[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6246 Introduced in House (IH)]








109th CONGRESS
  2d Session
                                H. R. 6246

   To reduce the excessive burden the liability system places on the 
  health care delivery system by establishing new rules for lawsuits 
     related to health care provided pursuant to a Federal program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 28, 2006

   Mr. Paul introduced the following bill; which was referred to the 
Committee on the Judiciary, and in addition to the Committee on 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 reduce the excessive burden the liability system places on the 
  health care delivery system by establishing new rules for lawsuits 
     related to health care provided pursuant to a Federal program.

    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 ``Physicians and Taxpayers Protection 
from Frivolous Litigation Act of 2006''.

SEC. 2. APPLICABILITY.

    (a) Applicability in Federal Courts.--This Act applies to any 
health care lawsuit that is brought in, or removed to, a Federal court.
    (b) Removal.--Any health care lawsuit that is brought in a State 
court may be removed to the appropriate United States district court 
pursuant to chapter 89 of title 28, United States Code, without regard 
to the amount in controversy.
    (c) Jurisdiction.--The United States district courts shall have 
jurisdiction of any health care lawsuit.

SEC. 3. ATTORNEY ACCOUNTABILITY.

    Notwithstanding Rule 11(c) of the Federal Rules of Civil Procedure, 
if a pleading, motion, or other paper related to a health care lawsuit 
is signed in violation of Rule 11(b) of the Federal Rules of Civil 
Procedure, the court, upon motion or its own initiative, shall impose 
upon the attorney, law firm, or parties that have violated this rule or 
are responsible for the violation, an appropriate sanction, which shall 
include an order to pay the other party or parties for the reasonable 
expenses incurred as a direct result of the filing of the pleading, 
motion, or other paper, that is the subject of the violation, including 
a reasonable attorney's fee.

SEC. 4. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

    (a) In General.--Subject to subsection (b), a health care lawsuit 
may not be commenced in a Federal court more than 3 years after the 
date of the alleged manifestation of injury or more than 1 year after 
the claimant discovers, or through the use of reasonable diligence 
should have discovered, the injury, whichever occurs first. The time 
limitation in the preceding sentence may be tolled only--
            (1) upon proof of fraud;
            (2) because of intentional concealment; or
            (3) because of the presence of a foreign body, which has no 
        therapeutic or diagnostic purpose or effect, in the person of 
        the injured person.
    (b) Actions on Behalf of Minors.--
            (1) In general.--A health care lawsuit in which the injured 
        party is a minor may not be commenced in a Federal court more 
        than 3 years after the date of the alleged manifestation of 
        injury, except that if the minor is under 6 years of age, the 
        lawsuit may not be commenced--
                    (A) more than 3 years after the date of the alleged 
                manifestation of injury, or
                    (B) after the minor's 8th birthday,
        whichever occurs later.
            (2) Tolling.--The time limitation under paragraph (1) shall 
        be tolled for any period during which a parent or guardian of 
        the minor or a health care provider or health care organization 
        committed fraud or collusion in the failure to bring an action 
        on behalf of the injured minor.

SEC. 5. COMPENSATING PATIENT INJURY.

    (a) Unlimited Amount of Damages for Actual Economic Losses in 
Health Care Lawsuits.--In any health care lawsuit, nothing in this Act 
shall limit a claimant's recovery of the full amount of the available 
economic damages, notwithstanding the limitation in subsection (b).
    (b) Additional Noneconomic Damages.--In any health care lawsuit, 
the amount of noneconomic damages, if available, may not exceed 
$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 injury.
    (c) No Discount of Award for Noneconomic Damages.--For purposes of 
applying the limitation in subsection (b), 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 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 that party in direct proportion to 
that party's percentage of responsibility. Whenever a judgment of 
liability is rendered as to any party, a separate judgment shall be 
rendered against each such party for the amount allocated to that 
party. For purposes of this subsection, the trier of fact shall 
determine the proportion of responsibility of each party for the 
claimant's harm.

SEC. 6. ADDITIONAL HEALTH BENEFITS.

    (a) In General.--In any health care lawsuit involving injury or 
wrongful death, 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 the collateral 
source benefits.
    (b) No Recovery by Provider of Collateral Source Benefits.--No 
provider of collateral source benefits may 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 health care lawsuit involving injury or wrongful death.
    (c) Applicability.--This section applies to any health care lawsuit 
that is settled and to any health care lawsuit that is resolved by a 
fact finder. This section shall not apply to section 1862(b) (42 U.S.C. 
1395y(b)) or section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) of the Social 
Security Act.

SEC. 7. PUNITIVE DAMAGES.

    (a) In General.--
            (1) Limitations.--Punitive damages may, if otherwise 
        permitted by applicable State or Federal law, be awarded 
        against any person in a health care lawsuit only if it is 
        proven by clear and convincing evidence that the person acted 
        with malicious intent to injure the claimant, or that the 
        person deliberately failed to avoid unnecessary injury that the 
        person knew the claimant was substantially certain to suffer. 
        In any health care lawsuit in which no judgment for 
        compensatory damages is rendered against a person, no punitive 
        damages may be awarded with respect to the claim in such 
        lawsuit.
            (2) Procedures.--No demand for punitive damages may be 
        included in a 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.
            (3) Separate proceeding.--At the request of any party in a 
        health care lawsuit, the trier of fact shall consider in a 
        separate proceeding--
                    (A) whether punitive damages are to be awarded and 
                the amount of such award; and
                    (B) 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, if awarded, in a health care lawsuit, the 
        trier of fact shall consider only the following:
                    (A) The severity of the harm caused by the conduct 
                of the party against whom the lawsuit is brought.
                    (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.
                    (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, if 
        awarded, in a health care lawsuit may not exceed $250,000 or 2 
        times the amount of economic damages awarded, whichever amount 
        is greater. The jury shall not be informed of the limitation 
        under this paragraph.

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

    (a) In General.--In any health care lawsuit, if an award of future 
damages, without reduction to present value, of $50,000 or more 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 any health care lawsuit, the court may be guided 
by the Uniform Periodic Payment of Judgments Act promulgated by the 
National Conference of Commissioners on Uniform State Laws.
    (b) Applicability.--This section applies to any action that has not 
been first set for trial or retrial before the effective date of this 
Act.

SEC. 9. DEFINITIONS.

    In this Act:
            (1) Alternative dispute resolution system; adr.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means a 
        system that provides for the resolution of health care lawsuits 
        in a manner other than through a civil action brought in a 
        Federal court.
            (2) Claimant.--The term ``claimant'' means any person who 
        brings a health care lawsuit, including a person who asserts or 
        claims a right to legal or equitable contribution, indemnity or 
        subrogation, arising out of a health care liability claim or a 
        health care liability action, and any person on whose behalf 
        such a claim is asserted or such an action is brought, whether 
        deceased, incompetent, or a minor.
            (3) Collateral source benefits.--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--
                    (A) any State or Federal health, sickness, income-
                disability, accident, or workers' compensation law;
                    (B) any health, sickness, income-disability, or 
                accident insurance that provides health benefits or 
                income-disability coverage;
                    (C) 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
                    (D) any other publicly or privately funded program.
            (4) 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) 
                health care services or medical products, 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.
            (5) Economic damages.--The term ``economic damages'' 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) health care services or medical 
        products, 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.
            (6) Health care lawsuit.--
                    (A) In general.--The term ``health care lawsuit'' 
                means--
                            (i) any health care liability claim; or
                            (ii) any health care liability action.
                    (B) Exclusions.--The term ``health care lawsuit'' 
                does not include a claim or action that--
                            (i) is based on criminal liability;
                            (ii) seeks civil fines or penalties paid to 
                        the Federal Government or a State or local 
                        government; or
                            (iii) is grounded in antitrust.
            (7) Health care liability action.--The term ``health care 
        liability action'' means a civil action brought in a State or 
        Federal court or pursuant to an alternative dispute resolution 
        system, in which a claimant alleges a health care liability 
        claim.
            (8) Health care liability claim.--The term ``health care 
        liability claim'' means a demand by any person, whether or not 
        pursuant to ADR, against a health care provider, health care 
        organization, or the manufacturer, distributor, supplier, 
        marketer, promoter, or seller of a medical product, including, 
        but not limited to, third-party claims, cross-claims, counter-
        claims, or contribution claims, which is based upon the 
        provision of, use of, or payment for (or the failure to 
        provide, use, or pay for) health care services or medical 
        products that are provided pursuant to any Federal program, 
        including the Medicare program (under title XVIII of the Social 
        Security Act), the Medicaid program (under title XIX of the 
        Social Security Act), and the State Children's Health Insurance 
        Program (under title XXI of the Social Security Act), or are 
        required to be provided under section 1867 of the Social 
        Security Act (relating to examination and treatment for 
        emergency medical conditions and women in labor and popularly 
        known as EMTALA), 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.
            (9) 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.
            (10) Health care provider.--The term ``health care 
        provider'' means any person or entity that--
                    (A) is required by State or Federal law or 
                regulation to be licensed, registered, or certified to 
                provide health care services; and
                    (B) either is so licensed, registered, or 
                certified, or is exempted from such requirement by 
                other statute or regulation.
            (11) Health care services.--The term ``health care 
        services'' means any services provided by a health care 
        organization or health care provider, or by any individual 
        working under the supervision of a health care provider, that 
        relates to--
                    (A) the diagnosis, prevention, or treatment of any 
                human disease or impairment; or
                    (B) the assessment or care of the health of human 
                beings.
            (12) Malicious intent to injure.--The term ``malicious 
        intent to injure'' means intentionally causing or attempting to 
        cause physical injury other than providing health care services 
        or medical products.
            (13) Medical product.--
                    (A) In general.--The term ``medical product''--
                            (i) means a drug, device, or biological 
                        product intended for humans;
                            (ii) includes any component or raw material 
                        used in a drug, device, or biological product 
                        intended for humans; and
                            (iii) does not include health care 
                        services.
                    (B) Drug, device, biological product.--
                            (i) Drug.--The term ``drug'' has the 
                        meaning given that term in sections 201(g)(1) 
                        and 201(h) of the Federal Food, Drug and 
                        Cosmetic Act (21 U.S.C. 321(g)(1)).
                            (ii) Device.--The term ``device'' has the 
                        meaning given that term in section 201(h) of 
                        the Federal Food, Drug and Cosmetic Act (21 
                        U.S.C. 321(h)).
                            (iii) Biological product.--The term 
                        ``biological product'' has the meaning given 
                        that term in section 351(i) of the Public 
                        Health Service Act (42 U.S.C. 262(i)).
            (14) 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.
            (15) Punitive damages.--The term ``punitive damages'' means 
        damages awarded, for the purpose of punishment or deterrence, 
        and not solely for compensatory purposes, against a health care 
        provider, health care organization, or a manufacturer, 
        distributor, supplier, marketer, promoter, or seller of a 
        medical product. Punitive damages are neither economic damages 
        nor noneconomic damages.
            (16) Recovery.--
                    (A) In general.--The term ``recovery'' means the 
                net sum recovered after deducting any disbursements or 
                costs incurred in connection with the prosecution or 
                settlement of a claim, including all costs paid or 
                advanced by any person.
                    (B) Exclusions.--For purposes of subparagraph (A), 
                costs of health care incurred by the plaintiff and the 
                attorneys' office overhead costs or charges for legal 
                services are not deductible disbursements or costs.
            (17) 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. 10. RELATIONSHIP TO FEDERAL TORT CLAIMS PROVISIONS AND STATE LAW.

    (a) Health Care Lawsuits.--The provisions governing 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, a longer 
        period in which a 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 and Other Laws.--Except as 
provided in section 2, nothing in this Act preempts the laws of any 
State relating to health care lawsuits.
    (c) Defenses Preserved.--No provision of this Act shall be 
construed to preempt any defense available to a party in a health care 
lawsuit under any other provision of Federal law.

SEC. 11. APPLICABILITY; EFFECTIVE DATE.

    This Act shall apply to any health care lawsuit brought in a 
Federal or State court, or subject to an alternative dispute resolution 
system, that is initiated on or after the date of the enactment of this 
Act, except that any health care lawsuit arising from an injury 
occurring before 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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