[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2657 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 2657

     To provide comprehensive reform regarding medical malpractice.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 26, 2005

 Mr. Baird (for himself, Mr. Moran of Virginia, and Mr. Ruppersberger) 
 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 provide comprehensive reform regarding medical malpractice.

    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 ``Comprehensive 
Medical Malpractice Reform Act of 2005''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

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

Sec. 101. Cap on non-economic damages.
Sec. 102. Reduction in premiums paid by physicians for medical 
                            malpractice insurance coverage.
Sec. 103. Sanctions for meritless actions and pleadings.
Sec. 104. Performance standards applicable to State medical boards.
Sec. 105. Interstate patient reporting and physician tracking database.
Sec. 106. Report on modification of malpractice procedures relating to 
                            mandated care under EMTALA.
Sec. 107. Definitions.
     TITLE II--HEALTH CARE MALPRACTICE LIABILITY MEDIATION PROGRAMS

Sec. 201. Grants to States and health care entities for mediation 
                            programs.
Sec. 202. Training and assistance for mediation programs.
Sec. 203. Authorization of appropriations.
       TITLE III--VOLUNTARY REPORTING OF MEDICAL SAFETY INCIDENTS

   Subtitle A--Reporting by individuals involved in the provision of 
                              health care

Sec. 301. Amendments to Public Health Service Act.
        Subtitle B--Liability protection in good-faith reporting

Sec. 311. Liability protection for health care providers in good-faith 
                            reporting to State medical boards.
                       TITLE IV--INSURANCE REFORM

Sec. 401. Uniform state requirements regarding proposed rate increases.
Sec. 402. Reduction in premiums paid by physicians for medical 
                            malpractice insurance coverage.
Sec. 403. Effective date.
   TITLE V--EXCLUSION OF PHARMACEUTICALS AND DEVICES FROM LIABILITY 
                                REFORMS

Sec. 501. Exclusion of pharmaceuticals and devices.

           TITLE I--HEALTH CARE MALPRACTICE LIABILITY REFORM

SEC. 101. CAP ON NON-ECONOMIC DAMAGES.

    (a) In General.--When an individual is injured or dies as the 
result of health care malpractice, a person entitled to recover non-
economic damages from a health care provider responsible for that 
malpractice may not recover such damages, in the aggregate from all 
such providers, in an amount more than $250,000, adjusted for inflation 
from 1975 as provided in subsection (b). This limitation applies 
separately to each person entitled to recover such damages.
    (b) Adjustment for Inflation From 1975.--
            (1) Publication by secretary of labor.--On or about 
        December 1 of each year, the Secretary of Labor shall publish 
        in the Federal Register a dollar amount determined by adjusting 
        the dollar amount specified in subsection (a) according to the 
        adjustments in the Consumer Price Index of the Bureau of Labor 
        Statistics of the Department of Labor for the period beginning 
        on or about October 1, 1975, and ending on or about October 1 
        of that year.
            (2) Applicability.--For purposes of subsection (a), the 
        dollar amount that applies to a calendar year is the dollar 
        amount published on or about December 1 of the preceding year.
            (3) Estimation.--Congress estimates that the dollar amount 
        that would apply to calendar year 2005 would be approximately 
        $878,000, though the dollar amount published under paragraph 
        (1), rather than the estimation in this paragraph, is to be 
        applied.
    (c) Applicability.--
            (1) In general.--Subject to paragraph (2), this section 
        applies whenever the amount of a recovery is made final in a 
        calendar year after the date of the enactment of this Act. In 
        applying the dollar amount to a recovery, all recoveries made 
        final (whether before or after the date of the enactment of 
        this Act) are included in the aggregate.
            (2) Not applicable when state board not in compliance.--
        During a period in which a State medical board is not in 
        compliance with the voluntary performance standards developed 
        under section 104 or is failing to submit the information 
        described in paragraphs (2) and (3)(A) of section 105(b) (as 
        determined by the Secretary under section 104 or 105, 
        respectively), the limitation in subsection (a) does not apply 
        to liability arising under the law of that State.
    (d) Relationship to State Law.--This section operates on a case-by-
case basis to provide a maximum recovery and to prevent State law from 
providing a recovery above that maximum. It does not prevent State law 
from providing a recovery below that maximum.

SEC. 102. 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 section;
            (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 
        (in this subsection referred to as the ``Secretary'') a written 
        certification that the company has complied with subparagraphs 
        (A) and (B).
    (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 subsection 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 subsection, 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. 103. SANCTIONS FOR MERITLESS ACTIONS AND PLEADINGS.

    (a) Signature Required.--Every pleading, written motion, and other 
paper in any medical malpractice action shall be signed by at least 1 
attorney of record in the attorney's individual name, or, if the party 
is not represented by an attorney, shall be signed by the party. Each 
paper shall state the signer's address and telephone number, if any. An 
unsigned paper shall be stricken unless omission of the signature is 
corrected promptly after being called to the attention of the attorney 
or party.
    (b) Certificate of Merit.--
            (1) In general.--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--
                    (A) 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;
                    (B) 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
                    (C) 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.
            (2) Paper considered to be a certification.--By presenting 
        to the court (whether by signing, filing, submitting, or later 
        advocating) a pleading, written motion, or other paper, an 
        attorney or unrepresented party is certifying that to the best 
        of the person's knowledge, information and belief, formed after 
        an inquiry reasonable under the circumstances--
                    (A) 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;
                    (B) the claims, defenses, 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
                    (C) the allegations and other factual contentions 
                have evidentiary support or, if specifically so 
                identified, are reasonable based on a lack of 
                information or belief.
    (c) Mandatory Sanctions.--
            (1) First violation.--If, after notice and a reasonable 
        opportunity to respond, a court, upon motion or upon its own 
        initiative, determines that subsection (b) has been violated, 
        the court shall find each attorney or party in violation in 
        contempt of court and shall require the payment of costs and 
        attorneys fees. The court may also impose additional 
        appropriate sanctions, such as striking the pleadings, 
        dismissing the suit, and sanctions plus interest, upon the 
        person in violation, or upon both such person and such person's 
        attorney or client (as the case may be).
            (2) Second violation.--If, after notice and a reasonable 
        opportunity to respond, a court, upon motion or upon its own 
        initiative, determines that subsection (b) has been violated 
        and that the attorney or party with respect to which the 
        determination was made has committed one previous violation of 
        subsection (b) before this or any other court, the court shall 
        find each such attorney or party in contempt of court and shall 
        require the payment of costs and attorneys fees, and require 
        such person in violation (or both such person and such person's 
        attorney or client (as the case may be)) to pay a monetary 
        fine. The court may also impose additional appropriate 
        sanctions, such as striking the pleadings, dismissing the suit 
        and sanctions plus interest, upon such person in violation, or 
        upon both such person and such person's attorney or client (as 
        the case may be).
            (3) Third and subsequent violations.--If, after notice and 
        a reasonable opportunity to respond, a court, upon motion or 
        upon its own initiative, determines that subsection (b) has 
        been violated and that the attorney or party with respect to 
        which the determination was made has committed more than one 
        previous violation of subsection (b) before this or any other 
        court, the court shall find each such attorney or party in 
        contempt of court, refer each such attorney to one or more 
        appropriate State bar associations for disciplinary 
        proceedings, require the payment of costs and attorneys fees, 
        and require such person in violation (or both such person and 
        such person's attorney or client (as the case may be)) to pay a 
        monetary fine. The court may also impose additional appropriate 
        sanctions, such as striking the pleadings, dismissing the suit, 
        and sanctions plus interest, upon such person in violation, or 
        upon both such person and such person's attorney or client (as 
        the case may be).
    (d) Central Tracking Database.--The Attorney General shall 
establish and maintain a central tracking database reporting system to 
which courts are to report violations of subsection (b). The database 
shall include all identifying information with respect to the attorney 
or the party (if not represented by an attorney). The Attorney General 
shall permit courts to consult the database to determine the extent to 
which an attorney or party has violated subsection (b) previously.

SEC. 104. PERFORMANCE STANDARDS APPLICABLE TO STATE MEDICAL BOARDS.

    (a) Development.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Health and Human Services, in 
consultation with the Federation of State Medical Boards, shall develop 
and make publicly available voluntary performance standards applicable 
to State medical boards.
    (b) Contents.--In developing performance standards under this 
section, the Secretary shall include standards to require the 
following:
            (1) Processing patient complaints within a specified 
        limited period of time.
            (2) Maintaining a website or toll-free telephone number to 
        enable a patient submitting a complaint to track the status of 
        the complaint.
            (3) Maintaining an adequate level of staff for the 
        activities of the State medical board.
            (4) Ensuring that staff are qualified.
            (5) Making the following information available to the 
        public for physicians:
                    (A) Each physician's education and training.
                    (B) Each physician's medical specialties.
                    (C) For each physician a description of medical 
                malpractice claims paid, hospital disciplinary actions 
                taken, criminal convictions occurring, and disciplinary 
                actions taken by the State medical board, within the 
                previous 10 years.
                    (D) At the option of a State medical board, each 
                physician's professional demographics (such as business 
                address, insurance plan and hospital affiliations, and 
                available translation services), professional or 
                community awards received, and research or other 
                professional publications.
            (6) Issuing an annual report that includes aggregate 
        disciplinary statistics, including--
                    (A) statistics on the number and type of complaints 
                received; and
                    (B) with respect to physicians, statistics on the 
                number and type of complaints received, disaggregated 
                by the medical school and graduate medical education 
                program completed by the physicians involved.
            (7) Such other issues as the Secretary determines 
        appropriate.
    (c) Determination Required.--For the period beginning 3 years after 
the date of the enactment of this Act, the Secretary shall determine 
whether the State medical board of each State is in compliance with the 
voluntary performance standards developed under subsection (a).
    (d) Determination of Noncompliance.--Before making a determination 
under subsection (c) that a State medical board is not in compliance 
with the voluntary performance standards developed under subsection 
(a), the Secretary shall--
            (1) propose a determination of noncompliance;
            (2) identify the reasons for such noncompliance; and
            (3) give the State medical board an opportunity to correct 
        such noncompliance.
    (e) Revision of Determinations.--The Secretary shall periodically 
review and, as necessary, revise determinations of compliance and 
noncompliance under subsection (c).
    (f) Report by Secretary.--Not later than 5 years after the date of 
the enactment of this Act, and annually thereafter, the Secretary shall 
submit a report to the Congress on the activities of the Secretary 
under this section, including a listing of the State medical boards 
determined by the Secretary to be in compliance or not in compliance 
with the voluntary standards developed under subsection (a).

SEC. 105. INTERSTATE PATIENT REPORTING AND PHYSICIAN TRACKING DATABASE.

    (a) Establishment.--The Secretary of Health and Human Services 
shall establish and maintain an interstate patient reporting and 
physician tracking database (in this section referred to as the 
``database'') .
    (b) Database Contents.--
            (1) In general.--The database shall consist of information 
        about physicians voluntarily submitted to the database by--
                    (A) State medical boards; and
                    (B) patients.
            (2) Submissions by state medical boards.--The database 
        shall encourage the State medical board of each State to 
        submit, with respect to each physician licensed by the State, 
        the following:
                    (A) The physician's identity.
                    (B) The physician's education and training.
                    (C) The physician's medical specialties.
                    (D) A description of medical malpractice claims 
                paid, hospital disciplinary actions taken, criminal 
                convictions occurring, and disciplinary actions taken 
                by the State medical board, within the previous 10 
                years.
            (3) Patient complaints.--The database shall--
                    (A) encourage the State medical board of each State 
                to submit, with respect to each physician licensed by 
                the State, a description of pending patient complaints 
                about the physician; and
                    (B) allow patients to submit complaints about 
                physicians directly to the database.
    (c) Availability of Information.--
            (1) In general.--The information submitted to the database 
        pursuant to subsection (b)(2) shall be available to the public, 
        including by means of the Internet and a toll-free telephone 
        number.
            (2) Patient complaints.--
                    (A) Confidentiality.--Any patient complaint about a 
                physician submitted to the database shall be kept 
                confidential and shall not be subject to disclosure 
                under section 552 of title 5, United States Code. 
                Except as provided in subparagraph (B), the database 
                may disclose information derived from such a patient 
                complaint only if the information is not individually 
                identifiable.
                    (B) Tracking patient complaints.--The database 
                shall--
                            (i) assign a tracking number to each 
                        patient complaint submitted to the database 
                        pursuant to subsection (b)(3);
                            (ii) provide notice and a description of 
                        each patient complaint submitted pursuant to 
                        subsection (b)(3)(B) to the applicable State 
                        medical board; and
                            (iii) allow the patient making any 
                        complaint submitted to the database pursuant to 
                        subsection (b)(3) to track the status of the 
                        complaint, including by means of the Internet 
                        and a toll-free telephone number.
                    (C) Analysis.--Subject to subparagraph (A), the 
                Secretary of Health and Human Services shall conduct 
                analysis of patient complaints submitted to the 
                database, including complaints that do not result in 
                disciplinary action, and use the data and conclusions 
                derived from such analysis to provide timely public 
                health safety information to health care consumers and 
                practitioners.
    (d) Technical Assistance.--The Secretary of Health and Human 
Services shall provide technical assistance to States to facilitate the 
exchange of information between State medical boards and the database.
    (e) Determination Required.--For the period beginning 3 years after 
the date of the enactment of this Act, the Secretary shall determine 
whether the State medical board of each State is failing to submit the 
information described in subsections (b)(2) and (b)(3)(A).
    (f) Determination of Noncompliance.--Before making a determination 
under subsection (e) that a State medical board is failing to submit 
such information, the Secretary shall--
            (1) propose a determination of noncompliance;
            (2) identify the reasons for such noncompliance; and
            (3) give the State medical board an opportunity to correct 
        such noncompliance.
    (g) Revision of Determinations.--The Secretary shall periodically 
review and, as necessary, revise determinations of compliance and 
noncompliance under subsection (e).
    (h) Assessment.--Not later than 3 years after the date of the 
enactment of this Act, the Secretary shall--
            (1) conduct an assessment of the database, including an 
        assessment of the value of the database to patients and the 
        effect of the database on physicians; and
            (2) submit a report to the Congress on the results of the 
        assessment, including any recommendations for improvement of 
        the database.

SEC. 106. REPORT ON MODIFICATION OF MALPRACTICE PROCEDURES RELATING TO 
              MANDATED CARE UNDER EMTALA.

    (a) Analysis.--The Secretary of Health and Human Services shall 
conduct a study on alternatives to the present medical malpractice 
litigation and compensation process in resolving health care 
malpractice claims arising out of a screening examination or treatment 
provided to comply with the requirements of section 1867 of the Social 
Security Act (42 U.S.C. 1395dd), commonly referred to as EMTALA.
    (b) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Secretary shall submit to the Congress a report on the 
study conducted under subsection (a). The Secretary shall include in 
such report alternatives to medical malpractice litigation and 
compensation, including medical liability insurance premium tax 
credits, no-fault medical liability insurance, and medical malpractice 
health courts.

SEC. 107. DEFINITIONS.

    In this title:
            (1) The term ``State medical board'' means a State entity 
        responsible for licensing physicians or a subdivision of such 
        an entity.
            (2) The term ``health care malpractice'' means the 
        negligence or other fault of a health care provider.
            (3) The term ``health care provider'' means--
                    (A) any individual who is engaged in the delivery 
                of health care services in a State and who is required 
                by State law or regulation to be licensed or certified 
                by the State to engage in the delivery of such services 
                in the State; and
                    (B) any entity that is engaged in the delivery of 
                health care services in a State and that, if it is 
                required by State law or regulation to be licensed or 
                certified by the State to engage in the delivery of 
                such services in the State, is so licensed.
            (4) The term ``State'' includes the District of Columbia, 
        the Commonwealth of Puerto Rico, and other territories and 
        possessions of the United States.

     TITLE II--HEALTH CARE MALPRACTICE LIABILITY MEDIATION PROGRAMS

SEC. 201. GRANTS TO STATES AND HEALTH CARE ENTITIES FOR MEDIATION 
              PROGRAMS.

    (a) Grants Authorized.--From amounts made available to carry out 
this section, the Attorney General shall carry out a program under 
which the Attorney General makes grants to States and health care 
entities to carry out mediation programs described in subsection (b).
    (b) Mediation Programs.--A mediation program referred to in 
subsection (a) is a program, based on the Rush model, under which an 
allegation that an individual has been injured or has died as the 
result of health care malpractice is mediated by those parties 
consenting to do so in an effort to resolve the matter without 
litigation.
    (c) Rush Model.--For purposes of this section, a program is based 
on the Rush model if the program satisfies each of the following:
            (1) Participation by the parties in the mediation is 
        voluntary.
            (2) At the commencement of a mediation, the parties enter 
        into a mediation agreement that--
                    (A) states that the parties--
                            (i) will not request or subpoena the 
                        mediator to testify or produce any documents or 
                        other information in any proceeding related to 
                        the mediation; and
                            (ii) will defend and indemnify the mediator 
                        in connection with any summons or subpoena 
                        arising out of the mediation proceeding;
                    (B) provides for confidentiality of the mediation 
                proceedings; and
                    (C) states that any apology or expression of 
                remorse by a health care provider or other entity at 
                any time during the mediation proceedings will be kept 
                confidential and will not be used in any subsequent 
                legal proceeding.
            (3) The program is similar to the mediation program carried 
        out as of January 1, 2005, at Rush-Presbyterian-St. Luke's 
        Medical Center in Chicago, Illinois.
    (d) Definitions.--In this section:
            (1) The term ``health care entity'' means an entity covered 
        by section 105(3)(B).
            (2) The term ``health care malpractice'' has the meaning 
        given such term in section 105.
            (3) The term ``State'' has the meaning given such term in 
        section 105.

SEC. 202. TRAINING AND ASSISTANCE FOR MEDIATION PROGRAMS.

    From amounts made available to carry out this section, the Attorney 
General shall carry out a program under which the Attorney General 
provides training and assistance to recipients of grant amounts under 
section 201 to carry out mediation programs under that section.

SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Attorney General 
such sums as may be necessary to carry out sections 201 and 202.

       TITLE III--VOLUNTARY REPORTING OF MEDICAL SAFETY INCIDENTS

   Subtitle A--Reporting by Individuals Involved in the Provision of 
                              Health Care

SEC. 301. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

    (a) In General.--Title IX of the Public Health Service Act (42 
U.S.C. 299 et seq.) is amended--
            (1) in section 912(c), by inserting ``, in accordance with 
        part C,'' after ``The Director shall'';
            (2) by redesignating part C as part D;
            (3) by redesignating sections 921 through 928, as sections 
        931 through 938, respectively;
            (4) in section 938(1) (as so redesignated), by striking 
        ``921'' and inserting ``931''; and
            (5) by inserting after part B the following:

                  ``PART C--PATIENT SAFETY IMPROVEMENT

``SEC. 921. DEFINITIONS.

    ``In this part:
            ``(1) Identifiable information.--The term `identifiable 
        information' means information that is presented in a form and 
        manner that allows the identification of any provider, patient, 
        or reporter of patient safety work product. With respect to 
        patients, such information includes any individually 
        identifiable health information as that term is defined in the 
        regulations promulgated pursuant to section 264(c) of the 
        Health Insurance Portability and Accountability Act of 1996 
        (Public Law 104-191; 110 Stat. 2033).
            ``(2) Nonidentifiable information.--The term 
        `nonidentifiable information' means information that is 
        presented in a form and manner that prevents the identification 
        of any provider, patient, or reporter of patient safety work 
        product. With respect to patients, such information must be de-
        identified consistent with the regulations promulgated pursuant 
        to section 264(c) of the Health Insurance Portability and 
        Accountability Act of 1996 (Public Law 104-191; 110 Stat. 
        2033).
            ``(3) Patient safety evaluation system.--The term `patient 
        safety evaluation system' means a process that involves the 
        collection, management, or analysis of information for 
        submission to or by a patient safety organization.
            ``(4) Patient safety organization.--The term `patient 
        safety organization' means a private or public organization or 
        component thereof that is certified, through a process to be 
        determined by the Secretary under section 925, to perform each 
        of the following activities:
                    ``(A) The conduct, as the organization or 
                component's primary activity, of efforts to improve 
                patient safety and the quality of health care delivery.
                    ``(B) The collection and analysis of patient safety 
                work product that is submitted by providers.
                    ``(C) The development and dissemination of 
                evidence-based information to providers with respect to 
                improving patient safety, such as recommendations, 
                protocols, or information regarding best practices.
                    ``(D) The utilization of patient safety work 
                product to carry out activities limited to those 
                described under this paragraph and for the purposes of 
                encouraging a culture of safety and of providing direct 
                feedback and assistance to providers to effectively 
                minimize patient risk.
                    ``(E) The maintenance of confidentiality with 
                respect to identifiable information.
                    ``(F) The provision of appropriate security 
                measures with respect to patient safety work product.
                    ``(G) The submission of nonidentifiable information 
                to the Agency consistent with standards established by 
                the Secretary under section 923(b) for any National 
                Patient Safety Database.
            ``(5) Patient safety work product.--
                    ``(A) The term `patient safety work product' means 
                any document or communication (including any 
                information, report, record, memorandum, analysis, 
                deliberative work, statement, or root cause analysis) 
                that--
                            ``(i) except as provided in subparagraph 
                        (B), is developed by a provider for the purpose 
                        of reporting to a patient safety organization, 
                        and is reported to a patient safety 
                        organization;
                            ``(ii) is created by a patient safety 
                        organization; or
                            ``(iii) would reveal the deliberations or 
                        analytic process of a patient safety evaluation 
                        system (as defined in paragraph (3)).
                    ``(B)(i) Patient safety work product described in 
                subparagraph (A)(i)--
                            ``(I) does not include any separate 
                        information described in clause (ii); and
                            ``(II) shall not be construed to include 
                        such separate information merely by reason of 
                        inclusion of a copy of the document or 
                        communication involved in a submission to, or 
                        the fact of submission of such a copy to, a 
                        patient safety organization.
                    ``(ii) Separate information described in this 
                clause is a document or communication (including a 
                patient's medical record or any other patient or 
                hospital record) that is developed or maintained, or 
                exists, separately from any patient safety evaluation 
                system.
                    ``(C) Information available from sources other than 
                a patient safety work product under this section may be 
                discovered or admitted in a civil or administrative 
                proceeding, if discoverable or admissible under 
                applicable law.
            ``(6) Provider.--The term `provider' means--
                    ``(A) an individual or entity licensed or otherwise 
                authorized under State law to provide health care 
                services, including--
                            ``(i) a hospital, nursing facility, 
                        comprehensive outpatient rehabilitation 
                        facility, home health agency, and hospice 
                        program;
                            ``(ii) a physician, physician assistant, 
                        nurse practitioner, clinical nurse specialist, 
                        certified nurse midwife, nurse anesthetist, 
                        psychologist, certified social worker, 
                        registered dietitian or nutrition professional, 
                        physical or occupational therapist, or other 
                        individual health care practitioner;
                            ``(iii) a pharmacist; and
                            ``(iv) a renal dialysis facility, 
                        ambulatory surgical center, pharmacy, physician 
                        or health care practitioner's office, long-term 
                        care facility, behavioral health residential 
                        treatment facility, clinical laboratory, or 
                        community health center; or
                    ``(B) any other person or entity specified in 
                regulations by the Secretary after public notice and 
                comment.

``SEC. 922. PRIVILEGE FOR PATIENT SAFETY WORK PRODUCT.

    ``(a) Privilege.--Notwithstanding any other provision of law and 
subject to subsection (c), patient safety work product shall not be--
            ``(1) subject to a civil or administrative subpoena or 
        order;
            ``(2) subject to discovery in connection with a civil or 
        administrative proceeding;
            ``(3) subject to disclosure pursuant to section 552 of 
        title 5, United States Code (commonly known as the Freedom of 
        Information Act), or any other similar Federal or State law;
            ``(4) required to be admitted as evidence or otherwise 
        disclosed in any State or Federal civil or administrative 
        proceeding; or
            ``(5) if the patient safety work product is identifiable 
        information and is received by a national accreditation 
        organization in its capacity as a patient safety organization--
                    ``(A) used by a national accreditation organization 
                in an accreditation action against the provider that 
                reported the information;
                    ``(B) shared by such organization with its survey 
                team; or
                    ``(C) required as a condition of accreditation by a 
                national accreditation association.
    ``(b) Reporter Protection.--
            ``(1) In general.--A provider may not use against an 
        individual in an adverse employment action described in 
        paragraph (2) the fact that the individual in good faith 
        reported information--
                    ``(A) to the provider with the intention of having 
                the information reported to a patient safety 
                organization; or
                    ``(B) directly to a patient safety organization.
            ``(2) Adverse employment action.--For purposes of this 
        subsection, an `adverse employment action' includes--
                    ``(A) the failure to promote an individual or 
                provide any other employment-related benefit for which 
                the individual would otherwise be eligible;
                    ``(B) an adverse evaluation or decision made in 
                relation to accreditation, certification, 
                credentialing, or licensing of the individual; and
                    ``(C) a personnel action that is adverse to the 
                individual concerned.
            ``(3) Remedies.--Any provider that violates this subsection 
        shall be subject to a civil monetary penalty of not more than 
        $20,000 for each such violation involved. Such penalty shall be 
        imposed and collected in the same manner as civil money 
        penalties under subsection (a) of section 1128A of the Social 
        Security Act are imposed and collected.
    ``(c) Disclosures.--Nothing in this section prohibits any of the 
following disclosures:
            ``(1) Voluntary disclosure of nonidentifiable information.
            ``(2) Voluntary disclosure of identifiable information by a 
        provider or patient safety organization, if such disclosure--
                    ``(A) is authorized by the provider for the 
                purposes of improving quality and safety;
                    ``(B) is to an entity or person subject to the 
                requirements of section 264(c) of the Health Insurance 
                Portability and Accountability Act of 1996 (Public Law 
                104-191; 110 Stat. 2033), or any regulation promulgated 
                under such section; and
                    ``(C) is not in conflict with such section or any 
                regulation promulgated under such section.
            ``(3) Disclosure as required by law by a provider to the 
        Food and Drug Administration, or on a voluntary basis by a 
        provider to a federally established patient safety program, 
        with respect to an Administration-regulated product or activity 
        for which that entity has responsibility, for the purposes of 
        activities related to the quality, safety, or effectiveness of 
        such Administration-regulated product or activity.
            ``(4) Disclosures of patient safety work product in 
        accordance with this part by a provider to a patient safety 
        organization.
    ``(d) Effect of Transfer, Disclosure.--The following shall not be 
treated as a waiver of any privilege or protection established under 
this part:
            ``(1) The transfer of any patient safety work product 
        between a provider and a patient safety organization.
            ``(2) Disclosure of patient safety work product as 
        described in subsection (c).
            ``(3) The unauthorized disclosure of patient safety work 
        product.
    ``(e) Penalty.--
            ``(1) Prohibition.--Except as provided in this part, and 
        subject to paragraphs (2) and (4), it shall be unlawful for any 
        person to disclose patient safety work product in violation of 
        this section, if such disclosure constitutes a negligent or 
        knowing breach of confidentiality.
            ``(2) Relation to hipaa.--The penalty under paragraph (3) 
        for a disclosure in violation of paragraph (1) does not apply 
        if the person would be subject to a penalty under section 
        264(c) of the Health Insurance Portability and Accountability 
        Act of 1996 (Public Law 104-191; 110 Stat. 2033), or any 
        regulation promulgated under such section, for the same 
        disclosure.
            ``(3) Amount.--Any person who violates paragraph (1) shall 
        be subject to a civil monetary penalty of not more than $10,000 
        for each such violation involved. Such penalty shall be imposed 
        and collected in the same manner as civil money penalties under 
        subsection (a) of section 1128A of the Social Security Act are 
        imposed and collected.
            ``(4) Subsequent disclosure.--Paragraph (1) applies only to 
        the first person that breaches confidentiality with respect to 
        particular patient safety work product.
    ``(f) Relation to HIPAA.--
            ``(1) In general.--For purposes of applying the regulations 
        promulgated pursuant to section 264(c) of the Health Insurance 
        Portability and Accountability Act of 1996 (Public Law 104-191; 
        110 Stat. 2033)--
                    ``(A) patient safety organizations shall be treated 
                as business associates; and
                    ``(B) activities of such organizations described in 
                section 921(4) in relation to a provider are deemed to 
                be health care operations (as defined in such 
                regulations) of the provider.
            ``(2) Rule of construction.--Nothing in this section shall 
        be construed to alter or affect the implementation of such 
        regulations or such section 264(c).
    ``(g) No Limitation of Other Privileges.--Nothing in this section 
shall be construed to affect privileges, including peer review and 
confidentiality protections, that are otherwise available under Federal 
or State laws.
    ``(h) No Limitation on Contracts.--Nothing in this section shall be 
construed to limit the power of a provider and a patient safety 
organization, or a patient safety organization and the Agency or any 
National Patient Safety Database, consistent with the provisions of 
this Act and other applicable law, to enter into a contract requiring 
greater confidentiality or delegating authority to make an authorized 
disclosure.
    ``(i) Relation to State Reporting Requirements.--Nothing in this 
part shall be construed as preempting or otherwise affecting any State 
law requiring a provider to report information, including information 
described in section 921(5)(B), that is not patient safety work 
product.
    ``(j) Continuation of Privilege.--Patient safety work product of an 
organization that is certified as a patient safety organization shall 
continue to be privileged and confidential, in accordance with this 
section, if the organization's certification is terminated or revoked 
or if the organization otherwise ceases to qualify as a patient safety 
organization.
    ``(k) Reports on Strategies to Improve Patient Safety.--
            ``(1) Draft report.--Not later than the date that is 18 
        months after any National Patient Safety Database is 
        operational, the Secretary, in consultation with the Director, 
        shall prepare a draft report on effective strategies for 
        reducing medical errors and increasing patient safety. The 
        draft report shall include any measure determined appropriate 
        by the Secretary to encourage the appropriate use of such 
        strategies, including use in any federally funded programs. The 
        Secretary shall make the draft report available for public 
        comment and submit the draft report to the Institute of 
        Medicine for review.
            ``(2) Final report.--Not later than 1 year after the date 
        described in paragraph (1), the Secretary shall submit a final 
        report to the Congress that includes, in an appendix, any 
        findings by the Institute of Medicine concerning research on 
        the strategies discussed in the draft report and any 
        modifications made by the Secretary based on such findings.

``SEC. 923. NATIONAL PATIENT SAFETY DATABASE.

    ``(a) Authority.--
            ``(1) In general.--In conducting activities under this 
        part, the Secretary shall provide for the establishment and 
        maintenance of a database to receive relevant nonidentifiable 
        patient safety work product, and may designate entities to 
        collect relevant nonidentifiable patient safety work product 
        that is voluntarily reported by patient safety organizations 
        upon the request of the Secretary. Any database established or 
        designated under this paragraph may be referred to as a 
        `National Patient Safety Database'.
            ``(2) Use of information.--Information reported to any 
        National Patient Safety Database shall be used to analyze 
        national and regional statistics, including trends and patterns 
        of health care errors. The information resulting from such 
        analyses may be included in the annual quality reports prepared 
        under section 913(b)(2).
            ``(3) Advisory role.--The Secretary shall provide 
        scientific support to patient safety organizations, including 
        the dissemination of methodologies and evidence-based 
        information related to root causes and quality improvement.
    ``(b) Standards.--In establishing or designating a database under 
subsection (a)(1), the Secretary shall, in consultation with 
representatives of patient safety organizations, the provider 
community, and the health information technology industry, determine 
common formats for the voluntary reporting of nonidentifiable patient 
safety work product, including necessary elements, common and 
consistent definitions, and a standardized computer interface for the 
processing of the work product. To the extent practicable, such 
standards shall be consistent with the administrative simplification 
provisions of part C of title XI of the Social Security Act.
    ``(c) Certain Methodologies for Collection.--The Secretary shall 
ensure that the methodologies for the collection of nonidentifiable 
patient safety work product for any National Patient Safety Database 
include the methodologies developed or recommended by the Patient 
Safety Task Force of the Department of Health and Human Services.
    ``(d) Facilitation of Information Exchange.--To the extent 
practicable, the Secretary may facilitate the direct link of 
information between providers and patient safety organizations and 
between patient safety organizations and any National Patient Safety 
Database.
    ``(e) Restriction on Transfer.--Only nonidentifiable information 
may be transferred to any National Patient Safety Database.

``SEC. 924. TECHNICAL ASSISTANCE.

    ``(a) In General.--The Secretary, acting through the Director, 
may--
            ``(1) provide technical assistance to patient safety 
        organizations, and to States with reporting systems for health 
        care errors; and
            ``(2) provide guidance on the type of data to be 
        voluntarily submitted to any National Patient Safety Database.
    ``(b) Annual Meetings.--Assistance provided under subsection (a) 
may include annual meetings for patient safety organizations to discuss 
methodology, communication, information collection, or privacy 
concerns.

``SEC. 925. CERTIFICATION OF PATIENT SAFETY ORGANIZATIONS.

    ``(a) In General.--Not later than 6 months after the date of 
enactment of the Patient Safety and Quality Improvement Act, the 
Secretary shall establish a process for certifying patient safety 
organizations.
    ``(b) Process.--The process established under subsection (a) shall 
include the following:
            ``(1) Certification of patient safety organizations by the 
        Secretary or by such other national or State governmental 
        organizations as the Secretary determines appropriate.
            ``(2) If the Secretary allows other governmental 
        organizations to certify patient safety organizations under 
        paragraph (1), the Secretary shall establish a process for 
        approving such organizations. Any such approved organization 
        shall conduct certifications and reviews in accordance with 
        this section.
            ``(3) A review of each certification under paragraph (1) 
        (including a review of compliance with each criterion in this 
        section and any related implementing standards as determined by 
        the Secretary through rulemaking) not less often than every 3 
        years, as determined by the Secretary.
            ``(4) Revocation of any such certification by the Secretary 
        or other such governmental organization that issued the 
        certification, upon a showing of cause.
    ``(c) Criteria.--A patient safety organization must meet the 
following criteria as conditions of certification:
            ``(1) The mission of the patient safety organization is to 
        conduct activities that are to improve patient safety and the 
        quality of health care delivery and is not in conflict of 
        interest with the providers that contract with the patient 
        safety organization.
            ``(2) The patient safety organization has appropriately 
        qualified staff, including licensed or certified medical 
        professionals.
            ``(3) The patient safety organization, within any 2 year 
        period, contracts with more than 1 provider for the purpose of 
        receiving and reviewing patient safety work product.
            ``(4) The patient safety organization is not a component of 
        a health insurer or other entity that offers a group health 
        plan or health insurance coverage.
            ``(5) The patient safety organization is managed, 
        controlled, and operated independently from any provider that 
        contracts with the patient safety organization for reporting 
        patient safety work product.
            ``(6) To the extent practical and appropriate, the patient 
        safety organization collects patient safety work product from 
        providers in a standardized manner that permits valid 
        comparisons of similar cases among similar providers.
    ``(d) Additional Criteria for Component Organizations.--If a 
patient safety organization is a component of another organization, the 
patient safety organization must, in addition to meeting the criteria 
described in subsection (c), meet the following criteria as conditions 
of certification:
            ``(1) The patient safety organization maintains patient 
        safety work product separately from the rest of the 
        organization, and establishes appropriate security measures to 
        maintain the confidentiality of the patient safety work 
        product.
            ``(2) The patient safety organization does not make an 
        unauthorized disclosure under this Act of patient safety work 
        product to the rest of the organization in breach of 
        confidentiality.
            ``(3) The mission of the patient safety organization does 
        not create a conflict of interest with the rest of the 
        organization.''.
    (b) Authorization of Appropriations.--Section 937 of the Public 
Health Service Act (as redesignated by subsection (a)) is amended by 
adding at the end the following:
    ``(e) Patient Safety and Quality Improvement.--For the purpose of 
carrying out part C, there are authorized to be appropriated such sums 
as may be necessary for each of the fiscal years 2006 through 2010.''.

        Subtitle B--Liability Protection in Good-faith Reporting

SEC. 311. LIABILITY PROTECTION FOR HEALTH CARE PROVIDERS IN GOOD-FAITH 
              REPORTING TO STATE MEDICAL BOARDS.

    (a) In General.--Notwithstanding any other provision of law, no 
health care provider providing information (including by making a 
report, filing charges, or presenting evidence) to a State medical 
board regarding the competence or professional conduct of a physician 
shall be held, by reason of having provided such information, to be 
liable in damages under any law of the United States or of any State 
(or political subdivision thereof) unless such information is false and 
the person providing the information knew that the information was 
false.
    (b) Attorney Fees.--If a health care provider establishes in a 
civil action that the health care provider is not liable in damages 
because of the application of subsection (a), the court shall award to 
the provider any attorney fees and costs incurred by the provider in 
establishing the application of subsection (a).
    (c) Definition.--In this section, the term ``State medical board'' 
means a State entity responsible for licensing physicians or a 
subdivision of such an entity.

                       TITLE IV--INSURANCE REFORM

SEC. 401. UNIFORM STATE REQUIREMENTS REGARDING PROPOSED RATE INCREASES.

    (a) In General.--The Congress intends that each State have in 
effect laws or regulations providing that--
            (1) a provider of medical malpractice insurance in the 
        State may not implement any increase in the rate for such 
        insurance that would result in such rate increasing more than a 
        certain percentage, as specified in such laws or regulations, 
        within a certain period of time, as specified in such laws or 
        regulations, unless, before such increase takes effect--
                    (A) the provider submits to an appropriate State 
                agency a description and justification of the rate 
                increase; and
                    (B) such agency makes a determination that the 
                increase is justified; and
            (2) any determination referred to in paragraph (1)(B) 
        regarding an increase in medical malpractice insurance rates is 
        made pursuant to an administrative hearing held by the 
        appropriate State agency; and
            (3) any individual or institution that is involved in the 
        provision of health care and is licensed by the State to 
        provide such care has standing, in any administrative 
        proceeding of the State regarding a proposed increase in the 
        rate for medical malpractice insurance (including a hearing 
        referred to in paragraph (2)), to challenge such increase.
    (b) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Secretary of Health and Human Services shall--
            (1) conduct and complete a survey of the laws and 
        regulations of the States to determine the extent to which the 
        States have in effects laws or regulations described in 
        subsection (a); and
            (2) submit a report to the Congress setting forth the 
        results of the survey, describing such laws and regulations of 
        the various States, and describing the extent of the uniformity 
        of such laws and regulations.
    (c) Definition.--For purposes of this section, the term ``State'' 
has the meaning given such term in section 105.
    (d) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 402. 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 section 101;
            (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 
        (in this subsection referred to 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. 403. EFFECTIVE DATE.

    Except as provided in section 401(d), this title shall take effect 
1 year after the date of the enactment of this Act.

   TITLE V--EXCLUSION OF PHARMACEUTICALS AND DEVICES FROM LIABILITY 
                                REFORMS

SEC. 501. EXCLUSION OF PHARMACEUTICALS AND DEVICES.

    For purposes of title I and II of this Act, the manufacturer or 
distributor of a pharmaceutical or device is not a health care 
provider, and health care malpractice does not include responsibility 
based on products liability.
                                 <all>