I

104TH CONGRESS

1ST SESSION H. R. 229

To impose certain requirements on medical malpractice liability claims.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. DORNAN introduced the following bill; which was referred to the Committee on the Judiciary and, in addition, to the Committee on 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 impose certain requirements on medical malpractice

liability claims.

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.

4 This Act may be cited as the ‘‘Medical Injury Com5 pensation Reform Act of 1995’’.

6 SEC. 2. GENERAL PROVISIONS.

7 (a) CONGRESSIONAL FINDINGS.—

8 (1) EFFECT ON INTERSTATE COMMERCE.—The

9 Congress finds that the health care and insurance
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1 industries are industries affecting interstate com2 merce and the medical malpractice litigation systems

3 existing throughout the United States affect inter4 state commerce by contributing to the high cost of

5 health care and premiums for malpractice insurance

6 purchased by health care providers.

7 (2) EFFECT ON FEDERAL SPENDING.—The

8 Congress finds that the medical malpractice litiga9 tion systems existing throughout the United States

10 have a significant effect on the amount, distribution,

11 and use of Federal funds because of—

12 (A) the large number of individuals who

13 receive health care benefits under programs op14 erated or financed by the Federal Government;

15 (B) the large number of individuals who

16 benefit because of the exclusion from Federal

17 taxes of the amounts spent by their employers

18 to provide them with health insurance benefits;

19 (C) the large number of health care provid20 ers and health care professionals who provide

21 items or services for which the Federal Govern22 ment makes payments; and

23 (D) the large number of such providers

24 and professionals who have received direct or

25 indirect financial assistance from the Federal
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1 Government because of their status as such

2 professionals or providers.

3 (b) APPLICABILITY.—This Act shall apply with re4 spect to any medical malpractice liability claim and to any

5 medical malpractice liability action brought in any State

6 or Federal court, except that this Act shall not apply to—

7 (1) a claim or action for damages arising from

8 a vaccine-related injury or death to the extent that

9 title XXI of the Public Health Service Act applies to

10 the claim or action; or

11 (2) a claim or action in which the claimant’s

12 sole allegation is an allegation of an injury arising

13 from the use of a medical product.

14 (c) PREEMPTION OF STATE LAW.—Subject to section

15 10, this Act supersedes State law only to the extent that

16 State law differs from any provision of law established by

17 or under this Act. Any issue that is not governed by any

18 provision of law established by or under this Act shall be

19 governed by otherwise applicable State or Federal law.

20 (d) FEDERAL COURT JURISDICTION NOT ESTAB21 LISHED ON FEDERAL QUESTION GROUNDS.—Nothing in

22 this Act shall be construed to establish any jurisdiction

23 in the district courts of the United States over medical

24 malpractice liability actions on the basis of section 1331

25 or 1337 of title 28, United States Code.
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1 SEC. 3. DEFINITIONS.

2 As used in this Act:

3 (1) CLAIMANT.—The term ‘‘claimant’’ means

4 any person who alleges a medical malpractice liabil5 ity claim or, in the case of an individual who is de6 ceased, incompetent, or a minor, the person on

7 whose behalf such a claim is alleged.

8 (2) ECONOMIC DAMAGES.—The term ‘‘economic

9 damages’’ means damages paid to compensate an in10 dividual for losses for hospital and other medical ex11 penses, lost wages, lost employment, and other pecu12 niary losses.

13 (3) HEALTH CARE PROFESSIONAL.—The term

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

15 provides health care services in a State and who is

16 required by State law or regulation to be licensed or

17 certified by the State to provide such services in the

18 State.

19 (4) HEALTH CARE PROVIDER.—The term

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

21 institution that is engaged in the delivery of health

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

23 law or regulation to be licensed or certified by the

24 State to engage in the delivery of such services in

25 the State.
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1 (5) INJURY.—The term ‘‘injury’’ means any ill2 ness, disease, or other harm that is the subject of

3 a medical malpractice liability action or claim.

4 (6) MEDICAL MALPRACTICE LIABILITY AC5 TION.—The term ‘‘medical malpractice liability ac6 tion’’ means a civil action (other than an action in

7 which the claimant’s sole allegation is an allegation

8 of an intentional tort) brought in a State or Federal

9 court against a health care provider or health care

10 professional (regardless of the theory of liability on

11 which the action is based) in which the claimant al12 leges a medical malpractice liability claim.

13 (7) MEDICAL MALPRACTICE LIABILITY

14 CLAIM.—The term ‘‘medical malpractice liability

15 claim’’ means a claim in which the claimant alleges

16 that injury was caused by the provision of (or the

17 failure to provide) health care services.

18 (8) MEDICAL PRODUCT.—The term ‘‘medical

19 product’’ means a device (as defined in section

20 201(h) of the Federal Food, Drug, and Cosmetic

21 Act) or a drug (as defined in section 201(g)(1) of

22 the Federal Food, Drug, and Cosmetic Act).

23 (9) NONECONOMIC DAMAGES.—The term ‘‘non24 economic damages’’ means damages paid to com25 pensate an individual for losses for physical and
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1 emotional pain, suffering, inconvenience, physical

2 impairment, mental anguish, disfigurement, loss of

3 enjoyment of life, loss of consortium, and other

4 nonpecuniary losses, but does not include punitive

5 damages.

6 (10) SECRETARY.—The term ‘‘Secretary’’

7 means the Secretary of Health and Human Services.

8 (11) STATE.—The term ‘‘State’’ means each of

9 the several States, the District of Columbia, the

10 Commonwealth of Puerto Rico, and any other terri11 tory or possession of the United States.

12 SEC. 4. EFFECTIVE DATE.

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

14 (b) and section 11, this Act shall apply with respect to

15 claims accruing or actions brought on or after the expira16 tion of the 3-year period that begins on the date of the

17 enactment of this Act.

18 (b) EXCEPTION FOR STATES REQUESTING EARLIER

19 IMPLEMENTATION OF REFORMS.—

20 (1) APPLICATION.—A State may submit an ap21 plication to the Secretary requesting the early imple22 mentation of this Act with respect to claims or ac23 tions brought in the State.

24 (2) DECISION BY SECRETARY.—The Secretary

25 shall issue a response to a State’s application under
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1 paragraph (1) not later than 90 days after receiving

2 the application. If the Secretary determines that the

3 State meets the requirements of this Act at the time

4 of submitting its application, the Secretary shall ap5 prove the State’s application, and this Act shall

6 apply with respect to actions brought in the State on

7 or after the expiration of the 90-day period that be8 gins on the date the Secretary issues the response.

9 If the Secretary denies the State’s application, the

10 Secretary shall provide the State with a written ex11 planation of the grounds for the decision.

12 SEC. 5. STATUTE OF LIMITATIONS.

13 (a) IN GENERAL.—No medical malpractice liability

14 claim may be brought after the expiration of the 2-year

15 period that begins on the date the alleged injury that is

16 the subject of the action should reasonably have been dis17 covered, but in no event after the expiration of the 4-year

18 period that begins on the date the alleged injury occurred.

19 (b) EXCEPTION FOR MINORS.—In the case of an al20 leged injury suffered by a minor who has not attained 6

21 years of age, no medical malpractice liability claim may

22 be brought after the expiration of the 2-year period that

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

24 of the action should reasonably have been discovered, but
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1 in no event after the date on which the minor attains 10

2 years of age.

3 SEC. 6. ATTORNEYS’ FEES.

4 (a) LIMITATION ON CONTINGENCY FEES.—An attor5 ney shall not contract for or collect a contingency fee for

6 representing a claimant in a medical malpractice liability

7 action in excess of the following:

8 (1) 40 percent of the first $50,000 (or portion

9 thereof) of the amount recovered by the claimant.

(2) 331 10 ⁄3 percent of the next $50,000 (or por11 tion thereof) of the amount recovered by the claim12 ant.

13 (3) 25 percent of the next $500,000 (or portion

14 thereof) of the amount recovered by the claimant.

15 (4) 15 percent of any amounts recovered by the

16 claimant in excess of $600,000.

17 This subsection applies whether the recovery is by settle18 ment, arbitration, or judgment.

19 (b) CALCULATION OF PERIODIC PAYMENTS.—If peri20 odic payments are awarded to the claimant pursuant to

21 section 7(b), the court shall place a total value on these

22 payments based upon the projected life expectancy of the

23 claimant and include this amount in computing the total

24 award from which attorneys’ fees are calculated under

25 subsection (a).
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1 (c) EFFECT OF FAILURE TO COMPLY.—Failure to

2 comply with this section by an attorney at law shall be

3 grounds for professional discipline by the appropriate

4 State agency responsible for the conduct of disciplinary

5 actions against attorneys-at-law.

6 (d) DEFINITIONS.—For purposes of this section—

7 (1) the term ‘‘contingency fee’’ means any fee

8 for professional legal services which is in whole or in

9 part contingent upon the recovery of any amount of

10 damages, whether through judgment or settlement;

11 and

12 (2) the term ‘‘recovered’’ means the net sum re13 covered after deducting any disbursements or costs

14 incurred in connection with prosecution or settle15 ment of the claim, except that costs of medical care

16 incurred by the claimant and the attorney’s office

17 overhead costs or charges shall not be deductible dis18 bursements under this paragraph.

19 SEC. 7. CALCULATION AND PAYMENT OF DAMAGES.

20 (a) LIMITATION ON NONECONOMIC DAMAGES.—The

21 total amount of noneconomic damages that may be award22 ed to a claimant for losses resulting from the injury which

23 is the subject of a medical malpractice liability action may

24 not exceed $250,000, regardless of the number of parties
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1 against whom the action is brought or the number of ac2 tions brought with respect to the injury.

3 (b) PERIODIC PAYMENTS FOR FUTURE LOSSES.—If

4 more than $50,000 in damages for expenses to be incurred

5 in the future is awarded to the claimant in a medical mal6 practice liability action, the court shall, at the request of

7 either party, enter a judgment ordering such damages to

8 be paid on a periodic basis determined appropriate by the

9 court (based upon projections of when such expenses are

10 likely to be incurred).

11 (c) MANDATORY OFFSETS FOR DAMAGES PAID BY A

12 COLLATERAL SOURCE.—The total amount of damages re13 ceived by a claimant in a medical malpractice liability ac14 tion shall be reduced by any other payment that has been

15 or will be made to the individual to compensate the claim16 ant for the injury that was the subject of the action, in17 cluding payment under—

18 (1) Federal or State disability or sickness pro19 grams;

20 (2) Federal, State, or private health insurance

21 programs;

22 (3) private disability insurance programs;

23 (4) employer wage continuation programs; and

24 (5) any other source of payment intended to

25 compensate the claimant for such injury.
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1 SEC. 8. NOTICE OF ACTION.

2 (a) NOTICE REQUIREMENT.—

3 (1) IN GENERAL.—No medical malpractice li4 ability action may be commenced unless the defend5 ant has been given at least 90 days notice of the in6 tention to commence the action.

7 (2) CONTENTS OF NOTICE.—The notice under

8 paragraph (1) shall include the legal basis of the

9 medical malpractice liability claim on which the ac10 tion is based and the type of loss sustained, includ11 ing the specific nature of the injuries suffered.

12 (b) EFFECT ON STATUTE OF LIMITATIONS.—If the

13 notice under paragraph (1) is served within 90 days before

14 the expiration of the statute of limitations for filing the

15 medical malpractice liability action, the time for commenc16 ing the action shall extend for 90 days after the notice

17 under paragraph (1) is served.

18 (c) EFFECT OF FAILURE TO COMPLY.—Failure to

19 comply with this section shall not invalidate any court pro20 ceedings in the medical malpractice liability action in21 volved, and shall not affect the jurisdiction of the court

22 to render a judgment in the action, but a failure to comply

23 with this section by an attorney at law shall be grounds

24 for professional discipline by the appropriate State agency

25 responsible for the conduct of disciplinary actions against

26 attorneys-at-law.
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1 SEC. 9. INJUNCTIVE RELIEF.

2 Whenever any person has engaged or is about to en3 gage in any conduct in violation of this Act, the appro4 priate court may, upon application of an interested party,

5 issue an injunction or other appropriate order restraining

6 such conduct.

7 SEC. 10. PREEMPTION.

8 (a) IN GENERAL.—The preceding provisions of this

9 Act supersede any State law only to the extent that State

10 law—

11 (1) permits the recovery of a greater amount of

12 damages by claimant;

13 (2) permits the collection of a greater amount

14 of attorneys’ fees by a claimant’s attorney; or

15 (3) establishes a longer period during which a

16 medical malpractice liability claim may be initiated.

17 (b) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE

18 OF LAW OR VENUE.—Nothing in subsection (a) shall be

19 construed to—

20 (1) waive or affect any defense of sovereign im21 munity asserted by any State under any provision of

22 law;

23 (2) waive or affect any defense of sovereign im24 munity asserted by the United States;

25 (3) affect the applicability of any provision of

26 the Foreign Sovereign Immunities Act of 1976;
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1 (4) preempt State choice-of-law rules with re2 spect to claims brought by a foreign country or a

3 citizen of a foreign country; or

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

5 venue or to apply the law of a foreign country or to

6 dismiss a claim of a foreign country or of a citizen

7 of a foreign nation on the ground of inconvenient

8 forum.

9 SEC. 11. PERMITTING STATE PROFESSIONAL SOCIETIES TO

10 PARTICIPATE IN DISCIPLINARY ACTIVITIES.

11 (a) ROLE OF PROFESSIONAL SOCIETIES.—Notwith12 standing any other provision of State or Federal law, a

13 State agency responsible for the conduct of disciplinary

14 actions for a type of health care practitioner may enter

15 into agreements with State or county professional societies

16 of such type of health care practitioner to permit such so17 cieties to participate in the licensing of such health care

18 practitioner, and to review any health care malpractice ac19 tion, health care malpractice claim or allegation, or other

20 information concerning the practice patterns of any such

21 health care practitioner. Any such agreement shall comply

22 with subsection (b).

23 (b) REQUIREMENTS OF AGREEMENTS.—Any agree24 ment entered into under subsection (a) for licensing activi25 ties or the review of any health care malpractice action,
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1 health care malpractice claim or allegation, or other infor2 mation concerning the practice patterns of a health care

3 practitioner shall provide that—

4 (1) the health care professional society conducts

5 such activities or review as expeditiously as possible;

6 (2) after the completion of such review, such so7 ciety shall report its findings to the State agency

8 with which it entered into such agreement;

9 (3) the conduct of such activities or review and

10 the reporting of such findings be conducted in a

11 manner which assures the preservation of confiden12 tiality of health care information and of the review

13 process; and

14 (4) no individual affiliated with such society is

15 liable for any damages or injury directly caused by

16 the individual’s actions in conducting such activities

17 or review.

18 (c) AGREEMENTS NOT MANDATORY.—Nothing in

19 this section may be construed to require a State to enter

20 into agreements with societies described in subsection (a)

21 to conduct the activities described in such subsection.

22 (d) EFFECTIVE DATE.—This section shall take effect

23 2 years after the date of the enactment of this Act.

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