[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1124 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 1124

To reduce the cost of medical malpractice insurance, to enhance patient 
            access to medical care, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 6, 2003

 Mr. Dingell (for himself, Mr. Brown of Ohio, Mr. Towns, Mr. Pallone, 
 Mr. Deutsch, Mr. Rush, Ms. Eshoo, Mr. Engel, Mr. Green of Texas, Ms. 
McCarthy of Missouri, Ms. DeGette, Mrs. Capps, Ms. Solis, Mr. Andrews, 
 and Mr. DeFazio) introduced the following bill; which was referred to 
the Committee on Energy and Commerce, and in addition to the Committee 
  on the Judiciary, 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 reduce the cost of medical malpractice insurance, to enhance patient 
            access to medical care, 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.

    This Act may be cited as the ``Medical Malpractice Reform Act of 
2003''.

  TITLE I--HEALTH PROVIDER SHORTAGES RESULTING FROM COSTS OF MEDICAL 
                         MALPRACTICE INSURANCE

SEC. 101. GRANTS AND CONTRACTS REGARDING HEALTH PROVIDER SHORTAGES.

    Subpart I of part D of title III of the Public Health Service Act 
(42 U.S.C. 254b et seq.) is amended by adding at the end the following 
section.

``SEC. 330L. HEALTH PROVIDER SHORTAGES RESULTING FROM COSTS OF MEDICAL 
              MALPRACTICE INSURANCE.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Health Resources and Services Administration, may make awards of 
grants or contracts in accordance with this section for geographic 
areas that, as determined by the Secretary, have a shortage of one or 
more types of health providers as a result of the providers making the 
decision to cease or curtail providing health services in the 
geographic areas because of the costs of maintaining malpractice 
insurance.
    ``(b) Recipients of Awards; Expenditure.--In accordance with such 
criteria as the Secretary may establish:
            ``(1) Awards under subsection (a) may be made to health 
        providers who agree to provide health services (or to continue 
        providing health services, as the case may be) in geographic 
        areas described in such subsection for the period during which 
        payments under the awards are made to the health providers.
            ``(2) Health providers who receive such awards may expend 
        the awards to assist the providers with the costs of 
        maintaining medical malpractice insurance for providing health 
        services in the geographic area for which the award is made.
    ``(c) Definition.--For purposes of this section, the term `health 
providers' means physicians and other health professionals, and 
organizations that provide health services (including hospitals, 
clinics, and group practices), that meet applicable legal requirements 
to provide the health services involved.''.

SEC. 102. HEALTH PROFESSIONAL ASSIGNMENTS TO TRAUMA CENTERS THROUGH 
              NATIONAL HEALTH SERVICE CORPS.

    Section 338H of the Public Health Service Act (42 U.S.C. 254q) is 
amended by adding at the end the following subsection:
    ``(d) Trauma Centers; Separate Authorization Regarding Shortages 
Resulting From Costs of Medical Malpractice Insurance.--
            ``(1) In general.--For the purpose of assigning Corps 
        surgeons, obstetricians/gynecologists, and other health 
        professionals to trauma centers in health professional shortage 
        areas described in paragraph (2), there are authorized to be 
        appropriated such sums as may be necessary for each of the 
        fiscal years 2003 through 2006. Such authorization is in 
        addition to any other authorization of appropriations that is 
        available for such purpose.
            ``(2) Description of areas.--A health professional shortage 
        area referred to in paragraph (1) is such an area in which, as 
        determined by the Secretary, a medical facility in the area has 
        lost its designation as a trauma center or as a particular 
        level of trauma center, or is at significant risk of losing 
        such a designation, as a result of one or more surgeons, 
        obstetricians/gynecologists, or other health professionals 
        making the decision to cease or curtail practicing at the 
        facility because of the costs of maintaining malpractice 
        insurance. For purposes of paragraph (1), (A) the term `trauma 
        center' includes such a medical facility; and (B) the Secretary 
        may adjust the criteria for designation as a health 
        professional shortage area to the extent necessary to make 
        funds appropriated under paragraph (1) available with respect 
        to any medical facility to ensure that the facility does not 
        lose any such designation as a result of such decisions by 
        health professionals.''.

          TITLE II--TORT REFORM REGARDING MEDICAL MALPRACTICE

           Subtitle A--Medical Malpractice Litigation Reform

SEC. 201. STATUTE OF LIMITATIONS.

    (a) In General.--In any State or Federal court, a medical 
malpractice action shall be barred unless the complaint is filed within 
3 years after the right of action accrues.
    (b) Accrual.--A right of action referred to in subsection (a) 
accrues upon the last to occur of the following dates:
            (1) The date of the injury.
            (2) The date on which the claimant discovers, or through 
        the use of reasonable diligence should have discovered, the 
        injury.
            (3) The date on which the claimant became 18 years of age.
    (c) Applicability.--This section shall apply to any injury 
occurring after the date of the enactment of this Act.

SEC. 202. ATTORNEY CERTIFICATE OF MERIT.

    (a) In General.--In any State or Federal court, a medical 
malpractice action shall be dismissed unless the attorney or 
unrepresented party presenting the complaint certifies that, to the 
best of the person's knowledge, information, and belief, formed after 
an inquiry reasonable under the circumstances,--
            (1) it is not being presented for any improper purpose, 
        such as to harass or to cause unnecessary delay or needless 
        increase in the cost of litigation;
            (2) the claims and other legal contentions therein are 
        warranted by existing law or by a nonfrivolous argument for the 
        extension, modification, or reversal of existing law or the 
        establishment of new law; and
            (3) the allegations and other factual contentions have 
        evidentiary support or, if specifically so identified, are 
        likely to have evidentiary support after a reasonable 
        opportunity for further investigation and discovery.
    (b) Sanctions.--If, after notice and a reasonable opportunity to 
respond, the court determines that a person, in certifying under 
subsection (a), has violated that subsection, the court shall impose an 
appropriate sanction upon the attorneys, law firms, or parties that 
have violated that subsection or are responsible for the violation. Any 
sanction or relief available under Rule 11 of the Federal Rules of 
Civil Procedure shall be available under this section.
    (c) Coordination With Other Sanctions.--A sanction imposed under 
this section shall be in addition to any other sanction available under 
any other law.
    (d) Applicability.--This section shall apply to any complaint filed 
after the date of the enactment of this Act.

SEC. 203. LIMITATION ON PUNITIVE DAMAGES.

    (a) In General.--In any State or Federal court, punitive damages 
may not be awarded on a medical malpractice action, except upon proof 
of--
            (1) gross negligence;
            (2) reckless indifference to life; or
            (3) an intentional act, such as voluntary intoxication or 
        impairment by a physician, sexual abuse or misconduct, assault 
        and battery, or falsification of records.
    (b) Allocation.--In such a case, the award of punitive damages 
shall be allocated 50 percent to the claimant and 50 percent to a 
trustee appointed by the court, to be used by such trustee in the 
manner specified in subtitle B. The court shall appoint the Secretary 
of Health and Human Services as such trustee.
    (c) Exception.--This subsection shall not apply with respect to an 
action if the applicable State law provides (or has been construed to 
provide) for damages in such an action that are only punitive or 
exemplary in nature.

SEC. 204. REDUCTION IN PREMIUMS PAID BY PHYSICIANS FOR MEDICAL 
              MALPRACTICE INSURANCE COVERAGE.

    (a) In General.--Not later than 180 days after the date of the 
enactment of this Act, each medical malpractice liability insurance 
company shall--
            (1) develop a reasonable estimate of the annual amount of 
        financial savings that will be achieved by the company as a 
        result of this subtitle;
            (2) develop and implement a plan to annually dedicate at 
        least 50 percent of such annual savings to reduce the amount of 
        premiums that the company charges physicians for medical 
        malpractice liability coverage; and
            (3) submit to the Secretary of Health and Human Services 
        (referred to in this section as the ``Secretary'') a written 
        certification that the company has complied with paragraphs (1) 
        and (2).
    (b) Reports.--Not later than one year after the date of the 
enactment of this Act and annually thereafter, each medical malpractice 
liability insurance company shall submit to the Secretary a report that 
identifies the percentage by which the company has reduced medical 
malpractice coverage premiums relative to the date of the enactment of 
this Act.
    (c) Enforcement.--A medical malpractice liability insurance company 
that violates a provision of this section is liable to the United 
States for a civil penalty in an amount assessed by the Secretary, not 
to exceed $11,000 for each such violation. The provisions of paragraphs 
(3) through (5) of section 303(g) of the Federal Food, Drug, and 
Cosmetic Act apply to such a civil penalty to the same extent and in 
the same manner as such paragraphs apply to a civil penalty under such 
section.
    (d) Definition.--For purposes of this section, the term ``medical 
malpractice liability insurance company'' means an entity in the 
business of providing an insurance policy under which the entity makes 
payment in settlement (or partial settlement) of, or in satisfaction of 
a judgment in, a medical malpractice action or claim.

SEC. 205. DEFINITIONS.

    In this subtitle:
            (1) The term ``State'' means each of the several States, 
        the District of Columbia, the Commonwealth of Puerto Rico, 
        American Samoa, Guam, the Commonwealth of the Northern Mariana 
        Islands, the Virgin Islands, and any other territory or 
        possession of the United States.
            (2) The term ``medical malpractice action'' means an action 
        against a physician, or other health professional, who is 
        licensed in accordance with the requirements of the State 
        involved that--
                    (A) arises under the law of the State involved;
                    (B) alleges the failure of such physician or other 
                health professional to adhere to the relevant 
                professional standard of care for the service and 
                specialty involved;
                    (C) alleges death or injury proximately caused by 
                such failure; and
                    (D) seeks monetary damages, whether compensatory or 
                punitive, as relief for such death or injury.

  Subtitle B--Use of Amounts Recovered as Punitive Damages in Medical 
                          Malpractice Actions

SEC. 221. AMOUNTS COVERED.

    (a) In General.--This subtitle applies to amounts allocated to the 
Secretary of Health and Human Services as trustee under section 203.
    (b) Availability.--Such amounts shall be available for use by the 
Secretary of Health and Human Services under section 222 and shall 
remain so available until expended.

SEC. 222. USE OF AMOUNTS.

    (a) In General.--Subject to subsection (b), the Secretary of Health 
and Human Services, acting through the Director of the Agency for 
Healthcare Research and Quality, shall use the amounts to which this 
subtitle applies for activities to reduce medical errors and improve 
patient safety.
    (b) No Funds for Mandatory Reporting System.--The Secretary of 
Health and Human Services may not use any part of such amounts to 
establish or maintain any system that requires mandatory reporting of 
medical errors.
    (c) Regulations.--The Secretary of Health and Human Services shall 
promulgate regulations to establish programs and procedures for 
carrying out this section.

SEC. 223. INVESTMENT.

    (a) In General.--The Secretary of Health and Human Services shall 
invest the amounts to which this subtitle applies in such amounts as 
such Secretary determines are not required to meet current withdrawals. 
Such investments may be made only in interest-bearing obligations of 
the United States. For such purpose, such obligations may be acquired 
on original issue at the issue price, or by purchase of outstanding 
obligations at the market price.
    (b) Sale of Obligations.--Any obligation acquired by the Secretary 
in such Secretary's capacity as trustee of such amounts may be sold by 
the Secretary at the market price.

   TITLE III--INDEPENDENT ADVISORY COMMISSION ON MEDICAL MALPRACTICE 
                               INSURANCE

SEC. 301. ESTABLISHMENT.

    (a) Findings.--The Congress finds as follows:
            (1) The sudden rise in medical malpractice premiums in 
        regions of the United States can threaten patient access to 
        doctors and other health providers.
            (2) Improving patient access to doctors and other health 
        providers is a national priority.
    (b) Establishment.--There is established a national commission to 
be known as the ``Independent Advisory Commission on Medical 
Malpractice Insurance'' (in this title referred to as the 
``Commission'').

SEC. 302. DUTIES.

    (a) In General.--The Commission shall evaluate the causes and scope 
of the recent and dramatic increases in medical malpractice insurance 
premiums and formulate additional proposals to reduce such medical 
malpractice premiums and make recommendations to avoid any dramatic 
increases in medical malpractice premiums in the future, in light of 
proposals for tort reform regarding medical malpractice.
    (b) Considerations.--In formulating proposals under this section, 
the Commission shall, at a minimum, consider the following:
            (1) Alternatives to the current medical malpractice tort 
        system that would ensure adequate compensation for patients, 
        preserve access to providers, and improve health care safety 
        and quality.
            (2) The effect of Federal laws on the pricing of medical 
        malpractice insurance.
            (3) Modifications of, and alternatives to, the existing 
        State and Federal regulations and oversight that affect, or 
        could affect, medical malpractice lines of insurance.
            (4) State and Federal reforms that would distribute the 
        risk of medical malpractice more equitably among health care 
        providers.
            (5) State and Federal reforms that would more evenly 
        distribute the risk of medical malpractice across various 
        categories of providers.
            (6) The effect of a Federal medical malpractice reinsurance 
        program administered by the Department of Health and Human 
        Services.
            (7) Programs that would reduce medical errors and increase 
        patient safety, including new innovations in technology and 
        management.

SEC. 303. REPORT.

    (a) In General.--The Commission shall transmit to Congress--
            (1) an initial report not later than 180 days after the 
        date of the initial meeting of the Commission; and
            (2) a report not less than each year thereafter until the 
        Commission terminates.
    (b) Contents.--Each report transmitted under this section shall 
contain a detailed statement of the findings and conclusions of the 
Commission, including proposals for addressing the current dramatic 
increases in medical malpractice insurance rates and recommendations 
for avoiding any such dramatic increases in the future.
    (c) Voting and Reporting Requirements.--With respect to each 
proposal or recommendation contained in the report submitted under 
subsection (a), each member of the Commission shall vote on the 
proposal or recommendation, and the Commission shall include, by 
member, the results of that vote in the report.

SEC. 304. MEMBERSHIP.

    (a) Number and Appointment.--The Commission shall be composed of 15 
members appointed by the Comptroller General of the United States.
    (b) Membership.--
            (1) In general.--The membership of the Commission shall 
        include individuals with national recognition for their 
        expertise in health finance and economics, actuarial science, 
        medical malpractice insurance, insurance regulation, health 
        care law, health care policy, health care access, allopathic 
        and osteopathic physicians, other providers of health care 
        services, patient advocacy, and other related fields, who 
        provide a mix of different professionals, broad geographic 
        representations, and a balance between urban and rural 
        representatives.
            (2) Inclusion.--The membership of the Commission shall 
        include the following:
                    (A) Two individuals with expertise in health 
                finance and economics, including one with expertise in 
                consumer protections in the area of health finance and 
                economics.
                    (B) Two individuals with expertise in medical 
                malpractice insurance, representing both commercial 
                insurance carriers and physician-sponsored insurance 
                carriers.
                    (C) An individual with expertise in State insurance 
                regulation and State insurance markets.
                    (D) An individual representing physicians.
                    (E) An individual with expertise in issues 
                affecting hospitals, nursing homes, nurses, and other 
                providers.
                    (F) Two individuals representing patient interests.
                    (G) Two individuals with expertise in health care 
                law or health care policy.
                    (H) An individual with expertise in representing 
                patients in malpractice lawsuits.
            (3) Majority.--The total number of individuals who are 
        directly involved with the provision or management of 
        malpractice insurance, representing physicians or other 
        providers, or representing physicians or other providers in 
        malpractice lawsuits, shall not constitute a majority of the 
        membership of the Commission.
            (4) Ethical disclosure.--The Comptroller General of the 
        United States shall establish a system for public disclosure by 
        members of the Commission of financial or other potential 
        conflicts of interest relating to such members.
    (c) Terms.--
            (1) In general.--The terms of the members of the Commission 
        shall be for 3 years except that the Comptroller General of the 
        United States shall designate staggered terms for the members 
        first appointed.
            (2) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed only for 
        the remainder of that term. A member may serve after the 
        expiration of that member's term until a successor has taken 
        office. A vacancy in the Commission shall be filled in the 
        manner in which the original appointment was made.
            (3) Compensation.--Members of the Commission shall be 
        compensated in accordance with section 1805(c)(4) of the Social 
        Security Act.
            (4) Chairman; vice chairman.--The Comptroller General of 
        the United States shall designate at the time of appointment a 
        member of the Commission as Chairman and a member as Vice 
        Chairman. In the case of vacancy of the Chairmanship or Vice 
        Chairmanship, the Comptroller General may designate another 
        member for the remainder of that member's term.
            (5) Meetings.--
                    (A) In general.--The Commission shall meet at the 
                call of the Chairman.
                    (B) Initial meeting.--The Commission shall hold an 
                initial meeting not later than the date that is 1 year 
                after the date of the enactment of this title, or the 
                date that is 3 months after the appointment of all the 
                members of the Commission, whichever occurs earlier.

SEC. 305. DIRECTOR AND STAFF; EXPERTS AND CONSULTANTS.

    Subject to such review as the Comptroller General of the United 
States deems necessary to assure the efficient administration of the 
Commission, the Commission may--
            (1) employ and fix the compensation of an Executive 
        Director (subject to the approval of the Comptroller General) 
        and such other personnel as may be necessary to carry out its 
        duties (without regard to the provisions of title 5, United 
        States Code, governing appointments in the competitive 
        service);
            (2) seek such assistance and support as may be required in 
        the performance of its duties from appropriate Federal 
        departments and agencies;
            (3) enter into contracts or make other arrangements, as may 
        be necessary for the conduct of the work of the Commission 
        (without regard to section 3709 of the Revised Statutes (41 
        U.S.C. 5));
            (4) make advance, progress, and other payments which relate 
        to the work of the Commission;
            (5) provide transportation and subsistence for persons 
        serving without compensation; and
            (6) prescribe such rules and regulations as it deems 
        necessary with respect to the internal organization and 
        operation of the Commission.

SEC. 306. POWERS.

    (a) Obtaining Official Data.--The Commission may secure directly 
from any department or agency of the United States information 
necessary to enable it to carry out this section. Upon request of the 
Chairman, the head of that department or agency shall furnish that 
information to the Commission on an agreed upon schedule.
    (b) Data Collection.--In order to carry out its functions, the 
Commission shall--
            (1) utilize existing information, both published and 
        unpublished, where possible, collected and assessed either by 
        its own staff or under other arrangements made in accordance 
        with this section;
            (2) carry out, or award grants or contracts for, original 
        research and experimentation, where existing information is 
        inadequate; and
            (3) adopt procedures allowing any interested party to 
        submit information for the Commission's use in making reports 
        and recommendations.
    (c) Access of General Accounting Office to Information.--The 
Comptroller General of the United States shall have unrestricted access 
to all deliberations, records, and nonproprietary data of the 
Commission, immediately upon request.
    (d) Periodic Audit.--The Commission shall be subject to periodic 
audit by the Comptroller General of the United States.

SEC. 307. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated such sums 
as may be necessary to carry out this title for each of fiscal years 
2004 through 2008.
    (b) Requests for Appropriations.--The Commission shall submit 
requests for appropriations in the same manner as the Comptroller 
General of the United States submits requests for appropriations, but 
amounts appropriated for the Commission shall be separate from amounts 
appropriated for the Comptroller General.
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