I

103D CONGRESS

2D SESSION H. R. 4791

To establish Federal standards for the resolution of health care malpractice

claims, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 19, 1994

Mr. GRAMS (for himself, Mr. GINGRICH, Mr. ARMEY, Mr. DELAY, Mr. SOLOMON, Mr. STENHOLM, Mr. HASTERT, Mr. DEAL, Mr. STEARNS, Mr. TALENT, Mr. DREIER, Mr. SAXTON, Mr. KNOLLENBERG, Mr. INHOFE, Mr.

ZIMMER, Mr. CALVERT, Mr. STUMP, Mr. TORKILDSEN, Mr. HEFLEY, Mr.

DOOLITTLE, Mr. BAKER of California, Mr. HORN, Mr. KING, Mr. LEWIS

of Florida, Mrs. FOWLER, Mr. HANCOCK, Mr. LINDER, Mr. BARCIA of

Michigan, and Mr. SMITH of Oregon), introduced the following bill; which

was referred to the Committee on the Judiciary

A BILL

To establish Federal standards for the resolution of health

care malpractice claims, and for other purposes.

1 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 of 1994’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.
2

•HR 4791 IH

TITLE I—GENERAL PROVISIONS

Sec. 101. Findings.

Sec. 102. Definitions.

Sec. 103. Period of applicability.

TITLE II—FEDERAL REFORM OF HEALTH CARE MALPRACTICE

Sec. 201. Requirement for initial resolution of action through alternative dispute resolution.

Sec. 202. Liability of multiple defendants several only.

Sec. 203. Treatment of noneconomic and punitive damages.

Sec. 204. General restrictions on payment of damages.

Sec. 205. Uniform statute of limitations.

Sec. 206. Treatment of attorney’s fees and other costs.

Sec. 207. Qualifications for expert witnesses.

Sec. 208. Preemption; effect on sovereign immunity.

TITLE III—REQUIREMENTS FOR ADR

Sec. 301. Basic requirements for State alternative dispute resolution systems.

Sec. 302. Certification of State systems; applicability of alternative Federal system.

1 TITLE I—GENERAL PROVISIONS

2 SEC. 101. FINDINGS.

3 Congress finds that—

4 (1) the health care and insurance industries are

5 industries affecting interstate commerce and the

6 health care malpractice litigation systems existing

7 throughout the United States affect interstate com8 merce by contributing to the high cost of health care

9 and premiums for malpractice insurance purchased

10 by health care providers; and

11 (2) the Federal Government has a major inter12 est in health care as a direct provider of health care

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

14 a demonstrated interest in assessing the quality of
3

•HR 4791 IH

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

2 the evaluative activities of several Federal agencies.

3 SEC. 102. DEFINITIONS.

4 In this Act:

5 (1) ALTERNATIVE DISPUTE RESOLUTION SYS6 TEM; ADR.—The term ‘‘alternative dispute resolu7 tion system’’ or ‘‘ADR’’ means a system established

8 under this Act that provides for the resolution of

9 health care malpractice claims in a manner other

10 than through health care malpractice actions.

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

12 any person who alleges a health care malpractice

13 claim, and any person on whose behalf such a claim

14 is alleged, including the decedent in the case of an

15 action brought through or on behalf of an estate.

16 (3) ECONOMIC LOSSES.—The term ‘‘economic

17 losses’’ means losses for hospital and medical ex18 penses, lost wages, lost employment, and other pecu19 niary losses.

20 (4) HEALTH CARE MALPRACTICE ACTION.—The

21 term ‘‘health care malpractice action’’ means a civil

22 action alleging a health care malpractice claim

23 against a health care provider or health care profes24 sional or a manufacturer of a medical product.
4

•HR 4791 IH

1 (5) HEALTH CARE MALPRACTICE CLAIM.—The

2 term ‘‘health care malpractice claim’’ means any

3 claim relating to the provision of (or the failure to

4 provide) health care services or the use of a medical

5 product, if the claim is based on negligence or gross

6 negligence, breach of express or implied warranty or

7 contract, or failure to discharge a duty to warn or

8 instruct to obtain consent.

9 (6) HEALTH CARE PROFESSIONAL.—The term

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

11 provides health care services in a State and who is

12 required by State law or regulation to be licensed or

13 certified by the State to provide such services in the

14 State, including (but not limited to) a physician,

15 nurse, chiropractor, nurse midwife, physical thera16 pist, social worker, or physician assistant.

17 (7) HEALTH CARE PROVIDER.—The term

18 ‘‘health care provider’’ means any organization or

19 institution that is engaged in the delivery of health

20 care services in a State and that is required by State

21 law or regulation to be licensed or certified by the

22 State to engage in the delivery of such services in

23 the State.
5

•HR 4791 IH

1 (8) INJURY.—The term ‘‘injury’’ means any in2 jury, illness, disease, or other harm that is the sub3 ject of a health care malpractice claim.

4 (9) MEDICAL PRODUCT.—

5 (A) IN GENERAL.—The term ‘‘medical

6 product’’ means a drug (as defined in section

7 201(g)(1) of the Federal Food, Drug, and Cos8 metic Act (21 U.S.C. 321(g)(1)) or a medical

9 device (as defined in section 201(h) of the Fed10 eral Food, Drug, and Cosmetic Act (21 U.S.C.

11 321(h)) if—

12 (i) such drug or device was subject to

13 premarket approval under section 505,

14 507, or 515 of the Federal Food, Drug,

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

16 360e) or section 351 of the Public Health

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

18 to the safety of the formulation or per19 formance of the aspect of such drug or de20 vice which is the subject of the claimant’s

21 allegation or the adequacy of the packag22 ing or labeling of such drug or device, and

23 such drug or device is approved by the

24 Food and Drug Administration; or
6

•HR 4791 IH

1 (ii) the drug or device is generally rec2 ognized as safe and effective under regula3 tions issued by the Secretary of Health

4 and Human Services under section 201(p)

5 of the Federal Food, Drug, and Cosmetic

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

7 (B) EXCEPTION IN CASE OF MISREPRE8 SENTATION OR FRAUD.—Notwithstanding sub9 paragraph (A), the term ‘‘medical product’’

10 shall not include any product described in such

11 subparagraph if it is shown that the product is

12 approved by the Food and Drug Administration

13 for marketing as a result of withheld informa14 tion, misrepresentation, or an illegal payment

15 by the manufacturer of the product.

16 (10) NONECONOMIC DAMAGES.—The term

17 ‘‘noneconomic damages’’ means losses for physical

18 and emotional pain, suffering, inconvenience, phys19 ical impairment, mental anguish, disfigurement, loss

20 of enjoyment of life, and other nonpecuniary losses,

21 but does not include punitive or exemplary damages.

22 (11) PUNITIVE DAMAGES; EXEMPLARY DAM23 AGES.—The terms ‘‘punitive damages’’ and ‘‘exem24 plary damages’’ mean compensation, in addition to

25 compensation for actual harm suffered, that is
7

•HR 4791 IH

1 awarded for the purpose of punishing a person for

2 conduct deemed to be malicious, wanton, willful, or

3 excessively reckless.

4 (12) SECRETARY.—The term ‘‘Secretary’’

5 means the Secretary of Health and Human Services.

6 (13) STATE.—Except as otherwise provided, the

7 term ‘‘State’’ means each of the several States, the

8 District of Columbia, Puerto Rico, the Virgin Is9 lands, Guam, American Samoa, and the Northern

10 Mariana Islands.

11 SEC. 103. PERIOD OF APPLICABILITY.

12 The provisions of this Act shall apply to claims initi13 ated during the 5-year period beginning upon the expira14 tion of the 1-year period that begins on the date of the

15 enactment of this Act.

16 TITLE II—FEDERAL REFORM OF

17 HEALTH CARE MALPRACTICE

18 SEC. 201. REQUIREMENT FOR INITIAL RESOLUTION OF AC19 TION THROUGH ALTERNATIVE DISPUTE RES20 OLUTION.

21 (a) IN GENERAL.—

22 (1) STATE CASES.—A health care malpractice

23 action may not be brought in any State court during

24 a calendar year unless the health care malpractice

25 claim that is the subject of the action has been ini-
8

•HR 4791 IH

1 tially resolved under an alternative dispute resolu2 tion system certified for the year by the Secretary

3 under section 302(a), or, in the case of a State in

4 which such a system is not in effect for the year,

5 under the alternative Federal system established

6 under section 302(b).

7 (2) FEDERAL DIVERSITY ACTIONS.—A health

8 care malpractice action may not be brought in any

9 Federal court under section 1332 of title 28, United

10 States Code, during a calendar year unless the

11 health care malpractice claim that is the subject of

12 the action has been initially resolved under the alter13 native dispute resolution system referred to in para14 graph (1) that applied in the State whose law ap15 plies in such action.

16 (3) CLAIMS AGAINST UNITED STATES.—

17 (A) ESTABLISHMENT OF PROCESS FOR

18 CLAIMS.—The Attorney General shall establish

19 an alternative dispute resolution process for the

20 resolution of tort claims consisting of health

21 care malpractice claims brought against the

22 United States under chapter 171 of title 28,

23 United States Code. Under such process, the

24 resolution of a claim shall occur after the com25 pletion of the administrative claim process ap-
9

•HR 4791 IH

1 plicable to the claim under section 2675 of such

2 title.

3 (B) REQUIREMENT FOR INITIAL RESOLU4 TION UNDER PROCESS.—A health care mal5 practice action based on a health care mal6 practice claim described in subparagraph (A)

7 may not be brought in any Federal court unless

8 the claim has been initially resolved under the

9 alternative dispute resolution process estab10 lished by the Attorney General under such sub11 paragraph.

12 (b) INITIAL RESOLUTION OF CLAIMS UNDER

13 ADR.—For purposes of subsection (a), an action is ‘‘ini14 tially resolved’’ under an alternative dispute resolution

15 system if—

16 (A) the ADR reaches a decision on wheth17 er the defendant is liable to the plaintiff for

18 damages; and

19 (B) if the ADR determines that the de20 fendant is liable, the ADR reaches a decision on

21 the amount of damages assessed against the de22 fendant.

23 (c) PROCEDURES FOR FILING ACTIONS.—

24 (1) NOTICE OF INTENT TO CONTEST DECI25 SION.—Not later than 60 days after a decision is is-
10

•HR 4791 IH

1 sued with respect to a health care malpractice claim

2 under an alternative dispute resolution system, each

3 party affected by the decision shall submit a sealed

4 statement to a court of competent jurisdiction indi5 cating whether or not the party intends to contest

6 the decision.

7 (2) DEADLINE FOR FILING ACTION.—A health

8 care malpractice action may not be brought by a

9 party unless—

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

11 required by paragraph (1); and

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

13 competent jurisdiction not later than 90 days

14 after the decision resolving the health care mal15 practice claim that is the subject of the action

16 is issued under the applicable alternative dis17 pute resolution system.

18 (3) COURT OF COMPETENT JURISDICTION.—

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

20 competent jurisdiction’’ means—

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

22 court, the appropriate State trial court; and

23 (B) with respect to actions filed in a Fed24 eral court, the appropriate United States dis25 trict court.
11

•HR 4791 IH

1 (d) LEGAL EFFECT OF UNCONTESTED ADR DECI2 SION.—The decision reached under an alternative dispute

3 resolution system shall, for purposes of enforcement by a

4 court of competent jurisdiction, have the same status in

5 the court as the verdict of a health care malpractice action

6 adjudicated in a State or Federal trial court. The previous

7 sentence shall not apply to a decision that is contested

8 by a party affected by the decision pursuant to subsection

9 (c)(1).

10 SEC. 202. LIABILITY OF MULTIPLE DEFENDANTS SEVERAL

11 ONLY.

12 The liability of each defendant in a health care mal13 practice action shall be several only and shall not be joint,

14 and each defendant’s fault shall be determined on the

15 basis of a percentage allocated to the defendant in direct

16 proportion to the defendant’s percentage of responsibility

17 (as determined by the trier of fact).

18 SEC. 203. TREATMENT OF NONECONOMIC AND PUNITIVE

19 DAMAGES.

20 (a) LIMITATION ON AMOUNT OF NONECONOMIC

21 DAMAGES.—The total amount of noneconomic damages

22 that may be awarded to a claimant and the members of

23 the claimant’s family for losses resulting from the injury

24 which is the subject of a health care malpractice action

25 may not exceed $250,000, regardless of the number of
12

•HR 4791 IH

1 parties against whom the action is brought or the number

2 of actions brought with respect to the injury.

3 (b) TREATMENT OF PUNITIVE DAMAGES.—

4 (1) PROHIBITING PUNITIVE DAMAGES EXCEPT

5 IN CASES OF GROSS OR CRIMINAL NEGLIGENCE.—No

6 punitive or exemplary damages may be awarded

7 against any individual with respect to a health care

8 malpractice claim unless the claimant establishes by

9 clear and convincing evidence that the harm suffered

10 by the claimant was the result of conduct manifest11 ing deliberate disregard for the health and safety of

12 the claimant or (in the case of a claim arising from

13 the use of a medical product) to the health and safe14 ty of those persons who might be harmed by the

15 medical product.

16 (2) LIMITATION CONCERNING CERTAIN

17 AWARDS.—In the case of a health care malpractice

18 claim in which the plaintiff alleges an injury result19 ing from the use of a medical product, no punitive

20 or exemplary damages may be awarded against the

21 manufacturer or seller of such product.

22 (3) PAYMENTS TO STATE FOR MEDICAL QUAL23 ITY ASSURANCE ACTIVITIES.—

24 (A) IN GENERAL.—Any punitive damages

25 awarded with respect to a health care mal-
13

•HR 4791 IH

1 practice claim shall be paid to the State in

2 which the action is brought or, in a case

3 brought in Federal court, in the State in which

4 the health care services that caused the injury

5 that is the subject of the claim were provided.

6 (B) ACTIVITIES DESCRIBED.—A State

7 shall use amounts paid pursuant to subpara8 graph (A) to carry out activities to assure the

9 safety and quality of health care services pro10 vided in the State, including (but not limited

11 to)—

12 (i) licensing or certifying health care

13 professionals and health care providers in

14 the State;

15 (ii) operating alternative dispute reso16 lution systems;

17 (iii) carrying out public education pro18 grams relating to health care malpractice

19 and the availability of alternative dispute

20 resolution systems in the State; and

21 (iv) carrying out programs to reduce

22 malpractice-related costs for retired provid23 ers or other providers volunteering to pro24 vide services in medically underserved

25 areas.
14

•HR 4791 IH

1 (C) MAINTENANCE OF EFFORT.—A State

2 shall use any amounts paid pursuant to sub3 paragraph (A) to supplement and not to replace

4 amounts spent by the State for the activities

5 described in subparagraph (B).

6 SEC. 204. GENERAL RESTRICTIONS ON PAYMENT OF DAM7 AGES.

8 (a) REDUCTIONS FOR CONTRIBUTIONS FROM COL9 LATERAL SOURCES.—

10 (1) IN GENERAL.—The total amount of dam11 ages received by an individual shall be reduced by

12 any other payment which has been made or which

13 will be made to such individual to compensate such

14 individual for an injury, including payments under—

15 (A) Federal or State disability or sickness

16 programs;

17 (B) Federal, State, or private health insur18 ance programs;

19 (C) private disability insurance programs;

20 (D) employer wage continuation programs;

21 and

22 (E) any other source of payment intended

23 to compensate such individual for such injury.
15

•HR 4791 IH

1 (2) ADMISSION AS EVIDENCE.—The availability

2 of a payment described in paragraph (1) shall be

3 made known to the trier of fact.

4 (b) PERIODIC PAYMENT OF DAMAGES FOR FUTURE

5 EXPENSES.—No individual may be required to pay more

6 than $100,000 in a single payment in damages for ex7 penses to be incurred in the future, but shall be permitted

8 to make such payments on a periodic basis. The periods

9 for such payments shall be determined by the court, based

10 on projections of when expenses are likely to be incurred.

11 SEC. 205. UNIFORM STATUTE OF LIMITATIONS.

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

13 (b), no health care malpractice claim may be initiated

14 after the expiration of the 2-year period that begins on

15 the date the alleged injury should reasonably have been

16 discovered, or the expiration of the 4-year period that be17 gins on the date the alleged injury occurred, whichever is

18 later.

19 (b) EXCEPTION FOR MINORS UNDER AGE 6.—In the

20 case of an alleged injury suffered by a minor who has not

21 attained 6 years of age, no health care malpractice claim

22 may be initiated after the expiration of the 2-year period

23 that begins on the date the alleged injury should reason24 ably have been discovered, but in no event later than 4

25 years after the date the alleged injury occurred or the date
16

•HR 4791 IH

1 on which the minor attains 8 years of age, whichever is

2 later.

3 SEC. 206. TREATMENT OF ATTORNEY’S FEES AND OTHER

4 COSTS.

5 (a) LIMITATION ON CONTINGENCY FEES.—An attor6 ney shall not contract for or collect a contingency fee for

7 representing a claimant in the resolution of a health care

8 malpractice claim in excess of the following:

9 (1) 50 percent of the first $50,000 (or portion

10 thereof) of the amount recovered by the claimant.

(2) 331 11 ⁄3 percent of the next $50,000 (or por12 tion thereof) of the amount recovered by the claim13 ant.

14 (3) 25 percent of the next $100,000 (or portion

15 thereof) of the amount recovered by the claimant.

16 (4) 10 percent of any additional amounts recov17 ered by the claimant in excess of $200,000.

18 (b) REQUIRING PARTY CONTESTING ADR RULING

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

20 (1) IN GENERAL.—The court in a health care

21 malpractice action shall require the party that (pur22 suant to section 201(c)(1)) contested the ruling of

23 the alternative dispute resolution system with re24 spect to the health care malpractice claim that is the

25 subject of the action to pay to the opposing party
17

•HR 4791 IH

1 the costs incurred by the opposing party under the

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

3 witnesses, and other litigation expenses (but not in4 cluding court costs, filing fees, or other expenses

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

6 or costs associated with the resolution of the claim

7 under the alternative dispute resolution system), but

8 only if—

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

10 party that contested the ruling is the claimant,

11 the amount of damages awarded to the party

12 under the action does not exceed the amount of

13 damages awarded to the party under the ADR

14 system by at least 15 percent; and

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

16 party that contested the ruling is the defendant,

17 the amount of damages assessed against the

18 party under the action is not at least 15 per19 cent less than the amount of damages assessed

20 under the ADR system.

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

22 apply if—

23 (A) the party contesting the ruling made

24 under the previous alternative dispute resolu25 tion system shows that—
18

•HR 4791 IH

1 (i) the ruling was procured by corrup2 tion, fraud, or undue means,

3 (ii) there was partiality or corruption

4 under the system,

5 (iii) there was other misconduct under

6 the system that materially prejudiced the

7 party’s rights, or

8 (iv) the ruling was based on an error

9 of law;

10 (B) the party contesting the ruling made

11 under the alternative dispute resolution system

12 presents new evidence before the trier of fact

13 that was not available for presentation under

14 the ADR system;

15 (C) the health care malpractice action

16 raised a novel issue of law; or

17 (D) the court finds that the application of

18 such paragraph to a party would constitute an

19 undue hardship, and issues an order waiving or

20 modifying the application of such paragraph

21 that specifies the grounds for the court’s deci22 sion.

23 (3) REQUIREMENT FOR PERFORMANCE

24 BOND.—The court in a health care malpractice ac25 tion shall require the party that (pursuant to section
19

•HR 4791 IH

1 201(c)(1)) contested the ruling of the alternative

2 dispute resolution system with respect to the health

3 care malpractice claim that is the subject of the ac4 tion to post a performance bond (in such amount

5 and consisting of such funds and assets as the court

6 determines to be appropriate), except that the court

7 may waive the application of such requirement to a

8 party if the court determines that the posting of

9 such a bond is not necessary to ensure that the

10 party shall meet the requirements of this subsection

11 to pay the opposing party the costs incurred by the

12 opposing party under the action.

13 (4) LIMIT ON ATTORNEY’S FEES PAID.—Attor14 neys’ fees that are required to be paid under para15 graph (1) by the contesting party shall not exceed

16 the amount of the attorneys’ fees incurred by the

17 contesting party in the action. If the attorneys’ fees

18 of the contesting party are based on a contingency

19 fee agreement, the amount of attorneys’ fees for

20 purposes of the preceding sentence shall not exceed

21 the reasonable value of those services.

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

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

24 health care malpractice action involved shall main25 tain accurate, complete records of hours worked on
20

•HR 4791 IH

1 the action, regardless of the fee arrangement with

2 the client involved.

3 (c) CONTINGENCY FEE DEFINED.—As used in this

4 section, the term ‘‘contingency fee’’ means any fee for pro5 fessional services which is, in whole or in part, contingent

6 upon the recovery of any amount of damages, whether

7 through judgment or settlement.

8 SEC. 207. QUALIFICATIONS FOR EXPERT WITNESSES.

9 (a) MEDICAL EXPERTISE.—No individual may testify

10 as an expert witness with respect to a health care mal11 practice claim unless the individual has expertise in the

12 relevant issues of medical practice involved in the claim.

13 (b) PAYMENT OF CONTINGENCY FEE PROHIBITED.—

14 The payment made to an expert witness for testimony with

15 respect to a health care malpractice claim may not vary

16 on the basis of the disposition of the claim.

17 SEC. 208. PREEMPTION; EFFECT ON SOVEREIGN IMMUNITY.

18 (a) PREEMPTION.—The standards established by this

19 title shall supersede any State law only to the extent that

20 State law establishes higher payment limits, permits the

21 recovery of a greater amount of damages or the awarding

22 of a greater amount of attorney’s fees, or establishes a

23 longer period during which a health care malpractice claim

24 may be initiated.
21

•HR 4791 IH

1 (b) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE

2 OF LAW OR VENUE.—Nothing in this Act shall be con3 strued to—

4 (1) waive or affect any defense of sovereign im5 munity asserted by any State under any provision of

6 law;

7 (2) waive or affect any defense of sovereign im8 munity asserted by the United States;

9 (3) affect the applicability of any provision of

10 the Foreign Sovereign Immunities Act of 1976;

11 (4) preempt State choice-of-law rules with re12 spect to claims brought by a foreign nation or a citi13 zen of a foreign nation; or

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

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

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

17 of a foreign nation on the ground of inconvenient

18 forum.

19 TITLE III—REQUIREMENTS FOR

20 ADR

21 SEC. 301. BASIC REQUIREMENTS FOR STATE ALTERNATIVE

22 DISPUTE RESOLUTION SYSTEMS.

23 (a) IN GENERAL.—A State’s alternative dispute reso24 lution system meets the requirements of this section if the

25 system—
22

•HR 4791 IH

1 (1) applies to all health care malpractice claims

2 under the jurisdiction of the courts of that State;

3 (2) requires that a written opinion resolving the

4 dispute be issued not later than 6 months after the

5 date by which each party against whom the claim is

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

7 exceptional cases for which a longer period is re8 quired for the issuance of such an opinion), and that

9 the opinion contain—

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

11 and

12 (B) a description of the costs incurred in

13 resolving the dispute under the system (includ14 ing any fees paid to the individuals hearing and

15 resolving the claim), together with an appro16 priate assessment of the costs against any of

17 the parties;

18 (3) requires individuals who hear and resolve

19 claims under the system to meet such qualifications

20 as the State may require (in accordance with regula21 tions of the Secretary);

22 (4) is approved by the State or by local govern23 ments in the State;

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

25 of multiple dispute resolution procedures—
23

•HR 4791 IH

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 STANDARDS TO ALTERNATIVE

24 DISPUTE RESOLUTION.—The provisions of title II shall

25 apply with respect to claims brought under a State alter-
24

•HR 4791 IH

1 native dispute resolution system or the alternative Federal

2 system in the same manner as such provisions apply with

3 respect to health care malpractice actions brought in the

4 State.

5 SEC. 302. CERTIFICATION OF STATE SYSTEMS; APPLICABIL6 ITY OF ALTERNATIVE FEDERAL SYSTEM.

7 (a) CERTIFICATION.—

8 (1) IN GENERAL.—Not later than 9 months

9 after the date of the enactment of this Act and peri10 odically thereafter, the Secretary, in consultation

11 with the Attorney General, shall determine whether

12 a State’s alternative dispute resolution system meets

13 the requirements of this part for the following cal14 endar 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 301.

20 (b) APPLICABILITY OF ALTERNATIVE FEDERAL SYS21 TEM.—

22 (1) ESTABLISHMENT AND APPLICABILITY.—

23 Not later than 9 months after the date of the enact24 ment of this Act, the Secretary, in consultation with

25 the Attorney General, shall establish by rule an al-
25

•HR 4791 IH

1 ternative Federal ADR system for the resolution of

2 health care malpractice claims during a calendar

3 year in States that do not have in effect an alter4 native dispute resolution system certified under sub5 section (a) for the year.

6 (2) REQUIREMENTS FOR SYSTEM.—Under the

7 alternative Federal ADR system established under

8 paragraph (1)—

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

10 section 301(a) shall apply to claims brought

11 under the system;

12 (B) if the system provides for the resolu13 tion of claims through arbitration, the claims

14 brought under the system shall be heard and

15 resolved by arbitrators appointed by the Sec16 retary in consultation with the Attorney Gen17 eral; and

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

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

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

21 account the existence of dispute resolution pro22 cedures in the State that affect the resolution

23 of health care malpractice claims.

24 (3) TREATMENT OF STATES WITH ALTER25 NATIVE SYSTEM IN EFFECT.—If the alternative Fed-
26

•HR 4791 IH

1 eral ADR system established under this subsection is

2 applied with respect to a State for a calendar year—

3 (A) the State shall reimburse the United

4 States (at such time and in such manner as the

5 Secretary may require) for the costs incurred

6 by the United States during the year as a result

7 of the application of the system with respect to

8 the State; and

9 (B) notwithstanding any other provision of

10 law, no funds may be paid to the State (or to

11 any unit of local government in the State) or to

12 any entity in the State pursuant to the Public

13 Health Service Act.

Æ

HR 4791 IH——2