Bills before Federal Legislatures

In bill text the following has special meaning
    underline denotes added text
    struck-out text denotes deleted text

United States 2nd Session of the 107th Congress
2001 US H 4600
Introduced
04/25/2002
Greenwood
HR 4600 IH


                                107th CONGRESS

                                  2d Session

                                  H. R. 4600

    To improve patient access to health care services and provide improved
medical care by reducing the excessive burden the liability system places on
the health care delivery system.

                       IN THE HOUSE OF REPRESENTATIVES

                                APRIL 25, 2002

    Mr. GREENWOOD (for himself, Mr. COX, Mr. MURTHA, Mr. TOOMEY, Mr. MORAN of
Virginia, Mr. PETERSON of Minnesota, Mr. STENHOLM, Mr. LUCAS of Kentucky, Mr.
PICKERING, and Mr. WELDON of Florida) introduced the following bill; which
was referred to the Committee on the Judiciary, and in addition to the
Committee on Energy and Commerce, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
                                    A BILL

    To improve patient access to health care services and provide improved
medical care by reducing the excessive burden the liability system places on
the health care delivery system.
    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 `Help Efficient, Accessible, Low Cost, Timely
Health Care (HEALTH) Act of 2002'.

    SEC. 2. FINDINGS AND PURPOSE.

    (a) FINDINGS-

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

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

    (3) EFFECT ON FEDERAL SPENDING- Congress finds that the health care
liability litigation systems existing throughout the United States have a
significant effect on the amount, distribution, and use of Federal funds
because of--

    (A) the large number of individuals who receive health care benefits under
programs operated or financed by the Federal Government;

    (B) the large number of individuals who benefit because of the exclusion
from Federal taxes of the amounts spent to provide them with health insurance
benefits; and

    (C) the large number of health care providers who provide items or
services for which the Federal Government makes payments.

    (b) PURPOSE- It is the purpose of this Act to implement reasonable,
comprehensive, and effective health care liability reforms designed to--

    (1) improve the availability of health care services in cases in which
health care liability actions have been shown to be a factor in the decreased
availability of services;

    (2) reduce the incidence of `defensive medicine' and lower the cost of
health care liability insurance, all of which contribute to the escalation of
health care costs;

    (3) ensure that persons with meritorious health care injury claims receive
fair and adequate compensation, including reasonable noneconomic damages;

    (4) improve the fairness and cost-effectiveness of our current health care
liability system to resolve disputes over, and provide compensation for,
health care liability by reducing uncertainty in the amount of compensation
provided to injured individuals; and

    (5) provide an increased sharing of information in the health care system
which will reduce unintended injury and improve patient care.

    SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

    A health care lawsuit may be commenced no later than 3 years after the
date of injury or 1 year after the claimant discovers, or through the use of
reasonable diligence should have discovered, the injury, whichever occurs
first. In no event shall the time for commencement of a health care lawsuit
exceed 3 years, except that in the case of an alleged injury sustained by a
minor before the age of 6, a health care lawsuit may be commenced by or on
behalf of the minor until the later of 3 years from the

    date of injury, or the date on which the minor attains the age of 8. SEC.
4. COMPENSATING PATIENT INJURY.

    (a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL ECONOMIC LOSSES IN HEALTH CARE
LAWSUITS- In any health care lawsuit, the full amount of a claimant's
economic loss may be fully recovered without limitation.

    (b) ADDITIONAL NONECONOMIC DAMAGES- In any health care lawsuit, the amount
of noneconomic damages recovered may be as much as $250,000, regardless of
the number of parties against whom the action is brought or the number of
separate claims or actions brought with respect to the same occurrence.

    (c) NO DISCOUNT OF AWARD FOR NONECONOMIC DAMAGES- In any health care
lawsuit, an award for future noneconomic damages shall not be discounted to
present value. The jury shall not be informed about the maximum award for
noneconomic damages. An award for noneconomic damages in excess of $250,000
shall be reduced either before the entry of judgment, or by amendment of the
judgment after entry of judgment, and such reduction shall be made before
accounting for any other reduction in damages required by law. If separate
awards are rendered for past and future noneconomic damages and the combined
awards exceed $250,000, the future noneconomic damages shall be reduced
first.

    (d) FAIR SHARE RULE- In any health care lawsuit, each party shall be
liable for that party's several share of any damages only and not for the
share of any other person. Each party shall be liable only for the amount of
damages allocated to such party in direct proportion to such party's
percentage of responsibility. A separate judgment shall be rendered against
each such party for the amount allocated to such party. For purposes of this
section, the trier of fact shall determine the proportion of responsibility
of each party for the claimant's harm.

    SEC. 5. MAXIMIZING PATIENT RECOVERY.

    (a) COURT SUPERVISION OF SHARE OF DAMAGES ACTUALLY PAID TO CLAIMANTS- In
any health care lawsuit, the court shall supervise the arrangements for
payment of damages to protect against conflicts of interest that may have the
effect of reducing the amount of damages awarded that are actually paid to
claimants. In particular, in any health care lawsuit in which the attorney
for a party claims a financial stake in the outcome by virtue of a contingent
fee, the court shall have the power to restrict the payment of a claimant's
damage recovery to such attorney, and to redirect such damages to the
claimant based upon the interests of justice and principles of equity. In no
event shall the total of all contingent fees for representing all claimants
in a health care lawsuit exceed the following limits:

    (1) 40 percent of the first $50,000 recovered by the claimant(s).

    (2) 33 1/3 percent of the next $50,000 recovered by the claimant(s).

    (3) 25 percent of the next $500,000 recovered by the claimant(s).

    (4) 15 percent of any amount by which the recovery by the claimant(s) is
in excess of $600,000.

    (b) APPLICABILITY- The limitations in this section shall apply whether the
recovery is by judgment, settlement, mediation, arbitration, or any other
form of alternative dispute resolution. In a health care lawsuit involving a
minor or incompetent person, a court retains the authority to authorize or
approve a fee that is less than the maximum permitted under this section.

    SEC. 6. ADDITIONAL HEALTH BENEFITS.

    In any health care lawsuit, any party may introduce evidence of collateral
source benefits. If a party elects to introduce such evidence, any opposing
party may introduce evidence of any amount paid or contributed or reasonably
likely to be paid or contributed in the future by or on behalf of the
opposing party to secure the right to such collateral source benefits. No
provider of collateral source benefits shall recover any amount against the
claimant or receive any lien or credit against the claimant's recovery or be
equitably or legally subrogated to the right of the claimant in a health care
lawsuit. This section shall apply to any health care lawsuit that is settled
as well as a health care lawsuit that isresolved by a fact finder.

    SEC. 7. PUNITIVE DAMAGES.

    (a) IN GENERAL- Punitive damages may, if otherwise permitted by applicable
State or Federal law, be awarded against any person in a health care lawsuit
only if it is proven by clear and convincing evidence that such person acted
with malicious intent to injure the claimant, or that such person
deliberately failed to avoid unnecessary injury that such person knew the
claimant was substantially certain to suffer. In any health care lawsuit
where no judgment for compensatory damages is rendered against such person,
no punitive damages may be awarded with respect to the claim in such lawsuit.
No demand for punitive damages shall be included in a health care lawsuit as
initially filed. A court may allow a claimant to file an amended pleading for
punitive damages only upon a motion by the claimant and after a finding by
the court, upon review of supporting and opposing affidavits or after a
hearing, after weighing the evidence, that the claimant has established by a
substantial probability that the claimant will prevail on the claim for
punitive damages. At the request of any party in a health care lawsuit, the
trier of fact shall consider in a separate proceeding--

    (1) whether punitive damages are to be awarded and the amount of such
award; and

    (2) the amount of punitive damages following a determination of punitive
liability.

    If a separate proceeding is requested, evidence relevant only to the claim
for punitive damages, as determined by applicable State law, shall be
inadmissible in any proceeding to determine whether compensatory damages are
to be awarded.

    (b) DETERMINING AMOUNT OF PUNITIVE DAMAGES-

    (1) FACTORS CONSIDERED- In determining the amount of punitive damages, the
trier of fact shall consider only the following:

    (A) the severity of the harm caused by the conduct of such party;

    (B) the duration of the conduct or any concealment of it by such party;

    (C) the profitability of the conduct to such party;

    (D) the number of products sold or medical procedures rendered for
compensation, as the case may be, by such party, of the kind causing the harm
complained of by the claimant;

    (E) any criminal penalties imposed on such party, as a result of the
conduct complained of by the claimant; and

    (F) the amount of any civil fines assessed against such party as a result
of the conduct complained of by the claimant.

    (2) MAXIMUM AWARD- The amount of punitive damages awarded in a health care
lawsuit may be up to as much as two times the amount of economic damages
awarded or $250,000, whichever is greater. The jury shall not be informed of
this limitation.

    (c) NO CIVIL MONETARY PENALTIES FOR PRODUCTS THAT COMPLY WITH FDA
STANDARDS-

    (1) IN GENERAL- No punitive damages may be awarded against the
manufacturer or distributor of a medical product based on a claim that such
product caused the claimant's harm where--

    (A)(i) such medical product was subject to premarket approval or clearance
by the Food and Drug Administration with respect to the safety of the
formulation or performance of the aspect of such medical product which caused
the claimant's harm or the adequacy of the packaging or labeling of such
medical product; and

    (ii) such medical product was so approved or cleared; or

    (B) such medical product is generally recognized among qualified experts
as safe and effective pursuant to conditions established by the Food and Drug
Administration and applicable Food and Drug Administration regulations,
including without limitation those related to packaging and labeling.

    (2) LIABILITY OF HEALTH CARE PROVIDERS- A health care provider who
prescribes a drug or device (including blood products) approved by the Food
and Drug Administration shall not be named as a party to a product liability
lawsuit involving such drug or device and shall not be liable to a claimant
in a class action lawsuit against the manufacturer, distributor, or product
seller of such drug or device.

    (3) PACKAGING- In a health care lawsuit for harm which is alleged to
relate to the adequacy of the packaging or labeling of a drug which is
required to have tamper-resistant packaging under regulations of the
Secretary of Health and Human Services (including labeling regulations
related to such packaging), the manufacturer or product seller of the drug
shall not be held liable for punitive damages unless such packaging or
labeling is found by the trier of fact by clear and convincing evidence to be
substantially out of compliance with such regulations.

    (4) EXCEPTION- Paragraph (1) shall not apply in any health care lawsuit in
which--

    (A) a person, before or after premarket approval or clearance of such
medical product, knowingly misrepresented to or withheld from the Food and
Drug Administration information that is required to be submitted under the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) or section 351
of the Public Health Service Act (42 U.S.C. 262) that is material and is
causally related to the harm which the claimant allegedly suffered; or

    (B) a person made an illegal payment to an official of the Food and Drug
Administration for the purpose of either securing or maintaining approval or
clearance of such medical product.

    SEC. 8. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN HEALTH
CARE LAWSUITS.

    (a) IN GENERAL- In any health care lawsuit, if an award of future damages,
without reduction to present value, equaling or exceeding $50,000 is made
against a party with sufficient insurance or other assets to fund a periodic
payment of such a judgment, the court shall, at the request of any party,
enter a judgment ordering that the future damages be paid by periodic
payments in accordance with the Uniform Periodic Payment of Judgments Act
promulgated by the National Conference of Commissioners on Uniform State
Laws.

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

    SEC. 9. DEFINITIONS.

    In this Act:

    (1) ALTERNATIVE DISPUTE RESOLUTION SYSTEM; ADR- The term `alternative
dispute resolution system' or `ADR' means a system that provides for the
resolution of health care lawsuits in a manner other than through a civil
action brought in a State or Federal court.

    (2) CLAIMANT- The term `claimant' means any person who brings a health
care lawsuit, including a person who asserts or claims a right to legal or
equitable contribution, indemnity or subrogation, arising out of a health
care liability claim or action, and any person on whose behalf such a claim
is asserted or such an action is brought, whether deceased, incompetent, or a
minor.

    (3) COLLATERAL SOURCE BENEFITS- The term `collateral source benefits'
means any amount paid or reasonably likely to be paid in the future to or on
behalf of the claimant, or any service, product or other benefit provided or
reasonably likely to be provided in the future to or on behalf of the
claimant, as a result of the injury or wrongful death, pursuant to--

    (A) any State or Federal health, sickness, income- disability, accident,
or workers' compensation law;

    (B) any health, sickness, income- disability, or accident insurance that
provides health benefits or income- disability coverage;

    (C) any contract or agreement of any group, organization, partnership, or
corporation to provide, pay for, or reimburse the cost of medical, hospital,
dental, or income disability benefits; and

    (D) any other publicly or privately funded program.

    (4) COMPENSATORY DAMAGES- The term `compensatory damages' means
objectively verifiable monetary losses incurred as a result of the provision
of, use of, or payment for (or failure to provide, use, or pay for) health
care services or medical products, such as past and future medical expenses,
loss of past and future earnings, cost of obtaining domestic services, loss
of employment, and loss of business or employment opportunities, damages for
physical and emotional pain, suffering, inconvenience, physical impairment,
mental anguish, disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic service),
hedonic damages, injury to reputation, and all other nonpecuniary losses of
any kind or nature. The term `compensatory damages' includes economic damages
and noneconomic damages, as such terms are defined in this section.

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

    (6) ECONOMIC DAMAGES- The term `economic damages' means objectively
verifiable monetary losses incurred as a result of the provision of, use of,
or payment for (or failure to provide, use, or pay for) health care services
or medical products, such as past and future medical expenses, loss of past
and future earnings, cost of obtaining domestic services, loss of employment,
and loss of business or employment opportunities.

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

    (8) HEALTH CARE LIABILITY ACTION- The term `health care liability action'
means a civil action brought in a State or Federal Court or pursuant to an
alternative dispute resolution system, against a health care provider, a
health care organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, regardless of the theory
of liability on which the claim is based, or the number of plaintiffs,
defendants, or other parties, or the number of causes of action, in which the
claimant alleges a health care liability claim.

    (9) HEALTH CARE LIABILITY CLAIM- The term `health care liability claim'
means a demand by any person, whether or not pursuant to ADR, against a
health care provider, health care organization, or the manufacturer,
distributor, supplier, marketer, promoter, or seller of a medical product,
including, but not limited to, third-party claims, cross-claims,
counter-claims, or contribution claims, which are based upon the provision
of, use of, or payment for (or the failure to provide, use, or pay for)
health care services or medical products, regardless of the theory of
liability on which the claim is based, or the number of plaintiffs,
defendants, or other parties, or the number of causes of action.

    (10) HEALTH CARE ORGANIZATION- The term `health care organization' means
any person or entity which is obligated to provide or pay for health benefits
under any health plan, including any person or entity acting under a contract
or arrangement with a health care organization to provide or administer any
health benefit.

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

    (12) HEALTH CARE GOODS OR SERVICES- The term `health care goods or
services' means any goods or services provided by a health care organization,
provider, or by any individual working under the supervision of a health care
provider, that relates to the diagnosis, prevention, or treatment of any
human disease or impairment, or the assessment of the health of human beings.

    (13) MALICIOUS INTENT TO INJURE- The term `malicious intent to injure'
means intentionally causing or attempting to cause physical injury other than
providing health care goods or services.

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

    (15) NONECONOMIC DAMAGES- The term `noneconomic damages' means damages for
physical and emotional pain, suffering, inconvenience, physical impairment,
mental anguish, disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic service),
hedonic damages, injury to reputation, and all other nonpecuniary losses of
any kind or nature.

    (16) PUNITIVE DAMAGES- The term `punitive damages' means damages awarded,
for the purpose of punishment or deterrence, and not solely for compensatory
purposes, against a health care provider, health care organization, or a
manufacturer, distributor, or supplier of a medical product. Punitive damages
are neither economic nor noneconomic damages.

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

    (18) STATE- The term `State' means each of the several States, the
District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands,
Guam, American Samoa, the Northern Mariana Islands, the Trust Territory of
the Pacific Islands, and any other territory or possession of the United
States, or any political subdivision thereof.

    SEC. 10. EFFECT ON OTHER LAWS.

    (a) VACCINE INJURY-

    (1) To the extent that title XXI of the Public Health Service Act
establishes a Federal rule of law applicable to a civil action brought for a
vaccine-related injury or death--

    (A) this Act does not affect the application of the rule of law to such an
action; and

    (B) any rule of law prescribed by this Act in conflict with a rule of law
of such title XXI shall not apply to such action.

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

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

    SEC. 11. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

    (a) HEALTH CARE LAWSUITS- The provisions governing health care lawsuits
set forth in this Act preempt, subject to subsections (b) and (c), State law
to the extent that State law prevents the application of any provisions of
law established by or under this Act. The provisions governing health care
lawsuits set forth in this Act supersede chapter 171 of title 28, United
States Code, to the extent that such chapter--

    (1) provides for a greater amount of damages or contingent fees, a longer
period in which a health care lawsuit may be commenced, or a reduced
applicability or scope of periodic payment of future damages, than provided
in this Act; or

    (2) prohibits the introduction of evidence regarding collateral source
benefits, or mandates or permits subrogation or a lien on collateral source
benefits.

    (b) PROTECTION OF STATES' RIGHTS- Any issue that is not governed by any
provision of law established by or under this Act (including State standards
of negligence) shall be governed by otherwise applicable State or Federal
law. This Act does not preempt or supersede any law that imposes greater
protections (such as a shorter statute of limitations) for health care
providers and health care organizations from liability, loss, or damages than
those provided by this Act.

    (c) STATE FLEXIBILITY- No provision of this Act shall be construed to
preempt--

    (1) any State statutory limit (whether enacted before, on, or after the
date of the enactment of this Act) on the amount of compensatory or punitive
damages (or the total amount of damages) that may be awarded in a health care
lawsuit, whether or not such State limit permits the recovery of a specific
dollar amount of damages that is greater or lesser than is provided for under
this Act, notwithstanding section 4(a); or

    (2) any defense available to a party in a health care lawsuit under any
other provision of State or Federal law.

    SEC. 12. APPLICABILITY; EFFECTIVE DATE.

    This Act shall apply to any health care lawsuit brought in a Federal or
State court, or subject to an alternative dispute resolution system, that is
initiated on or after the date of the enactment of this Act, except that any
health care lawsuit arising from an injury occurring prior to the date of the
enactment of this Act shall be governed by the applicable statute of
limitations provisions in effect at the time the injury occurred.