[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1091 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1091

    To impose certain requirements on health care liability claims.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 18, 1997

 Mr. Stump (for himself, Mr. Callahan, and Mr. Everett) introduced the 
  following bill; which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
    To impose certain requirements on health care liability claims.

    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 Act of 1997''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

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

Sec. 101. Federal reform of medical injury compensation.
Sec. 102. Preemption of State law.
Sec. 103. Definitions.
Sec. 104. Effective date.
                 TITLE II--HEALTH CARE LIABILITY REFORM

                      Subtitle A--Reform Described

Sec. 201. Requirement for initial resolution of action through 
                            alternative dispute resolution.
Sec. 202. Statute of limitations.
Sec. 203. Attorneys' fees.
Sec. 204. Calculation and payment of damages.
Sec. 205. Joint and several liability.
Sec. 206. Injunctive relief.
Sec. 207. Permitting State professional societies to participate in 
                            disciplinary activities.
   Subtitle B--Requirements for State Alternative Dispute Resolution 
                             Systems (ADR)

Sec. 211. Basic requirements.
Sec. 212. Certification of State systems; applicability of alternative 
                            Federal system.
Sec. 213. Reports on implementation and effectiveness of alternative 
                            dispute resolution systems.

                      TITLE I--GENERAL PROVISIONS

SEC. 101. FEDERAL REFORM OF MEDICAL INJURY COMPENSATION.

    (a) Congressional Findings.--
            (1) Effect on interstate commerce.--The Congress finds that 
        the health care and insurance industries are industries 
        affecting interstate commerce and the medical 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.
            (2) Effect on federal spending.--The Congress finds that 
        the medical malpractice 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 by their employers to provide them with 
                health insurance benefits;
                    (C) the large number of health care providers and 
                health care professionals who provide items or services 
                for which the Federal Government makes payments; and
                    (D) the large number of such providers and 
                professionals who have received direct or indirect 
                financial assistance from the Federal Government 
                because of their status as such professionals or 
                providers.
    (b) Applicability.--This Act shall apply with respect to any health 
care liability claim and to any health care liability action brought in 
any State or Federal court, except that this Act shall not apply to--
            (1) a claim or 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 claim or action; or
            (2) a claim or action in which the claimant's sole 
        allegation is an allegation of an injury arising from the use 
        of a medical product.
    (c) Federal Court Jurisdiction Not Established on Federal Question 
Grounds.--Nothing in this Act shall be construed to establish any 
jurisdiction in the district courts of the United States over health 
care liability actions on the basis of section 1331 or 1337 of title 
28, United States Code.

SEC. 102. PREEMPTION OF STATE LAW.

    (a) In General.--Subject to the provisions contained in subsection 
(b) of this section, the provisions governing health care liability 
actions set forth in this Act supersede State law to the extent that 
State law differs from any provisions of law established by or under 
this Act with respect to the limitation contained in such provisions. 
Any issue that is not governed by any provision of law established 
herein will be governed by otherwise applicable State or Federal law.
    (b) Limitations.--The provisions of this Act will supersede any 
State law, with respect to both procedural and substantive matters, 
only to the extent that State law permits the recovery of a greater 
amount of damages by a plaintiff than that authorized under section 
204, permits the awarding of a greater amount of attorneys' fees than 
what is authorized under section 203, reduces the applicability or 
scope of the regulation of periodic payment of future damages 
authorized under section 204(b), or establishes a longer period during 
which a health care liability claim may be initiated than that 
permitted under section 202. The provisions of this Act shall supersede 
any Federal or State law which mandates reimbursement from the 
plaintiff's recovery for the cost of collateral source benefits. The 
provisions of this Act shall not preempt any State law that imposes 
greater restrictions on liability or damages than those provided 
herein.
    (c) Vaccine Injury.--
            (1) To the extent that title XXI of the Public Health 
        Service Act establishes a Federal rule of law applicable to a 
        civil action brought for a vaccine-related injury or death--
                    (A) this Act does not affect the application of the 
                rule of law to such an action, and
                    (B) any rule of law prescribed by this Act in 
                conflict with a rule of law of such title XXI shall not 
                apply to such action.
            (2) If there is an aspect of a civil action brought for a 
        vaccine-related injury or death to which a Federal rule of law 
        under title XXI of the Public Health Service Act does not 
        apply, then this Act or otherwise applicable law (as determined 
        under this Act) will apply to such aspect of such action.
    (d) Other Federal Law.--Except as provided in this section, nothing 
in this Act shall be deemed to effect any defense available to a 
defendant in a health care liability claim or action under any other 
provision of Federal law.

SEC. 103. DEFINITIONS.

    As used in this Act:
            (1) Alternative dispute resolution system; adr.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means a 
        system that provides for the resolution of health care 
        liability claims in a manner other than through health care 
        liability actions brought in the State or Federal courts.
            (2) Claimant.--The term ``claimant'' means any person who 
        asserts a health care liability claim or bring a health care 
        liability action, including a person who asserts or claims a 
        right to legal or equitable contribution, indemnity or 
        subrogation, arising out of a health care liability claim or 
        action, and any person on whose behalf such a claim is asserted 
        or such an action is brought, whether deceased, incompetent or 
        a minor.
            (3) Derivative claim.--The term ``derivative claim'' means 
        any third-party claim arising from the claim of injury of a 
        person by a health care service or product, such as loss of 
        consortium, emotional distress, injury to an unborn child, or 
        wrongful death.
            (4) Economic damages.--The term ``economic damages'' means 
        objectively verifiable monetary losses incurred as a result of 
        the provision of (or failure to provide) health care services 
        or the use of a medical product, such as past and future 
        medical expenses, loss of past and future earnings, cost of 
        obtaining domestic services, loss of employment, and loss of 
        business or employment opportunities.
            (5) Health care liability action.--The term ``health care 
        liability action'' means a civil action brought in a State or 
        Federal court or pursuant to ADR, against a health care 
        provider, a health care organization, or the manufacturer, 
        distributor or supplier of a medical product, regardless of the 
        theory of liability on which the claim is based, or the number 
        of plaintiffs, or defendants or causes of action, in which the 
        claimant alleges a health care liability claim.
            (6) Health care liability claim.--The term ``health care 
        liability claim'' means a demand by any person, whether or not 
        pursuant to ADR, against a health care provider, health care 
        organization, or the manufacturer, distributor or supplier of a 
        medical product, including, but not limited to, third-party 
        claims, cross-claims, counter-claims or contribution claims, 
        which are based upon the provision of (or the failure to 
        provide) health care services or the use of a medical product, 
        regardless of the theory of liability on which the claim is 
        based, or the number of plaintiffs, defendants, or causes of 
        action.
            (7) Health care organization.--The term ``health care 
        organization'' means any person or entity which is obligated to 
        provide health benefits under any health plans, including any 
        person or entity acting under a contract or arrangement with a 
        health care organization to provide or administer any health 
        benefit.
            (8) Health care provider.--The term ``health care 
        provider'' means any person or entity required by State or 
        Federal laws or regulations to be licensed, registered, or 
        certified to provide health care services, and being either so 
        licensed, registered, or certified, or exempted from such 
        requirement by other statute or regulation.
            (9) Health care services.--The term ``health care 
        services'' means any service provided by a health care 
        provider, or by any individual working under the supervision of 
        a health care provider, that relates to the diagnosis, 
        prevention, or treatment of any human disease or impairment, or 
        the assessment of the health of human beings.
            (10) Medical product.--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)), including any component or raw 
        material used therein, but excluding health care services, as 
        defined in paragraph (1) of this section.
            (11) Noneconomic damages.--The term ``noneconomic damages'' 
        means damages for physical and emotional pain, suffering, 
        inconvenience, physical impairment, mental anguish, 
        disfigurement, loss of enjoyment of life, loss of society and 
        companionship, loss of consortium (other than loss of domestic 
        service), hedonic damages, injury to reputation and all other 
        nonpecuniary losses of any kind or nature.
            (12) Punitive damages.--The term ``punitive damages'' means 
        damages awarded, for the purpose of punishment or deterrence, 
        and not solely for compensatory purposes, against a health care 
        provider, health care organization, or a manufacturer, 
        distributor or supplier of a medical product. Punitive damages 
        are neither economic nor noneconomic damages.
            (13) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, American Samoa, the Northern 
        Mariana Islands, the Trust Territory of the Pacific Islands, 
        and any other territory or possession of the United States.

SEC. 104. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b) and section 
207, this Act shall apply with respect to claims accruing or actions 
brought on or after the expiration of the 3-year period that begins on 
the date of the enactment of this Act.
    (b) Exception for States Requesting Earlier Implementation of 
Reforms.--
            (1) Application.--A State may submit an application to the 
        Secretary requesting the early implementation of this Act with 
        respect to claims or actions brought in the State.
            (2) Decision by secretary.--The Secretary shall issue a 
        response to a State's application under paragraph (1) not later 
        than 90 days after receiving the application. If the Secretary 
        determines that the State meets the requirements of this Act at 
        the time of submitting its application, the Secretary shall 
        approve the State's application, and this Act shall apply with 
        respect to actions brought in the State on or after the 
        expiration of the 90-day period that begins on the date the 
        Secretary issues the response. If the Secretary denies the 
        State's application, the Secretary shall provide the State with 
        a written explanation of the grounds for the decision.

                 TITLE II--HEALTH CARE LIABILITY REFORM

                      Subtitle A--Reform Described

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

    (a) In General.--
            (1) State cases.--A health care liability action may not be 
        brought in any State court during a calendar year unless the 
        health care liability 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 212(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 212(b).
            (2) Federal diversity actions.--A health care liability 
        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 liability 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 liability 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 liability action based on a 
                health care liability 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--
            (1) the ADR reaches a decision on whether the defendant is 
        liable to the plaintiff for damages; and
            (2) 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 liability 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 liability 
        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 liability 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 liability 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. STATUTE OF LIMITATIONS.

    (a) General Statute of Limitations.--No health care liability claim 
or action may be commenced later than one year after the plaintiff 
discovers, or through the use of reasonable diligence should have 
discovered, the injury. In no event shall a health care liability claim 
or action be permitted to be filed later than 3 years after the date of 
the injury. Such time limitation may be tolled upon proof of the 
presence of a foreign object, exclusive of infectious agents, which has 
no therapeutic or diagnostic purpose or effect in the person of the 
injured plaintiff.
    (b) Minors Under the Age of 6.--In the case of an alleged injury 
sustained by a minor before the age of 6, no health care liability 
claim or action may be commenced by or on behalf of the minor later 
than (1) 3 years from the date of injury or (2) the date on which the 
minor attains the age of 8, whichever provides a longer period. Such 
limitation may be tolled upon proof of the presence of a foreign 
object, exclusive of infectious agents, which has no therapeutic or 
diagnostic purpose or effect in the person of the injured plaintiff.

SEC. 203. ATTORNEYS' FEES.

    (a) Limitation on Contingency Fees.--An attorney shall not contract 
for or collect a contingency fee for representing a claimant in a 
health care liability action in excess of the following:
            (1) 25 percent of the first $100,000 (or portion thereof) 
        recovered by the claimant.
            (2) 20 percent of the next $150,000 (or portion thereof) 
        recovered by the claimant.
            (3) 15 percent of the next $250,000 (or portion thereof) 
        recovered by the claimant.
            (4) 10 percent of any amount in excess of $500,000 
        recovered by the claimant.
    (b) Requiring Party Contesting ADR Ruling to Pay Attorney's Fees 
and Other Costs.--
            (1) In general.--The court in a health care liability 
        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 liability 
        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 10 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 10 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 liability 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 liability 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 liability 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 attorneys' 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 liability 
        action involved shall maintain accurate, complete records of 
        hours worked on the action, regardless of the fee arrangement 
        with the client involved.
    (c) Calculation of Periodic Payments.--If periodic payments are 
awarded to the claimant pursuant to section 204(b), the court shall 
place a total value on these payments based upon the projected life 
expectancy of the claimant and include this amount in computing the 
total award from which attorneys' fees are calculated under subsection 
(a).
    (d) Effect of Failure To Comply.--Failure to comply with this 
section by an attorney at law shall be grounds for professional 
discipline by the appropriate State agency responsible for the conduct 
of disciplinary actions against attorneys-at-law.
    (e) Definitions.--For purposes of this section--
            (1) 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; and
            (2) the term ``recovered'' means the net sum recovered 
        after deducting any disbursements or costs incurred in 
        connection with prosecution or settlement of the claim, except 
        that costs of medical care incurred by the claimant and the 
        attorney's office overhead costs or charges shall not be 
        deductible disbursements under this paragraph.

SEC. 204. CALCULATION AND PAYMENT OF DAMAGES.

    (a) Limitation on Noneconomic Damages.--The total amount of 
noneconomic damages that may be awarded to a claimant for losses 
resulting from the injury which is the subject of a health care 
liability 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) Periodic Payments for Future Losses.--If more than $50,000 in 
damages for expenses to be incurred in the future is awarded to the 
claimant in a health care liability action, the court shall, at the 
request of either party, enter a judgment ordering such damages to be 
paid on a periodic basis determined appropriate by the court (based 
upon projections of when such expenses are likely to be incurred).
    (c) Mandatory Offsets for Damages Paid by a Collateral Source.--The 
total amount of damages received by a claimant in a health care 
liability action shall be reduced by any other payment that has been or 
will be made to the individual to compensate the claimant for the 
injury that was the subject of the action, including payment under--
            (1) Federal or State disability or sickness programs;
            (2) Federal, State, or private health insurance programs;
            (3) private disability insurance programs;
            (4) employer wage continuation programs; and
            (5) any other source of payment intended to compensate the 
        claimant for such injury.
    (d) Treatment of Punitive Damages.--
            (1) In general.--Punitive damages may, if otherwise 
        permitted by applicable law, be awarded in any civil actions 
        subject to this Act only if it is proven by clear and 
        convincing evidence that the defendant intended to injure the 
        claimant for a reason unrelated to the provision of health care 
        services, or that the defendant understood the claimant was 
        substantially certain to suffer unnecessary injury, yet the 
        defendant deliberately failed to avoid such injury. Punitive 
        damages may not be awarded against a defendant, however, with 
        respect to any claim where no judgment for compensatory damages 
        (including nominal damages) is rendered against such defendant.
            (2) Limitation concerning certain medical products.--
                    (A) In general.--Punitive damages shall not be 
                awarded pursuant to this section against a manufacturer 
                or distributor of a medical product which caused the 
                claimant's harm where--
                            (i) such medical product was subject to 
                        premarket approval of review by the Food and 
                        Drug Administration under section 505, 506, 
                        510, 515, or 520 of the Federal Food, Drug, and 
                        Cosmetic Act (21 U.S.C. 355, 356, 360, 360e, or 
                        360j) 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 medical product which caused the 
                        claimant's harm or the adequacy of the 
                        packaging or labeling of such medical product, 
                        and, where required, such medical product was 
                        marketed in conformity with regulations of the 
                        Food and Drug Administration; or
                            (ii) the medical product is generally 
                        recognized as safe and effective pursuant to 
                        conditions established by the Food and Drug 
                        Administration and applicable regulations, 
                        including without limitations those related to 
                        packaging and labeling.
                    (B) Exceptions.--The provisions of subparagraph (A) 
                shall not apply in any case in which--
                            (i) the defendant, before or after the 
                        grant of permission to market such medical 
                        product, knowingly withheld from or 
                        misrepresented to the Food and Drug 
                        Administration required information that is 
                        material and relevant to the performance of 
                        such medical product and is casually related to 
                        the harm which the claimant allegedly suffered; 
                        or
                            (ii) the defendant made an illegal payment 
                        to an official of the Food and Drug 
                        Administration for the purpose of either 
                        securing or maintaining approval of such 
                        medical product.
            (3) Requirements for pleading of punitive damages.--No 
        demand for punitive damages shall be included in a claim or 
        action for health care liability as initially filed. A court 
        may allow a claimant to file an amended pleading for punitive 
        damages only upon motion by a claimant and 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. The court shall 
        not grant a motion allowing the filing of an amended pleading 
        that includes a claim for punitive damages if the motion for 
        such an order is not filed within 2 years after the complaint 
        or initial pleading is filed or not less than 9 months before 
        the date the matter is first set for trial, whichever is 
        earlier.
            (4) Separate proceeding.--At the request of any defendant 
        in a health care liability action, the trier of fact shall 
        consider in a separate proceeding (1) whether punitive damages 
        are to be awarded and the amount of such award, or (2) the 
        amount of punitive damages following a determination of 
        punitive liability. If a separate proceeding is requested, 
        evidence relevant only to the claim of punitive damages, as 
        determined by applicable State law, shall be admissible in any 
        proceeding to determine whether compensatory damages are to be 
        awarded.
            (5) Determining amount of punitive damages.--
                    (A) Factors considered.--In determining the amount 
                of punitive damages, the trier of fact shall consider 
                only--
                            (i) the severity of the harm caused by the 
                        conduct of the defendant;
                            (ii) the duration of the conduct or any 
                        concealment of it by the defendant;
                            (iii) the profitability of the conduct to 
                        the defendant;
                            (iv) 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;
                            (v) awards of punitive or exemplary damages 
                        to persons similarly situated to the claimant;
                            (vi) prospective awards of compensatory 
                        damages to persons similarly situated to the 
                        claimant;
                            (vii) any criminal imposed on the defendant 
                        as a result of the conduct complained of by the 
                        claimant; and
                            (viii) the amount of any civil fines 
                        assessed against the defendant as a result of 
                        the conduct complained of by the claimant.
                    (B) General limitation.--In no event shall the 
                amount of punitive damages awarded exceed 2 times the 
                amount of compensatory damages awarded or $250,000 
                whichever is greater. The jury shall not be informed of 
                this limitation.

SEC. 205. JOINT AND SEVERAL LIABILITY.

    A defendant may be held severally but not jointly liable in a 
health care liability action. A person found liable for damages in any 
such action may be found liable, if at all, only for those damages 
directly attributable to the person's proportionate share of fault or 
responsibility for the injury, and may not be found liable for damages 
attributable to the proportionate share of fault or responsibility of 
any other person (without regard to whether that person is a party to 
the action) for the injury, including any person bringing the action.

SEC. 206. INJUNCTIVE RELIEF.

    Whenever any person has engaged or is about to engage in any 
conduct in violation of this subtitle, the appropriate court may, upon 
application of an interested party, issue an injunction or other 
appropriate order restraining such conduct.

SEC. 207. PERMITTING STATE PROFESSIONAL SOCIETIES TO PARTICIPATE IN 
              DISCIPLINARY ACTIVITIES.

    (a) Role of Professional Societies.--Notwithstanding any other 
provision of State or Federal law, a State agency responsible for the 
conduct of disciplinary actions for a type of health care practitioner 
may enter into agreements with State or county professional societies 
of such type of health care practitioner to permit such societies to 
participate in the licensing of such health care practitioner, and to 
review any health care malpractice action, health care malpractice 
claim or allegation, or other information concerning the practice 
patterns of any such health care practitioner. Any such agreement shall 
comply with subsection (b).
    (b) Requirements of Agreements.--Any agreement entered into under 
subsection (a) for licensing activities or the review of any health 
care malpractice action, health care malpractice claim or allegation, 
or other information concerning the practice patterns of a health care 
practitioner shall provide that--
            (1) the health care professional society conducts such 
        activities or review as expeditiously as possible;
            (2) after the completion of such review, such society shall 
        report its findings to the State agency with which it entered 
        into such agreement;
            (3) the conduct of such activities or review and the 
        reporting of such findings be conducted in a manner which 
        assures the preservation of confidentiality of health care 
        information and of the review process; and
            (4) no individual affiliated with such society is liable 
        for any damages or injury directly caused by the individual's 
        actions in conducting such activities or review.
    (c) Agreements Not Mandatory.--Nothing in this section may be 
construed to require a State to enter into agreements with societies 
described in subsection (a) to conduct the activities described in such 
subsection.
    (d) Effective Date.--This section shall take effect 2 years after 
the date of the enactment of this Act.

   Subtitle B--Requirements for State Alternative Dispute Resolution 
                             Systems (ADR)

SEC. 211. BASIC REQUIREMENTS.

    (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 liability 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 Malpractice Liability Standards to Alternative 
Dispute Resolution.--The provisions of subtitle A 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 liability actions brought 
in the State.

SEC. 212. CERTIFICATION OF STATE SYSTEMS; APPLICABILITY OF ALTERNATIVE 
              FEDERAL SYSTEM.

    (a) Certification.--
            (1) In general.--Not later than October 1 of each year 
        (beginning with 1997), the Secretary, in consultation with the 
        Attorney General, shall determine whether a State's alternative 
        dispute resolution system meets the requirements of this 
        subtitle 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 211.
    (b) Applicability of Alternative Federal System.--
            (1) Establishment and applicability.--Not later than 
        October 1, 1997, the Secretary, in consultation with the 
        Attorney General, shall establish by rule an alternative 
        Federal ADR system for the resolution of health care liability 
        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 
                211(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 liability 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.

SEC. 213. REPORTS ON IMPLEMENTATION AND EFFECTIVENESS OF ALTERNATIVE 
              DISPUTE RESOLUTION SYSTEMS.

    (a) In General.--Not later than 5 years after the date of the 
enactment of this Act, the Secretary shall prepare and submit to the 
Congress a report describing and evaluating State alternative dispute 
resolution systems operated pursuant to this part and the alternative 
Federal system established under section 212(b).
    (b) Contents of Report.--The Secretary shall include in the report 
prepared and submitted under subsection (a)--
            (1) information on--
                    (A) the effect of the alternative dispute 
                resolution systems on the cost of health care within 
                each State,
                    (B) the impact of such systems on the access of 
                individuals to health care within the State, and
                    (C) the effect of such systems on the quality of 
                health care provided within the State; and
            (2) to the extent that such report does not provide 
        information on no-fault systems operated by States as 
        alternative dispute resolution systems pursuant to this part, 
        an analysis of the feasibility and desirability of establishing 
        a system under which health care liability claims shall be 
        resolved on a no-fault basis.
                                 <all>
HR 1195 IH----2
HR 1195 IH----3