II 111th CONGRESS 1st Session S. 2662 IN THE SENATE OF THE UNITED STATES November 2, 2009 Mr. Graham (for himself and Mr. Chambliss) introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To establish Federal standards for the resolution of health care malpractice claims, and for other purposes.

1.

Short title

This Act may be cited as the Fair Resolution of Medical Liability Disputes Act of 2009.

2.

Findings

Congress finds that— (1)the health care and insurance industries are industries affecting interstate commerce, and the health care malpractice litigation systems throughout the United States affect interstate commerce by contributing to the high cost of health care and premiums for malpractice insurance purchased by health care providers; and (2)the Federal Government, as a direct provider of health care and as a source of payment for health care, has a major interest in health care and a demonstrated interest in assessing the quality of care, access to care, and the costs of care through the evaluative activities of several Federal agencies.

3.

Definitions

In this Act: (1)

Alternative dispute resolution system; ADR

The term alternative dispute resolution system or ADR means a system established under this Act that provides for the resolution of covered health care malpractice claims in a manner other than through a civil action in Federal or State court. (2)

Covered health care malpractice action

The term covered health care malpractice action means a civil action in which a covered health care malpractice claim is made against a health care provider or health care professional. (3)

Covered health care malpractice claim

The term covered health care malpractice claim means a malpractice claim (excluding product liability claims) relating to the provision of, or the failure to provide, health care services involving a defendant covered health care professional or provider. (4)

Covered health care professional

The term covered health care professional means an individual, including a physician, nurse, chiropractor, nurse midwife, physical therapist, social worker, or physician assistant— (A)who provides health care services in a State; (B)for whom individuals entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395c et seq.), or enrolled for benefits under part B of such Act (42 U.S.C. 1395j et seq.) comprise not less than 25 percent of the total patients of such professional, as determined by the Secretary; and (C)who is required by State law or regulation to be licensed or certified by a State a condition for providing such services in the State. (5)

Covered health care provider

The term covered health care provider means an organization or institution— (A)that is engaged in the delivery of health care services in a State; (B)for which individuals entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395c et seq.), or enrolled for benefits under part B of such Act (42 U.S.C. 1395j et seq.) comprise not less than 25 percent of the total patients of such organization or institution, as determined by the Secretary; and (C)that is required by State law or regulation to be licensed or certified by the State as a condition for engaging in the delivery of such services in the State. (6)

Secretary

The term Secretary means the Secretary of Health and Human Services. (7)

State

The term State means each of the several States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.

4.

Requirement for initial resolution of action through alternative dispute resolution

(a)

In general

(1)

State cases

A covered health care malpractice action may not be brought in any State court during a calendar year unless the covered health care malpractice claim that is the subject of the action has been initially resolved under an alternative dispute resolution system certified for the year by the Attorney General under section 6(a), or, in the case of a State in which such a system is not in effect for the year, under the alternative Federal system established under section 6(b). (2)

Federal diversity actions

A covered health care malpractice action may not be brought in a Federal court under section 1332 of title 28, United States Code, during a calendar year unless the covered health care malpractice claim that is the subject of the action has been initially resolved under the alternative dispute resolution system described in paragraph (1) that applied in the State whose law applies in such action. (b)

Initial resolution of claims under ADR

For purposes of subsection (a), an action is initially resolved under an alternative dispute resolution system if— (1)the ADR reaches a decision on whether the defendant is liable to the plaintiff for damages; and (2)if the ADR determines that the defendant is liable, the ADR reaches a decision regarding the amount of damages assessed against the defendant. (c)

Procedures for filing actions

(1)

Notice of intent to contest decision

(A)

In general

Not later than 60 days after a decision is issued with respect to a covered health care malpractice claim under an alternative dispute resolution system, each party affected by the decision shall submit a sealed statement to a court of competent jurisdiction, selected by the arbitrator, indicating whether the party intends to contest the decision. (B)

Sealed statements

Each sealed statement submitted to a court under subparagraph (A) shall remain sealed until the earlier of— (i)the date on which all affected parties have submitted such statement; or (ii)the submission deadline described in subparagraph (A). (2)

Requirements for filing action

A covered health care malpractice action may not be brought by a party unless— (A)such party files the action in a court of competent jurisdiction not later than 90 days after the decision resolving the covered health care malpractice claim that is the subject of the action is issued under the applicable alternative dispute resolution system; and (B)any party has filed the notice of intent required by paragraph (1). (3)

Court of competent jurisdiction

For purposes of this subsection, the term court of competent jurisdiction means— (A)with respect to actions filed in a State court, the appropriate State trial court; and (B)with respect to actions filed in a Federal court, the appropriate United States district court. (d)

Legal effect of uncontested ADR decision

A decision reached under an alternative dispute resolution system that is not contested under subsection (c) shall, for purposes of enforcement by a court of competent jurisdiction, have the same status in the court as the verdict of a covered health care malpractice action adjudicated in a State or Federal trial court. (e)

Standard of judicial review

The standard of judicial review of a claim filed under subsection (c) shall be de novo. (f)

Award of costs and attorneys' fees after initial ADR resolution

(1)

In general

In the case of a covered health care malpractice action brought in any State or Federal court after ADR, if the final judgment or order issued (exclusive of costs, expenses, and attorneys' fees incurred after judgment or trial) in the action is not more favorable to a party contesting the ADR decision than the ADR decision, the opposing party may file with the court, not later than 10 days after the final judgment or order is issued, a petition for payment of costs and expenses, including attorneys' fees, incurred with respect to the claim or claims after the date of the ADR decision. (2)

Award of costs and expenses

If the court finds, under a petition filed under paragraph (1), with respect to a claim or claims, that the judgment or order finally obtained is not more favorable to the party contesting the ADR decision with respect to the claim or claims than the ADR decision, the court shall order the contesting party to pay the costs and expenses of the opposing party, including attorneys' fees, incurred with respect to the claim or claims after the date of the ADR decision, unless the court finds that requiring the payment of such costs and expenses would be manifestly unjust. (3)

Limitation

Attorneys' fees awarded under this subsection shall be in an amount reasonably attributable to the claim or claims involved, calculated on the basis of an hourly rate of the attorney, which may not exceed that which the court considers acceptable in the community in which the attorney practices law, taking into account the attorney's qualifications and experience and the complexity of the case. Attorneys' fees under this subsection may not exceed— (A)the actual cost incurred by the party for attorneys' fees payable to an attorney for services in connection with the claim or claims; or (B)if no such cost was incurred by the party due to a contingency fee agreement, a reasonable cost that would have been incurred by the party for noncontingent attorneys' fees payable to an attorney for services in connection with the claim or claims. (g)

Applicability

The requirements of this section shall apply only to each covered health care malpractice claim arising out of an event (or events) occurring on or after the date that is 270 days after the date of enactment of this Act.

5.

Basic requirements for state alternative dispute resolution systems

The alternative dispute resolution system of a State meets the requirements of this section if the system— (1)applies to all covered health care malpractice claims under the jurisdiction of the courts of such State; (2)requires that a written opinion resolving the dispute be issued not later than 180 days after the date on which each party against whom the claim is filed has received notice of the claim (other than in exceptional cases for which a longer period is required for the issuance of such an opinion), and that the opinion contain— (A)findings of fact relating to the dispute; and (B)a description of the costs incurred in resolving the dispute under the system (including any fees paid to the individuals hearing and resolving the claim), together with an appropriate assessment of the costs against any of the parties; (3)requires individuals who hear and resolve claims under the system to meet such qualifications as the State may require (in accordance with regulations of the Attorney General); (4)is approved by the State or by local governments in the State; (5)with respect to a State system that consists of multiple dispute resolution procedures— (A)permits the parties to a dispute to select the procedure to be used for the resolution of the dispute under the system; and (B)if the parties do not agree on the procedure to be used for the resolution of the dispute, assigns a particular procedure to the parties; (6)provides for the transmittal to the State agency responsible for monitoring or disciplining health care professionals and health care providers of any findings made under the system that such a professional or provider committed malpractice, unless, during the 90-day period beginning on the date the system resolves the claim against the professional or provider, the professional or provider brings an action contesting the decision made under the system; and (7)provides for the regular transmittal to the Administrator of the Agency for Healthcare Research and Quality of information on disputes resolved under the system, in a manner that assures that the identity of the parties to a dispute shall not be revealed.

6.

Certification of State systems; applicability of alternative Federal system

(a)

Certification

(1)

In general

Not later than 270 days after the date of enactment of this Act and periodically thereafter, the Attorney General, in consultation with the Secretary, shall determine whether the alternative dispute resolution systems of each State meet the requirements of this Act. (2)

Basis for certification

The Attorney General shall certify the alternative dispute resolution system of a State under this subsection for a calendar year if the Attorney General determines under paragraph (1) that such system meets the requirements of section 5. (b)

Applicability of alternative Federal system

(1)

Establishment and applicability

Not later than 270 days after the date of enactment of this Act, the Attorney General, in consultation with the Secretary, shall establish by rulemaking an alternative Federal ADR system for the resolution of covered health care malpractice claims during a calendar year, to be used for a calendar year in States that do not have an alternative dispute resolution system that is certified under subsection (a) for such year. (2)

Requirements for system

Under the alternative Federal ADR system established under paragraph (1)— (A)paragraphs (1), (2), (6), and (7) of section 5 shall apply to claims brought under such system; (B)the claims brought under such system shall be heard and resolved by medical and legal experts appointed as arbitrators by the Attorney General, in consultation with the Secretary; and (C)with respect to a State in which such system is in effect, the Attorney General may (at the request of such State) modify the system to take into account the existence of dispute resolution procedures in the State that affect the resolution of health care malpractice claims. (3)

Treatment of States with alternative system in effect

If the alternative Federal ADR system established under this subsection is applied with respect to a State for a calendar year such State shall reimburse the United States, at such time and in such manner as the Secretary may require, for the costs incurred by the United States during such year as a result of the application of the system with respect to the State.

7.

GAO study of private litigation insurance

The Comptroller General of the United States shall— (1)undertake a study of the effectiveness of private litigation insurance markets, such as those in the United Kingdom and Germany, in providing affordable access to courts, evaluating the merit of prospective claims, and ensuring that prevailing parties in loser pays systems are reimbursed for attorneys' fees; and (2)not later than 270 days after the date of enactment of this Act, submit to Congress a report describing the results of such study.