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107TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 107–697

PROVIDING FOR CONSIDERATION OF H.R. 4600, HELP EFFICIENT, ACCESSIBLE, LOW COST, TIMELY HEALTH CARE

(HEALTH) ACT OF 2002

SEPTEMBER 25, 2002.—Referred to the House Calendar and ordered to be printed

Mr. REYNOLDS, from the Committee on Rules,

submitted the following

R E P O R T

[To accompany H. Res. 553]

The Committee on Rules, having had under consideration House

Resolution 553, by a record vote of 9 to 2, report the same to the

House with the recommendation that the resolution be adopted.

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for consideration in the House of H.R.

4600, the Help Efficient, Accessible, Low Cost, Timely Health Care

(HEALTH) Act of 2002, under a closed rule. The rule provides one

hour of debate on the bill, as amended, with 40 minutes equally divided and controlled by the chairman and ranking minority member of the Committee on the Judiciary and 20 minutes equally divided and controlled by the chairman and ranking minority member of the Committee on Energy and Commerce. The rule waives

all points of order against consideration of the bill.

The rule provides that the bill shall be considered as read for

amendment. The rule further provides that in lieu of the amendments recommended by the Committees on the Judiciary and on

Energy and Commerce now printed in the bill, the amendment in

the nature of a substitute printed in this report shall be considered

as adopted. Finally, the rule provides one motion to recommit with

or without instructions.

The waiver of all points of order includes a waiver of clause 4(a)

of rule XIII (requiring a three-day layover of the committee report).

The waiver of clause 4(a) of rule XIII is needed because the report

was not available until Wednesday, September 25 and the bill may

be considered by the House as early as Thursday, September 26.
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COMMITTEE VOTES

Pursuant to clause 3(b) of House rule XIII the results of each

record vote on an amendment or motion to report, together with

the names of those voting for and against, are printed below:

Rules Committee Record Vote No. 173

Date: September 25, 2002.

Measure: H.R. 4600.

Motion by: Mr. McGovern.

Summary of motion: To grant an open rule.

Results: Defeated 2 to 8.

Vote by Members: Goss—Nay; Linder—Nay; Pryce—Nay; DiazBalart—Nay; Hastings (WA)—Nay; Sessions—Nay; Reynolds—Nay;

McGovern—Yea; Hastings (FL)—Yea; Dreier—Nay.

Rules Committee Record Vote No. 174

Date: September 25, 2002.

Measure: H.R. 4600.

Motion by: Mr. McGovern.

Summary of motion: To make in order and grant the appropriate

waivers to the amendment offered by Representative Markey requiring that savings realized by insurers as a result of the

$250,000 cap on damages for pain and suffering be passed on to

health care providers in the form of lower premiums.

Results: Defeated 2 to 8.

Vote by Members: Goss—Nay; Linder—Nay; Pryce—Nay; DiazBalart—Nay; Hastings (WA)—Nay; Sessions—Nay; Reynolds—Nay;

McGovern—Yea; Hastings (FL)—Yea; Dreier—Nay.

Rules Committee Record Vote No. 175

Date: September 25, 2002.

Measure: H.R. 4600.

Motion by: Mr. Linder.

Summary of motion: To report the resolution.

Results: Agreed to 9 to 12.

Vote by Members: Goss—Yea; Linder—Yea; Pryce—Yea; DiazBalart—Yea; Hastings (WA)—Yea; Myrick—Yea; Sessions—Yea;

Reynolds—Yea; McGovern—Nay; Hastings (FL)—Nay; Dreier—

Yea.

SUMMARY OF AMENDMENT CONSIDERED AS ADOPTED

The amendment in the nature of a substitute consists of the text

of H.R. 4600 as reported from the Judiciary Committee with the

following changes:

Amendment to Section 3: This amendment clarifies the underlying bill so that the statute of limitations is 3 years from the date

of manifestation of the injury or one year after that claimant discovers, or through the use of reasonable diligence should have discovered the injury, which ever occurs first. The amendment also

makes this section consistent with California state law, which is

the model for the underlying bill by providing an exception to the

3-year limitation in instances of fraud, intentional concealment, or

the presence of a foreign body that has no therapeutic effect.
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Amendment to Section 7. This amendment clarifies the underlying bill by providing a substantial compliance test for firms

whose products have been approved by the Food and Drug Administration (FDA). This ensures that if the manufacturing and distribution of a medical product was not in compliance with the FDA

regulations than it may be subject to punitive damages in a health

care lawsuit, as defined in the bill.

Amendment to Section 6. This amendment clarifies the underlying bill so that it does not apply to two sections of the Social Security Act.

Amendment to Section 13. This amendment is a sense of Congress resolution that a health insurer should be liable for damages

for harm caused when it makes a decision as to what care is medically necessary and appropriate.

TEXT OF AMENDMENT CONSIDERED AS ADOPTED

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Help Efficient, Accessible, Lowcost, Timely Healthcare (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—
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(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;

(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.

The time for the commencement of a health care lawsuit shall be

3 years after the date of manifestation 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 after the date of manifestation of injury unless tolled

for any of the following:

(1) Upon proof of fraud;

(2) Intentional concealment; or

(3) The presence of a foreign body, which has no therapeutic

or diagnostic purpose or effect, in the person of the injured person.

Actions by a minor shall be commenced within 3 years from the

date of the alleged manifestation of injury except that actions by

a minor under the full age of 6 years shall be commenced within

3 years of manifestation of injury or prior to the minor’s 8th birthday, whichever provides a longer period. Such time limitation shall

be tolled for minors for any period during which a parent or guardian and a health care provider or health care organization have

committed fraud or collusion in the failure to bring an action on behalf of the injured minor.

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 re-
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duced 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) 331⁄3 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
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lawsuit that is settled as well as a health care lawsuit that is resolved by a fact finder. This section shall not apply to section

1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42 U.S.C.

1396a(a)(25)) of the Social Security Act.

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.
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(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, unless the Food and Drug Administration

has determined that such medical product was not manufactured or distributed in substantial compliance with applicable Food and Drug Administration statutes and regulations.

(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.
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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),
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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.
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(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—
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(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
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governed by the applicable statute of limitations provisions in effect

at the time the injury occurred.

SEC. 13. SENSE OF CONGRESS.

It is the sense of Congress that a health insurer should be liable

for damages for harm caused when it makes a decision as to what

care is medically necessary and appropriate.

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