf of a minor.--With 
                respect to an action brought on behalf or through a 
                minor, such term includes the parent or guardian of the 
                minor.
                    (D) Exclusions.--Such term does not include--
                            (i) a provider of professional services, in 
                        any case in which--
                                    (I) the sale or use of an implant 
                                is incidental to the transaction; and
                                    (II) the essence of the transaction 
                                is the furnishing of judgment, skill, 
                                or services; or
                            (ii) a manufacturer, seller, or 
                        biomaterials supplier.
            (3) Component part.--
                    (A) In general.--The term ``component part'' means 
                a manufactured piece of an implant.
                    (B) Certain components.--Such term includes a 
                manufactured piece of an implant that--
                            (i) has significant nonimplant 
                        applications; and
                            (ii) alone, has no implant value or 
                        purpose, but when combined with other component 
                        parts and materials, constitutes an implant.
            (4) Harm.--
                    (A) In general.--The term ``harm'' means--
                            (i) any injury to or damage suffered by an 
                        individual;
                            (ii) any illness, disease, or death of that 
                        individual resulting from that injury or 
                        damage; and
                            (iii) any loss to that individual or any 
                        other individual resulting from that injury or 
                        damage.
                    (B) Exclusion.--The term does not include any 
                commercial loss or loss of or damage to an implant.
            (5) Implant.--The term ``implant'' means--
                    (A) a medical device that is intended by the 
                manufacturer of the device--
                            (i) to be placed into a surgically or 
                        naturally formed or existing cavity of the body 
                        for a period of at least 30 days; or
                            (ii) to remain in contact with bodily 
                        fluids or internal human tissue through a 
                        surgically produced opening for a period of 
                        less than 30 days; and
                    (B) suture materials used in implant procedures.
            (6) Manufacturer.--The term ``manufacturer'' means any 
        person who, with respect to an implant--
                    (A) is engaged in the manufacture, preparation, 
                propagation, compounding, or processing (as defined in 
                section 510(a)(1) of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 360(a)(1)) of the implant; and
                    (B) is required--
                            (i) to register with the Secretary pursuant 
                        to section 510 of the Federal Food, Drug, and 
                        Cosmetic Act (21 U.S.C. 360) and the 
                        regulations issued under such section; and
                            (ii) to include the implant on a list of 
                        devices filed with the Secretary pursuant to 
                        section 510(j) of such Act (21 U.S.C. 360(j)) 
                        and the regulations issued under such section.
            (7) Medical device.--The term ``medical device'' means a 
        device, as defined in section 201(h) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 321(h)).
            (8) Qualified specialist.--With respect to an action, the 
        term ``qualified specialist'' means a person who is qualified 
        by knowledge, skill, experience, training, or education in the 
        specialty area that is the subject of the action.
            (9) Raw material.--The term ``raw material'' means a 
        substance or product that--
                    (A) has a generic use; and
                    (B) may be used in an application other than an 
                implant.
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (11) Seller.--
                    (A) In general.--The term ``seller'' means a person 
                who, in the course of a business conducted for that 
                purpose, sells, distributes, leases, packages, labels, 
                or otherwise places an implant in the stream of 
                commerce.
                    (B) Exclusions.--The term does not include--
                            (i) a seller or lessor of real property;
                            (ii) a provider of professional services, 
                        in any case in which the sale or use of an 
                        implant is incidental to the transaction and 
                        the essence of the transaction is the 
                        furnishing of judgment, skill, or services; or
                            (iii) any person who acts in only a 
                        financial capacity with respect to the sale of 
                        an implant.

SEC. 124. GENERAL REQUIREMENTS; APPLICABILITY; PREEMPTION.

    (a) General Requirements.--
            (1) In general.--In any civil action covered by this 
        subtitle, a biomaterials supplier may raise any defense set 
        forth in section 125.
            (2) Procedures.--Notwithstanding any other provision of 
        law, the Federal or State court in which a civil action covered 
        by this subtitle is pending shall, in connection with a motion 
        for dismissal or judgment based on a defense described in 
        paragraph (1), use the procedures set forth in section 126.
    (b) Applicability.--
            (1) In general.--Except as provided in paragraph (2), 
        notwithstanding any other provision of law, this subtitle 
        applies to any civil action brought by a claimant, whether in a 
        Federal or State court, against a manufacturer, seller, or 
        biomaterials supplier, on the basis of any legal theory, for 
        harm allegedly caused by an implant.
            (2) Exclusion.--A civil action brought by a purchaser of a 
        medical device for use in providing professional services 
        against a manufacturer, seller, or biomaterials supplier for 
        loss or damage to an implant or for commercial loss to the 
        purchaser--
                    (A) shall not be considered an action that is 
                subject to this subtitle; and
                    (B) shall be governed by applicable commercial or 
                contract law.
    (c) Scope of Preemption.--
            (1) In general.--This subtitle supersedes any State law 
        regarding recovery for harm caused by an implant and any rule 
        of procedure applicable to a civil action to recover damages 
        for such harm only to the extent that this subtitle establishes 
        a rule of law applicable to the recovery of such damages.
            (2) Applicability of other laws.--Any issue that arises 
        under this subtitle and that is not governed by a rule of law 
        applicable to the recovery of damages described in paragraph 
        (1) shall be governed by applicable Federal or State law.
    (d) Statutory Construction.--Nothing in this subtitle may be 
construed--
            (1) to affect any defense available to a defendant under 
        any other provisions of Federal or State law in an action 
        alleging harm caused by an implant; or
            (2) to create a cause of action or Federal court 
        jurisdiction pursuant to section 1331 or 1337 of title 28, 
        United States Code, that otherwise would not exist under 
        applicable Federal or State law.

SEC. 125. LIABILITY OF BIOMATERIALS SUPPLIERS.

    (a) In General.--
            (1) Exclusion from liability.--Except as provided in 
        paragraph (2), a biomaterials supplier shall not be liable for 
        harm to a claimant caused by an implant.
            (2) Liability.--A biomaterials supplier that--
                    (A) is a manufacturer may be liable for harm to a 
                claimant described in subsection (b);
                    (B) is a seller may be liable for harm to a 
                claimant described in subsection (c); and
                    (C) furnishes raw materials or component parts that 
                fail to meet applicable contractual requirements or 
                specifications may be liable for a harm to a claimant 
                described in subsection (d).
    (b) Liability as Manufacturer.--
            (1) In general.--A biomaterials supplier may, to the extent 
        required and permitted by any other applicable law, be liable 
        for harm to a claimant caused by an implant if the biomaterials 
        supplier is the manufacturer of the implant.
            (2) Grounds for liability.--The biomaterials supplier may 
        be considered the manufacturer of the implant that allegedly 
        caused harm to a claimant only if the biomaterials supplier--
                    (A)(i) has registered with the Secretary pursuant 
                to section 510 of the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 360) and the regulations issued under 
                such section; and
                    (ii) included the implant on a list of devices 
                filed with the Secretary pursuant to section 510(j) of 
                such Act (21 U.S.C. 360(j)) and the regulations issued 
                under such section; or
                    (B) is the subject of a declaration issued by the 
                Secretary pursuant to paragraph (3) that states that 
                the supplier, with respect to the implant that 
                allegedly caused harm to the claimant, was required 
                to--
                            (i) register with the Secretary under 
                        section 510 of such Act (21 U.S.C. 360), and 
                        the regulations issued under such section, but 
                        failed to do so; or
                            (ii) include the implant on a list of 
                        devices filed with the Secretary pursuant to 
                        section 510(j) of such Act (21 U.S.C. 360(j)) 
                        and the regulations issued under such section, 
                        but failed to do so.
            (3) Administrative procedures.--
                    (A) In general.--The Secretary may issue a 
                declaration described in paragraph (2)(B) on the motion 
                of the Secretary or on petition by any person, after 
                providing--
                            (i) notice to the affected persons; and
                            (ii) an opportunity for an informal 
                        hearing.
                    (B) Docketing and final decision.--Immediately upon 
                receipt of a petition filed pursuant to this paragraph, 
                the Secretary shall docket the petition. Not later than 
                180 days after the petition is filed, the Secretary 
                shall issue a final decision on the petition.
                    (C) Applicability of statute of limitations.--Any 
                applicable statute of limitations shall toll during the 
                period during which a claimant has filed a petition 
                with the Secretary under this paragraph.
    (c) Liability as Seller.--A biomaterials supplier may, to the 
extent required and permitted by any other applicable law, be liable as 
a seller for harm to a claimant caused by an implant if the 
biomaterials supplier--
            (1) held title to the implant that allegedly caused harm to 
        the claimant as a result of purchasing the implant after--
                    (A) the manufacture of the implant; and
                    (B) the entrance of the implant in the stream of 
                commerce; and
            (2) subsequently resold the implant.
    (d) Liability for Violating Contractual Requirements or 
Specifications.--A biomaterials supplier may, to the extent required 
and permitted by any other applicable law, be liable for harm to a 
claimant caused by an implant, if the claimant in an action shows, by a 
preponderance of the evidence, that--
            (1) the raw materials or component parts delivered by the 
        biomaterials supplier either--
                    (A) did not constitute the product described in the 
                contract between the biomaterials supplier and the 
                person who contracted for delivery of the product; or
                    (B) failed to meet any specifications that were--
                            (i) provided to the biomaterials supplier 
                        and not expressly repudiated by the 
                        biomaterials supplier prior to acceptance of 
                        delivery of the raw materials or component 
                        parts;
                            (ii)(I) published by the biomaterials 
                        supplier;
                            (II) provided to the manufacturer by the 
                        biomaterials supplier; or
                            (III) contained in a master file that was 
                        submitted by the biomaterials supplier to the 
                        Secretary and that is currently maintained by 
                        the biomaterials supplier for purposes of 
                        premarket approval of medical devices; or
                            (iii)(I) included in the submissions for 
                        purposes of premarket approval or review by the 
                        Secretary under section 510, 513, 515, or 520 
                        of the Federal Food, Drug, and Cosmetic Act (21 
                        U.S.C. 360, 360c, 360e, or 360j); and
                            (II) have received clearance from the 
                        Secretary,
                if such specifications were provided by the 
                manufacturer to the biomaterials supplier and were not 
                expressly repudiated by the biomaterials supplier prior 
                to the acceptance by the manufacturer of delivery of 
                the raw materials or component parts; and
            (2) such conduct was an actual and proximate cause of the 
        harm to the claimant.

SEC. 126. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS AGAINST 
              BIOMATERIALS SUPPLIERS.

    (a) Motion To Dismiss.--In any action that is subject to this 
subtitle, a biomaterials supplier who is a defendant in such action 
may, at any time during which a motion to dismiss may be filed under an 
applicable law, move to dismiss the action on the grounds that--
            (1) the defendant is a biomaterials supplier; and
            (2)(A) the defendant should not, for the purposes of--
                    (i) section 125(b), be considered to be a 
                manufacturer of the implant that is subject to such 
                section; or
                    (ii) section 125(c), be considered to be a seller 
                of the implant that allegedly caused harm to the 
                claimant; or
            (B)(i) the claimant has failed to establish, pursuant to 
        section 125(d), that the supplier furnished raw materials or 
        component parts in violation of contractual requirements or 
        specifications; or
            (ii) the claimant has failed to comply with the procedural 
        requirements of subsection (b).
    (b) Procedural Requirements.--
            (1) In general.--The procedural requirements described in 
        paragraphs (2) and (3) shall apply to any action by a claimant 
        against a biomaterials supplier that is subject to this 
        subtitle.
            (2) Manufacturer of implant shall be named a party.--The 
        claimant shall be required to name the manufacturer of the 
        implant as a party to the action, unless--
                    (A) the manufacturer is subject to service of 
                process solely in a jurisdiction in which the 
                biomaterials supplier is not domiciled or subject to a 
                service of process; or
                    (B) an action against the manufacturer is barred by 
                applicable law.
            (3) Affidavit.--At the time the claimant brings an action 
        against a biomaterials supplier the claimant shall be required 
        to submit an affidavit that--
                    (A) declares that the claimant has consulted and 
                reviewed the facts of the action with a qualified 
                specialist, whose qualifications the claimant shall 
                disclose;
                    (B) includes a written determination by a qualified 
                specialist that the raw materials or component parts 
                actually used in the manufacture of the implant of the 
                claimant were raw materials or component parts 
                described in section 125(d)(1), together with a 
                statement of the basis for such a determination;
                    (C) includes a written determination by a qualified 
                specialist that, after a review of the medical record 
                and other relevant material, the raw material or 
                component part supplied by the biomaterials supplier 
                and actually used in the manufacture of the implant was 
                a cause of the harm alleged by claimant, together with 
                a statement of the basis for the determination; and
                    (D) states that, on the basis of review and 
                consultation of the qualified specialist, the claimant 
                (or the attorney of the claimant) has concluded that 
                there is a reasonable and meritorious cause for the 
                filing of the action against the biomaterials supplier.
    (c) Proceeding on Motion To Dismiss.--The following rules shall 
apply to any proceeding on a motion to dismiss filed under this 
section:
            (1) Affidavits relating to listing and declarations.--
                    (A) In general.--The defendant in the action may 
                submit an affidavit demonstrating that defendant has 
                not included the implant on a list, if any, filed with 
                the Secretary pursuant to section 510(j) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 360(j)).
                    (B) Response to motion to dismiss.--In response to 
                the motion to dismiss, the claimant may submit an 
                affidavit demonstrating that--
                            (i) the Secretary has, with respect to the 
                        defendant and the implant that allegedly caused 
                        harm to the claimant, issued a declaration 
                        pursuant to section 125(b)(2)(B); or
                            (ii) the defendant who filed the motion to 
                        dismiss is a seller of the implant who is 
                        liable under section 125(c).
            (2) Effect of motion to dismiss on discovery.--
                    (A) In general.--If a defendant files a motion to 
                dismiss under paragraph (1) or (3) of subsection (a), 
                no discovery shall be permitted in connection to the 
action that is the subject of the motion, other than discovery 
necessary to determine a motion to dismiss for lack of jurisdiction, 
until such time as the court rules on the motion to dismiss in 
accordance with the affidavits submitted by the parties in accordance 
with this section.
                    (B) Discovery.--If a defendant files a motion to 
                dismiss under subsection (a)(2) on the grounds that the 
                biomaterials supplier did not furnish raw materials or 
                component parts in violation of contractual 
                requirements or specifications, the court may permit 
                discovery, as ordered by the court. The discovery 
                conducted pursuant to this subparagraph shall be 
                limited to issues that are directly relevant to--
                            (i) the pending motion to dismiss; or
                            (ii) the jurisdiction of the court.
            (3) Affidavits relating status of defendant.--
                    (A) In general.--Except as provided in clauses (i) 
                and (ii) of subparagraph (B), the court shall consider 
                a defendant to be a biomaterials supplier who is not 
                subject to an action for harm to a claimant caused by 
                an implant, other than an action relating to liability 
                for a violation of contractual requirements or 
                specifications described in subsection (d).
                    (B) Responses to motion to dismiss.--The court 
                shall grant a motion to dismiss any action that asserts 
                liability of the defendant under subsection (b) or (c) 
                of section 125 on the grounds that the defendant is not 
                a manufacturer subject to such subsection 125(b) or 
                seller subject to subsection 125(c), unless the 
                claimant submits a valid affidavit that demonstrates 
                that--
                            (i) with respect to a motion to dismiss 
                        contending the defendant is not a manufacturer, 
                        the defendant meets the applicable requirements 
                        for liability as a manufacturer under section 
                        125(b); or
                            (ii) with respect to a motion to dismiss 
                        contending that the defendant is not a seller, 
                        the defendant meets the applicable requirements 
                        for liability as a seller under section 125(c).
            (4) Basis of ruling on motion to dismiss.--
                    (A) In general.--The court shall rule on a motion 
                to dismiss filed under subsection (a) solely on the 
                basis of the pleadings of the parties made pursuant to 
                this section and any affidavits submitted by the 
                parties pursuant to this section.
                    (B) Motion for summary judgment.--Notwithstanding 
                any other provision of law, if the court determines 
                that the pleadings and affidavits made by parties 
                pursuant to this section raise genuine issues as 
                concerning material facts with respect to a motion 
                concerning contractual requirements and specifications, 
                the court may deem the motion to dismiss to be a motion 
                for summary judgment made pursuant to subsection (d).
    (d) Summary Judgment.--
            (1) In general.--
                    (A) Basis for entry of judgment.--A biomaterials 
                supplier shall be entitled to entry of judgment without 
                trial if the court finds there is no genuine issue as 
                concerning any material fact for each applicable 
                element set forth in paragraphs (1) and (2) of section 
                125(d).
                    (B) Issues of material fact.--With respect to a 
                finding made under subparagraph (A), the court shall 
                consider a genuine issue of material fact to exist only 
                if the evidence submitted by claimant would be 
                sufficient to allow a reasonable jury to reach a 
                verdict for the claimant if the jury found the evidence 
                to be credible.
            (2) Discovery made prior to a ruling on a motion for 
        summary judgment.--If, under applicable rules, the court 
        permits discovery prior to a ruling on a motion for summary 
        judgment made pursuant to this subsection, such discovery shall 
        be limited solely to establishing whether a genuine issue of 
        material fact exists.
            (3) Discovery with respect to a biomaterials supplier.--A 
        biomaterials supplier shall be subject to discovery in 
        connection with a motion seeking dismissal or summary judgment 
        on the basis of the inapplicability of section 125(d) or the 
        failure to establish the applicable elements of section 125(d) 
        solely to the extent permitted by the applicable Federal or 
        State rules for discovery against nonparties.
    (e) Stay Pending Petition for Declaration.--If a claimant has filed 
a petition for a declaration pursuant to section 125(b) with respect to 
a defendant, and the Secretary has not issued a final decision on the 
petition, the court shall stay all proceedings with respect to that 
defendant until such time as the Secretary has issued a final decision 
on the petition.
    (f) Manufacturer Conduct of Proceeding.--The manufacturer of an 
implant that is the subject of an action covered under this subtitle 
shall be permitted to file and conduct a proceeding on any motion for 
summary judgment or dismissal filed by a biomaterials supplier who is a 
defendant under this section if the manufacturer and any other 
defendant in such action enter into a valid and applicable contractual 
agreement under which the manufacturer agrees to bear the cost of such 
proceeding or to conduct such proceeding.
    (g) Attorney Fees.--The court shall require the claimant to 
compensate the biomaterials supplier (or a manufacturer appearing in 
lieu of a supplier pursuant to subsection (f)) for attorney fees and 
costs, if--
            (1) the claimant named or joined the biomaterials supplier; 
        and
            (2) the court found the claim against the biomaterials 
        supplier to be without merit and frivolous.

                       Subtitle C--Applicability

SEC. 131. APPLICABILITY.

    This title shall apply to all civil actions covered under this 
title that are commenced on or after the date of enactment of this Act, 
including any such action with respect to which the harm asserted in 
the action or the conduct that caused the harm occurred before the date 
of enactment of this Act.

       TITLE II--PROTECTION OF THE HEALTH AND SAFETY OF PATIENTS

SEC. 201. HEALTH CARE QUALITY ASSURANCE PROGRAM.

    (a) Fund.--Each State shall establish a health care quality 
assurance program, to be approved by the Secretary, and a fund 
consisting of such amounts as are transferred to the fund under 
subsection (b).
    (b) Transfer of Amounts.--Each State shall require that 50 percent 
of all awards of punitive damages resulting from all health care 
liability actions in that State be transferred to the fund established 
under subsection (a) in the State.
    (c) Obligations from Fund.--The chief executive officer of a State 
shall obligate such sums as are available in the fund established in 
that State under subsection (a) to--
            (1) license and certify health care professionals in the 
        State;
            (2) implement health care quality assurance programs; and
            (3) carry out programs to reduce malpractice-related costs 
        for health care providers volunteering to provide health care 
        services in medically underserved areas.

SEC. 202. RISK MANAGEMENT PROGRAMS.

    (a) Requirements for Providers.--Each State shall require each 
health care professional and health care provider providing services in 
the State to participate in a risk management program to prevent and 
provide early warning of practices which may result in injuries to 
patients or which otherwise may endanger patient safety.
    (b) Requirements for Insurers.--Each State shall require each 
entity which provides health care professional or provider liability 
insurance to health care professionals and health care providers in the 
State to--
            (1) establish risk management programs based on data 
        available to such entity or sanction programs of risk 
        management for health care professionals and health care 
        providers provided by other entities; and
            (2) require each such professional or provider, as a 
        condition of maintaining insurance, to participate in one 
        program described in paragraph (1) at least once in each 3-year 
        period.

SEC. 203. NATIONAL PRACTITIONER DATA BANK.

    Section 427 of the Health Care Quality Improvement Act of 1986 (42 
U.S.C. 11137) is amended--
            (1) by redesignating subsections (b) through (d) as 
        subsections (c) through (e), respectively;
            (2) by inserting after subsection (a), the following new 
        subsection:
    ``(b) Disclosure of Information.--The Secretary shall promulgate 
regulations providing for the disclosure of information reported to the 
Secretary under sections 422 and 423, upon request, to any 
individual.''; and
            (3) in subsection (c) (as so redesignated)--
                    (A) in the first sentence of paragraph (1), by 
                striking ``under this part'' and inserting ``under 
                section 421''; and
                    (B) in paragraph (3), by striking ``subsection 
                (a)'' and inserting ``subsections (a) and (b)''.

                        TITLE III--SEVERABILITY

SEC. 301. SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of the provisions 
of such to any person or circumstance shall not be affected thereby.
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