[Congressional Record Volume 143, Number 81 (Wednesday, June 11, 1997)]
[Senate]
[Pages S5533-S5540]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCONNELL (for himself and Mr. Lieberman):
  S. 886. A bill to reform the health care liability system and improve 
health care quality through the establishment of quality assurance 
programs, and for other purposes; to the Committee on Labor and Human 
Resources.


   THE HEALTH CARE LIABILITY REFORM AND QUALITY ASSURANCE ACT OF 1997

  Mr. McCONNELL. Mr. President, I am pleased to introduce the Health 
Care Liability Reform and Quality Assurance Act of 1997. This is 
virtually the same legislation as S. 454 that I introduced in the last 
Congress with Senators Lieberman and Kassebaum. That bill was reported 
out of the Labor Committee and received the support of 53 Senators when 
it was added as an amendment to the product liability legislation. 
Ultimately, however, the amendment was withdrawn under the threat of a 
filibuster. I am very happy to, once again, be joining with Senator 
Lieberman in this effort.
  Health care liability is one issue on which there has been some 
bipartisan consensus about the need to make significant changes. This 
bill which I am introducing today with the cosponsorship and assistance 
of Senator Lieberman represents this bipartisan effort.
  The purpose of our bill is to promote patient safety, compensate 
those who suffer injuries fully and fairly, without enriching lawyers 
and bureaucrats, make health care more accessible, gain some cost 
containment in health care, strengthen the doctor-patient relationship 
and encourage medical innovation. Our present system, unfortunately, 
does none of the above.
  First of all, patients don't get compensated. The Rand Corp. has 
reported that only 43 cents of every dollar spent in the liability 
system goes to the injured party. That means lawyers, experts, and 
court fees eat up a significant percentage of every dollar spent in the 
liability system.
  Second, the prohibitive cost of liability insurance means some 
doctors won't provide care to those in our society who need it most. 
Half-a-million rural women can't get an obstetrician to deliver their 
babies. This problem, however, is not limited to rural areas. High 
malpractice premiums force doctors to avoid the practice of medicine in 
urban areas as well, making it more difficult for minority communities 
to get necessary care.
  Third, companies that invent new products are discouraged under the 
current system from putting them on the market. Medical device 
manufacturers are finding it more difficult to get raw materials to 
produce life saving devices because of the risk of lawsuits.
  Fourth, doctors are less likely to explore risky treatment because of 
the proliferation of lawsuits. A doctor has a better than 1 in 3 chance 
of being sued during his practice years. And the likelihood of suit has 
nothing to do with whether the doctor was negligent. The General 
Accounting Office reports that almost 60 percent of all suits are 
dismissed without a verdict or even a settlement.
  So, something is very wrong with our liability system, and our bill 
will help solve the problem. I have included a summary of the bill's 
provisions, and I ask unanimous consent that the full text of the bill 
and the summary be printed in the Record.
  Mr. President, I am hopeful that health care liability will get full 
consideration and action in this Congress. It is very important that we 
tackle this issue, and I look forward to prompt action.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 886

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Health 
     Care Liability Reform and Quality Assurance Act of 1997''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                 TITLE I--HEALTH CARE LIABILITY REFORM

                      Subtitle A--Liability Reform

Sec. 101. Findings and purpose.
Sec. 102. Definitions.
Sec. 103. Applicability.
Sec. 104. Statute of limitations.
Sec. 105. Reform of punitive damages.
Sec. 106. Periodic payments.
Sec. 107. Scope of liability.
Sec. 108. Mandatory offsets for damages paid by a collateral source.
Sec. 109. Treatment of attorneys' fees and other costs.
Sec. 110. Obstetric cases.
Sec. 111. State-based alternative dispute resolution mechanisms.
Sec. 112. Requirement of certificate of merit.

               Subtitle B--Biomaterials Access Assurance

Sec. 121. Short title.
Sec. 122. Findings.
Sec. 123. Definitions.
Sec. 124. General requirements; applicability; preemption.
Sec. 125. Liability of biomaterials suppliers.
Sec. 126. Procedures for dismissal of civil actions against 
              biomaterials suppliers.
Sec. 127. Applicability.

                       Subtitle C--Applicability

Sec. 131. Applicability.

       TITLE II--PROTECTION OF THE HEALTH AND SAFETY OF PATIENTS

Sec. 201. Additional resources for State health care quality assurance 
              and access activities.
Sec. 202. Quality assurance, patient safety, and consumer information.

                        TITLE III--SEVERABILITY

Sec. 301. Severability.
                 TITLE I--HEALTH CARE LIABILITY REFORM
                      Subtitle A--Liability Reform

     SEC. 101. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds the following:
       (1) Effect on health care access and costs.--The civil 
     justice system of the United States is a costly and 
     inefficient mechanism for resolving claims of health care 
     liability and compensating injured patients and the problems 
     associated with the current system are having an adverse 
     impact on the availability of, and access to, health care 
     services and the cost of health care in the United States.
       (2) Effect on interstate commerce.--The health care and 
     insurance industries are industries affecting interstate 
     commerce and the health care liability litigation systems 
     existing throughout the United States affect interstate 
     commerce by contributing to the high cost of health care and 
     premiums for health care liability insurance purchased by 
     participants in the health care system.
       (3) Effect on federal spending.--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 such individuals 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 reform that is designed to--
       (1) ensure that individuals with meritorious health care 
     injury claims receive fair and adequate compensation;
       (2) improve the availability of health care service in 
     cases in which health care liability actions have been shown 
     to be a factor in the decreased availability of services; and
       (3) improve the fairness and cost-effectiveness of the 
     current health care liability system of the United States to 
     resolve disputes over, and provide compensation for, health 
     care liability by reducing uncertainty and unpredictability 
     in the amount of compensation provided to injured 
     individuals.

     SEC. 102. DEFINITIONS.

       As used in this subtitle:
       (1) Claimant.--The term ``claimant'' means any person who 
     commences a health care liability action, and any person on 
     whose behalf such an action is commenced, including the 
     decedent in the case of an action brought through or on 
     behalf of an estate.
       (2) Clear and convincing evidence.--The term ``clear and 
     convincing evidence'' means that measure or degree of proof 
     that will produce in the mind of the trier of fact a firm 
     belief or conviction as to the truth of the allegations 
     sought to be established, except that such measure or degree 
     of proof is more than that required under preponderance of 
     the evidence, but less than that required for proof beyond a 
     reasonable doubt.
       (3) Collateral source rule.--The term ``collateral source 
     rule'' means a rule, either statutorily established or 
     established at common law, that prevents the introduction of 
     evidence regarding collateral source benefits or that 
     prohibits the deduction of collateral source benefits from an 
     award of damages in a health care liability action.

[[Page S5534]]

       (4) Contingency fee.--The term ``contingency fee'' means 
     any fee for professional legal services which is, in whole or 
     in part, contingent upon the recovery of any amount of 
     damages, whether through judgment or settlement.
       (5) Economic losses.--The term ``economic losses'' means 
     objectively verifiable monetary losses incurred as a result 
     of the provision of (or failure to provide or pay for) health 
     care services or the use of a medical product, including past 
     and future medical expenses, loss of past and future 
     earnings, cost of obtaining replacement services in the home 
     (including child care, transportation, food preparation, and 
     household care), cost of making reasonable accommodations to 
     a personal residence, loss of employment, and loss of 
     business or employment opportunities. Economic losses are 
     neither noneconomic losses nor punitive damages.
       (6) Health care liability action.--The term ``health care 
     liability action'' means a civil action against a health care 
     provider, health care professional, health plan, or other 
     defendant, including a right to legal or equitable 
     contribution, indemnity, subrogation, third-party claims, 
     cross claims, or counter-claims, in which the claimant 
     alleges injury related to the provision of, payment for, or 
     the failure to provide or pay for, health care services or 
     medical products, regardless of the theory of liability on 
     which the action is based. Such term does not include a 
     product liability action, except where such an action is 
     brought as part of a broader health care liability action.
       (7) Health plan.--The term ``health plan'' means any person 
     or entity which is obligated to provide or pay for health 
     benefits under any health insurance arrangement, including 
     any person or entity acting under a contract or arrangement 
     to provide, arrange for, or administer any health benefit.
       (8) Health care professional.--The term ``health care 
     professional'' means any individual who provides health care 
     services in a State and who is required by Federal or State 
     laws or regulations to be licensed, registered or certified 
     to provide such services or who is certified to provide 
     health care services pursuant to a program of education, 
     training and examination by an accredited institution, 
     professional board, or professional organization.
       (9) Health care provider.--The term ``health care 
     provider'' means any organization or institution that is 
     engaged in the delivery of health care items or services in a 
     State and that is required by Federal or State laws or 
     regulations to be licensed, registered or certified to engage 
     in the delivery of such items or services.
       (10) Health care services.--The term ``health care 
     services'' means any services provided by a health care 
     professional, health care provider, or health plan or any 
     individual working under the supervision of a health care 
     professional, that relate to the diagnosis, prevention, or 
     treatment of any disease or impairment, or the assessment of 
     the health of human beings.
       (11) Injury.--The term ``injury'' means any illness, 
     disease, or other harm that is the subject of a health care 
     liability action.
       (12) Medical product.--The term ``medical product'' means a 
     drug (as defined in section 201(g)(1) of the Federal Food, 
     Drug, and Cosmetic Act (21 U.S.C. 321(g)(1)) or a medical 
     device as defined in section 201(h) of such Act (21 U.S.C. 
     321(h)), including any component or raw material used 
     therein, but excluding health care services, as defined in 
     paragraph (9).
       (13) Noneconomic losses.--The term ``noneconomic losses'' 
     means losses for physical and emotional pain, suffering, 
     inconvenience, physical impairment, mental anguish, 
     disfigurement, loss of enjoyment of life, loss of consortium, 
     loss of society or companionship (other than loss of domestic 
     services), and other nonpecuniary losses incurred by an 
     individual with respect to which a health care liability 
     action is brought. Noneconomic losses are neither economic 
     losses nor punitive damages.
       (14) Punitive damages.--The term ``punitive damages'' means 
     damages awarded, for the purpose of punishment or deterrence, 
     and not for compensatory purposes, against a health care 
     professional, health care provider, or other defendant in a 
     health care liability action. Punitive damages are neither 
     economic nor noneconomic damages.
       (15) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (16) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, and 
     the Commonwealth of Puerto Rico.

     SEC. 103. APPLICABILITY.

       (a) In General.--Except as provided in subsection (c), this 
     subtitle shall apply with respect to any health care 
     liability action brought in any Federal or State court, 
     except that this subtitle shall not apply to an action for 
     damages arising from a vaccine-related injury or death to the 
     extent that title XXI of the Public Health Service Act (42 
     U.S.C. 300aa-1) applies to the action.
       (b) Preemption.--
       (1) In general.--The provisions of this subtitle shall 
     preempt any State law existing on, or enacted subsequent to, 
     the date of enactment of this Act, only to the extent that 
     such law is inconsistent with the limitations contained in 
     such provisions and shall not preempt State law to the extent 
     that such law--
       (A) places greater restrictions on the amount of or 
     standards for awarding noneconomic or punitive damages;
       (B) places greater limitations on the awarding of attorneys 
     fees for awards in excess of $150,000;
       (C) permits a lower threshold for the periodic payment of 
     future damages;
       (D) establishes a shorter period during which a health care 
     liability action may be initiated or a more restrictive rule 
     with respect to the time at which the period of limitations 
     begins to run; or
       (E) implements collateral source rule reform that either 
     permits the introduction of evidence of collateral source 
     benefits or provides for the mandatory offset of collateral 
     source benefits from damage awards.
       (2) Rules of construction.--The provisions of this subtitle 
     shall not be construed to preempt any State law that--
       (A) permits State officials to commence health care 
     liability actions as a representative of an individual;
       (B) permits provider-based dispute resolution;
       (C) places a maximum limit on the total damages in a health 
     care liability action;
       (D) places a maximum limit on the time in which a health 
     care liability action may be initiated; or
       (E) provides for defenses in addition to those contained in 
     this Act.
       (c) Effect on Sovereign Immunity and Choice of Law or 
     Venue.--Nothing in this subtitle shall be construed to--
       (1) waive or affect any defense of sovereign immunity 
     asserted by any State under any provision of law;
       (2) waive or affect any defense of sovereign immunity 
     asserted by the United States;
       (3) affect the applicability of any provision of the 
     Foreign Sovereign Immunities Act of 1976;
       (4) preempt State choice-of-law rules with respect to 
     actions brought by a foreign nation or a citizen of a foreign 
     nation;
       (5) affect the right of any court to transfer venue or to 
     apply the law of a foreign nation or to dismiss an action of 
     a foreign nation or of a citizen of a foreign nation on the 
     ground of inconvenient forum; or
       (6) supersede any provision of Federal law.
       (d) Federal Court Jurisdiction Not Established on Federal 
     Question Grounds.--Nothing in this subtitle shall be 
     construed to establish any jurisdiction in the district 
     courts of the United States over health care liability 
     actions on the basis of section 1331 or 1337 of title 28, 
     United States Code.

     SEC. 104. STATUTE OF LIMITATIONS.

       A health care liability action that is subject to this Act 
     may not be initiated unless a complaint with respect to such 
     action is filed within the 2-year period beginning on the 
     date on which the claimant discovered or, in the exercise of 
     reasonable care, should have discovered the injury and its 
     cause, except that such an action relating to a claimant 
     under legal disability may be filed within 2 years after the 
     date on which the disability ceases. If the commencement of a 
     health care liability action is stayed or enjoined, the 
     running of the statute of limitations under this section 
     shall be suspended for the period of the stay or injunction.

     SEC. 105. REFORM OF PUNITIVE DAMAGES.

       (a) Limitation.--With respect to a health care liability 
     action, an award for punitive damages may only be made, if 
     otherwise permitted by applicable law, if it is proven by 
     clear and convincing evidence that the defendant--
       (1) intended to injure the claimant for a reason unrelated 
     to the provision of health care services;
       (2) understood the claimant was substantially certain to 
     suffer unnecessary injury, and in providing or failing to 
     provide health care services, the defendant deliberately 
     failed to avoid such injury; or
       (3) acted with a conscious, flagrant disregard of a 
     substantial and unjustifiable risk of unnecessary injury 
     which the defendant failed to avoid in a manner which 
     constitutes a gross deviation from the normal standard of 
     conduct in such circumstances.
       (b) Punitive Damages Not Permitted.--Notwithstanding the 
     provisions of subsection (a), punitive damages may not be 
     awarded against a defendant with respect to any health care 
     liability action if no judgment for compensatory damages, 
     including nominal damages (under $500), is rendered against 
     the defendant.
       (c) Procedure for Determining Punitive Damages.--
       (1) In general.--In any health care liability action 
     subject to this subtitle in which punitive damages are 
     recoverable, the trier of fact shall determine, concurrent 
     with all other issues presented in such action, whether such 
     damages shall be allowed. If the trier of fact determines 
     that such damages are allowed, a separate proceeding shall be 
     conducted by the court to determine the amount of such 
     damages to be awarded.
       (2) Separate proceeding.--At a separate proceeding to 
     determine the amount of punitive damages to be awarded under 
     paragraph (1), the court shall consider the following:
       (A) The severity of the harm caused by the conduct of the 
     defendant.
       (B) The duration of the conduct or any concealment of such 
     conduct by the defendant.
       (C) The profitability of the conduct of the defendant.
       (D) The number of products sold or medical procedures 
     rendered for compensation, as the case may be, by the 
     defendant of the kind

[[Page S5535]]

     causing the harm complained of by the claimant.
       (E) The total deterrent effect of other damages and 
     punishment imposed upon the defendant as a result of the 
     misconduct, including compensatory, exemplary and punitive 
     damage awards to individuals in situations similar to those 
     of the claimant and the severity of any criminal or 
     administrative penalties, or civil fines, to which the 
     defendant has been or may be subjected.
       (3) Determination.--At the conclusion of a separate 
     proceeding under paragraph (1), the court shall determine the 
     amount of punitive damages to be awarded with respect to the 
     health care liability action involved and shall enter 
     judgment for that amount. The court shall clearly state its 
     reasons for setting the amount of such award in findings of 
     fact and conclusions of law, demonstrating consideration of 
     each of the factors described in paragraph (2).
       (d) Limitation Amount.--The amount of damages that may be 
     awarded as punitive damages in any health care liability 
     action shall not exceed 3 times the amount awarded to the 
     claimant for the economic injury on which such claim is 
     based, or $250,000, whichever is greater. This subsection 
     shall be applied by the court and shall not be disclosed to 
     the jury.
       (e) Restrictions Permitted.--Nothing in this Act shall be 
     construed to imply a right to seek punitive damages where 
     none exists under Federal or State law.

     SEC. 106. PERIODIC PAYMENTS.

       With respect to a health care liability action, if the 
     award of future damages exceeds $100,000, the adjudicating 
     body shall, at the request of either party, enter a judgment 
     ordering that future damages be paid on a periodic basis in 
     accordance with the guidelines contained in the Uniform 
     Periodic Payments of Judgments Act, as promulgated by the 
     National Conference of Commissioners on Uniform State Laws in 
     July of 1990. The adjudicating body may waive the 
     requirements of this section if such body determines that 
     such a waiver is in the interests of justice.

     SEC. 107. SCOPE OF LIABILITY.

       (a) In General.--With respect to punitive and noneconomic 
     damages, the liability of each defendant in a health care 
     liability action shall be several only and may not be joint. 
     Such a defendant shall be liable only for the amount of 
     punitive or noneconomic damages allocated to the defendant in 
     direct proportion to such defendant's percentage of fault or 
     responsibility for the injury suffered by the claimant.
       (b) Determination of Percentage of Liability.--With respect 
     to punitive or noneconomic damages, the trier of fact in a 
     health care liability action shall determine the extent of 
     each party's fault or responsibility for injury suffered by 
     the claimant, and shall assign a percentage of responsibility 
     for such injury to each such party.

     SEC. 108. MANDATORY OFFSETS FOR DAMAGES PAID BY A COLLATERAL 
                   SOURCE.

       (a) In General.--With respect to a health care liability 
     action, the total amount of damages received by an individual 
     under such action shall be reduced, in accordance with 
     subsection (b), by any other payment that has been, or will 
     be, made to an individual to compensate such individual for 
     the injury that was the subject of such action.
       (b) Amount of Reduction.--The amount by which an award of 
     damages to an individual for an injury shall be reduced under 
     subsection (a) shall be--
       (1) the total amount of any payments (other than such 
     award) that have been made or that will be made to such 
     individual to pay costs of or compensate such individual for 
     the injury that was the subject of the action; minus
       (2) the amount paid by such individual (or by the spouse, 
     parent, or legal guardian of such individual) to secure the 
     payments described in paragraph (1).
       (c) Determination of Amounts From Collateral Services.--The 
     reductions required under subsection (b) shall be determined 
     by the court in a pretrial proceeding. At the subsequent 
     trial--
       (1) no evidence shall be admitted as to the amount of any 
     charge, payments, or damage for which a claimant--
       (A) has received payment from a collateral source or the 
     obligation for which has been assured by a third party; or
       (B) is, or with reasonable certainty, will be eligible to 
     receive payment from a collateral source of the obligation 
     which will, with reasonable certainty be assumed by a third 
     party; and
       (2) the jury, if any, shall be advised that--
       (A) except for damages as to which the court permits the 
     introduction of evidence, the claimant's medical expenses and 
     lost income have been or will be paid by a collateral source 
     or third party; and
       (B) the claimant shall receive no award for any damages 
     that have been or will be paid by a collateral source or 
     third party.

     SEC. 109. TREATMENT OF ATTORNEYS' FEES AND OTHER COSTS.

       (a) Limitation on Amount of Contingency Fees.--An attorney 
     who represents, on a contingency fee basis, a claimant in a 
     health care liability action may not charge, demand, receive, 
     or collect for services rendered in connection with such 
     action in excess of the following amount recovered by 
     judgment or settlement under such action:
       (1) 33\1/3\ percent of the first $150,000 (or portion 
     thereof) recovered, based on after-tax recovery, plus
       (2) 25 percent of any amount in excess of $150,000 
     recovered, based on after-tax recovery.
       (b) Calculation of Periodic Payments.--In the event that a 
     judgment or settlement includes periodic or future payments 
     of damages, the amount recovered for purposes of computing 
     the limitation on the contingency fee under subsection (a) 
     shall be based on the cost of the annuity or trust 
     established to make the payments. In any case in which an 
     annuity or trust is not established to make such payments, 
     such amount shall be based on the present value of the 
     payments.

     SEC. 110. OBSTETRIC CASES.

       With respect to a health care liability action relating to 
     services provided during labor or the delivery of a baby, if 
     the health care professional against whom the action is 
     brought did not previously treat the pregnant woman for the 
     pregnancy, the trier of fact may not find that the defendant 
     committed malpractice and may not assess damages against the 
     health care professional unless the malpractice is proven by 
     clear and convincing evidence.

     SEC. 111. STATE-BASED ALTERNATIVE DISPUTE RESOLUTION 
                   MECHANISMS.

       (a) Establishment by States.--Each State is encouraged to 
     establish or maintain alternative dispute resolution 
     mechanisms that promote the resolution of health care 
     liability claims in a manner that--
       (1) is affordable for the parties involved in the claims;
       (2) provides for the timely resolution of claims; and
       (3) provides the parties with convenient access to the 
     dispute resolution process.
       (b) Guidelines.--The Attorney General, in consultation with 
     the Secretary and the Administrative Conference of the United 
     States, shall develop guidelines with respect to alternative 
     dispute resolution mechanisms that may be established by 
     States for the resolution of health care liability claims. 
     Such guidelines shall include procedures with respect to the 
     following methods of alternative dispute resolution:
       (1) Arbitration.--The use of arbitration, a nonjury 
     adversarial dispute resolution process which may, subject to 
     subsection (c), result in a final decision as to facts, law, 
     liability or damages. The parties may elect binding 
     arbitration.
       (2) Mediation.--The use of mediation, a settlement process 
     coordinated by a neutral third party without the ultimate 
     rendering of a formal opinion as to factual or legal 
     findings.
       (3) Early neutral evaluation.--The use of early neutral 
     evaluation, in which the parties make a presentation to a 
     neutral attorney or other neutral evaluator for an assessment 
     of the merits, to encourage settlement. If the parties do not 
     settle as a result of assessment and proceed to trial, the 
     neutral evaluator's opinion shall be kept confidential.
       (4) Early offer and recovery mechanism.--The use of early 
     offer and recovery mechanisms under which a health care 
     provider, health care organization, or any other alleged 
     responsible defendant may offer to compensate a claimant for 
     his or her reasonable economic damages, including future 
     economic damages, less amounts available from collateral 
     sources.
       (5) No fault.--The use of a no-fault statute under which 
     certain health care liability actions are barred and 
     claimants are compensated for injuries through their health 
     plans or through other appropriate mechanisms.
       (c) Further Redress.--
       (1) In general.--The extent to which any party may seek 
     further redress (subsequent to a decision of an alternative 
     dispute resolution method) concerning a health care liability 
     claim in a Federal or State court shall be dependent upon the 
     methods of alternative dispute resolution adopted by the 
     State.
       (2) Claimant.--With respect to further redress described in 
     paragraph (1), if the party initiating such court action is 
     the claimant and the claimant receives a level of damages 
     that is at least 25 percent less under the decision of the 
     court than under the State alternative dispute resolution 
     method, such party shall bear the reasonable costs, including 
     legal fees, incurred in the court action by the other party 
     or parties to such action.
       (3) Provider or other defendant.--With respect to further 
     redress described in paragraph (1), if the party initiating a 
     court action is the health care professional, health care 
     provider health plan, or other defendant in a health care 
     liability action and the health care professional, health 
     care provider, health plan or other defendant is found liable 
     for a level of damages that is at least 25 percent more under 
     the decision of the court than under the State alternative 
     dispute resolution method, such party shall bear the 
     reasonable costs, including legal fees, incurred in the court 
     action by the other party or parties to such action.
       (d) Technical Assistance and Evaluations.--
       (1) Technical assistance.--The Attorney General may provide 
     States with technical assistance in establishing or 
     maintaining alternative dispute resolution mechanisms under 
     this section.
       (2) Evaluations.--The Attorney General, in consultation 
     with the Secretary and the Administrative Conference of the 
     United States, shall monitor and evaluate the effectiveness 
     of State alternative dispute resolution mechanisms 
     established or maintained under this section.

[[Page S5536]]

     SEC. 112. REQUIREMENT OF CERTIFICATE OF MERIT.

       (a) Requiring Submission With Complaint.--Except as 
     provided in subsection (b) and subject to the penalties of 
     subsection (d), no health care liability action may be 
     brought by any individual unless, at the time the individual 
     commences such action, the individual or the individual's 
     attorney submits an affidavit declaring that--
       (1) the individual (or the individual's attorney) has 
     consulted and reviewed the facts of the claim with a 
     qualified specialist (as defined in subsection (c));
       (2) the individual or the individual's attorney has 
     obtained a written report by a qualified specialist that 
     clearly identifies the individual and that includes the 
     specialist's determination that, based upon a review of the 
     available medical record and other relevant material, a 
     reasonable medical interpretation of the facts supports a 
     finding that the claim against the defendant is meritorious 
     and based on good cause; and
       (3) on the basis of the qualified specialist's review and 
     consultation, the individual, and if represented, the 
     individual's attorney, have concluded that the claim is 
     meritorious and based on good cause.
       (b) Extension in Certain Instances.--
       (1) In general.--Subject to paragraph (2), subsection (a) 
     shall not apply with respect to an individual who brings a 
     health care liability action without submitting an affidavit 
     described in such subsection if--
       (A) despite good faith efforts, the individual is unable to 
     obtain the written report before the expiration of the 
     applicable statute of limitations;
       (B) despite good faith efforts, at the time the individual 
     commences the action, the individual has been unable to 
     obtain medical records or other information necessary, 
     pursuant to any applicable law, to prepare the written report 
     requested; or
       (C) the court of competent jurisdiction determines that the 
     affidavit requirement shall be extended upon a showing of 
     good cause.
       (2) Deadline for submission where extension applies.--In 
     the case of an individual who brings an action to which 
     paragraph (1) applies, the action shall be dismissed unless 
     the individual submits the affidavit described in subsection 
     (a) not later than--
       (A) in the case of an action to which subparagraph (A) of 
     paragraph (1) applies, 90 days after commencing the action; 
     or
       (B) in the case of an action to which subparagraph (B) of 
     paragraph (1) applies, 90 days after obtaining the 
     information described in such subparagraph or when good cause 
     for an extension no longer exists.
       (c) Qualified Specialist Defined.--
       (1) In general.--As used in subsection (a), the term 
     ``qualified specialist'' means, with respect to a health care 
     liability action, a health care professional who has 
     expertise in the same or substantially similar area of 
     practice to that involved in the action.
       (2) Evidence of expertise.--For purposes of paragraph (1), 
     evidence of required expertise may include evidence that the 
     individual--
       (A) practices (or has practiced) or teaches (or has taught) 
     in the same or substantially similar area of health care or 
     medicine to that involved in the action; or
       (B) is otherwise qualified by experience or demonstrated 
     competence in the relevant practice area.
       (d) Sanctions for Submitting False Affidavit.--Upon the 
     motion of any party or on its own initiative, the court in a 
     health care liability action may impose a sanction on a 
     party, the party's attorney, or both, for--
       (1) any knowingly false statement made in an affidavit 
     described in subsection (a);
       (2) making any false representations in order to obtain a 
     qualified specialist's report; or
       (3) failing to have the qualified specialist's written 
     report in his or her custody and control;

     and may require that the sanctioned party reimburse the other 
     party to the action for costs and reasonable attorney's fees.
               Subtitle B--Biomaterials Access Assurance

     SEC. 121. SHORT TITLE.

       This subtitle may be cited as the ``Biomaterials Access 
     Assurance Act of 1997''.

     SEC. 122. FINDINGS.

       Congress finds that--
       (1) each year millions of citizens of the United States 
     depend on the availability of lifesaving or life enhancing 
     medical devices, many of which are permanently implantable 
     within the human body;
       (2) a continued supply of raw materials and component parts 
     is necessary for the invention, development, improvement, and 
     maintenance of the supply of the devices;
       (3) most of the medical devices are made with raw materials 
     and component parts that--
       (A) are not designed or manufactured specifically for use 
     in medical devices; and
       (B) come in contact with internal human tissue;
       (4) the raw materials and component parts also are used in 
     a variety of nonmedical products;
       (5) because small quantities of the raw materials and 
     component parts are used for medical devices, sales of raw 
     materials and component parts for medical devices constitute 
     an extremely small portion of the overall market for the raw 
     materials and medical devices;
       (6) under the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 301 et seq.), manufacturers of medical devices are 
     required to demonstrate that the medical devices are safe and 
     effective, including demonstrating that the products are 
     properly designed and have adequate warnings or instructions;
       (7) notwithstanding the fact that raw materials and 
     component parts suppliers do not design, produce, or test a 
     final medical device, the suppliers have been the subject of 
     actions alleging inadequate--
       (A) design and testing of medical devices manufactured with 
     materials or parts supplied by the suppliers; or
       (B) warnings related to the use of such medical devices;
       (8) even though suppliers of raw materials and component 
     parts have very rarely been held liable in such actions, such 
     suppliers have ceased supplying certain raw materials and 
     component parts for use in medical devices because the costs 
     associated with litigation in order to ensure a favorable 
     judgment for the suppliers far exceeds the total potential 
     sales revenues from sales by such suppliers to the medical 
     device industry;
       (9) unless alternate sources of supply can be found, the 
     unavailability of raw materials and component parts for 
     medical devices will lead to unavailability of lifesaving and 
     life-enhancing medical devices;
       (10) because other suppliers of the raw materials and 
     component parts in foreign nations are refusing to sell raw 
     materials or component parts for use in manufacturing certain 
     medical devices in the United States, the prospects for 
     development of new sources of supply for the full range of 
     threatened raw materials and component parts for medical 
     devices are remote;
       (11) it is unlikely that the small market for such raw 
     materials and component parts in the United States could 
     support the large investment needed to develop new suppliers 
     of such raw materials and component parts;
       (12) attempts to develop such new suppliers would raise the 
     cost of medical devices;
       (13) courts that have considered the duties of the 
     suppliers of the raw materials and component parts have 
     generally found that the suppliers do not have a duty--
       (A) to evaluate the safety and efficacy of the use of a raw 
     material or component part in a medical device; and
       (B) to warn consumers concerning the safety and 
     effectiveness of a medical device;
       (14) attempts to impose the duties referred to in 
     subparagraphs (A) and (B) of paragraph (13) on suppliers of 
     the raw materials and component parts would cause more harm 
     than good by driving the suppliers to cease supplying 
     manufacturers of medical devices; and
       (15) in order to safeguard the availability of a wide 
     variety of lifesaving and life-enhancing medical devices, 
     immediate action is needed--
       (A) to clarify the permissible bases of liability for 
     suppliers of raw materials and component parts for medical 
     devices; and
       (B) to provide expeditious procedures to dispose of 
     unwarranted suits against the suppliers in such manner as to 
     minimize litigation costs.

     SEC. 123. DEFINITIONS.

       As used in this subtitle:
       (1) Biomaterials supplier.--
       (A) In general.--The term ``biomaterials supplier'' means 
     an entity that directly or indirectly supplies a component 
     part or raw material for use in the manufacture of an 
     implant.
       (B) Persons included.--Such term includes any person who--
       (i) has submitted master files to the Secretary for 
     purposes of premarket approval of a medical device; or
       (ii) licenses a biomaterials supplier to produce component 
     parts or raw materials.
       (2) Claimant.--
       (A) In general.--The term ``claimant'' means any person who 
     brings a civil action, or on whose behalf a civil action is 
     brought, arising from harm allegedly caused directly or 
     indirectly by an implant, including a person other than the 
     individual into whose body, or in contact with whose blood or 
     tissue, the implant is placed, who claims to have suffered 
     harm as a result of the implant.
       (B) Action brought on behalf of an estate.--With respect to 
     an action brought on behalf of or through the estate of an 
     individual into whose body, or in contact with whose blood or 
     tissue the implant is placed, such term includes the decedent 
     that is the subject of the action.
       (C) Action brought on behalf of a minor or incompetent.--
     With respect to an action brought on behalf of or through a 
     minor or incompetent, such term includes the parent or 
     guardian of the minor or incompetent.
       (D) Exclusions.--Such term does not include--
       (i) a provider of professional health care services, in any 
     case in which--

       (I) the sale or use of an implant is incidental to the 
     transaction; and
       (II) the essence of the transaction is the furnishing of 
     judgment, skill, or services;

       (ii) a person acting in the capacity of a manufacturer, 
     seller, or biomaterials supplier; or
       (iii) a person alleging harm caused by either the silicone 
     gel or the silicone envelope utilized in a breast implant 
     containing silicone gel, except that--

       (I) neither the exclusion provided by this clause nor any 
     other provision of this subtitle may be construed as a 
     finding that silicone gel (or any other form of silicone) may 
     or may not cause harm; and

[[Page S5537]]

       (II) the existence of the exclusion under this clause may 
     not--

       (aa) be disclosed to a jury in any civil action or other 
     proceeding; and
       (bb) except as necessary to establish the applicability of 
     this subtitle, otherwise be presented in any civil action or 
     other proceeding.
       (3) Component part.--
       (A) In general.--The term ``component part'' means a 
     manufactured piece of an implant.
       (B) Certain components.--Such term includes a manufactured 
     piece of an implant that--
       (i) has significant non-implant applications; and
       (ii) alone, has no implant value or purpose, but when 
     combined with other component parts and materials, 
     constitutes an implant.
       (4) Harm.--
       (A) In general.--The term ``harm'' means--
       (i) any injury to or damage suffered by an individual;
       (ii) any illness, disease, or death of that individual 
     resulting from that injury or damage; and
       (iii) any loss to that individual or any other individual 
     resulting from that injury or damage.
       (B) Exclusion.--The term does not include any commercial 
     loss or loss of or damage to an implant.
       (5) Implant.--The term ``implant'' means--
       (A) a medical device that is intended by the manufacturer 
     of the device--
       (i) to be placed into a surgically or naturally formed or 
     existing cavity of the body for a period of at least 30 days; 
     or
       (ii) to remain in contact with bodily fluids or internal 
     human tissue through a surgically produced opening for a 
     period of less than 30 days; and
       (B) suture materials used in implant procedures.
       (6) Manufacturer.--The term ``manufacturer'' means any 
     person who, with respect to an implant--
       (A) is engaged in the manufacture, preparation, 
     propagation, compounding, or processing (as defined in 
     section 510(a)(1)) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 360(a)(1)) of the implant; and
       (B) is required--
       (i) to register with the Secretary pursuant to section 510 
     of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360) 
     and the regulations issued under such section; and
       (ii) to include the implant on a list of devices filed with 
     the Secretary pursuant to section 510(j) of such Act (21 
     U.S.C. 360(j)) and the regulations issued under such section.
       (7) Medical device.--The term ``medical device'' means a 
     device, as defined in section 201(h) of the Federal Food, 
     Drug, and Cosmetic Act (21 U.S.C. 321(h)) and includes any 
     device component of any combination product as that term is 
     used in section 503(g) of such Act (21 U.S.C. 353(g)).
       (8) Raw material.--The term ``raw material'' means a 
     substance or product that--
       (A) has a generic use; and
       (B) may be used in an application other than an implant.
       (9) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (10) Seller.--
       (A) In general.--The term ``seller'' means a person who, in 
     the course of a business conducted for that purpose, sells, 
     distributes, leases, packages, labels, or otherwise places an 
     implant in the stream of commerce.
       (B) Exclusions.--The term does not include--
       (i) a seller or lessor of real property;
       (ii) a provider of professional services, in any case in 
     which the sale or use of an implant is incidental to the 
     transaction and the essence of the transaction is the 
     furnishing of judgment, skill, or services; or
       (iii) any person who acts in only a financial capacity with 
     respect to the sale of an implant.

     SEC. 124. GENERAL REQUIREMENTS; APPLICABILITY; PREEMPTION.

       (a) General Requirements.--
       (1) In general.--In any civil action covered by this 
     subtitle, a biomaterials supplier may raise any defense set 
     forth in section 125.
       (2) Procedures.--Notwithstanding any other provision of 
     law, the Federal or State court in which a civil action 
     covered by this subtitle is pending shall, in connection with 
     a motion for dismissal or judgment based on a defense 
     described in paragraph (1), use the procedures set forth in 
     section 126.
       (b) Applicability.--
       (1) In general.--Except as provided in paragraph (2), 
     notwithstanding any other provision of law, this subtitle 
     applies to any civil action brought by a claimant, whether in 
     a Federal or State court, against a manufacturer, seller, or 
     biomaterials supplier, on the basis of any legal theory, for 
     harm allegedly caused by an implant.
       (2) Exclusion.--A civil action brought by a purchaser of a 
     medical device for use in providing professional services 
     against a manufacturer, seller, or biomaterials supplier for 
     loss or damage to an implant or for commercial loss to the 
     purchaser--
       (A) shall not be considered an action that is subject to 
     this subtitle; and
       (B) shall be governed by applicable commercial or contract 
     law.
       (c) Scope of Preemption.--
       (1) In general.--This subtitle supersedes any State law 
     regarding recovery for harm caused by an implant and any rule 
     of procedure applicable to a civil action to recover damages 
     for such harm only to the extent that this subtitle 
     establishes a rule of law applicable to the recovery of such 
     damages.
       (2) Applicability of other laws.--Any issue that arises 
     under this subtitle and that is not governed by a rule of law 
     applicable to the recovery of damages described in paragraph 
     (1) shall be governed by applicable Federal or State law.
       (d) Statutory Construction.--Nothing in this subtitle may 
     be construed--
       (1) to affect any defense available to a defendant under 
     any other provisions of Federal or State law in an action 
     alleging harm caused by an implant; or
       (2) to create a cause of action or Federal court 
     jurisdiction pursuant to section 1331 or 1337 of title 28, 
     United States Code, that otherwise would not exist under 
     applicable Federal or State law.

     SEC. 125. LIABILITY OF BIOMATERIALS SUPPLIERS.

       (a) In General.--
       (1) Exclusion from liability.--Except as provided in 
     paragraph (2), a biomaterials supplier shall not be liable 
     for harm to a claimant caused by an implant.
       (2) Liability.--A biomaterials supplier that--
       (A) is a manufacturer may be liable for harm to a claimant 
     described in subsection (b);
       (B) is a seller may be liable for harm to a claimant 
     described in subsection (c); and
       (C) furnishes raw materials or component parts that fail to 
     meet applicable contractual requirements or specifications 
     may be liable for a harm to a claimant described in 
     subsection (d).
       (b) Liability as Manufacturer.--
       (1) In general.--A biomaterials supplier may, to the extent 
     required and permitted by any other applicable law, be liable 
     for harm to a claimant caused by an implant if the 
     biomaterials supplier is the manufacturer of the implant.
       (2) Grounds for liability.--The biomaterials supplier may 
     be considered the manufacturer of the implant that allegedly 
     caused harm to a claimant only if the biomaterials supplier--
       (A)(i) has registered with the Secretary pursuant to 
     section 510 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 360) and the regulations issued under such section; 
     and
       (ii) included the implant on a list of devices filed with 
     the Secretary pursuant to section 510(j) of such Act (21 
     U.S.C. 360(j)) and the regulations issued under such section;
       (B) is the subject of a declaration issued by the Secretary 
     pursuant to paragraph (3) that states that the supplier, with 
     respect to the implant that allegedly caused harm to the 
     claimant, was required to--
       (i) register with the Secretary under section 510 of such 
     Act (21 U.S.C. 360), and the regulations issued under such 
     section, but failed to do so; or
       (ii) include the implant on a list of devices filed with 
     the Secretary pursuant to section 510(j) of such Act (21 
     U.S.C. 360(j)) and the regulations issued under such section, 
     but failed to do so; or
       (C) is related by common ownership or control to a person 
     meeting all the requirements described in subparagraph (A) or 
     (B), if the court deciding a motion to dismiss in accordance 
     with section 126(c)(3)(B)(i) finds, on the basis of 
     affidavits submitted in accordance with section 126, that it 
     is necessary to impose liability on the biomaterials supplier 
     as a manufacturer because the related manufacturer meeting 
     the requirements of subparagraph (A) or (B) lacks sufficient 
     financial resources to satisfy any judgment that the court 
     feels it is likely to enter should the claimant prevail.
       (3) Administrative procedures.--
       (A) In general.--The Secretary may issue a declaration 
     described in paragraph (2)(B) on the motion of the Secretary 
     or on petition by any person, after providing--
       (i) notice to the affected persons; and
       (ii) an opportunity for an informal hearing.
       (B) Docketing and final decision.--Immediately upon receipt 
     of a petition filed pursuant to this paragraph, the Secretary 
     shall docket the petition. Not later than 180 days after the 
     petition is filed, the Secretary shall issue a final decision 
     on the petition.
       (C) Applicability of statute of limitations.--Any 
     applicable statute of limitations shall toll during the 
     period during which a claimant has filed a petition with the 
     Secretary under this paragraph.
       (c) Liability as Seller.--A biomaterials supplier may, to 
     the extent required and permitted by any other applicable 
     law, be liable as a seller for harm to a claimant caused by 
     an implant if--
       (1) the biomaterials supplier--
       (A) held title to the implant that allegedly caused harm to 
     the claimant as a result of purchasing the implant after--
       (i) the manufacture of the implant; and
       (ii) the entrance of the implant in the stream of commerce; 
     and
       (B) subsequently resold the implant; or
       (2) the biomaterials supplier is related by common 
     ownership or control to a person meeting all the requirements 
     described in paragraph (1), if a court deciding a motion to 
     dismiss in accordance with section 126(c)(3)(B)(ii) finds, on 
     the basis of affidavits submitted in accordance with section 
     126, that it is necessary to impose liability on the 
     biomaterials supplier as a seller because the related seller 
     meeting the requirements

[[Page S5538]]

     of paragraph (1) lacks sufficient financial resources to 
     satisfy any judgment that the court feels it is likely to 
     enter should the claimant prevail.
       (d) Liability for Violating Contractual Requirements or 
     Specifications.--A biomaterials supplier may, to the extent 
     required and permitted by any other applicable law, be liable 
     for harm to a claimant caused by an implant, if the claimant 
     in an action shows, by a preponderance of the evidence, 
     that--
       (1) the raw materials or component parts delivered by the 
     biomaterials supplier either--
       (A) did not constitute the product described in the 
     contract between the biomaterials supplier and the person who 
     contracted for delivery of the product; or
       (B) failed to meet any specifications that were--
       (i) provided to the biomaterials supplier and not expressly 
     repudiated by the biomaterials supplier prior to acceptance 
     of delivery of the raw materials or component parts;
       (ii)(I) published by the biomaterials supplier;
       (II) provided to the manufacturer by the biomaterials 
     supplier; or
       (III) contained in a master file that was submitted by the 
     biomaterials supplier to the Secretary and that is currently 
     maintained by the biomaterials supplier for purposes of 
     premarket approval of medical devices; or
       (iii) included in the submissions for purposes of premarket 
     approval or review by the Secretary under section 510, 513, 
     515, or 520 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 360, 360c, 360e, or 360j), and received clearance from 
     the Secretary if such specifications were provided by the 
     manufacturer to the biomaterials supplier and were not 
     expressly repudiated by the biomaterials supplier prior to 
     the acceptance by the manufacturer of delivery of the raw 
     materials or component parts; and
       (2) such conduct was an actual and proximate cause of the 
     harm to the claimant.

     SEC. 126. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS AGAINST 
                   BIOMATERIALS SUPPLIERS.

       (a) Motion To Dismiss.--In any action that is subject to 
     this subtitle, a biomaterials supplier who is a defendant in 
     such action may, at any time during which a motion to dismiss 
     may be filed under an applicable law, move to dismiss the 
     action against it on the grounds that--
       (1) the defendant is a biomaterials supplier; and
       (2)(A) the defendant should not, for the purposes of--
       (i) section 125(b), be considered to be a manufacturer of 
     the implant that is subject to such section; or
       (ii) section 125(c), be considered to be a seller of the 
     implant that allegedly caused harm to the claimant; or
       (B)(i) the claimant has failed to establish, pursuant to 
     section 125(d), that the supplier furnished raw materials or 
     component parts in violation of contractual requirements or 
     specifications; or
       (ii) the claimant has failed to comply with the procedural 
     requirements of subsection (b).
       (b) Manufacturer of Implant Shall Be Named a Party.--The 
     claimant shall be required to name the manufacturer of the 
     implant as a party to the action, unless--
       (1) the manufacturer is subject to service of process 
     solely in a jurisdiction in which the biomaterials supplier 
     is not domiciled or subject to a service of process; or
       (2) an action against the manufacturer is barred by 
     applicable law.
       (c) Proceeding on Motion To Dismiss.--The following rules 
     shall apply to any proceeding on a motion to dismiss filed 
     under this section:
       (1) Affidavits relating to listing and declarations.--
       (A) In general.--The defendant in the action may submit an 
     affidavit demonstrating that defendant has not included the 
     implant on a list, if any, filed with the Secretary pursuant 
     to section 510(j) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 360(j)).
       (B) Response to motion to dismiss.--In response to the 
     motion to dismiss, the claimant may submit an affidavit 
     demonstrating that--
       (i) the Secretary has, with respect to the defendant and 
     the implant that allegedly caused harm to the claimant, 
     issued a declaration pursuant to section 125(b)(2)(B); or
       (ii) the defendant who filed the motion to dismiss is a 
     seller of the implant who is liable under section 125(c).
       (2) Effect of motion to dismiss on discovery.--
       (A) In general.--If a defendant files a motion to dismiss 
     under paragraph (1) or (2) of subsection (a), no discovery 
     shall be permitted in connection to the action that is the 
     subject of the motion, other than discovery necessary to 
     determine a motion to dismiss for lack of jurisdiction, until 
     such time as the court rules on the motion to dismiss in 
     accordance with the affidavits submitted by the parties in 
     accordance with this section.
       (B) Discovery.--If a defendant files a motion to dismiss 
     under subsection (a)(2)(B)(i) on the grounds that the 
     biomaterials supplier did not furnish raw materials or 
     component parts in violation of contractual requirements or 
     specifications, the court may permit discovery, as ordered by 
     the court. The discovery conducted pursuant to this 
     subparagraph shall be limited to issues that are directly 
     relevant to--
       (i) the pending motion to dismiss; or
       (ii) the jurisdiction of the court.
       (3) Affidavits relating status of defendant.--
       (A) In general.--Except as provided in clauses (i) and (ii) 
     of subparagraph (B), the court shall consider a defendant to 
     be a biomaterials supplier who is not subject to an action 
     for harm to a claimant caused by an implant, other than an 
     action relating to liability for a violation of contractual 
     requirements or specifications described in subsection (d).
       (B) Responses to motion to dismiss.--The court shall grant 
     a motion to dismiss any action that asserts liability of the 
     defendant under subsection (b) or (c) of section 125 on the 
     grounds that the defendant is not a manufacturer subject to 
     such section 125(b) or seller subject to section 125(c), 
     unless the claimant submits a valid affidavit that 
     demonstrates that--
       (i) with respect to a motion to dismiss contending the 
     defendant is not a manufacturer, the defendant meets the 
     applicable requirements for liability as a manufacturer under 
     section 125(b); or
       (ii) with respect to a motion to dismiss contending that 
     the defendant is not a seller, the defendant meets the 
     applicable requirements for liability as a seller under 
     section 125(c).
       (4) Basis of ruling on motion to dismiss.--
       (A) In general.--The court shall rule on a motion to 
     dismiss filed under subsection (a) solely on the basis of the 
     pleadings of the parties made pursuant to this section and 
     any affidavits submitted by the parties pursuant to this 
     section.
       (B) Motion for summary judgment.--Notwithstanding any other 
     provision of law, if the court determines that the pleadings 
     and affidavits made by parties pursuant to this section raise 
     genuine issues as concerning material facts with respect to a 
     motion concerning contractual requirements and 
     specifications, the court may deem the motion to dismiss to 
     be a motion for summary judgment made pursuant to subsection 
     (d).
       (d) Summary Judgment.--
       (1) In general.--
       (A) Basis for entry of judgment.--A biomaterials supplier 
     shall be entitled to entry of judgment without trial if the 
     court finds there is no genuine issue as concerning any 
     material fact for each applicable element set forth in 
     paragraphs (1) and (2) of section 125(d).
       (B) Issues of material fact.--With respect to a finding 
     made under subparagraph (A), the court shall consider a 
     genuine issue of material fact to exist only if the evidence 
     submitted by claimant would be sufficient to allow a 
     reasonable jury to reach a verdict for the claimant if the 
     jury found the evidence to be credible.
       (2) Discovery made prior to a ruling on a motion for 
     summary judgment.--If, under applicable rules, the court 
     permits discovery prior to a ruling on a motion for summary 
     judgment made pursuant to this subsection, such discovery 
     shall be limited solely to establishing whether a genuine 
     issue of material fact exists as to the applicable elements 
     set forth in paragraphs (1) and (2) of section 125(d).
       (3) Discovery with respect to a biomaterials supplier.--A 
     biomaterials supplier shall be subject to discovery in 
     connection with a motion seeking dismissal or summary 
     judgment on the basis of the inapplicability of section 
     125(d) or the failure to establish the applicable elements of 
     section 125(d) solely to the extent permitted by the 
     applicable Federal or State rules for discovery against 
     nonparties.
       (e) Stay Pending Petition for Declaration.--If a claimant 
     has filed a petition for a declaration pursuant to section 
     125(b)(3)(A) with respect to a defendant, and the Secretary 
     has not issued a final decision on the petition, the court 
     shall stay all proceedings with respect to that defendant 
     until such time as the Secretary has issued a final decision 
     on the petition.
       (f) Manufacturer Conduct of Proceeding.--The manufacturer 
     of an implant that is the subject of an action covered under 
     this subtitle shall be permitted to file and conduct a 
     proceeding on any motion for summary judgment or dismissal 
     filed by a biomaterials supplier who is a defendant under 
     this section if the manufacturer and any other defendant in 
     such action enter into a valid and applicable contractual 
     agreement under which the manufacturer agrees to bear the 
     cost of such proceeding or to conduct such proceeding.
       (g) Attorney Fees.--The court shall require the claimant to 
     compensate the biomaterials supplier (or a manufacturer 
     appearing in lieu of a supplier pursuant to subsection (f)) 
     for attorney fees and costs, if--
       (1) the claimant named or joined the biomaterials supplier; 
     and
       (2) the court found the claim against the biomaterials 
     supplier to be without merit and frivolous.

     SEC. 127. APPLICABILITY.

       This subtitle shall apply to all civil actions covered 
     under this subtitle that are commenced on or after the date 
     of enactment of this Act, including any such action with 
     respect to which the harm asserted in the action or the 
     conduct that caused the harm occurred before the date of 
     enactment of this Act.
                       Subtitle C--Applicability

     SEC. 131. APPLICABILITY.

       This title shall apply to all civil actions covered under 
     this title that are commenced

[[Page S5539]]

     on or after the date of enactment of this Act, including any 
     such action with respect to which the harm asserted in the 
     action or the conduct that caused the injury occurred before 
     the date of enactment of this Act.
       TITLE II--PROTECTION OF THE HEALTH AND SAFETY OF PATIENTS

     SEC. 201. ADDITIONAL RESOURCES FOR STATE HEALTH CARE QUALITY 
                   ASSURANCE AND ACCESS ACTIVITIES.

       Each State shall require that not less than 50 percent of 
     all awards of punitive damages resulting from all health care 
     liability actions in that State, if punitive damages are 
     otherwise permitted by applicable law, be used for activities 
     relating to--
       (1) the licensing, investigating, disciplining, and 
     certification of health care professionals in the State; and
       (2) the reduction of malpractice-related costs for health 
     care providers volunteering to provide health care services 
     in medically underserved areas.

     SEC. 202. QUALITY ASSURANCE, PATIENT SAFETY, AND CONSUMER 
                   INFORMATION.

       (a) Advisory Panel.--
       (1) In general.--Not later than 90 days after the date of 
     enactment of this Act, the Administrator of the Agency for 
     Health Care Policy and Research (hereafter referred to in 
     this section as the ``Administrator'') shall establish an 
     advisory panel to coordinate and evaluate, methods, 
     procedures, and data to enhance the quality, safety, and 
     effectiveness of health care services provided to patients.
       (2) Participation.--In establishing the advisory panel 
     under paragraph (1), the Administrator shall ensure that 
     members of the panel include representatives of public and 
     private sector entities having expertise in quality 
     assurance, risk assessment, risk management, patient safety, 
     and patient satisfaction.
       (3) Objectives.--In carrying out the duties described in 
     this section, the Administrator, acting through the advisory 
     panel established under paragraph (1), shall conduct a survey 
     of public and private entities involved in quality assurance, 
     risk assessment, patient safety, patient satisfaction, and 
     practitioner licensing. Such survey shall include the 
     gathering of data with respect to--
       (A) performance measures of quality for health care 
     providers and health plans;
       (B) developments in survey methodology, sampling, and audit 
     methods;
       (C) methods of medical practice and patterns, and patient 
     outcomes; and
       (D) methods of disseminating information concerning 
     successful health care quality improvement programs, risk 
     management and patient safety programs, practice guidelines, 
     patient satisfaction, and practitioner licensing.
       (b) Guidelines.--Not later than 2 years after the date of 
     enactment of this Act, the Administrator shall, in accordance 
     with chapter 5 of title 5, United States Code, establish 
     health care quality assurance, patient safety and consumer 
     information guidelines. Such guidelines shall be modified 
     periodically when determined appropriate by the 
     Administrator. Such guidelines shall be advisory in nature 
     and not binding.
       (c) Reports.--
       (1) Initial report.--Not later than 6 months after the date 
     of enactment of this Act, the Administrator shall prepare and 
     submit to the Committee on Labor and Human Resources of the 
     Senate and the Committee on Commerce of the House of 
     Representatives, a report that contains--
       (A) data concerning the availability of information 
     relating to risk management, quality assessment, patient 
     safety, and patient satisfaction;
       (B) an estimation of the degree of consensus concerning the 
     accuracy and content of the information available under 
     subparagraph (A);
       (C) a summary of the best practices used in the public and 
     private sectors for disseminating information to consumers; 
     and
       (D) an evaluation of the National Practitioner Data Bank 
     (as established under the Health Quality Improvement Act of 
     1986), for reliability and validity of the data and the 
     effectiveness of the Data Bank in assisting hospitals and 
     medical groups in overseeing the quality of practitioners.
       (2) Interim report.--Not later than 1 year after the date 
     of enactment of this Act, the Administrator shall prepare and 
     submit to the Committees referred to in paragraph (1) a 
     report, based on the results of the advisory panel survey 
     conducted under subsection (a)(3), concerning--
       (A) the consensus of indicators of patient safety and risk;
       (B) an assessment of the consumer perspective on health 
     care quality that includes an examination of--
       (i) the information most often requested by consumers;
       (ii) the types of technical quality information that 
     consumers find compelling;
       (iii) the amount of information that consumers consider to 
     be sufficient and the amount of such information considered 
     overwhelming; and
       (iv) the manner in which such information should be 
     presented;

     and recommendations for increasing the awareness of consumers 
     concerning such information;
       (C) proposed methods, building on existing data gathering 
     and dissemination systems, for ensuring that such data is 
     available and accessible to consumers, employers, hospitals, 
     and patients;
       (D) the existence of legal, regulatory, and practical 
     obstacles to making such data available and accessible to 
     consumers;
       (E) privacy or proprietary issues involving the 
     dissemination of such data;
       (F) an assessment of the appropriateness of collecting such 
     data at the Federal or State level;
       (G) an evaluation of the value of permitting consumers to 
     have access to information contained in the National 
     Practitioner Data Bank and recommendations to improve the 
     reliability and validity of the information; and
       (H) the reliability and validity of data collected by the 
     State medical boards and recommendations for developing 
     investigation protocols.
       (3) Annual report.--Not later than 1 year after the date of 
     the submission of the report under paragraph (2), and each 
     year thereafter, the Administrator shall prepare and submit 
     to the Committees referred to in paragraph (1) a report 
     concerning the progress of the advisory panel in the 
     development of a consensus with respect to the findings of 
     the panel and in the development and modification of the 
     guidelines required under subsection (b).
       (4) Termination.--The advisory panel shall terminate on the 
     date that is 3 years after the date of enactment of this Act.
                        TITLE III--SEVERABILITY

     SEC. 301. SEVERABILITY.

       If any provision of this Act, an amendment made by this 
     Act, or the application of such provision or amendment to any 
     person or circumstance is held to be unconstitutional, the 
     remainder of this Act, the amendments made by this Act, and 
     the application of the provisions of such to any person or 
     circumstance shall not be affected thereby.
                                  ____


     Health Care Liability Reform and Quality Assurance Act of 1997

                       TITLE I--LIABILITY REFORM


                subtitle A--health care liability reform

     1. Scope
       The bill: Applies to any action, filed in federal or state 
     court, against a health care provider, professional, payor, 
     hmo, insurance company or any other defendant (except in 
     cases based on vaccine-related injuries);
       Preempts state law to the extent it is inconsistent with 
     the provisions herein; no preemption for state laws which 
     provide, among other things: a. additional defenses; b. 
     greater limitations on attorneys' fees; c. greater 
     restrictions on punitive or non-economic damages; d. maximum 
     limit on the total damages.
       Does not create federal jurisdiction for health care 
     liability actions.
     2. Uniform statute of limitations
       Cases could be filed two years from the date that the 
     injury was discovered or should have been discovered, except 
     that any person under a legal disability may file within two 
     years after the disability ceases.
     3. Limit on punitive damages
       Punitive damages will be awarded if it is proven by clear 
     and convincing evidence that the defendant: a. intended to 
     injure; b. understood claimant was substantially certain to 
     suffer unnecessary injury and deliberately failed to avoid 
     injury; or c. acted with conscious disregard of substantial 
     and unjustifiable risk which defendant failed to avoid in a 
     way which constitutes a gross deviation from the normal 
     standard of conduct.
       No punitive damages where compensatory damages of less than 
     $500 are awarded.
       Trier of fact determines if punitive damages are allowed. 
     If so, then a separate proceeding is conducted by the court.
       In determining the amount, court must consider only: a. 
     severity of harm; b. duration of defendant's conduct and any 
     concealment; c. profitability of defendant's conduct; d. 
     number of products sold/procedures rendered which caused 
     similar harm; e. similar awards of punitive damages in 
     similar circumstances; f. criminal penalties imposed on 
     defendant; g. civil fines imposed.
       No award may exceed the greater of 3 times the amount of 
     economic damages or $250,000.
     4. Periodic payment of future damages
       No more than $100,000 of future damages may be required to 
     be paid in one single payment. The court will determine the 
     schedule for payments, based on projection of future losses 
     and reduced to present value. This requirement may be waived, 
     in the interests of justice.
     5. Several, not joint, liability
       A defendant would be liable only for the amount of non-
     economic and punitive damages allocated to defendant's direct 
     proportion of fault or responsibility. The trier of fact 
     determines percentage of responsibility of each defendant.
     6. Collateral source
       Total damages must be reduced by payments from other 
     sources to compensate individuals for injury that is the 
     subject of the health care liability action. The offset is 
     reduced by any amount paid by the injured party (or family 
     member) to secure the payment. The reductions must be 
     determined by the judge in a pretrial proceeding.
     7. Attorneys' fees
       This section limits attorney contingent fees to 33\1/3\% of 
     the first $150,000 and 25% of any amount in excess of 
     $150,000.
     8. Obstetric cases
       This section precludes a malpractice award against a health 
     care professional relating to

[[Page S5540]]

     delivery of a baby, if the health care professional did not 
     previously treat the woman during the pregnancy, unless 
     malpractice is proven by clear and convincing evidence.
     9. State-based alternative dispute resolution
       Prior to the filing, or immediately following the filing of 
     the action, the parties are encouraged to participate in a 
     state administered alternative dispute resolution system.
       The Attorney General will develop adr methods for use by 
     the states, including arbitration, mediation, early neutral 
     evaluation, early offer and recovery. The parties may elect 
     binding arbitration.
     10. Certificate of merit
       The certificate of merit provision requires that, prior to 
     bringing a lawsuit, an individual (or his or her attorney) 
     must submit an affidavit declaring that a qualified 
     specialist reviewed the facts and concluded that the claim is 
     meritorious.
       A qualified specialist means a health care professional 
     with expertise (the specialist practices or teaches or has 
     experience or demonstrated competence) in the same or 
     substantially similar area of practice as that involved in 
     the case.
       A court may impose sanctions for the submission of a false 
     affidavit.


                Subtitle B--Biomaterial Access Assurance

     1. Summary
       The Biomaterial Access Assurance Act would allow suppliers 
     of the raw materials (biomaterial) used to make medical 
     implants, to obtain dismissal, without extensive discovery or 
     other legal costs, in certain tort suits in which plaintiffs 
     allege harm from a finished medical implant.

           TITLE II--PROTECTION OF PATIENT HEALTH AND SAFETY

     1. Quality assurance
       The quality assurance section requires each state to 
     establish a health care quality assurance program and fund, 
     approved by the Secretary of HHS. It also allocates 50% of 
     all punitive damage awards to be transferred to the fund for 
     the purpose of licensing and certifying health professionals, 
     implementing programs, including programs to reduce 
     malpractice costs for volunteers serving under served areas.
     2. Risk management programs
       Finally, professionals and providers must participate in a 
     risk management program to prevent and provide early warning 
     of practices which may result in injuries. Insurers also must 
     establish risk management programs and require participation, 
     once every 3 years, as a condition of maintaining insurance.
                                 ______