I

104TH CONGRESS

1ST SESSION H. R. 352

To establish uniform national standards for the resolution of medical

malpractice claims, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. PORTER introduced the following bill; which was referred to the

Committee on the Judiciary

A BILL

To establish uniform national standards for the resolution

of medical malpractice claims, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Medical Malpractice Fairness Act’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings; purpose.

TITLE I—UNIFORM STANDARDS FOR MALPRACTICE CLAIMS

Sec. 101. Applicability.
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Sec. 102. Requirement for initial resolution of action through alternative dispute resolution.

Sec. 103. Procedural requirements for filing of actions.

Sec. 104. Treatment of noneconomic and punitive damages.

Sec. 105. Periodic payments for future losses.

Sec. 106. Treatment of attorney’s fees and other costs.

Sec. 107. Uniform statute of limitations.

Sec. 108. Special provision for certain obstetric services.

Sec. 109. Optional application of practice guidelines.

Sec. 110. Jurisdiction of Federal courts.

Sec. 111. Preemption.

TITLE II—REQUIREMENTS FOR STATE ALTERNATIVE DISPUTE

RESOLUTION SYSTEMS (ADR)

Sec. 201. Basic requirements.

Sec. 202. Certification of State systems; applicability of alternative Federal system.

Sec. 203. Reports on implementation and effectiveness of alternative dispute

resolution systems.

TITLE III—DEFINITIONS

Sec. 301. Definitions.

1 SEC. 2. FINDINGS; PURPOSE.

2 (a) FINDINGS.—Congress finds that—

3 (1) the costs of health care consume more than

4 14 percent of the Gross Domestic Product of the

5 United States, significantly affecting interstate com6 merce and the budget of the Federal Government;

7 (2) claims for medical malpractice are a signifi8 cant factor in the cost of health care and cause phy9 sicians, hospitals, and other health care providers to

10 undertake diagnostic tests and procedures partly as

11 defensive measures against the possibility of mal12 practice claims;

13 (3) the health care and insurance industries are

14 industries affecting interstate commerce and the
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1 medical malpractice litigation systems existing

2 throughout the United States affect interstate com3 merce by contributing to the high cost of health care

4 and premiums for malpractice insurance purchased

5 by health care providers; and

6 (4) the Federal Government has a major inter7 est in health care as a direct provider of health care

8 and as a source of payment for health care, and has

9 a demonstrated interest in assessing the quality of

10 care, access to care, and the costs of care through

11 the evaluative activities of several Federal agencies.

12 (b) PURPOSE.—It is the purpose of this Act to—

13 (1) develop alternative dispute resolution proce14 dures to attain a more efficient, expeditious, and eq15 uitable resolution of health care malpractice dis16 putes;

17 (2) enhance general knowledge concerning the

18 benefits of different forms of alternative dispute res19 olution mechanisms; and

20 (3) establish uniformity and curb excesses in

21 the State-based medical liability systems through

22 Federally mandated reforms.
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1 TITLE I—UNIFORM STANDARDS

2 FOR MALPRACTICE CLAIMS

3 SEC. 101. APPLICABILITY.

4 Except as provided in section 111, this Act shall

5 apply to any medical malpractice liability action brought

6 in a Federal or State court, and to any medical mal7 practice claim subject to an alternative dispute resolution

8 system, that is initiated on or after January 1, 1997.

9 SEC. 102. REQUIREMENT FOR INITIAL RESOLUTION OF AC10 TION THROUGH ALTERNATIVE DISPUTE RES11 OLUTION.

12 (a) IN GENERAL.—

13 (1) STATE CASES.—A medical malpractice li14 ability action may not be brought in any State court

15 during a calendar year unless the medical mal16 practice claim that is the subject of the action has

17 been initially resolved under an alternative dispute

18 resolution system certified for the year by the Sec19 retary under section 202(a), or, in the case of a

20 State in which such a system is not in effect for the

21 year, under the alternative Federal system estab22 lished under section 202(b).

23 (2) FEDERAL DIVERSITY ACTIONS.—A medical

24 malpractice liability action may not be brought in

25 any Federal court under section 1332 of title 28,
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1 United States Code, during a calendar year unless

2 the medical malpractice claim that is the subject of

3 the action has been initially resolved under the alter4 native dispute resolution system referred to in para5 graph (1) that applied in the State whose law ap6 plies in such action.

7 (3) CLAIMS AGAINST UNITED STATES.—

8 (A) ESTABLISHMENT OF PROCESS FOR

9 CLAIMS.—The Attorney General shall establish

10 an alternative dispute resolution process for the

11 resolution of tort claims consisting of medical

12 malpractice claims brought against the United

13 States under chapter 171 of title 28, United

14 States Code. Under such process, the resolution

15 of a claim shall occur after the completion of

16 the administrative claim process applicable to

17 the claim under section 2675 of such title.

18 (B) REQUIREMENT FOR INITIAL RESOLU19 TION UNDER PROCESS.—A medical malpractice

20 liability action based on a medical malpractice

21 claim described in subparagraph (A) may not

22 be brought in any Federal court unless the

23 claim has been initially resolved under the alter24 native dispute resolution process established by

25 the Attorney General under such subparagraph.
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1 (b) INITIAL RESOLUTION OF CLAIMS UNDER

2 ADR.—For purposes of subsection (a), an action is ‘‘ini3 tially resolved’’ under an alternative dispute resolution

4 system if—

5 (1) the ADR reaches a decision on whether the

6 defendant is liable to the plaintiff for damages; and

7 (2) if the ADR determines that the defendant

8 is liable, the ADR reaches a decision on the amount

9 of damages assessed against the defendant.

10 (c) LEGAL EFFECT OF UNCONTESTED ADR DECI11 SION.—If no party files a notice of intent to contest a deci12 sion reached under an alternative dispute resolution sys13 tem pursuant to section 103(a)(1), the decision shall be

14 enforced by a court of competent jurisdiction in the same

15 manner as the verdict of a medical malpractice liability

16 action adjudicated in a State or Federal trial court.

17 SEC. 103. PROCEDURAL REQUIREMENTS FOR FILING OF

18 ACTIONS.

19 (a) PROCEDURES FOR FILING ACTIONS AFTER DECI20 SION.—

21 (1) NOTICE OF INTENT TO CONTEST DECI22 SION.—Not later than 60 days after a decision is is23 sued with respect to a medical malpractice claim

24 under an alternative dispute resolution system, each

25 party affected by the decision shall submit a sealed
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1 statement to a court of competent jurisdiction indi2 cating whether or not the party intends to contest

3 the decision.

4 (2) DEADLINE FOR FILING ACTION.—A medical

5 malpractice liability action may not be brought by a

6 party unless—

7 (A) the party has filed the notice of intent

8 required by paragraph (1); and

9 (B) the party files the action in a court of

10 competent jurisdiction not later than 90 days

11 after the decision resolving the medical mal12 practice claim that is the subject of the action

13 is issued under the applicable alternative dis14 pute resolution system.

15 (3) COURT OF COMPETENT JURISDICTION.—

16 For purposes of this subsection, the term ‘‘court of

17 competent jurisdiction’’ means—

18 (A) with respect to actions filed in a State

19 court, the appropriate State trial court; and

20 (B) with respect to actions filed in a Fed21 eral court, the appropriate United States dis22 trict court.

23 (b) CERTIFICATE OF MERIT.—

24 (1) IN GENERAL.—Each individual who files a

25 notice of intent to contest a decision under the alter-
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1 native dispute resolution system pursuant to sub2 section (a)(1) shall, not later than 90 days after the

3 applicable medical malpractice liability action is

4 filed—

5 (A) submit a certificate of merit described

6 in subsection (b); or

7 (B) post a surety (or equivalent security)

8 bond of $4,000 (or, during the 45-day period

9 that begins on the date the action is filed, a

10 cost bond of $2,000) with the court.

11 (2) EXTENSION OF DEADLINE.—On the motion

12 of any party to the action or upon a written agree13 ment of the parties filed with the court, the court

14 may extend the deadline specified in paragraph (1)

15 for a period not to exceed 30 days.

16 (3) WAIVER FOR GOOD CAUSE.—The court may

17 waive the application of paragraph (1) to a plaintiff

18 if the plaintiff shows good cause that such para19 graph should not apply.

20 (4) CERTIFICATE OF MERIT DESCRIBED.—In

21 this subsection, a ‘‘certificate of merit’’ means—

22 (A) with respect to a plaintiff, an affidavit

23 declaring that the individual (or the individual’s

24 attorney) has obtained a written opinion from a

25 medical expert who is knowledgeable of the rel-
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1 evant medical issues involved in the action that

2 the defendant was negligent and the defend3 ant’s conduct was a proximate cause of the al4 leged injury that is the subject of the action;

5 and

6 (B) with respect to a defendant, an affida7 vit declaring that the individual (or the individ8 ual’s attorney) has obtained a written opinion

9 from a medical expert who is knowledgeable of

10 the relevant medical issues involved in the ac11 tion that the defendant followed the appropriate

12 standards or procedures and exercised due care,

13 and that the defendant’s conduct was not the

14 proximate cause of the alleged injury that is the

15 subject of the action.

16 (c) EFFECT OF FAILURE TO MEET REQUIREMENT

17 TO FILE CERTIFICATE.—If an individual fails to file a cer18 tificate of merit with respect to a medical malpractice li19 ability action under subsection (b)—

20 (1) if the individual is a plaintiff, the court

21 shall dismiss the action without prejudice to the

22 refiling of the action by the individual;

23 (2) if the individual is a defendant, the court

24 shall award judgment to the plaintiff based on the

25 plaintiff’s pleadings; and
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1 (3) the court shall require the individual to pay

2 any court costs incurred by the opposing parties as

3 a result of the filing of the action.

4 (d) JUDICIAL NOTICE OF DECISION UNDER ADR

5 SYSTEM.—A medical malpractice liability action brought

6 after a decision on the claim that is the subject of the

7 action has been reached under an alternative dispute reso8 lution system shall be tried de novo, except that the court

9 shall take judicial notice of such decision and (in the case

10 of an action tried by a jury) shall read the decision to

11 the jury prior to any opening statements and make the

12 decision available to the jury during the trial.

13 SEC. 104. TREATMENT OF NONECONOMIC AND PUNITIVE

14 DAMAGES.

15 (a) LIMITATION ON NONECONOMIC DAMAGES.—The

16 total amount of noneconomic damages that may be award17 ed to a claimant and the members of the claimant’s family

18 for losses resulting from the injury which is the subject

19 of a medical malpractice liability action may not exceed

20 $250,000, regardless of the number of parties against

21 whom the action is brought or the number of actions

22 brought with respect to the injury.

23 (b) TREATMENT OF PUNITIVE DAMAGES AWARDED

24 AGAINST MANUFACTURER OF MEDICAL PRODUCT.—
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1 (1) LIMITATION ON AMOUNT OF AWARD.—The

2 total amount of punitive or exemplary damages that

3 may be awarded with respect to an injury which is

4 the subject of a medical malpractice liability action

5 may not exceed twice the total amount of other dam6 ages awarded with respect to the injury.

7 (2) DISTRIBUTION OF AWARD.—Of the total

8 amount of any punitive damages awarded in a medi9 cal malpractice liability action, 50 percent shall be

10 paid to the claimant and 50 percent shall be paid to

11 the State in which the action is brought (or, in a

12 case brought in Federal court, in the State in which

13 the health care services that caused the injury that

14 is the subject of the action were provided) for the

15 purposes of carrying out the activities described in

16 paragraph (3).

17 (3) ACTIVITIES DESCRIBED.—A State shall use

18 amounts paid pursuant to paragraph (2) to carry

19 out activities to assure the safety and quality of

20 health care services provided in the State, including

21 (but not limited to)—

22 (A) implementing health care quality as23 surance programs;

24 (B) carrying out programs to reduce mal25 practice-related costs for providers volunteering
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1 to provide services in medically underserved

2 areas; and

3 (C) implementing and operating a State al4 ternative dispute resolution system certified by

5 the Secretary under section 203.

6 (4) MAINTENANCE OF EFFORT.—A State shall

7 use any amounts paid pursuant to paragraph (2) to

8 supplement and not to replace amounts spent by the

9 State for the activities described in paragraph (3).

10 (c) SEVERAL LIABILITY FOR NONECONOMIC DAM11 AGES.—The liability of each defendant for noneconomic

12 damages shall be several only and shall not be joint, and

13 each defendant shall be liable only for the amount of non14 economic damages allocated to the defendant in direct pro15 portion to the defendant’s percentage of responsibility (as

16 determined by the trier of fact).

17 SEC. 105. PERIODIC PAYMENTS FOR FUTURE LOSSES.

18 (a) PERIODIC PAYMENTS PERMITTED.—

19 (1) IN GENERAL.—In any medical malpractice

20 liability action in which the damages awarded for fu21 ture economic loss exceeds $100,000, a defendant

22 may not be required to pay such damages in a sin23 gle, lump-sum payment, but may be permitted to

24 make such payments on a periodic basis if the

25 court—
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1 (A) determines that economic damages in2 curred through the date of the award shall be

3 paid;

4 (B) bases the periods for such payments

5 upon projections of when such expenses are

6 likely to be incurred; and

7 (C) determines that the periodic payments

8 are adequately secured.

9 (b) WAIVER.—A court may waive the application of

10 subsection (a) with respect to a defendant if the court de11 termines that it is not in the best interests of the plaintiff

12 to receive payments for damages on such a periodic basis.

13 SEC. 106. TREATMENT OF ATTORNEY’S FEES AND OTHER

14 COSTS.

15 (a) REQUIRING PARTY CONTESTING ADR RULING

16 TO PAY ATTORNEY’S FEES AND OTHER COSTS.—

17 (1) IN GENERAL.—The court in a medical mal18 practice liability action shall require the party that

19 (pursuant to section 103(a)(1)) contested the ruling

20 of the alternative dispute resolution system with re21 spect to the medical malpractice claim that is the

22 subject of the action to pay to the opposing party

23 the costs incurred by the opposing party under the

24 action, including attorney’s fees, fees paid to expert

25 witnesses, and other litigation expenses (but not in-
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1 cluding court costs, filing fees, or other expenses

2 paid directly by the party to the court, or any fees

3 or costs associated with the resolution of the claim

4 under the alternative dispute resolution system), but

5 only if—

6 (A) in the case of an action in which the

7 party that contested the ruling is the claimant,

8 the amount of damages awarded to the party

9 under the action is less than the amount of

10 damages awarded to the party under the ADR

11 system; and

12 (B) in the case of an action in which the

13 party that contested the ruling is the defendant,

14 the amount of damages assessed against the

15 party under the action is greater than the

16 amount of damages assessed under the ADR

17 system.

18 (2) EXCEPTIONS.—Paragraph (1) shall not

19 apply if—

20 (A) the party contesting the ruling made

21 under the previous alternative dispute resolu22 tion system shows that—

23 (i) the ruling was procured by corrup24 tion, fraud, or undue means,
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1 (ii) there was partiality or corruption

2 under the system,

3 (iii) there was other misconduct under

4 the system that materially prejudiced the

5 party’s rights, or

6 (iv) the ruling was based on an error

7 of law;

8 (B) the party contesting the ruling made

9 under the alternative dispute resolution system

10 presents new evidence before the trier of fact

11 that was not available for presentation under

12 the ADR system;

13 (C) the medical malpractice liability action

14 raised a novel issue of law; or

15 (D) the court finds that the application of

16 such paragraph to a party would constitute an

17 undue hardship, and issues an order waiving or

18 modifying the application of such paragraph

19 that specifies the grounds for the court’s deci20 sion.

21 (3) LIMIT ON ATTORNEY’S FEES PAID.—Attor22 neys’ fees that are required to be paid under para23 graph (1) by the contesting party shall not exceed

24 the amount of the attorneys’ fees incurred by the

25 contesting party in the action. If the attorneys’ fees
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1 of the contesting party are based on a contingency

2 fee agreement, the amount of attorneys’ fees for

3 purposes of the preceding sentence shall not exceed

4 the reasonable value of those services.

5 (4) RECORDS.—In order to receive attorneys’

6 fees under paragraph (1), counsel of record in the

7 medical malpractice liability action involved shall

8 maintain accurate, complete records of hours worked

9 on the action, regardless of the fee arrangement

10 with the client involved.

11 (b) CONTINGENCY FEE DEFINED.—As used in this

12 section, the term ‘‘contingency fee’’ means any fee for pro13 fessional legal services which is, in whole or in part, con14 tingent upon the recovery of any amount of damages,

15 whether through judgment or settlement.

16 SEC. 107. UNIFORM STATUTE OF LIMITATIONS.

17 (a) IN GENERAL.—Except as provided in subsection

18 (b), no medical malpractice claim may be initiated after

19 the expiration of the 2-year period that begins on the date

20 on which the alleged injury that is the subject of such

21 claim was discovered, but in no event may such a claim

22 be initiated after the expiration of the 4-year period that

23 begins on the date on which the alleged injury that is the

24 subject of such claim occurred.
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1 (b) EXCEPTION FOR MINORS.—In the case of an al2 leged injury suffered by a minor who has not attained 6

3 years of age, a medical malpractice claim may not be initi4 ated after the expiration of the 2-year period that begins

5 on the date on which the alleged injury that is the subject

6 of such claim was discovered or should reasonably have

7 been discovered, but in no event may such a claim be initi8 ated after the date on which the minor attains 12 years

9 of age.

10 SEC. 108. SPECIAL PROVISION FOR CERTAIN OBSTETRIC

11 SERVICES.

12 (a) IN GENERAL.—In the case of a medical mal13 practice claim relating to services provided during labor

14 or the delivery of a baby, if the health care professional

15 or health care provider against whom the claim is brought

16 did not previously treat the claimant for the pregnancy,

17 the trier of fact may not find that such professional or

18 provider committed malpractice and may not assess dam19 ages against such professional or provider unless the mal20 practice is proven by clear and convincing evidence.

21 (b) APPLICABILITY TO GROUP PRACTICES OR

22 AGREEMENTS AMONG PROVIDERS.—For purposes of sub23 section (a), a health care professional shall be considered

24 to have previously treated an individual for a pregnancy

25 if the professional is a member of a group practice whose
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1 members previously treated the individual for the preg2 nancy or is providing services to the individual during

3 labor or the delivery of a baby pursuant to an agreement

4 with another professional.

5 SEC. 109. OPTIONAL APPLICATION OF PRACTICE GUIDE6 LINES.

7 (a) DEVELOPMENT AND CERTIFICATION OF GUIDE8 LINES.—Each State may develop, for certification by the

9 Secretary, a set of specialty clinical practice guidelines,

10 based on recommended guidelines from national specialty

11 societies, to be updated annually. In the absence of rec12 ommended guidelines from such societies, each State may

13 develop such guidelines based on such criteria as the State

14 considers appropriate (including based on recommended

15 guidelines developed by the Agency for Health Care Policy

16 and Research).

17 (b) PROVISION OF HEALTH CARE UNDER GUIDE18 LINES.—Notwithstanding any other provision of law, in

19 any medical malpractice liability action arising from the

20 conduct of a health care provider or health care profes21 sional, if such conduct was in accordance with a guideline

22 developed by the State in which the conduct occurred and

23 certified by the Secretary under subsection (a), the guide24 line—
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1 (1) may be introduced by any party to the ac2 tion (including a health care provider, health care

3 professional, or patient); and

4 (2) if introduced, shall establish a rebuttable

5 presumption that the conduct was in accordance

6 with the appropriate standard of medical care, which

7 may only be overcome by the presentation of clear

8 and convincing evidence on behalf of the party

9 against whom the presumption operates.

10 SEC. 110. JURISDICTION OF FEDERAL COURTS.

11 Nothing in this Act shall be construed to establish

12 jurisdiction over any medical malpractice liability action

13 in the district courts of the United States on the basis

14 of sections 1331 or 1337 of title 28, United States Code.

15 SEC. 111. PREEMPTION.

16 (a) IN GENERAL.—This Act supersedes any State

17 law only to the extent that the State law permits the recov18 ery by a claimant or the assessment against a defendant

19 of a greater amount of damages or establishes a less strict

20 standard of proof for determining whether a defendant has

21 committed malpractice, than the provisions of this Act.

22 (b) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE

23 OF LAW OR VENUE.—Nothing in this Act shall be con24 strued to—
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1 (1) waive or affect any defense of sovereign im2 munity asserted by any State under any provision of

3 law;

4 (2) waive or affect any defense of sovereign im5 munity asserted by the United States;

6 (3) affect the applicability of any provision of

7 the Foreign Sovereign Immunities Act of 1976;

8 (4) preempt State choice-of-law rules with re9 spect to claims brought by a foreign nation or a citi10 zen of a foreign nation; or

11 (5) affect the right of any court to transfer

12 venue or to apply the law of a foreign nation or to

13 dismiss a claim of a foreign nation or of a citizen

14 of a foreign nation on the ground in inconvenient

15 forum.

16 TITLE II—REQUIREMENTS FOR

17 STATE ALTERNATIVE DIS18 PUTE RESOLUTION SYSTEMS

19 (ADR)

20 SEC. 201. BASIC REQUIREMENTS.

21 (a) IN GENERAL.—A State’s alternative dispute reso22 lution system meets the requirements of this section if the

23 system—

24 (1) applies to all medical malpractice claims

25 under the jurisdiction of the courts of that State;
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1 (2) requires that a written opinion resolving the

2 dispute be issued not later than 6 months after the

3 date by which each party against whom the claim is

4 filed has received notice of the claim (other than in

5 exceptional cases for which a longer period is re6 quired for the issuance of such an opinion), and that

7 the opinion contain—

8 (A) findings of fact relating to the dispute,

9 and

10 (B) a description of the costs incurred in

11 resolving the dispute under the system (includ12 ing any fees paid to the individuals hearing and

13 resolving the claim), together with an appro14 priate assessment of the costs against any of

15 the parties;

16 (3) requires individuals who hear and resolve

17 claims under the system to meet such qualifications

18 as the State may require (in accordance with regula19 tions of the Secretary);

20 (4) is approved by the State or by local govern21 ments in the State;

22 (5) with respect to a State system that consists

23 of multiple dispute resolution procedures—
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1 (A) permits the parties to a dispute to se2 lect the procedure to be used for the resolution

3 of the dispute under the system, and

4 (B) if the parties do not agree on the pro5 cedure to be used for the resolution of the dis6 pute, assigns a particular procedure to the par7 ties;

8 (6) provides for the transmittal to the State

9 agency responsible for monitoring or disciplining

10 health care professionals and health care providers

11 of any findings made under the system that such a

12 professional or provider committed malpractice, un13 less, during the 90-day period beginning on the date

14 the system resolves the claim against the profes15 sional or provider, the professional or provider

16 brings an action contesting the decision made under

17 the system; and

18 (7) provides for the regular transmittal to the

19 Administrator for Health Care Policy and Research

20 of information on disputes resolved under the sys21 tem, in a manner that assures that the identity of

22 the parties to a dispute shall not be revealed.

23 (b) APPLICATION OF MALPRACTICE LIABILITY

24 STANDARDS TO ALTERNATIVE DISPUTE RESOLUTION.—

25 The provisions of part 1 (other than section 102) shall
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1 apply with respect to claims brought under a State alter2 native dispute resolution system or the alternative Federal

3 system in the same manner as such provisions apply with

4 respect to medical malpractice liability actions brought in

5 the State.

6 SEC. 202. CERTIFICATION OF STATE SYSTEMS; APPLICABIL7 ITY OF ALTERNATIVE FEDERAL SYSTEM.

8 (a) CERTIFICATION.—

9 (1) IN GENERAL.—Not later than October 1 of

10 each year (beginning with 1996), the Secretary, in

11 consultation with the Attorney General, shall deter12 mine whether a State’s alternative dispute resolution

13 system meets the requirements of this title for the

14 following calendar year.

15 (2) BASIS FOR CERTIFICATION.—The Secretary

16 shall certify a State’s alternative dispute resolution

17 system under this subsection for a calendar year if

18 the Secretary determines under paragraph (1) that

19 the system meets the requirements of section 201,

20 including the requirement described in section 104

21 that punitive damages awarded under the system are

22 paid to the State for the uses described in such sec23 tion.

24 (b) APPLICABILITY OF ALTERNATIVE FEDERAL SYS25 TEM.—
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1 (1) ESTABLISHMENT AND APPLICABILITY.—

2 Not later than October 1, 1996, the Secretary, in

3 consultation with the Attorney General, shall estab4 lish by rule an alternative Federal ADR system for

5 the resolution of medical malpractice claims during

6 a calendar year in States that do not have in effect

7 an alternative dispute resolution system certified

8 under subsection (a) for the year.

9 (2) REQUIREMENTS FOR SYSTEM.—Under the

10 alternative Federal ADR system established under

11 paragraph (1)—

12 (A) paragraphs (1), (2), (6), and (7) of

13 section 201(a) shall apply to claims brought

14 under the system;

15 (B) if the system provides for the resolu16 tion of claims through arbitration, the claims

17 brought under the system shall be heard and

18 resolved by arbitrators appointed by the Sec19 retary in consultation with the Attorney Gen20 eral; and

21 (C) with respect to a State in which the

22 system is in effect, the Secretary may (at the

23 State’s request) modify the system to take into

24 account the existence of dispute resolution pro-
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1 cedures in the State that affect the resolution

2 of medical malpractice claims.

3 (3) TREATMENT OF STATES WITH ALTER4 NATIVE SYSTEM IN EFFECT.—If the alternative Fed5 eral ADR system established under this subsection is

6 applied with respect to a State for a calendar year,

7 the State shall make a payment to the United States

8 (at such time and in such manner as the Secretary

9 may require) in an amount equal to 110 percent of

10 the costs incurred by the United States during the

11 year as a result of the application of the system with

12 respect to the State.

13 SEC. 203. REPORTS ON IMPLEMENTATION AND EFFECTIVE14 NESS OF ALTERNATIVE DISPUTE RESOLU15 TION SYSTEMS.

16 (a) IN GENERAL.—Not later than 5 years after the

17 date of the enactment of this Act, the Secretary shall pre18 pare and submit to the Congress a report describing and

19 evaluating State alternative dispute resolution systems op20 erated pursuant to this title and the alternative Federal

21 system established under section 202(b).

22 (b) CONTENTS OF REPORT.—The Secretary shall in23 clude in the report prepared and submitted under sub24 section (a)—

25 (1) information on—
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1 (A) the effect of the alternative dispute

2 resolution systems on the cost of health care

3 within each State,

4 (B) the impact of such systems on the ac5 cess of individuals to health care within the

6 State, and

7 (C) the effect of such systems on the qual8 ity of health care provided within the State; and

9 (2) to the extent that such report does not pro10 vide information on no-fault systems operated by

11 States as alternative dispute resolution systems pur12 suant to this title, an analysis of the feasibility and

13 desirability of establishing a system under which

14 medical malpractice claims shall be resolved on a no15 fault basis.

16 TITLE III—DEFINITIONS

17 SEC. 301. DEFINITIONS.

18 As used in this Act:

19 (1) ALTERNATIVE DISPUTE RESOLUTION SYS20 TEM.—The term ‘‘alternative dispute resolution sys21 tem’’ means a system that is enacted or adopted by

22 a State to resolve medical malpractice claims other

23 than through a medical malpractice liability action.

24 (2) CLAIMANT.—The term ‘‘claimant’’ means

25 any person who brings a health care liability action
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1 and, in the case of an individual who is deceased, in2 competent, or a minor, the person on whose behalf

3 such an action is brought.

4 (3) CLEAR AND CONVINCING EVIDENCE.—The

5 term ‘‘clear and convincing evidence’’ is that meas6 ure or degree of proof that will produce in the mind

7 of the trier of fact a firm belief or conviction as to

8 the truth of the allegations sought to be established,

9 except that such measure or degree of proof is more

10 than that required under preponderance of the evi11 dence, but less than that required for proof beyond

12 a reasonable doubt.

13 (4) ECONOMIC DAMAGES.—The term ‘‘economic

14 damages’’ means damages paid to compensate an in15 dividual for losses for hospital and other medical ex16 penses, lost wages, lost employment, and other pecu17 niary losses.

18 (5) HEALTH CARE PROFESSIONAL.—The term

19 ‘‘health care professional’’ means any individual who

20 provides health care services in a State and who is

21 required by State law or regulation to be licensed or

22 certified by the State to provide such services in the

23 State.

24 (6) HEALTH CARE PROVIDER.—The term

25 ‘‘health care provider’’ means any organization or
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1 institution that is engaged in the delivery of health

2 care services in a State that is required by State law

3 or regulation to be licensed or certified by the State

4 to engage in the delivery of such services in the

5 State.

6 (7) INJURY.—The term ‘‘injury’’ means any ill7 ness, disease, or other harm that is the subject of

8 a medical malpractice claim.

9 (8) MEDICAL MALPRACTICE LIABILITY AC10 TION.—The term ‘‘medical malpractice liability ac11 tion’’ means any civil action brought pursuant to

12 State law in which a plaintiff alleges a medical mal13 practice claim against a health care provider or

14 health care professional, but does not include any

15 action in which the plaintiff’s sole allegation is an al16 legation of an intentional tort.

17 (9) MEDICAL MALPRACTICE CLAIM.—The term

18 ‘‘medical malpractice claim’’ means any claim relat19 ing to the provision of (or the failure to provide)

20 health care services or the use of a medical product,

21 without regard to the theory of liability asserted,

22 and includes any third-party claim, cross-claim,

23 counterclaim, or contribution claim in a medical

24 malpractice liability action.

25 (10) MEDICAL PRODUCT.—
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1 (A) IN GENERAL.—The term ‘‘medical

2 product’’ means, with respect to the allegation

3 of a claimant, a drug (as defined in section

4 201(g)(1) of the Federal Food, Drug, and Cos5 metic Act (21 U.S.C. 321(g)(1)) or a medical

6 device (as defined in section 201(h) of the Fed7 eral Food, Drug, and Cosmetic Act (21 U.S.C.

8 321(h)) if—

9 (i) such drug or device was subject to

10 premarket approval under section 505,

11 507, or 515 of the Federal Food, Drug,

12 and Cosmetic Act (21 U.S.C. 355, 357, or

13 360e) or section 351 of the Public Health

14 Service Act (42 U.S.C. 262) with respect

15 to the safety of the formulation or per16 formance of the aspect of such drug or de17 vice which is the subject of the claimant’s

18 allegation or the adequacy of the packag19 ing or labeling of such drug or device, and

20 such drug or device is approved by the

21 Food and Drug Administration; or

22 (ii) the drug or device is generally rec23 ognized as safe and effective under regula24 tions issued by the Secretary of Health

25 and Human Services under section 201(p)
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1 of the Federal Food, Drug, and Cosmetic

2 Act (21 U.S.C. 321(p)).

3 (B) EXCEPTION IN CASE OF MISREPRE4 SENTATION OR FRAUD.—Notwithstanding sub5 paragraph (A), the term ‘‘medical product’’

6 shall not include any product described in such

7 subparagraph if the claimant shows that the

8 product is approved by the Food and Drug Ad9 ministration for marketing as a result of with10 held information, misrepresentation, or an ille11 gal payment by manufacturer of the product.

12 (11) NONECONOMIC DAMAGES.—The term

13 ‘‘noneconomic damages’’ means damages paid to

14 compensate an individual for losses for physical and

15 emotional pain, suffering, inconvenience, physical

16 impairment, mental anguish, disfigurement, loss of

17 enjoyment of life, loss of consortium, and other

18 nonpecuniary losses, but does not include punitive

19 damages.

20 (12) PUNITIVE DAMAGES.—The term ‘‘punitive

21 damages’’ means compensation, in addition to com22 pensation for actual harm suffered, that is awarded

23 for the purpose of punishing a person for conduct
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1 deemed to be malicious, wanton, willful, or exces2 sively reckless.

Æ

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