[Congressional Record Volume 151, Number 89 (Wednesday, June 29, 2005)]
[Senate]
[Pages S7635-S7639]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ENZI (for himself and Mr. Baucus):
  S. 1337. A bill to restore fairness and reliability to the medical 
justice system and promote patient safety by fostering alternatives to 
current medical tort litigation, and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. ENZI. Mr. President, I rise today along with my colleague Senator 
Baucus from Montana to introduce a bill that will help bring about a 
more reliable system of medical justice for all Americans.
  In the last Congress, we had three robust debates on a critical 
issue--medical liability reform. Though a majority of the Members of 
this body wanted to begin working to pass legislation, we didn't have 
the 60 Senators necessary to invoke cloture and begin the real work on 
the bills. That was disappointing, because skyrocketing medical 
liability insurance premiums are forcing doctors to move their 
practices to States with better legal environments and lower premiums. 
This is endangering the availability of critical healthcare services in 
many areas of Wyoming and other states.
  Throughout our debate, I heard many of my colleagues say that they 
wanted to work on this issue, but that they simply could not support 
the bill as it stood. While I disagreed with their positions then, I 
respected their opposition. I also trust that they sincerely wanted to 
help solve our Nation's medical liability and litigation crisis.
  During those debates, I noticed something interesting. While we 
argued the ``pros and cons'' of the bills, no one stood up to defend 
our current system of medical litigation. In fact, even some of the 
lawyers in this body agreed that our medical litigation system needs 
reform.
  Why didn't we hear anyone defend the merits of our current medical 
litigation system? It's because our system doesn't work. It simply 
doesn't work for patients or for healthcare providers.
  Compensation to patients injured by healthcare errors is neither 
prompt nor fair. The randomness and delay associated with medical 
litigation does not contribute to timely, reasonable compensation for 
most injured patients. Some injured patients get huge jury awards, 
while many others get nothing at all.
  Let's look at the facts. In 1991, a group of researchers published a 
study in the New England Journal of Medicine. The study, known as the 
Harvard Medical Practice Study, was the basis for the Institute of 
Medicine's estimate that nearly 100,000 people die every year from 
healthcare errors.
  As part of their study, the researchers reviewed the medical records 
of a random sample of more than 31,000 patients in New York State. They 
matched those records with statewide data on medical malpractice 
claims. The researchers found that nearly 30 percent of injuries caused 
by medical negligence resulted in temporary disability, permanent 
disability or death. However, less than 2 percent of those who were 
injured by medical negligence filed a claim. These figures suggest that 
most people who suffer negligent injuries don't receive any 
compensation.
  When a patient does decide to litigate, only a few recover anything. 
Only one of every ten medical malpractice cases actually goes to trial, 
and of those cases, plaintiffs win less than one of every five. In 
addition, patients who file suit and are ultimately successful must 
wait a long time for their compensation--the average length of a 
medical malpractice action filed in state court is about 30 months.
  While the vast majority of malpractice cases that go to trial are 
settled before the court hands down a verdict, the settlements even 
then don't guarantee that patients are compensated fairly, particularly 
after legal fees are subtracted. Research shows that for every dollar 
paid in malpractice insurance premiums, about 40 cents in compensation 
is actually paid to the plaintiff--the rest goes for legal fees, court 
costs, and other administrative expenditures.
  To sum up: most patients injured by negligence don't file claims or 
receive compensation. Few of those that do file claims and go to court 
recover anything, and those who are successful wait a long time for 
their compensation. And those who settle out of court end up receiving 
only 40 cents for every dollar that healthcare providers pay in 
liability insurance premiums.
  It's hard to say that our medical litigation system does right by 
patients in light of those facts. Unfortunately, our system doesn't 
work for healthcare providers either.
  Earlier, I spoke about those Harvard researchers who found that fewer 
than 2 percent of those who were injured by medical negligence even 
filed a claim. As they reviewed the medical records for their study, 
the researchers also found another interesting fact--most of the 
providers against whom claims were eventually filed were not negligent 
at all.
  That's right--most providers who were sued had not committed a 
negligent act.
  In matching the records they reviewed to data on malpractice claims, 
the Harvard researchers found 47 actual malpractice claims. In only 8 
of the 47 claims did they find evidence that medical malpractice had 
caused an injury. Even more amazingly, the physician reviewers found no 
evidence of any medical injury, negligent or not, in 26 of the 47 
claims. However, 40 percent of these cases where they found no evidence 
of negligence nonetheless resulted in a payment by the provider. 
Basically, the researchers found no positive relationship between 
medical negligence and compensation.
  That study was based on 1984 data. The same group of researchers 
conducted another study in Colorado and Utah in 1992, and they found 
the same thing. As in the 1984 study, they found that only 3 percent of 
patients who suffered an injury as a result of negligence actually 
sued. And again, physician reviewers could not find negligence in most 
of the cases in which lawsuits were filed.

  Now, I assume that the patients who sued had either an adverse 
medical outcome, or at least an outcome that was less satisfactory than 
the patient expected. But our medical litigation system is not supposed 
to compensate patients for adverse outcomes or dissatisfaction--it's 
supposed to compensate patients who are victims of negligent behavior. 
It's supposed to be a deterrent to substandard medical care.
  It's not fair to doctors and hospitals that they must pay to defend 
against meritless lawsuits. Nor is it fair that they must face a choice 
between settling for a small sum, even if they aren't at fault, so that 
they avoid getting sucked into the whirlpool of our medical litigation 
system.
  It's not hard to understand why physicians and hospitals and their 
insurers want to stay out of court. When they lose, the decisions are 
increasingly resulting in mega-awards based on subjective ``non-
economic'' damages. The number of awards exceeding $1 million grew by 
50 percent between the periods of 1994-1996 and 1999-2000. Today, more 
than half of all jury awards exceed $1 million.
  As a result, when a patient suffers a bad outcome and sues, providers 
have an incentive to settle the case out of court, even if the provider 
isn't at fault. But is this how our medical litigation system is 
supposed to work--as a tool for shaking down our healthcare providers?
  Let's face it--our medical litigation system is broken. It doesn't 
work for

[[Page S7636]]

patients or providers. Even worse, it replaces the trust in the 
provider-patient relationship with distrust.
  Then, when courts and juries render verdicts with huge awards that 
bear no relation to the conduct of the defendants, this destabilizes 
the insurance markets and sends premiums skyrocketing. This forces many 
physicians to curtail, move or drop their practices, leaving patients 
without access to necessary medical care. This is a particular problem 
in states like Wyoming, where we traditionally struggle with recruiting 
doctors and other healthcare providers.
  Perhaps we could live with this flawed system if litigation served to 
improve quality or safety, but it doesn't. Litigation discourages the 
exchange of critical information that could be used to improve the 
quality and safety of patient care. The constant threat of litigation 
also drives the inefficient, costly and even dangerous practice of 
``defensive medicine.''
  Yes, indeed, defensive medicine is dangerous. A recent study found 
that one of every 1200 children who receive a CAT scan may die later in 
life from radiation-induced cancer. Knowing this puts a physician faced 
with anxious parents in a difficult situation. Does the doctor use his 
or her professional judgment and tell the parents of a sick child not 
to worry, or does the doctor order the CAT scan and subject the child 
to radiation that is probably unnecessary, just to provide some 
protection against a possible lawsuit?
  We have a medical litigation system in which many patients who are 
hurt by negligent actions receive no compensation for their loss. Those 
who do receive compensation end up with about 40 cents of every premium 
dollar after legal fees and other costs are subtracted. And the 
likelihood and the outcomes of lawsuits and settlements bear little 
relation to whether or not a healthcare provider was at fault.
  We like to say that justice is blind. With respect to our medical 
litigation system, I would say that justice is absent and nowhere to be 
found.
  During our debates in the last Congress, I said that the current 
medical liability crisis and the shortcomings of our medical litigation 
system make it clear that it is time for a major change. I also said 
that regardless of how we voted, we all should work toward replacing 
the current medical tort liability scheme with a more reliable and 
predictable system of medical justice.
  Today, Senator Baucus and I are introducing a bill that would help 
achieve that goal.
  Most of us are familiar with the report on medical errors from the 
Institute of Medicine, also known as the IOM. Many of us may be less 
familiar with another report that the IOM published in 2003. That 
report is called ``Fostering Rapid Advances in Healthcare: Learning 
from System Demonstrations.''
  Our Secretary of Health and Human Services at that time, Tommy 
Thompson, challenged the IOM to identify bold ideas that would 
challenge conventional thinking about some of the most vexing problems 
facing our healthcare system. In response, an IOM committee developed 
this report, which identified a set of demonstration projects that 
committee members felt would break new ground and yield a very high 
return-on-investment in terms of dollars and health.
  Medical liability was one of the areas upon which the IOM committee 
focused. The IOM suggested that the federal government should support 
demonstration projects in the states. These demonstrations should be 
based on ``replacing tort liability with a system of patient-centered 
and safety-focused non-judicial compensation.''
  The bill we are introducing today is in the spirit of this IOM 
report. This bill, the Fair and Reliable Medical Justice Act, would 
authorize funding for States to create demonstration programs to test 
alternatives to current medical tort litigation.
  The funding to States under this bill would cover planning grants for 
developing proposals based on the models or other innovative ideas. 
Funding to States would also include the initial costs of getting the 
alternatives up and running.
  The Fair and Reliable Medical Justice Act would require participating 
states and the Federal Government to collaborate in continuous 
evaluations of the results of the alternatives as compared to 
traditional tort litigation. This way, all States and the federal 
government can learn from new approaches.
  By funding demonstration projects, I believe Congress could enable 
States to experiment with and learn from ideas that could provide long-
term solutions to the current medical liability and litigation crisis.
  In introducing this bill, I wanted to provide some alternative ideas 
that would contribute to the debate. As a result, the bill describes 
three models to which states could look in designing their 
alternatives.
  For instance, a State could provide healthcare providers and 
organizations with immunity from lawsuits if they disclose an error 
that results in an injury and make a timely offer to compensate an 
injured patient for his or her actual net economic loss, plus a payment 
for pain and suffering if experts deem such a payment to be 
appropriate. This could give a healthcare provider who makes an honest 
mistake the chance to make amends financially with a patient, without 
the provider fearing that their honesty would land them in a lawsuit.
  Another idea would be for a state to set up classes of avoidable 
injuries and a schedule of compensation for them, and then establish an 
administrative board to resolve claims related to those injuries. A 
scientifically rigorous process of identifying preventable injuries and 
setting appropriate compensation would be preferable to the randomness 
of the current system.
  Still another option would be for a state to establish a special 
healthcare court for adjudicating medical malpractice cases. For this 
idea to work, the State would need to ensure that the presiding judges 
have expertise in and an understanding of healthcare, and allow them to 
make binding rulings on issues like causation compensation, and 
standards of care.
  We already have specialized courts for complicated issues like taxes 
and highly charged issues like substance abuse and domestic violence. 
With all the flaws in our current medical litigation system, perhaps we 
should consider special courts for the complex and emotional issue of 
medical malpractice.
  I believe one thing in our medical liability debate is absolutely 
clear--people are demanding change. The States are debating liability 
reform, and a number of states have enacted new laws. States are 
heeding this call for change, and Congress should support those 
efforts.
  My own State, Wyoming, had had a number of lively legislative debates 
on medical liability reform over the past few years, but we have a 
constitutional amendment that prohibits limits on the amounts that can 
be recovered through lawsuits. The Wyoming Senate has considered bills 
recently to amend our State's constitution to create a commission on 
healthcare errors. That commission would have the power to review 
claims, decide if healthcare negligence had occurred, and determine the 
compensation for the death or injury according to a schedule or formula 
provided by law.
  According to the key sponsor of these bills, Senator Charlie Scott, 
one of the biggest obstacles to passage is the uncertainty surrounding 
this new idea. No one has any basis for knowing what a proper schedule 
or formula for compensation would be. No one knows how much the system 
might cost, or how much injured patients would recover compared to what 
they recover now.
  Senator Scott wrote me to say that federal support for finding 
answers to these questions might help the bill's sponsors sufficiently 
respond to the legitimate concerns of their fellow Wyoming legislators. 
We should be helping state legislators like Senator Scott develop 
thoughtful and innovative ideas such as the one he has proposed. That's 
one of the reasons I am offering this bill.
  Clearly, the American people and their elected representatives have 
identified the need to reform our current medical litigation system. 
There is a real medical liability crisis, and Congress needs to act 
sooner rather than later.
  My cosponsor Senator Baucus and I voted differently on medical 
liability reform in the last Congress, but we

[[Page S7637]]

both agree that we ought to lend a hand to States that are working to 
change their current medical litigation systems and to develop creative 
alternatives that could work much better for patients and providers. 
The States have been policy pioneers in many areas--workers' 
compensation, welfare reform, and electricity deregulation, to name 
three. Medical litigation should be the next item on the agenda of the 
laboratories of democracy that are our 50 States.
  No one questions the need to restore reliability to our medical 
justice system. But how do we begin the process? One way is to foster 
innovation by encouraging States to develop more rational and 
predictable methods for resolving healthcare injury claims. And that is 
what the Fair and Reliable Medical Justice Act aims to do.
  In the long run, we would all be better off with a more reliable 
system of medical justice than we have today. I know that my fellow 
Senators recognize this, so I hope my colleagues on both sides of the 
aisle will work with me and Senator Baucus on this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1337

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Fair and Reliable Medical 
     Justice Act''.

     SEC. 2. PURPOSES.

       The purposes of this Act are--
       (1) to restore fairness and reliability to the medical 
     justice system by fostering alternatives to current medical 
     tort litigation that promote early disclosure of health care 
     errors and provide prompt, fair, and reasonable compensation 
     to patients who are injured by health care errors;
       (2) to promote patient safety through early disclosure of 
     health care errors; and
       (3) to support and assist States in developing such 
     alternatives.

     SEC. 3. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES 
                   TO CURRENT MEDICAL TORT LITIGATION.

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

     ``SEC. 3990. STATE DEMONSTRATION PROGRAMS TO EVALUATE 
                   ALTERNATIVES TO CURRENT MEDICAL TORT 
                   LITIGATION.

       ``(a) In General.--The Secretary is authorized to award 
     demonstration grants to States for the development, 
     implementation, and evaluation of alternatives to current 
     tort litigation for resolving disputes over injuries 
     allegedly caused by health care providers or health care 
     organizations.
       ``(b) Duration.--The Secretary may award up to 10 grants 
     under subsection (a) and each grant awarded under such 
     subsection may not exceed a period of 5 years.
       ``(c) Conditions for Demonstration Grants.--
       ``(1) Requirements.--Each State desiring a grant under 
     subsection (a) shall--
       ``(A) develop an alternative to current tort litigation for 
     resolving disputes over injuries allegedly caused by health 
     care providers or health care organizations that may be 1 of 
     the models described in subsection (d); and
       ``(B) promote a reduction of health care errors by allowing 
     for patient safety data related to disputes resolved under 
     subparagraph (A) to be collected and analyzed by 
     organizations that engage in voluntary efforts to improve 
     patient safety and the quality of health care delivery.
       ``(2) Alternative to current tort litigation.--Each State 
     desiring a grant under subsection (a) shall demonstrate how 
     the proposed alternative described in paragraph (1)(A)--
       ``(A) makes the medical liability system more reliable 
     through prompt and fair resolution of disputes;
       ``(B) encourages the early disclosure of health care 
     errors;
       ``(C) enhances patient safety; and
       ``(D) maintains access to liability insurance.
       ``(3) Sources of compensation.--Each State desiring a grant 
     under subsection (a) shall identify the sources from and 
     methods by which compensation would be paid for claims 
     resolved under the proposed alternative to current tort 
     litigation, which may include public or private funding 
     sources, or a combination of such sources. Funding methods 
     shall to the extent practicable provide financial incentives 
     for activities that improve patient safety.
       ``(4) Scope.--
       ``(A) In general.--Each State desiring a grant under 
     subsection (a) may establish a scope of jurisdiction (such as 
     a designated geographic region, a designated area of health 
     care practice, or a designated group of health care providers 
     or health care organizations) for the proposed alternative to 
     current tort litigation that is sufficient to evaluate the 
     effects of the alternative.
       ``(B) Notification of patients.--A State proposing a scope 
     of jurisdiction under subparagraph (A) shall demonstrate how 
     patients would be notified that they are receiving health 
     care services that fall within such scope.
       ``(5) Preference in awarding demonstration grants.--In 
     awarding grants under subsection (a), the Secretary shall 
     give preference to States--
       ``(A) that have developed the proposed alternative through 
     substantive consultation with relevant stakeholders; and
       ``(B) in which State law at the time of the application 
     would not prohibit the adoption of an alternative to current 
     tort litigation.
       ``(d) Models.--
       ``(1) In general.--Any State desiring a grant under 
     subsection (a) that proposes an alternative described in 
     paragraph (2), (3), or (4) shall be deemed to meet the 
     criteria under subsection (c)(2).
       ``(2) Early disclosure and compensation model.--In the 
     early disclosure and compensation model, the State shall--
       ``(A) require that health care providers or health care 
     organizations notify a patient (or an immediate family member 
     or designee of the patient) of an adverse event that results 
     in serious injury to the patient, and that such notification 
     shall not constitute an acknowledgment or an admission of 
     liability;
       ``(B) provide immunity from tort liability to any health 
     care provider or health care organization that offers in good 
     faith to pay compensation in accordance with this section to 
     a patient for an injury incurred in the provision of health 
     care services (limited to claims arising out of the same 
     nucleus of operative facts as the injury, and except in cases 
     of fraud related to the provision of health care services, or 
     in cases of criminal or intentional harm);
       ``(C) set a limited time period during which a health care 
     provider or health care organization may make an offer of 
     compensation benefits under subparagraph (B), with 
     consideration for instances where prompt recognition of an 
     injury is unlikely or impossible;
       ``(D) require that the compensation provided under 
     subparagraph (B) include--
       ``(i) payment for the net economic loss of the patient, on 
     a periodic basis, reduced by any payments received by the 
     patient under--

       ``(I) any health or accident insurance;
       ``(II) any wage or salary continuation plan; or
       ``(III) any disability income insurance;

       ``(ii) payment for the non-economic damages of the patient, 
     if appropriate for the injury, based on a defined payment 
     schedule developed by the State in consultation with relevant 
     experts and with the Secretary in accordance with subsection 
     (g); and
       ``(iii) reasonable attorney's fees;
       ``(E) not abridge the right of an injured patient to seek 
     redress through the State tort system if a health care 
     provider does not enter into a compensation agreement with 
     the patient in accordance with subparagraph (B) or if the 
     compensation offered does not meet the requirements of 
     subparagraph (D) or is not offered in good faith;
       ``(F) permit a health care provider or health care 
     organization that offers in good faith to pay compensation 
     benefits to an individual under subparagraph (B) to join in 
     the payment of the compensation benefits any health care 
     provider or health care organization that is potentially 
     liable, in whole or in part, for the injury; and
       ``(G) permit any health care provider or health care 
     organization to contribute voluntarily in the payment of 
     compensation benefits to an individual under subparagraph 
     (B).
       ``(3) Administrative determination of compensation model.--
       ``(A) In general.--In the administrative determination of 
     compensation model--
       ``(i) the State shall--

       ``(I) designate an administrative entity (in this paragraph 
     referred to as the `Board') that shall include 
     representatives of--

       ``(aa) relevant State licensing boards;
       ``(bb) patient advocacy groups;
       ``(cc) health care providers and health care organizations; 
     and
       ``(dd) attorneys in relevant practice areas;

       ``(II) set up classes of avoidable injuries, in 
     consultation with relevant experts and with the Secretary in 
     accordance with subsection (g), that will be used by the 
     Board to determine compensation under clause (ii)(II);
       ``(III) modify tort liability, through statute or contract, 
     to bar negligence claims in court against health care 
     providers and health care organizations for the classes of 
     injuries established under subclause (II), except in cases of 
     fraud related to an injury, or in cases of criminal or 
     intentional harm;
       ``(IV) outline a procedure for informing patients about the 
     modified liability system described in this paragraph and, in 
     systems where participation by the health care provider, 
     health care organization, or patient is voluntary, allow for 
     the decision by the provider, organization, or patient of 
     whether to participate to be made prior to the provision of, 
     use of, or payment for the health care service;
       ``(V) provide for an appeals process to allow for review of 
     decisions; and
       ``(VI) establish procedures to coordinate settlement 
     payments with other sources of payment;

       ``(ii) the Board shall--

[[Page S7638]]

       ``(I) resolve health care liability claims for certain 
     classes of avoidable injuries as determined by the State and 
     determine compensation for such claims;
       ``(II) develop a schedule of compensation to be used in 
     making such determinations that includes--

       ``(aa) payment for the net economic loss of the patient, on 
     a periodic basis, reduced by any payments received by the 
     patient under any health or accident insurance, any wage or 
     salary continuation plan, or any disability income insurance;
       ``(bb) payment for the non-economic damages of the patient, 
     if appropriate for the injury, based on a defined payment 
     schedule developed by the State in consultation with relevant 
     experts and with the Secretary in accordance with subsection 
     (g); and
       ``(cc) reasonable attorney's fees; and

       ``(III) update the schedule under subclause (II) on a 
     regular basis.

       ``(B) Appeals.--The State, in establishing the appeals 
     process described in subparagraph (A)(i)(V), may choose 
     whether to allow for de novo review, review with deference, 
     or some opportunity for parties to reject determinations by 
     the Board and elect to file a civil action after such 
     rejection. Any State desiring to adopt the model described in 
     this paragraph shall indicate how such review method meets 
     the criteria under subsection (c)(2).
       ``(C) Timeliness.--The State shall establish timeframes to 
     ensure that claims handled under the system described in this 
     paragraph provide for adjudication that is more timely and 
     expedited than adjudication in a traditional tort system.
       ``(4) Special health care court model.--In the special 
     health care court model, the State shall--
       ``(A) establish a special court for the timely adjudication 
     of disputes over injuries allegedly caused by health care 
     providers or health care organizations in the provision of 
     health care services;
       ``(B) ensure that such court is presided over by judges 
     with health care expertise who meet applicable State 
     standards for judges and who agree to preside over such court 
     voluntarily;
       ``(C) provide authority to such judges to make binding 
     rulings on causation, compensation, standards of care, and 
     related issues with reliance on independent expert witnesses 
     commissioned by the court;
       ``(D) provide for an appeals process to allow for review of 
     decisions; and
       ``(E) at its option, establish an administrative entity 
     similar to the entity described in paragraph (3)(A)(i)(I) to 
     provide advice and guidance to the special court.
       ``(e) Application.--
       ``(1) In general.--Each State desiring a grant under 
     subsection (a) shall submit to the Secretary an application, 
     at such time, in such manner, and containing such information 
     as the Secretary may require.
       ``(2) Review panel.--
       ``(A) In general.--In reviewing applications under 
     paragraph (1), the Secretary shall consult with a review 
     panel composed of relevant experts appointed by the 
     Comptroller General.
       ``(B) Composition.--
       ``(i) Nominations.--The Comptroller General shall solicit 
     nominations from the public for individuals to serve on the 
     review panel.
       ``(ii) Appointment.--The Comptroller General shall appoint, 
     at least 11 but not more than 15, highly qualified and 
     knowledgeable individuals to serve on the review panel and 
     shall ensure that the following entities receive fair 
     representation on such panel:

       ``(I) Patient advocates.
       ``(II) Health care providers and health care organizations.
       ``(III) Attorneys with expertise in representing patients 
     and health care providers.
       ``(IV) Insurers.
       ``(V) State officials.

       ``(C) Chairperson.--The Comptroller General, or an 
     individual within the Government Accountability Office 
     designated by the Comptroller General, shall be the 
     chairperson of the review panel.
       ``(D) Availability of information.--The Comptroller General 
     shall make available to the review panel such information, 
     personnel, and administrative services and assistance as the 
     review panel may reasonably require to carry out its duties.
       ``(E) Information from agencies.--The review panel may 
     request directly from any department or agency of the United 
     States any information that such panel considers necessary to 
     carry out its duties. To the extent consistent with 
     applicable laws and regulations, the head of such department 
     or agency shall furnish the requested information to the 
     review panel.
       ``(f) Report.--Each State receiving a grant under 
     subsection (a) shall submit to the Secretary a report 
     evaluating the effectiveness of activities funded with grants 
     awarded under such subsection at such time and in such manner 
     as the Secretary may require.
       ``(g) Technical Assistance.--
       ``(1) In general.--The Secretary shall provide technical 
     assistance to the States awarded grants under subsection (a).
       ``(2) Requirements.--Technical assistance under paragraph 
     (1) shall include--
       ``(A) the development of a defined payment schedule for 
     non-economic damages (including guidance on the consideration 
     of individual facts and circumstances in determining 
     appropriate payment), the development of classes of avoidable 
     injuries, and guidance on early disclosure to patients of 
     adverse events; and
       ``(B) the development, in consultation with States, of 
     common definitions, formats, and data collection 
     infrastructure for States receiving grants under this section 
     to use in reporting to facilitate aggregation and analysis of 
     data both within and between States.
       ``(3) Use of common definitions, formats, and data 
     collection infrastructure.--States not receiving grants under 
     this section may also use the common definitions, formats, 
     and data collection infrastructure developed under paragraph 
     (2)(B).
       ``(h) Evaluation.--
       ``(1) In general.--The Secretary, in consultation with the 
     review panel established under subsection (e)(2), shall enter 
     into a contract with an appropriate research organization to 
     conduct an overall evaluation of the effectiveness of grants 
     awarded under subsection (a) and to annually prepare and 
     submit a report to the appropriate committees of Congress. 
     Such an evaluation shall begin not later than 18 months 
     following the date of implementation of the first program 
     funded by a grant under subsection (a).
       ``(2) Contents.--The evaluation under paragraph (1) shall 
     include--
       ``(A) an analysis of the effect of the grants awarded under 
     subsection (a) on the number, nature, and costs of health 
     care liability claims;
       ``(B) a comparison of the claim and cost information of 
     each State receiving a grant under subsection (a); and
       ``(C) a comparison between States receiving a grant under 
     this section and States that did not receive such a grant, 
     matched to ensure similar legal and health care environments, 
     and to determine the effects of the grants and subsequent 
     reforms on--
       ``(i) the liability environment;
       ``(ii) health care quality;
       ``(iii) patient safety; and
       ``(iv) patient and health care provider and organization 
     satisfaction with the reforms.
       ``(i) Option to Provide for Initial Planning Grants.--Of 
     the funds appropriated pursuant to subsection (k), the 
     Secretary may use a portion not to exceed $500,000 per State 
     to provide planning grants to such States for the development 
     of demonstration project applications meeting the criteria 
     described in subsection (c). In selecting States to receive 
     such planning grants, the Secretary shall give preference to 
     those States in which State law at the time of the 
     application would not prohibit the adoption of an alternative 
     to current tort litigation.
       ``(j) Definitions.--In this section:
       ``(1) Health care services.--The term `health care 
     services' means any services provided by a health care 
     provider, or by any individual working under the supervision 
     of a health care provider, that relate to--
       ``(A) the diagnosis, prevention, or treatment of any human 
     disease or impairment; or
       ``(B) the assessment of the health of human beings.
       ``(2) Health care organization.--The term `health care 
     organization' means any individual or entity which is 
     obligated to provide, pay for, or administer health benefits 
     under any health plan.
       ``(3) Health care provider.--The term `health care 
     provider' means any individual or entity--
       ``(A) licensed, registered, or certified under Federal or 
     State laws or regulations to provide health care services; or
       ``(B) required to be so licensed, registered, or certified 
     but that is exempted by other statute or regulation.
       ``(4) Net economic loss.--The term `net economic loss' 
     means--
       ``(A) reasonable expenses incurred for products, services, 
     and accommodations needed for health care, training, and 
     other remedial treatment and care of an injured individual;
       ``(B) reasonable and appropriate expenses for 
     rehabilitation treatment and occupational training;
       ``(C) 100 percent of the loss of income from work that an 
     injured individual would have performed if not injured, 
     reduced by any income from substitute work actually 
     performed; and
       ``(D) reasonable expenses incurred in obtaining ordinary 
     and necessary services to replace services an injured 
     individual would have performed for the benefit of the 
     individual or the family of such individual if the individual 
     had not been injured.
       ``(5) Non-economic damages.--The term `non-economic 
     damages' means losses for physical and emotional pain, 
     suffering, inconvenience, physical impairment, mental 
     anguish, disfigurement, loss of enjoyment of life, loss of 
     society and companionship, loss of consortium (other than 
     loss of domestic service), injury to reputation, and all 
     other non-pecuniary losses of any kind or nature, to the 
     extent permitted under State law.
       ``(k) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary. Amounts appropriated pursuant to 
     this subsection shall remain available until expended.''.
  Mr. BAUCUS. Mr. President, I rise today to join Senator ENZI in 
introducing the Fair and Reliable Medical Justice Act of 2005. We have 
debated the medical liability issue in this chamber for years now. But 
the Senate has failed to take action to make the situation better. We 
need to deal with the issue of rising liability costs, and I think this 
bill is a good place to start.

[[Page S7639]]

  One of my top priorities in the Senate is ensuring appropriate access 
to affordable, quality health care. In a rural State such as Montana, 
where health care providers are often few and far between, that is a 
tall order. It is a job that is made all the harder by rising medical 
liability insurance premiums.
  To ensure proper access to care, we need to make certain that our 
health care providers can afford their medical liability insurance. We 
also need to make sure that patients who are harmed by medical mistakes 
have access to timely, reasonable compensation for their injuries.
  The Fair and Reliable Medical Justice Act promotes the testing of 
alternatives to current medical tort liability litigation. It aims to 
increase the number of injured patients who receive compensation for 
their injuries, and make such compensation more accurate and more 
timely, all at lower administrative costs than current systems. The 
bill also encourages patient safety by promoting disclosure of medical 
errors, unlike the current system which does not encourage disclosure.
  The Fair and Reliable Medical Justice Act would establish State-based 
demonstration programs to help States test alternative systems of 
health care-related dispute resolution under three different models: 
early disclosure and compensation; administrative determination of 
compensation; and special health care courts. Under the bill, states 
may develop other alternative plans for resolving health care related 
disputes as well.
  The first model involves a system of early disclosure, which 
encourages providers to disclose medical errors that harm patients and 
offer just compensation for injuries. This model would maintain 
patients' access to the traditional legal system if claims cannot be 
resolved by early disclosure, or in cases resulting from criminal or 
intentional harm or fraud.
  The second model would establish a board made up of providers and 
health care organizations, advocates, and attorneys. The board would 
establish classes of avoidable injuries and determine compensation 
rates for each, including economic and non-economic losses, and 
attorneys' fees.
  The third model involves special health care courts, presided over by 
judges with special health care expertise, and assisted by independent 
experts. The judges would be subject to the same criteria as other 
State judges and sit on the court voluntarily.
  These models are based on innovative efforts currently underway in 
the private sector and in some States, where success is already being 
achieved. I think it is time for us to try to encourage more innovation 
and expand the range of options being considered. State-based 
demonstrations provide a great setting for experimentation and 
learning. The Institute of Medicine suggested as much in its 2002 
report entitled ``Fostering Rapid Advances in Health Care: Learning 
from System Demonstrations.''
  I thank Senator Enzi for his leadership on this issue. I am proud to 
have worked with him to develop legislation that I believe will enhance 
patient safety. It is unacceptable that around 100,000 Americans die 
annually as a result of medical errors. And it is unacceptable that 
many patients hurt by medical errors receive no compensation for their 
injuries
  This bill is a good opportunity for us to make progress on both 
fronts--to look at the medical liability issue from a new perspective, 
through a set of commonsense pilot projects centered on improving 
patient safety. I urge my colleagues to support this important effort.
                                 ______