[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4942 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 4942

To improve patient access to health care services, extend the solvency 
   of the Medicare Trust Fund, and provide improved medical care by 
reducing the excessive burden the liability system places on the health 
                         care delivery system.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 13, 2002

 Mr. Weldon of Florida (for himself and Mr. Greenwood) introduced the 
 following bill; which was referred to the Committee on the Judiciary, 
  and in addition to the Committees on Ways and Means and Energy and 
Commerce, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To improve patient access to health care services, extend the solvency 
   of the Medicare Trust Fund, and provide improved medical care by 
reducing the excessive burden the liability system places on the health 
                         care delivery system.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Solvency and Enhanced 
Benefits Act of 2002''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--
            (1) Congress finds that our current civil justice system is 
        adversely affecting patient access to health care services, 
        better patient care, and cost-efficient health care, in that 
        the health care liability system is a costly and ineffective 
        mechanism for resolving claims of health care liability and 
        compensating injured patients, and is a deterrent to the 
        sharing of information among health care professionals which 
        impedes efforts to improve patient safety and quality of care.
            (2) Congress finds that the current health care liability 
        system encourages health care providers to practice defensive 
        medicine to protect themselves from lawsuits. These additional 
        tests and procedures result in additional costs to senior 
        citizens and too often provide little to improve the health of 
        the patient. Their sole purposes in too many instances serves 
        the purpose of protecting against possible lawsuits.
            (3) Congress finds that the current health care liability 
        system encourages health care providers to practice defensive 
        medicine, which results in added costs to the Medicare Trust 
        Fund. Health care providers often order tests to rule out any 
        possible serious illness. Often these tests provide little 
        benefit to the patient.
            (4) Congress finds that the current liability system 
        diverts valuable resources away from improved patient care and 
        expanded Medicare benefits and instead misdirects them toward 
        tests and procedures that do little to improve patient health, 
        but serve primarily to protect the health care provider from 
        excessive lawsuits.
            (5) Congress finds that when the State of California 
        enacted medical malpractice reform legislation (MICRA), 
        Medicare benefited in that unnecessary procedures and tests 
        were not ordered.
            (6) Congress finds that senior citizens spend a larger 
        portion of their income on health care than other age groups, 
        and that it is in the best interest of senior citizens to help 
        lower the cost of health care and make the Medicare Trust Fund 
        more solvent.
    (b) Purpose.--It is the purpose of this Act to implement 
reasonable, comprehensive, and effective health care liability reforms 
designed to--
            (1) improve the solvency of and extend the life of the 
        Medicare Trust Fund by reducing the costs associated with 
        defensive medicine and excessive malpractice awards;
            (2) improve the availability of health care services in 
        cases in which health care liability actions have been shown to 
        be a factor in the decreased availability of services;
            (3) reduce the incidence of ``defensive medicine'' and 
        lower the cost of health care liability insurance, all of which 
        contribute to the escalation of health care costs;
            (4) ensure that persons with meritorious health care injury 
        claims receive fair, adequate, and timely compensation, 
        including reasonable noneconomic damages;
            (5) improve the fairness and cost-effectiveness of our 
        current health care liability system to resolve disputes over, 
        and provide compensation for, health care liability by reducing 
        uncertainty in the amount of compensation provided to injured 
        individuals; and
            (6) provide an increased sharing of information in the 
        health care system which will reduce unintended injury and 
        improve patient care.

SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

    A medicare-related health care lawsuit may be commenced no later 
than 3 years after the date of injury or 1 year after the claimant 
discovers, or through the use of reasonable diligence should have 
discovered, the injury, whichever occurs first. In no event shall the 
time for commencement of a medicare-related health care lawsuit exceed 
3 years, except that in the case of an alleged injury sustained by a 
minor before the age of 6, a medicare-related health care lawsuit may 
be commenced by or on behalf of the minor until the later of 3 years 
from the date of injury, or the date on which the minor attains the age 
of 8.

SEC. 4. COMPENSATING PATIENT INJURY.

    (a) Unlimited Amount of Damages for Actual Economic Losses.--In any 
medicare-related health care lawsuit, the full amount of a claimant's 
economic loss may be fully recovered without limitation.
    (b) Additional Noneconomic Damages.--In any medicare-related health 
care lawsuit, the amount of noneconomic damages recovered by a claimant 
may be as much as $250,000, regardless of the number of parties against 
whom the action is brought or the number of separate claims or actions 
brought with respect to the same occurrence.
    (c) No Discount of Award for Noneconomic Damages.--In any medicare-
related health care lawsuit, an award for future noneconomic damages 
shall not be discounted to present value. The jury shall not be 
informed about the maximum award for noneconomic damages. An award for 
noneconomic damages in excess of $250,000 shall be reduced either 
before the entry of judgment, or by amendment of the judgment after 
entry of judgment, and such reduction shall be made before accounting 
for any other reduction in damages required by law. If separate awards 
are rendered for past and future noneconomic damages and the combined 
awards exceed $250,000, the future noneconomic damages shall be reduced 
first.
    (d) Fair Share Rule.--In any medicare-related health care lawsuit, 
each party shall be liable for that party's several share of any 
damages only and not for the share of any other person. Each party 
shall be liable only for the amount of damages allocated to such party 
in direct proportion to such party's percentage of responsibility. A 
separate judgment shall be rendered against each such party for the 
amount allocated to such party. For purposes of this section, the trier 
of fact shall determine the proportion of responsibility of each party 
for the claimant's harm.

SEC. 5. MAXIMIZING PATIENT RECOVERY.

    (a) Court Supervision of Share of Damages Actually Paid to 
Claimants.--In any medicare-related health care lawsuit, the court 
shall supervise the arrangements for payment of damages to protect 
against conflicts of interest that may have the effect of reducing the 
amount of damages awarded that are actually paid to claimants. In 
particular, in any medicare-related health care lawsuit in which the 
attorney for a party claims a financial stake in the outcome by virtue 
of a contingent fee, the court shall have the power to restrict the 
payment of a claimant's damage recovery to such attorney, and to 
redirect such damages to the claimant based upon the interests of 
justice and principles of equity. In no event shall the total of all 
contingent fees for representing all claimants in a medicare-related 
health care lawsuit exceed the following limits:
            (1) 40 percent of the first $50,000 recovered by the 
        claimant(s).
            (2) 33\1/3\ percent of the next $50,000 recovered by the 
        claimant(s).
            (3) 25 percent of the next $500,000 recovered by the 
        claimant(s).
            (4) 15 percent of any amount by which the recovery by the 
        claimant(s) is in excess of $600,000.
    (b) Applicability.--The limitations in this section shall apply 
whether the recovery is by judgment or settlement, or by mediation, 
arbitration, or any other form of alternative dispute resolution. In a 
medicare-related health care lawsuit involving a minor or incompetent 
person, a court retains the authority to authorize or approve a fee 
that is less than the maximum permitted under this section.
    (c) Definition.--In this section, the term ``contingent fee'' 
includes all compensation to any person or persons which is payable 
only if a recovery is effected on behalf of one or more claimants.

SEC. 6. ADDITIONAL HEALTH BENEFITS.

    (a) In General.--In any medicare-related health care lawsuit, any 
party may introduce evidence of collateral source benefits. If a party 
elects to introduce such evidence, any opposing party may introduce 
evidence of any amount paid or contributed or reasonably likely to be 
paid or contributed in the future by or on behalf of the opposing party 
to secure the right to such collateral source benefits. No provider of 
collateral source benefits shall recover any amount against the 
claimant or receive any lien or credit against the claimant's recovery 
or be equitably or legally subrogated to the right of the claimant in a 
medicare-related health care lawsuit. This section shall apply to any 
medicare-related health care lawsuit that is settled as well as a 
medicare-related health care lawsuit that is resolved by a fact finder.
    (b) Definition.--In this section, the term ``collateral source 
benefits'' means any amount paid or reasonably likely to be paid in the 
future to or on behalf of the claimant, or any service, product or 
other benefit provided or reasonably likely to be provided in the 
future to or on behalf of the claimant, as a result of the injury or 
wrongful death, pursuant to--
            (1) any State or Federal health, sickness, income-
        disability, accident, or workers' compensation law;
            (2) any health, sickness, income-disability, or accident 
        insurance that provides health benefits or income-disability 
        coverage;
            (3) any contract or agreement of any group, organization, 
        partnership, or corporation to provide, pay for, or reimburse 
        the cost of medical, hospital, dental, or income disability 
        benefits; and
            (4) any other publicly or privately funded program.

SEC. 7. PUNITIVE DAMAGES.

    (a) In General.--Punitive damages may, if otherwise permitted by 
applicable State or Federal law, be awarded against any person in a 
medicare-related health care lawsuit only if it is proven by clear and 
convincing evidence that such person acted with malicious intent 
to injure the claimant, or that such person deliberately failed to 
avoid unnecessary injury that such person knew the claimant was 
substantially certain to suffer. In any medicare-related health care 
lawsuit where no judgment for compensatory damages is rendered against 
such person, no punitive damages may be awarded with respect to the 
claim in such lawsuit. No demand for punitive damages shall be included 
in a medicare-related health care lawsuit as initially filed. A court 
may allow a claimant to file an amended pleading for punitive damages 
only upon a motion by the claimant and after a finding by the court, 
upon review of supporting and opposing affidavits or after a hearing, 
after weighing the evidence, that the claimant has established by a 
substantial probability that the claimant will prevail on the claim for 
punitive damages. At the request of any party in a medicare-related 
health care lawsuit, the trier of fact shall consider in a separate 
proceeding--
            (1) whether punitive damages are to be awarded and the 
        amount of such award; and
            (2) the amount of punitive damages following a 
        determination of punitive liability.
If a separate proceeding is requested, evidence relevant only to the 
claim for punitive damages, as determined by applicable State law, 
shall be inadmissible in any proceeding to determine whether 
compensatory damages are to be awarded.
    (b) Determining Amount of Punitive Damages.--
            (1) Factors considered.--In determining the amount of 
        punitive damages under subsection (a), the trier of fact shall 
        consider only the following:
                    (A) the severity of the harm caused by the conduct 
                of such party;
                    (B) the duration of the conduct or any concealment 
                of it by such party;
                    (C) the profitability of the conduct to such party;
                    (D) the number of products sold or medical 
                procedures rendered for compensation, as the case may 
                be, by such party, of the kind causing the harm 
                complained of by the claimant;
                    (E) any criminal penalties imposed on such party, 
                as a result of the conduct complained of by the 
                claimant; and
                    (F) the amount of any civil fines assessed against 
                such party as a result of the conduct complained of by 
                the claimant.
            (2) Maximum award.--The amount of punitive damages awarded 
        in a medicare-related health care lawsuit may be up to as much 
        as two times the amount of economic damages awarded or 
        $250,000, whichever is greater. The jury shall not be informed 
        of this limitation.
    (c) No Civil Monetary Penalties for Products That Comply With FDA 
Standards.--
            (1) In general.--No punitive damages may be awarded in a 
        medicare-related health care lawsuit against the manufacturer 
        or distributor of a medical product based on a medicare-related 
        liability claim that such product caused the claimant's harm 
        where--
                    (A)(i) such medical product was subject to 
                premarket approval or clearance by the Food and Drug 
                Administration with respect to the safety of the 
                formulation or performance of the aspect of such 
                medical product which caused the claimant's harm or the 
                adequacy of the packaging or labeling of such medical 
                product; and
                    (ii) such medical product was so approved or 
                cleared; or
                    (B) such medical product is generally recognized 
                among qualified experts as safe and effective pursuant 
                to conditions established by the Food and Drug 
                Administration and applicable Food and Drug 
                Administration regulations, including without 
                limitation those related to packaging and labeling.
            (2) Liability of health care providers.--A person who 
        prescribes a drug or device (including blood products) approved 
        by the Food and Drug Administration that constitutes a 
        medicare-related item or service shall not be named as a party 
        to a product liability lawsuit involving such drug or device 
        and shall not be liable to a claimant in a class action lawsuit 
        against the manufacturer, distributor, or product seller of 
        such drug or device.
            (3) Packaging.--In a medicare-related health care lawsuit 
        for harm which is alleged to relate to the adequacy of the 
        packaging or labeling of a drug which is required to have 
        tamper-resistant packaging under regulations of the Secretary 
        of Health and Human Services (including labeling regulations 
        related to such packaging), the manufacturer or product seller 
        of the drug shall not be held liable for punitive damages 
        unless such packaging or labeling is found by the trier of fact 
        by clear and convincing evidence to be substantially out of 
        compliance with such regulations.
            (4) Exception.--Paragraph (1) shall not apply in any 
        medicare-related health care lawsuit in which--
                    (A) a person, before or after premarket approval or 
                clearance of such medical product, knowingly 
                misrepresented to or withheld from the Food and Drug 
                Administration information that is required to be 
                submitted under the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 301 et seq.) or section 351 of the 
                Public Health Service Act (42 U.S.C. 262) that is 
                material and is causally related to the harm which the 
                claimant allegedly suffered; or
                    (B) a person made an illegal payment to an official 
                of the Food and Drug Administration for the purpose of 
                either securing or maintaining approval or clearance of 
                such medical product.
    (d) Definitions.--In this section:
            (2) Malicious intent to injure.--The term ``malicious 
        intent to injure'' means intentionally causing or attempting to 
cause physical injury other than providing health care goods or 
services.
            (3) Medical product.--The term ``medical product'' means a 
        drug or device intended for humans, and the terms ``drug'' and 
        ``device'' have the meanings given such terms in sections 
        201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic Act 
        (21 U.S.C. 321), respectively, including any component or raw 
        material used therein, but excluding health care services.

SEC. 8. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN 
              MEDICARE-RELATED HEALTH CARE LAWSUITS.

    (a) In General.--In any medicare-related health care lawsuit, if an 
award of future damages, without reduction to present value, equaling 
or exceeding $50,000 is made against a party with sufficient insurance 
or other assets to fund a periodic payment of such a judgment, the 
court shall, at the request of any party, enter a judgment ordering 
that the future damages be paid by periodic payments in accordance with 
the Uniform Periodic Payment of Judgments Act promulgated by the 
National Conference of Commissioners on Uniform State Laws.
    (b) Applicability.--This section applies to all actions which have 
not been first set for trial or retrial before the effective date of 
this Act.

SEC. 9. EFFECT ON OTHER LAWS.

    (a) 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.
    (b) Other Federal Law.--Except as provided in this section, nothing 
in this Act shall be deemed to affect any defense available to a 
defendant in a medicare-related health care lawsuit or action under any 
other provision of Federal law.

SEC. 10. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

    (a) Health Care Lawsuits.--The provisions governing medicare-
related health care lawsuits set forth in this Act preempt, subject to 
subsections (b) and (c), State law to the extent that State law 
prevents the application of any provisions of law established by or 
under this Act. The provisions governing medicare-related health care 
lawsuits set forth in this Act supersede chapter 171 of title 28, 
United States Code, to the extent that such chapter--
            (1) provides for a greater amount of damages or contingent 
        fees, a longer period in which a medicare-related health care 
        lawsuit may be commenced, or a reduced applicability or scope 
        of periodic payment of future damages, than provided in this 
        Act; or
            (2) prohibits the introduction of evidence regarding 
        collateral source benefits, or mandates or permits subrogation 
        or a lien on collateral source benefits.
    (b) Protection of States' Rights.--Any issue that is not governed 
by any provision of law established by or under this Act (including 
State standards of negligence) shall be governed by otherwise 
applicable State or Federal law. This Act does not preempt or supersede 
any law that imposes greater protections (such as a shorter statute of 
limitations) for health care providers and health care organizations 
from liability, loss, or damages than those provided by this Act.
    (c) State Flexibility.--No provision of this Act shall be construed 
to preempt--
            (1) any State statutory limit (whether enacted before, on, 
        or after the date of the enactment of this Act) on the amount 
        of compensatory or punitive damages (or the total amount of 
        damages) that may be awarded in a medicare-related health care 
        lawsuit, whether or not such State limit permits the recovery 
        of a specific dollar amount of damages that is greater or 
        lesser than is provided for under this Act, notwithstanding 
        section 4(a); or
            (2) any defense available to a party in a medicare-related 
        health care lawsuit under any other provision of State or 
        Federal law.

SEC. 11. NO MEDICARE+CHOICE CAUSE OF ACTION.

    No provision of this Act may be construed to create a cause of 
action against a Medicare+Choice plan under part C of title XVIII of 
the Social Security Act.

SEC. 12. DEFINITIONS.

    In this Act:
            (1) Medicare-related health care lawsuit.--The term 
        ``medicare-related health care lawsuit'' means any action 
        concerning medicare-related items or services, brought in a 
        State or Federal court or pursuant to alternative dispute 
        resolution, against any person, regardless of the theory of 
        liability on which the claim is based, in which the claimant 
        alleges a medicare-related liability claim.
            (2) Medicare-related liability claim.--The term ``medicare-
        related liability claim'' means a demand by any person, whether 
        or not pursuant to alternative dispute resolution, against any 
        person, based upon the provision of, use of, or payment for (or 
        the failure to provide, use, or pay for) medicare-related items 
        or services, regardless of the theory of liability on which the 
        claim is based, or the number of plaintiffs, defendants, or 
        other parties, or the number of causes of action.
            (3) Medicare-related items or services.--The term 
        ``medicare-related items or services'' means items or services 
        for which payment may be made under title XVIII of the Social 
        Security Act (including under a Medicare+Choice plan under part 
        C of such title).
            (4) Alternative dispute resolution.--The term ``alternative 
        dispute resolution'' means a system that provides for the 
        resolution of claims in a manner other than through a civil 
        action brought in a State or Federal court.
            (5) Claimant.--The term ``claimant'' means any person who 
        brings a medicare-related health care lawsuit, including a 
        person who asserts or claims a right to legal or equitable 
        contribution, indemnity or subrogation, arising out of a 
        medicare-related claim, and any person on whose behalf such a 
        claim is asserted or such an action is brought, whether 
        deceased, incompetent, or a minor.
            (6) Compensatory damages.--The term ``compensatory 
        damages''--
                    (A) means objectively verifiable monetary losses 
                incurred as a result of the provision of, use of, or 
                payment for (or failure to provide, use, or pay for) 
                medicare-related items or services, such as past and 
                future medical expenses, loss of past and future 
                earnings, cost of obtaining domestic services, loss of 
                employment, and loss of business or employment 
                opportunities, damages for physical and emotional pain, 
                suffering, inconvenience, physical impairment, mental 
                anguish, disfigurement, loss of enjoyment of life, loss 
                of society and companionship, loss of consortium (other 
                than loss of domestic service), hedonic damages, injury 
                to reputation, and all other nonpecuniary losses of any 
                kind or nature; and
                    (B) includes economic damages and noneconomic 
                damages, as such terms are defined in this section.
            (7) Economic damages.--The term ``economic damages'' means 
        objectively verifiable monetary losses, 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.
            (8) 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.
            (9) Punitive damages.--The term ``punitive damages'' means 
        damages awarded, for the purpose of punishment or deterrence, 
        and not solely for compensatory purposes. Punitive damages are 
        neither economic nor noneconomic damages.
            (10) Recovery.--The term ``recovery'' means the net sum 
        recovered after deducting any disbursements or costs incurred 
        in connection with prosecution or settlement of the claim, 
        including all costs paid or advanced by any person. Costs of 
        health care incurred by the claimant and the attorneys' office 
        overhead costs or charges for legal services are not deductible 
        disbursements or costs for such purpose.
            (11) Health care organization.--The term ``health care 
        organization'' means any person or entity which is obligated to 
        provide or pay for health benefits under any health plan, 
        including any person or entity acting under a contract or 
        arrangement with a health care organization to provide or 
        administer any health benefit.
            (12) 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.
            (13) Health care goods or services.--The term ``health care 
        goods or services'' means any goods or services provided by a 
        health care organization, provider, or by any individual 
        working under the supervision of a health care provider, that 
        relates to the diagnosis, prevention, or treatment of any human 
        disease or impairment, or the assessment of the health of human 
        beings.
            (14) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, American Samoa, the Northern 
        Mariana Islands, the Trust Territory of the Pacific Islands, 
        and any other territory or possession of the United States, or 
        any political subdivision thereof.

SEC. 13. SENSE OF CONGRESS.

    It is the sense of Congress that any savings generated by this Act 
due to reduced Federal Medicare expenditures associated with defensive 
medicine and higher medical malpractice insurance rates should be 
placed in a Medicare Trust Fund to be used solely to meet Medicare 
expenditures, including current benefits, enhanced or new benefits, or 
the costs associated with the enactment of a prescription drugs 
benefit.

SEC. 14. APPLICABILITY; EFFECTIVE DATE.

    This Act shall apply to any medicare-related health care lawsuit 
brought in a Federal or State court, or subject to alternative dispute 
resolution, that is initiated on or after the date of the enactment of 
this Act, except that any medicare-related health care lawsuit arising 
from an injury occurring prior to the date of the enactment of this Act 
shall be governed by the applicable statute of limitations provisions 
in effect at the time the injury occurred.
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