State demonstration programs to evaluate alternatives to current medical tort litigation

Part P of title III of the Public Health Service Act (42 U.S.C. 280g et seq.) is amended by adding at the end the following:

399R.

State demonstration programs to evaluate alternatives to current medical tort litigation

(a)

In general

The Secretary is authorized to award demonstration grants to States for the development, implementation, and evaluation of alternatives to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations. In awarding such grants, the Secretary shall ensure the diversity of the alternatives so funded. (b)

Duration

The Secretary may award up to 10 grants under subsection (a) and each grant awarded under such subsection may not exceed a period of 5 years. (c)

Conditions for demonstration grants

(1)

Requirements

Each State desiring a grant under subsection (a) shall— (A)develop an alternative to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations; and (B)promote a reduction of health care errors by allowing for patient safety data related to disputes resolved under subparagraph (A) to be collected and analyzed by organizations that engage in efforts to improve patient safety and the quality of health care. (2)

Alternative to current tort litigation

Each State desiring a grant under subsection (a) shall demonstrate how the proposed alternative described in paragraph (1)(A)— (A)makes the medical liability system more reliable through prompt and fair resolution of disputes; (B)encourages the disclosure of health care errors; (C)enhances patient safety by detecting, analyzing, and reducing medical errors and adverse events; (D)maintains access to liability insurance; and (E)provides patients the opportunity to opt out of or voluntarily withdraw from participating in the alternative. (3)

Sources of compensation

Each State desiring a grant under subsection (a) shall identify the sources from and methods by which compensation would be paid for claims resolved under the proposed alternative to current tort litigation, which may include public or private funding sources, or a combination of such sources. Funding methods shall to the extent practicable provide financial incentives for activities that improve patient safety. (4)

Scope

(A)

In general

Each State desiring a grant under subsection (a) may establish a scope of jurisdiction (such as a designated geographic region, a designated area of health care practice, or a designated group of health care providers or health care organizations) for the proposed alternative to current tort litigation that is sufficient to evaluate the effects of the alternative. (B)

Notification of patients

A State proposing a scope of jurisdiction under subparagraph (A) shall demonstrate how patients would be notified that they are receiving health care services that fall within such scope, and that they may opt out of or voluntarily withdraw from participating in the alternative. (5)

Preference in awarding demonstration grants

In awarding grants under subsection (a), the Secretary shall give preference to States— (A)that have developed the proposed alternative through substantive consultation with relevant stakeholders, including patient advocates, health care providers and health care organizations, attorneys with expertise in representing patients and health care providers, medical malpractice insurers, and patient safety experts; (B)that make proposals that are likely to enhance patient safety by detecting, analyzing, and reducing medical errors and adverse events; and (C)in which State law at the time of the application would not prohibit the adoption of an alternative to current tort litigation. (d)

Application

(1)

In general

Each State desiring a grant under subsection (a) shall submit to the Secretary an application, at such time, in such manner, and containing such information as the Secretary may require. (2)

Review panel

(A)

In general

In reviewing applications under paragraph (1), the Secretary shall consult with a review panel composed of relevant experts appointed by the Comptroller General. (B)

Composition

(i)

Nominations

The Comptroller General shall solicit nominations from the public for individuals to serve on the review panel. (ii)

Appointment

The Comptroller General shall appoint, at least 14 but not more than 19, highly qualified and knowledgeable individuals to serve on the review panel and shall ensure that the following entities receive fair representation on such panel: (I)Patient advocates. (II)Health care providers and health care organizations. (III)Attorneys with expertise in representing patients and health care providers. (IV)Medical malpractice insurers. (V)State officials. (VI)Patient safety experts. (C)

Chairperson

The Comptroller General, or an individual within the Government Accountability Office designated by the Comptroller General, shall be the chairperson of the review panel. (D)

Availability of information

The Comptroller General shall make available to the review panel such information, personnel, and administrative services and assistance as the review panel may reasonably require to carry out its duties. (E)

Information from agencies

The review panel may request directly from any department or agency of the United States any information that such panel considers necessary to carry out its duties. To the extent consistent with applicable laws and regulations, the head of such department or agency shall furnish the requested information to the review panel. (e)

Reports

(1)

By State

Each State receiving a grant under subsection (a) shall submit to the Secretary an annual report evaluating the effectiveness of activities funded with grants awarded under such subsection. (2)

By Secretary

The Secretary shall submit to Congress an annual compendium of the reports submitted under paragraph (1). (f)

Technical assistance

(1)

In general

The Secretary shall provide technical assistance to the States applying for or awarded grants under subsection (a). (2)

Requirements

Technical assistance under paragraph (1) shall include— (A)guidance on non-economic damages, including the consideration of individual facts and circumstances in determining appropriate payment, guidance on identifying avoidable injuries, and guidance on disclosure to patients of health care errors and adverse events; and (B)the development, in consultation with States, of common definitions, formats, and data collection infrastructure for States receiving grants under this section to use in reporting to facilitate aggregation and analysis of data both within and between States. (3)

Use of common definitions, formats, and data collection infrastructure

States not receiving grants under this section may also use the common definitions, formats, and data collection infrastructure developed under paragraph (2)(B). (g)

Evaluation

(1)

In general

The Secretary, in consultation with the review panel established under subsection (d)(2), shall enter into a contract with an appropriate research organization to conduct an overall evaluation of the effectiveness of grants awarded under subsection (a) and to annually prepare and submit a report to Congress. Such an evaluation shall begin not later than 18 months following the date of implementation of the first program funded by a grant under subsection (a). (2)

Contents

The evaluation under paragraph (1) shall include— (A)an analysis of the effects of the grants awarded under subsection (a) on the measures described in paragraph (3); (B)a comparison between and among the alternatives approved under subsection (a) of the measures described in paragraph (3); and (C)a comparison between and among States receiving grants approved under subsection (a) and similar States not receiving such grants of the measures described in paragraph (3). (3)

Measures

The evaluations under paragraph (2) shall analyze and make comparisons on the basis of— (A)the nature and number of disputes over injuries allegedly caused by health care providers or health care organizations; (B)the nature and number of claims in which tort litigation was pursued despite the existence of an alternative under subsection (a); (C)the disposition of disputes and claims described in clauses (i) and (ii), including the length of time and estimated costs to all parties; (D)the medical liability environment; (E)health care quality; (F)patient safety in terms of detecting, analyzing, and reducing medical errors and adverse events; and (G)patient and health care provider and organization satisfaction with the alternative under subsection (a) and with the medical liability environment. (4)

Funding

The Secretary shall reserve 5 percent of the amount appropriated in each fiscal year under subsection (j) to carry out this subsection. (h)

Option to provide for initial planning grants

Of the funds appropriated pursuant to subsection (j), the Secretary may use a portion not to exceed $500,000 per State to provide planning grants to such States for the development of demonstration project applications meeting the criteria described in subsection (c). In selecting States to receive such planning grants, the Secretary shall give preference to those States in which State law at the time of the application would not prohibit the adoption of an alternative to current tort litigation. (i)

Definitions

In this section: (1)

Health care services

The term health care services means any services provided by a health care provider, or by any individual working under the supervision of a health care provider, that relate to— (A)the diagnosis, prevention, or treatment of any human disease or impairment; or (B)the assessment of the health of human beings. (2)

Health care organization

The term health care organization means any individual or entity which is obligated to provide, pay for, or administer health benefits under any health plan. (3)

Health care provider

The term health care provider means any individual or entity— (A)licensed, registered, or certified under Federal or State laws or regulations to provide health care services; or (B)required to be so licensed, registered, or certified but that is exempted by other statute or regulation. (4)

Net economic loss

The term net economic loss means— (A)reasonable expenses incurred for products, services, and accommodations needed for health care, training, and other remedial treatment and care of an injured individual; (B)reasonable and appropriate expenses for rehabilitation treatment and occupational training; (C)100 percent of the loss of income from work that an injured individual would have performed if not injured, reduced by any income from substitute work actually performed; and (D)reasonable expenses incurred in obtaining ordinary and necessary services to replace services an injured individual would have performed for the benefit of the individual or the family of such individual if the individual had not been injured. (5)

Non-economic damages

The term non-economic damages means losses 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), injury to reputation, and all other non-pecuniary losses of any kind or nature, to the extent permitted under State law. (j)

Authorization of appropriations

There are authorized to be appropriated to carry out this section such sums as may be necessary. Amounts appropriated pursuant to this subsection shall remain available until expended.