Short title

This Act may be cited as the

Help Efficient, Accessible, Low-Cost, Timely Healthcare Act of 2005

or the

HEALTH Act of 2005

Findings and purpose

(a)

Findings

(1)

Effect on HEALTH care access and costs

Congress finds that our current civil justice system is adversely affecting patient access to health care services, better patient care, and cost-efficient health care, in that the health care liability system is a costly and ineffective mechanism for resolving claims of health care liability and compensating injured patients, and is a deterrent to the sharing of information among health care professionals which impedes efforts to improve patient safety and quality of care. (2)

Effect on interstate commerce

Congress finds that the health care and insurance industries are industries affecting interstate commerce and the health care liability litigation systems existing throughout the United States are activities that affect interstate commerce by contributing to the high costs of health care and premiums for health care liability insurance purchased by health care system providers. (3)

Effect on Federal spending

Congress finds that the health care liability litigation systems existing throughout the United States have a significant effect on the amount, distribution, and use of Federal funds because of— (A)the large number of individuals who receive health care benefits under programs operated or financed by the Federal Government; (B)the large number of individuals who benefit because of the exclusion from Federal taxes of the amounts spent to provide them with health insurance benefits; and (C)the large number of health care providers who provide items or services for which the Federal Government makes payments. (b)

Purpose

It is the purpose of this Act to implement reasonable, comprehensive, and effective health care liability reforms designed to— (1)improve the availability of health care services in cases in which health care liability actions have been shown to be a factor in the decreased availability of services; (2)reduce the incidence of defensive medicine and lower the cost of health care liability insurance, all of which contribute to the escalation of health care costs; (3)ensure that persons with meritorious health care injury claims receive fair and adequate compensation, including reasonable noneconomic damages; (4)improve the fairness and cost-effectiveness of our current health care liability system to resolve disputes over, and provide compensation for, health care liability by reducing uncertainty in the amount of compensation provided to injured individuals; and (5)provide an increased sharing of information in the health care system which will reduce unintended injury and improve patient care.

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 State or 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 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 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. Such term includes economic damages and noneconomic damages, as such terms are defined in this section. (5)

Contingent fee

The term contingent fee includes all compensation to any person or persons which is payable only if a recovery is effected on behalf of one or more claimants. (6)

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. (7)

HEALTH care lawsuit

The term health care lawsuit means any health care liability claim concerning the provision of health care goods or services affecting interstate commerce, or any health care liability action concerning the provision of (or the failure to provide) health care goods or services affecting interstate commerce, brought in a State or Federal court or pursuant to an alternative dispute resolution system, against a health care provider, a health care organization, or the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product, regardless of the theory of liability on which the claim is based, or the number of claimants, plaintiffs, defendants, or other parties, or the number of claims or causes of action, in which the claimant alleges a health care liability claim. (8)

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, against a health care provider, a health care organization, or the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product, 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, in which the claimant alleges a health care liability claim. (9)

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 third-party claims, cross-claims, counter-claims, or contribution claims, which are 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, 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. (10)

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. (11)

HEALTH care provider

The term health care provider means any person or entity required by State or Federal laws or regulations to be licensed, registered, or certified to provide health care services, and being either so licensed, registered, or certified, or exempted from such requirement by other statute or regulation. (12)

HEALTH care goods or services

The term health care goods or services means any goods or services provided by a health care organization, provider, or by any individual working under the supervision of a health care provider, that relates to the diagnosis, prevention, care, or treatment of any human disease or impairment, or the assessment of the health of human beings. (13)

Malicious intent to injure

The term malicious intent to injure means intentionally causing or attempting to cause physical injury other than providing health care goods or services. (14)

Medical product

The term medical product means a drug or device intended for humans. The terms drug and device have the meanings given such terms in sections 201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321), respectively, including any component or raw material used therein, but excluding health care services. (15)

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. (16)

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, or supplier of a medical product. Punitive damages are neither economic nor noneconomic damages. (17)

Recovery

The term recovery means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or settlement of the claim, including all costs paid or advanced by any person. Costs of health care incurred by the plaintiff and the attorneys’ office overhead costs or charges for legal services are not deductible disbursements or costs for such purpose. (18)

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.

Encouraging speedy resolution of claims

(a)

In general

Except as otherwise provided for in this section, the time for the commencement of a health care lawsuit shall be 3 years after the date of manifestation of injury or 1 year after the claimant discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first. (b)

General exception

The time for the commencement of a health care lawsuit shall not exceed 3 years after the date of manifestation of injury unless the tolling of time was delayed as a result of— (1)fraud; (2)intentional concealment; or (3)the presence of a foreign body, which has no therapeutic or diagnostic purpose or effect, in the person of the injured person. (c)

Minors

An action by a minor shall be commenced within 3 years from the date of the alleged manifestation of injury except that if such minor is under the full age of 6 years, such action shall be commenced within 3 years of the manifestation of injury, or prior to the eighth birthday of the minor, whichever provides a longer period. Such time limitation shall be tolled for minors for any period during which a parent or guardian and a health care provider or health care organization have 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 the recovery by a claimant of the full amount of the available economic damages, notwithstanding the limitation contained in subsection (b). (b)

Additional noneconomic damages

In any health care lawsuit, the amount of noneconomic damages recovered, if otherwise available under applicable Federal or State law, may be as much as $250,000, regardless of the number of parties against whom the action is brought or the number of separate claims or actions brought with respect to the same occurrence. (c)

No discount of award for noneconomic damages

In any health care lawsuit— (1)an award for future noneconomic damages shall not be discounted to present value; (2)the jury shall not be informed about the maximum award for noneconomic damages under subsection (b); (3)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; and (4)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 such party in direct proportion to such party’s percentage of responsibility. A separate judgment shall be rendered against each such party for the amount allocated to such party. For purposes of this section, the trier of fact shall determine the proportion of responsibility of each party for the claimant’s harm.

Maximizing patient recovery

(a)

Court supervision of share of damages actually paid to claimants

(1)

In general

In any health care lawsuit, the court shall supervise the arrangements for payment of damages to protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants. (2)

Contingency fees

(A)

In general

In any health care lawsuit in which the attorney for a party claims a financial stake in the outcome by virtue of a contingent fee, the court shall have the power to restrict the payment of a claimant’s damage recovery to such attorney, and to redirect such damages to the claimant based upon the interests of justice and principles of equity. (B)

Limitation

The total of all contingent fees for representing all claimants in a health care lawsuit shall not exceed the following limits: (i)40 percent of the first $50,000 recovered by the claimant(s). (ii)331/3 percent of the next $50,000 recovered by the claimant(s). (iii)25 percent of the next $500,000 recovered by the claimant(s). (iv)15 percent of any amount by which the recovery by the claimant(s) is in excess of $600,000. (b)

Applicability

(1)

In general

The limitations in subsection (a) shall apply whether the recovery is by judgment, settlement, mediation, arbitration, or any other form of alternative dispute resolution. (2)

Minors

In a health care lawsuit involving a minor or incompetent person, a court retains the authority to authorize or approve a fee that is less than the maximum permitted under this section. (c)

Expert witnesses

(1)

Requirement

No individual shall be qualified to testify as an expert witness concerning issues of negligence in any health care lawsuit against a defendant unless such individual— (A)except as required under paragraph (2), is a health care professional who— (i)is appropriately credentialed or licensed in 1 or more States to deliver health care services; and (ii)typically treats the diagnosis or condition or provides the type of treatment under review; and (B)can demonstrate by competent evidence that, as a result of training, education, knowledge, and experience in the evaluation, diagnosis, and treatment of the disease or injury which is the subject matter of the lawsuit against the defendant, the individual was substantially familiar with applicable standards of care and practice as they relate to the act or omission which is the subject of the lawsuit on the date of the incident. (2)

Physician review

In a health care lawsuit, if the claim of the plaintiff involved treatment that is recommended or provided by a physician (allopathic or osteopathic), an individual shall not be qualified to be an expert witness under this subsection with respect to issues of negligence concerning such treatment unless such individual is a physician. (3)

Specialties and subspecialties

With respect to a lawsuit described in paragraph (1), a court shall not permit an expert in one medical specialty or subspecialty to testify against a defendant in another medical specialty or subspecialty unless, in addition to a showing of substantial familiarity in accordance with paragraph (1)(B), there is a showing that the standards of care and practice in the two specialty or subspecialty fields are similar. (4)

Limitation

The limitations in this subsection shall not apply to expert witnesses testifying as to the degree or permanency of medical or physical impairment.

Additional HEALTH benefits

(a)

In general

The amount of any damages received by a claimant in any health care lawsuit shall be reduced by the court by the amount of any collateral source benefits to which the claimant is entitled, less any insurance premiums or other payments made by the claimant (or by the spouse, parent, child, or legal guardian of the claimant) to obtain or secure such benefits. (b)

Preservation of current law

Where a payor of collateral source benefits has a right of recovery by reimbursement or subrogation and such right is permitted under Federal or State law, subsection (a) shall not apply. (c)

Application of provision

This section shall apply to any health care lawsuit that is settled or resolved by a fact finder.

Punitive damages

(a)

Punitive damages permitted

(1)

In general

Punitive damages may, if otherwise available under 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 such person acted with malicious intent to injure the claimant, or that such person deliberately failed to avoid unnecessary injury that such person knew the claimant was substantially certain to suffer. (2)

Filing of lawsuit

No demand for punitive damages shall 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.

(4)

Limitation where no compensatory damages are awarded

In any health care lawsuit where no judgment for compensatory damages is rendered against a person, no punitive damages may be awarded with respect to the claim in such lawsuit against such person. (b)

Determining amount of punitive damages

(1)

Factors considered

In determining the amount of punitive damages under this section, the trier of fact shall consider only the following: (A)the severity of the harm caused by the conduct of such party; (B)the duration of the conduct or any concealment of it by such party; (C)the profitability of the conduct to such party; (D)the number of products sold or medical procedures rendered for compensation, as the case may be, by such party, of the kind causing the harm complained of by the claimant; (E)any criminal penalties imposed on such party, as a result of the conduct complained of by the claimant; and (F)the amount of any civil fines assessed against such party as a result of the conduct complained of by the claimant. (2)

Maximum award

The amount of punitive damages awarded in a health care lawsuit may not exceed an amount equal to two times the amount of economic damages awarded in the lawsuit or $250,000, whichever is greater. The jury shall not be informed of the limitation under the preceding sentence. (c)

Liability of health care providers

A health care provider who prescribes, or who dispenses pursuant to a prescription, a drug or device (including blood products) approved by the Food and Drug Administration shall not be named as a party to a product liability lawsuit invoking such drug or device and shall not be liable to a claimant in a class action lawsuit against the manufacturer, distributor, or product seller of such drug or device.

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, equaling or exceeding $50,000 is made against a party with sufficient insurance or other assets to fund a periodic payment of such a judgment, the court shall, at the request of any party, enter a judgment ordering that the future damages be paid by periodic payments in accordance with the Uniform Periodic Payment of Judgments Act promulgated by the National Conference of Commissioners on Uniform State Laws. (b)

Applicability

This section applies to all actions which have not been first set for trial or retrial before the effective date of this Act.

10.

Effect on other laws

(a)

Vaccine injury

(1)

In general

To the extent that title XXI of the Public Health Service Act establishes a Federal rule of law applicable to a civil action brought for a vaccine-related injury or death— (A)this Act shall not affect the application of the rule of law to such an action; and (B)any rule of law prescribed by this Act in conflict with a rule of law of such title XXI shall not apply to such action. (2)

Exception

If there is an aspect of a civil action brought for a vaccine-related injury or death to which a Federal rule of law under title XXI of the Public Health Service Act does not apply, then this Act or otherwise applicable law (as determined under this Act) will apply to such aspect of such action. (b)

Other Federal law

Except as provided in this section, nothing in this Act shall be deemed to affect any defense available to a defendant in a health care lawsuit or action under any other provision of Federal law.

11.

State flexibility and protection of states’ rights

(a)

HEALTH care lawsuits

The provisions governing health care lawsuits set forth in this Act shall preempt, subject to subsections (b) and (c), State law to the extent that State law prevents the application of any provisions of law established by or under this Act. The provisions governing health care lawsuits set forth in this Act supersede chapter 171 of title 28, United States Code, to the extent that such chapter— (1)provides for a greater amount of damages or contingent fees, a longer period in which a 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. (b)

Preemption of certain State laws

The provisions of this Act shall preempt any constitutional provision, statute, or rule of State law, whether enacted prior to, on, or after the date of enactment of this Act, that— (1)prohibits the application of any limitation on the amount of compensatory, punitive, or total damages in a health care lawsuit; or (2)provides for a greater amount of compensatory, punitive, or total damages in a health care lawsuit than those provided for under this Act. (c)

Protection of state’s rights and other laws

(1)

In general

Any issue that is not governed by a provision of law established by or under this Act (including the State standards of negligence) shall be governed by otherwise applicable Federal or State law. (2)

Rule of construction

Nothing in this Act shall be construed to— (A)preempt or supersede any Federal or State law that imposes greater procedural or substantive protections (such as a shorter statute of limitations) for a health care provider, health care organization, or the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product from liability, loss, or damages than those provided by this Act; (B)create a cause of action that is not otherwise available under Federal or State law; or (C)affect the scope of preemption of any other Federal law.

12.

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 prior to the date of enactment of this Act shall be governed by the applicable statute of limitations provisions in effect at the time the injury occurred.