Short title

This Act may be cited as the Physicians and Taxpayers Protection from Frivolous Litigation Act of 2006.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.