81–872

107TH CONGRESS REPT. 107–693 " HOUSE OF REPRESENTATIVES ! 2d Session Part 2

HELP EFFICIENT, ACCESSIBLE, LOW COST, TIMELY 

HEALTH CARE (HEALTH) ACT OF 2002

SEPTEMBER 25, 2002.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. TAUZIN, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 4600] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 4600) to improve patient access to health care services and provide improved medical care by reducing the excessive 

burden the liability system places on the health care delivery system, having considered the same, report favorably thereon with an 

amendment and recommend that the bill as amended do pass.

CONTENTS 

Page 

Amendment .............................................................................................................. 2

Purpose and Summary ............................................................................................ 7

Background and Need for Legislation .................................................................... 7

Hearings ................................................................................................................... 9

Committee Consideration ........................................................................................ 9

Committee Votes ...................................................................................................... 10

Committee Oversight Findings ............................................................................... 19

Statement of General Performance Goals and Objectives .................................... 19

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 19

Committee Cost Estimate ....................................................................................... 19

Congressional Budget Office Estimate ................................................................... 19

Federal Mandates Statement ................................................................................. 28

Advisory Committee Statement .............................................................................. 28

Constitutional Authority Statement ...................................................................... 28

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Dissenting Views ..................................................................................................... 00

AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Help Efficient, Accessible, Low Cost, Timely Health 

Care (HEALTH) Act of 2002’’. 

SEC. 2. FINDINGS AND PURPOSE. 

(a) FINDINGS.— (1) EFFECT ON HEALTH CARE ACCESS AND COSTS.—Congress finds that our current civil justice system is adversely affecting patient access to health care services, better patient care, and cost-efficient health care, in that the health care 

liability system is a costly and ineffective mechanism for resolving claims of 

health care liability and compensating injured patients, and is a deterrent to 

the sharing of information among health care professionals which impedes efforts to improve patient safety and quality of care. 

(2) EFFECT ON INTERSTATE COMMERCE.—Congress finds that the health care 

and insurance industries are industries affecting interstate commerce and the 

health care liability litigation systems existing throughout the United States 

are activities that affect interstate commerce by contributing to the high costs 

of health care and premiums for health care liability insurance purchased by 

health care system providers. 

(3) EFFECT ON FEDERAL SPENDING.—Congress finds that the health care liability litigation systems existing throughout the United States have a significant 

effect on the amount, distribution, and use of Federal funds because of— (A) the large number of individuals who receive health care benefits 

under programs operated or financed by the Federal Government; 

(B) the large number of individuals who benefit because of the exclusion 

from Federal taxes of the amounts spent to provide them with health insurance benefits; and 

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

(b) PURPOSE.—It is the purpose of this Act to implement reasonable, comprehensive, and effective health care liability reforms designed to— (1) improve the availability of health care services in cases in which health 

care liability actions have been shown to be a factor in the decreased availability of services; 

(2) reduce the incidence of ‘‘defensive medicine’’ and lower the cost of health 

care liability insurance, all of which contribute to the escalation of health care 

costs; 

(3) ensure that persons with meritorious health care injury claims receive fair 

and adequate compensation, including reasonable noneconomic damages; 

(4) improve the fairness and cost-effectiveness of our current health care liability system to resolve disputes over, and provide compensation for, health 

care liability by reducing uncertainty in the amount of compensation provided 

to injured individuals; and 

(5) provide an increased sharing of information in the health care system 

which will reduce unintended injury and improve patient care. 

SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS. 

The time for the commencement of a health care lawsuit shall be 3 years after 

the date of injury or 1 year after the claimant discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first. In no 

event shall the time for commencement of a health care lawsuit exceed 3 years 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 

injury except that actions by a minor under the full age of 6 years shall be commenced within 3 years 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. 

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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 eco- nomic loss may be fully recovered without limitation. 

(b) ADDITIONAL NONECONOMIC DAMAGES.—In any health care lawsuit, the amount of noneconomic damages recovered may be as much as $250,000, regardless of the 

number of parties against whom the action is brought or the number of separate 

claims or actions brought with respect to the same occurrence. 

(c) NO DISCOUNT OF AWARD FOR NONECONOMIC DAMAGES.—In any health care 

lawsuit, an award for future noneconomic damages shall not be discounted to 

present value. The jury shall not be informed about the maximum award for noneconomic damages. An award for noneconomic damages in excess of $250,000 shall 

be reduced either before the entry of judgment, or by amendment of the judgment 

after entry of judgment, and such reduction shall be made before accounting for any 

other reduction in damages required by law. If separate awards are rendered for 

past and future noneconomic damages and the combined awards exceed $250,000, 

the future noneconomic damages shall be reduced first.

(d) FAIR SHARE RULE.—In any health care lawsuit, each party shall be liable for 

that party’s several share of any damages only and not for the share of any other 

person. Each party shall be liable only for the amount of damages allocated to such 

party in direct proportion to such party’s percentage of responsibility. A separate 

judgment shall be rendered against each such party for the amount allocated to 

such party. For purposes of this section, the trier of fact shall determine the proportion of responsibility of each party for the claimant’s harm. 

SEC. 5. MAXIMIZING PATIENT RECOVERY. 

(a) COURT SUPERVISION OF SHARE OF DAMAGES ACTUALLY PAID TO CLAIMANTS.—

In any health care lawsuit, the court shall supervise the arrangements for payment 

of damages to protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants. In particular, in any health care lawsuit in which the attorney for a party claims a financial stake in the outcome by virtue of a contingent fee, the court shall have the 

power to restrict the payment of a claimant’s damage recovery to such attorney, and 

to redirect such damages to the claimant based upon the interests of justice and 

principles of equity. In no event shall the total of all contingent fees for representing 

all claimants in a health care lawsuit exceed the following limits: 

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

(2) 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 lawsuit that 

is settled as well as a health care lawsuit that is resolved by a fact finder. 

SEC. 7. PUNITIVE DAMAGES. 

(a) IN GENERAL.—Punitive damages may, if otherwise permitted by applicable 

State or Federal law, be awarded against any person in a health care lawsuit only 

if it is proven by clear and convincing evidence that such person acted with malicious intent to injure the claimant, or that such person deliberately failed to avoid 

unnecessary injury that such person knew the claimant was substantially certain 

to suffer. In any health care lawsuit where no judgment for compensatory damages 

is rendered against such person, no punitive damages may be awarded with respect 

to the claim in such lawsuit. No demand for punitive damages shall be included in 

a health care lawsuit as initially filed. A court may allow a claimant to file an 

amended pleading for punitive damages only upon a motion by the claimant and 

after a finding by the court, upon review of supporting and opposing affidavits or 

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after a hearing, after weighing the evidence, that the claimant has established by 

a substantial probability that the claimant will prevail on the claim for punitive 

damages. At the request of any party in a health care lawsuit, the trier of fact shall 

consider in a separate proceeding— (1) whether punitive damages are to be awarded and the amount of such 

award; and 

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

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

proceeding to determine whether compensatory damages are to be awarded. 

(b) DETERMINING AMOUNT OF PUNITIVE DAMAGES.— (1) FACTORS CONSIDERED.—In determining the amount of punitive damages, 

the trier of fact shall consider only the following: 

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

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

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

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

complained of by the claimant; 

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

(F) the amount of any civil fines assessed against such party as a result 

of the conduct complained of by the claimant. 

(2) MAXIMUM AWARD.—The amount of punitive damages awarded in a health 

care lawsuit may be up to as much as two times the amount of economic damages awarded or $250,000, whichever is greater. The jury shall not be informed 

of this limitation. 

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

STANDARDS.—

(1) IN GENERAL.—No punitive damages may be awarded against the manufacturer or distributor of a medical product based on a claim that such product 

caused the claimant’s harm where—

(A)(i) such medical product was subject to premarket approval or clearance by the Food and Drug Administration with respect to the safety of the 

formulation or performance of the aspect of such medical product which 

caused the claimant’s harm or the adequacy of the packaging or labeling 

of such medical product; and 

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

(B) such medical product is generally recognized among qualified experts 

as safe and effective pursuant to conditions established by the Food and 

Drug Administration and applicable Food and Drug Administration regulations, including without limitation those related to packaging and labeling. 

(2) LIABILITY OF HEALTH CARE PROVIDERS.—A health care provider who prescribes a drug or device (including blood products) approved by the Food and 

Drug Administration shall not be named as a party to a product liability lawsuit involving such drug or device and shall not be liable to a claimant in a 

class action lawsuit against the manufacturer, distributor, or product seller of 

such drug or device. 

(3) PACKAGING.—In a health care lawsuit for harm which is alleged to relate 

to the adequacy of the packaging or labeling of a drug which is required to have 

tamper-resistant packaging under regulations of the Secretary of Health and 

Human Services (including labeling regulations related to such packaging), the 

manufacturer or product seller of the drug shall not be held liable for punitive 

damages unless such packaging or labeling is found by the trier of fact by clear 

and convincing evidence to be substantially out of compliance with such regulations. 

(4) EXCEPTION.—Paragraph (1) shall not apply in any health care lawsuit in 

which—

(A) a person, before or after premarket approval or clearance of such 

medical product, knowingly misrepresented to or withheld from the Food 

and Drug Administration information that is required to be submitted 

under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) or 

section 351 of the Public Health Service Act (42 U.S.C. 262) that is material 

and is causally related to the harm which the claimant allegedly suffered; 

or 

(B) a person made an illegal payment to an official of the Food and Drug 

Administration for the purpose of either securing or maintaining approval 

or clearance of such medical product. 

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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, with- out reduction to present value, equaling or exceeding $50,000 is made against a 

party with sufficient insurance or other assets to fund a periodic payment of such 

a judgment, the court shall, at the request of any party, enter a judgment ordering 

that the future damages be paid by periodic payments in accordance with the Uniform Periodic Payment of Judgments Act promulgated by the National Conference 

of Commissioners on Uniform State Laws. 

(b) APPLICABILITY.—This section applies to all actions which have not been first 

set for trial or retrial before the effective date of this Act. 

SEC. 9. DEFINITIONS. 

In this Act:

(1) ALTERNATIVE DISPUTE RESOLUTION SYSTEM; ADR.—The term ‘‘alternative 

dispute resolution system’’ or ‘‘ADR’’ means a system that provides for the resolution of health care lawsuits in a manner other than through a civil action 

brought in a State or Federal court. 

(2) CLAIMANT.—The term ‘‘claimant’’ means any person who brings a health 

care lawsuit, including a person who asserts or claims a right to legal or equitable contribution, indemnity or subrogation, arising out of a health care liability claim or action, and any person on whose behalf such a claim is asserted 

or such an action is brought, whether deceased, incompetent, or a minor. 

(3) COLLATERAL SOURCE BENEFITS.—The term ‘‘collateral source benefits’’ means any amount paid or reasonably likely to be paid in the future to or on 

behalf of the claimant, or any service, product or other benefit provided or reasonably likely to be provided in the future to or on behalf of the claimant, as 

a result of the injury or wrongful death, pursuant to— (A) any State or Federal health, sickness, income-disability, accident, or 

workers’ compensation law; 

(B) any health, sickness, income-disability, or accident insurance that 

provides health benefits or income-disability coverage; 

(C) any contract or agreement of any group, organization, partnership, or 

corporation to provide, pay for, or reimburse the cost of medical, hospital, 

dental, or income disability benefits; and 

(D) any other publicly or privately funded program. 

(4) COMPENSATORY DAMAGES.—The term ‘‘compensatory damages’’ means objectively verifiable monetary losses incurred as a result of the provision of, use 

of, or payment for (or failure to provide, use, or pay for) health care services 

or medical products, such as past and future medical expenses, loss of past and 

future earnings, cost of obtaining domestic services, loss of employment, and 

loss of business or employment opportunities, damages for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of 

consortium (other than loss of domestic service), hedonic damages, injury to reputation, and all other nonpecuniary losses of any kind or nature. The term 

‘‘compensatory damages’’ includes economic damages and noneconomic damages, 

as such terms are defined in this section. 

(5) CONTINGENT FEE.—The term ‘‘contingent fee’’ includes all compensation to 

any person or persons which is payable only if a recovery is effected on behalf 

of one or more claimants. 

(6) ECONOMIC DAMAGES.—The term ‘‘economic damages’’ means objectively 

verifiable monetary losses incurred as a result of the provision of, use of, or payment for (or failure to provide, use, or pay for) health care services or medical 

products, such as past and future medical expenses, loss of past and future 

earnings, cost of obtaining domestic services, loss of employment, and loss of 

business or employment opportunities. 

(7) HEALTH CARE LAWSUIT.—The term ‘‘health care lawsuit’’ means any health 

care liability claim concerning the provision of health care goods or services affecting interstate commerce, or any health care liability action concerning the 

provision of health care goods or services affecting interstate commerce, brought 

in a State or Federal court or pursuant to an alternative dispute resolution system, against a health care provider, a health care organization, or the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product, 

regardless of the theory of liability on which the claim is based, or the number 

of claimants, plaintiffs, defendants, or other parties, or the number of claims or 

causes of action, in which the claimant alleges a health care liability claim. 

(8) HEALTH CARE LIABILITY ACTION.—The term ‘‘health care liability action’’

means a civil action brought in a State or Federal Court or pursuant to an alternative dispute resolution system, against a health care provider, a health 

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care organization, or the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product, regardless of the theory of liability on 

which the claim is based, or the number of plaintiffs, defendants, or other parties, or the number of causes of action, in which the claimant alleges a health 

care liability claim. 

(9) HEALTH CARE LIABILITY CLAIM.—The term ‘‘health care liability claim’’

means a demand by any person, whether or not pursuant to ADR, against a 

health care provider, health care organization, or the manufacturer, distributor, 

supplier, marketer, promoter, or seller of a medical product, including, but not 

limited to, third-party claims, cross-claims, counter-claims, or contribution 

claims, which are based upon the provision of, use of, or payment for (or the 

failure to provide, use, or pay for) health care services or medical products, regardless of the theory of liability on which the claim is based, or the number 

of plaintiffs, defendants, or other parties, or the number of causes of action. 

(10) HEALTH CARE ORGANIZATION.—The term ‘‘health care organization’’

means any person or entity which is obligated to provide or pay for health benefits under any health plan, including any person or entity acting under a contract or arrangement with a health care organization to provide or administer 

any health benefit. 

(11) HEALTH CARE PROVIDER.—The term ‘‘health care provider’’ means any 

person or entity required by State or Federal laws or regulations to be licensed, 

registered, or certified to provide health care services, and being either so licensed, registered, or certified, or exempted from such requirement by other 

statute or regulation. 

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

(13) MALICIOUS INTENT TO INJURE.—The term ‘‘malicious intent to injure’’

means intentionally causing or attempting to cause physical injury other than 

providing health care goods or services. 

(14) MEDICAL PRODUCT.—The term ‘‘medical product’’ means a drug or device 

intended for humans, and the terms ‘‘drug’’ and ‘‘device’’ have the meanings 

given such terms in sections 201(g)(1) and 201(h) of the Federal Food, Drug and 

Cosmetic Act (21 U.S.C. 321), respectively, including any component or raw material used therein, but excluding health care services. 

(15) NONECONOMIC DAMAGES.—The term ‘‘noneconomic damages’’ means damages for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society 

and companionship, loss of consortium (other than loss of domestic service), hedonic damages, injury to reputation, and all other nonpecuniary losses of any 

kind or nature. 

(16) PUNITIVE DAMAGES.—The term ‘‘punitive damages’’ means damages 

awarded, for the purpose of punishment or deterrence, and not solely for compensatory purposes, against a health care provider, health care organization, or 

a manufacturer, distributor, or supplier of a medical product. Punitive damages 

are neither economic nor noneconomic damages. 

(17) RECOVERY.—The term ‘‘recovery’’ means the net sum recovered after deducting any disbursements or costs incurred in connection with prosecution or 

settlement of the claim, including all costs paid or advanced by any person. 

Costs of health care incurred by the plaintiff and the attorneys’ office overhead 

costs or charges for legal services are not deductible disbursements or costs for 

such purpose. 

(18) STATE.—The term ‘‘State’’ means each of the several States, the District 

of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 

American Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States, or any 

political subdivision thereof. 

SEC. 10. EFFECT ON OTHER LAWS. 

(a) VACCINE INJURY.—

(1) To the extent that title XXI of the Public Health Service Act establishes 

a Federal rule of law applicable to a civil action brought for a vaccine-related 

injury or death—

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

action; and 

(B) any rule of law prescribed by this Act in conflict with a rule of law 

of such title XXI shall not apply to such action. 

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(2) If there is an aspect of a civil action brought for a vaccine-related injury 

or death to which a Federal rule of law under title XXI of the Public Health 

Service Act does not apply, then this Act or otherwise applicable law (as determined under this Act) will apply to such aspect of such action. 

(b) OTHER FEDERAL LAW.—Except as provided in this section, nothing in this Act 

shall be deemed to affect any defense available to a defendant in a health care lawsuit or action under any other provision of Federal law. 

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

(a) HEALTH CARE LAWSUITS.—The provisions governing health care lawsuits set 

forth in this Act preempt, subject to subsections (b) and (c), State law to the extent 

that State law prevents the application of any provisions of law established by or 

under this Act. The provisions governing health care lawsuits set forth in this Act 

supersede chapter 171 of title 28, United States Code, to the extent that such chapter—

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

or 

(2) prohibits the introduction of evidence regarding collateral source benefits, 

or mandates or permits subrogation or a lien on collateral source benefits. 

(b) PROTECTION OF STATES’ RIGHTS.—Any issue that is not governed by any provision of law established by or under this Act (including State standards of negligence) shall be governed by otherwise applicable State or Federal law. This Act 

does not preempt or supersede any law that imposes greater protections (such as 

a shorter statute of limitations) for health care providers and health care organizations from liability, loss, or damages than those provided by this Act. 

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

(1) any State statutory limit (whether enacted before, on, or after the date of 

the enactment of this Act) on the amount of compensatory or punitive damages 

(or the total amount of damages) that may be awarded in a health care lawsuit, 

whether or not such State limit permits the recovery of a specific dollar amount 

of damages that is greater or lesser than is provided for under this Act, notwithstanding section 4(a); or 

(2) any defense available to a party in a health care lawsuit under any other 

provision of State or Federal law. 

SEC. 12. APPLICABILITY; EFFECTIVE DATE. 

This Act shall apply to any health care lawsuit brought in a Federal or State 

court, or subject to an alternative dispute resolution system, that is initiated on or 

after the date of the enactment of this Act, except that any health care lawsuit arising from an injury occurring prior to the date of the enactment of this Act shall be 

governed by the applicable statute of limitations provisions in effect at the time the 

injury occurred. 

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.

PURPOSE AND SUMMARY

H.R. 4600 seeks to improve patient access to health care services 

and provide improved medical care by reducing the excessive burden the liability system places on the health care delivery system. 

BACKGROUND AND NEED FOR LEGISLATION

One of the primary purposes of the tort system is to provide an 

avenue for compensation for injured victims. The tort system also 

serves to deter behaviors that can cause harm to individuals and 

society as a whole. Nevertheless, excessive litigation can distort 

these useful functions, and lead to impacts that are the opposite of 

what is intended—harming the very people the system aims to protect. In the health care sector, excessive litigation has been extremely harmful to patient access to care. 

8

In several states across the country, medical liability insurance 

rates have skyrocketed, causing major insurers to drop coverage or 

raise premiums. St. Paul’s Companies, the largest malpractice carrier in the United States, covering 9 percent of doctors, announced 

in December 2001 that it would no longer offer coverage to health 

care providers. In addition, MIXX, PHICO, Frontier Insurance 

Group, and Doctors Insurance Reciprocal have either limited their 

coverage or left the medical liability insurance market. States that 

had not enacted meaningful medical liability reforms (such as Nevada, Georgia, Oregon, Mississippi, Ohio, Pennsylvania, and Washington) were particularly affected. 

In some cases, the new premiums are more than the actual income a health care provider accumulates annually. Even doctors 

that have never lost a single medical malpractice judgment or ever 

had a claim filed against them are seeing huge increases in medical 

liability premiums. The Medical Liability Monitor reports that 

medical liability insurance premiums are increasing at the highest 

rate since the mid-1980’s. In Florida, medical liability insurance 

coverage for pregnancy-related care is as high as $202,000 in some 

counties. Medical liability insurance rates are up 81 percent in 

Pennsylvania, and higher for some health care specialties. 

Doctors, unable to afford medical liability insurance, are being 

forced to drop part of their specialty practice, retire early, or move 

to another state to practice. In several states, patients are being 

left without access to high-quality care. For example, the University of Nevada Medical Center closed its trauma center in Las 

Vegas for ten days. The trauma center was able to re-open only because some of the surgeons agreed to become county employees for 

a limited time, which capped their liability for non-economic damages if they were sued. When the Las Vegas trauma center closed, 

the most severely injured patients would have to be transported to 

the nearest Level I trauma center, located five hours away. In Mississippi, over a third of the neurosurgeons have left the state in the 

past year. In West Virginia, rural areas, such as Putnam County 

and Jackson County, the sole community provider hospitals in the 

areas have closed their obstetrics units because the price of medical 

malpractice insurance is unaffordable. 

The mere threat of a health care lawsuit is so perverse that 

many doctors engage in defensive medicine. Stanford economists 

Daniel Kessler and Mark McClellan have conducted studies using 

national data on Medicare populations and concluded that patients 

from states that adopted medical care litigation reforms—such as 

limiting non-economic damage awards (pain and suffering)—incur 

significantly lower hospital costs while suffering no increase in adverse health outcomes associated with the illness for which they 

were treated. Based on these studies, the authors have quantified 

the cost of ‘‘defensive medicine,’’ in which doctors perform tests and 

prescribe medicines that are not necessary to better the health of 

the patient, but rather serve as a precautionary step just in case 

the doctor is named in a lawsuit. Published in the Quarterly Journal of Economics, their study, ‘‘Do Doctors Practice Defensive Medicine,’’ estimates that direct medical care litigation reforms could 

lead to reductions of well over $50 billion per year in health care 

expenditures, without serious adverse consequences for patients. 

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In 1975, Governor Jerry Brown signed into law California’s Medical Injury Compensation Reform Act (MICRA). This landmark legislation has helped to stabilize the California medial liability insurance market for over twenty-seven years. MICRA reforms authorize 

100 percent recovery of economic loss and up to $250,000 in noneconomic loss. In order to ensure the complete recovery of damages 

for injured patients, MICRA prevents bankruptcies in which plaintiff’s would receive only pennies on the dollar by authorizing courts 

to require periodic payments for future damages. To instill fairness 

and prevent double recoveries, MICRA authorizes defendants to introduce evidence showing the plaintiff received compensation for 

losses from outside sources. MICRA’s reforms also allow more 

money to go directly to injured patients by including limits on contingency fees lawyers can charge in health care cases. 

Overall, according to data of the National Association of Insurance Commissioners, the rate of increase in medical liability premiums in California since 1976 has been a very modest 167%, 

whereas the rest of the United States has experienced a 505% rate 

of increase. The price of some lines of medical liability insurance 

have even gone down significantly in California after MICRA was 

enacted. According to the Doctor’s Company, in 1976, when California’s MICRA law went into effect, the average medical malpractice 

premium was $23,698 in 2001 dollars. In 2001, the average premium was only $14,107. 

On July 24, 2002, President Bush called on Congress to pass legislation that includes minimum standards to make the medical liability system more fair, predictable, and timely. Several of the 

provisions are similar to California’s MICRA. H.R. 4600 includes 

many of the provisions outlined by President Bush. 

HEARINGS

The Subcommittee on Health held a hearing on ‘‘Harming Patient Access to Care: The Impact of Excessive Litigation’’ on July 

17, 2002. The Subcommittee received testimony from: Lisa Hollier, 

M.D., on behalf of the American College of Obstetricians and Gynecologists; Sam Roberts, M.D.; Mr. Stuart H. Fine, Chief Executive 

Officer, Grand View Hospital, on behalf of the American Hospital 

Association; Ms. Lauren Townsend, Coalition for Consumer Justice; 

Ms. Fran Visco, President, National Breast Cancer Coalition; Richard Anderson, M.D., CEO, The Doctor’s Company, on behalf of the 

Physician Insurers Association of America; Mr. Jamie Court, on behalf of the Foundation for Taxpayer and Consumer Rights; Mr. 

Travis Plunkett, on behalf of the Consumer Federation of America; 

Victor E. Schwartz, Esq., Shook, Hardy & Bacon L.L.P.; and Mr. 

Jim Hurly, on behalf of the American Academy of Actuaries. 

COMMITTEE CONSIDERATION

On September 18, 2002 the Full Committee met in open markup 

session and favorably ordered reported H.R. 4600, as amended, by 

a roll call vote of 27 yeas and 22 nays, a quorum being present. 

COMMITTEE VOTES

Clause 3(b) of rule XII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

10

to report legislation and amendments thereto. The following are 

the recorded votes taken on the motion by Mr. Tauzin to order H.R. 

4600 reported to the House, and on the amendments offered to the 

measure, including the names of those members voting for and 

against.

11


Insert offset folio 12 here HR693.001
12


Insert offset folio 13 here HR693.002
13


Insert offset folio 14 here HR693.003
14


Insert offset folio 15 here HR693.004
15


Insert offset folio 16 here HR693.005
16


Insert offset folio 17 here HR693.006
17


Insert offset folio 18 here HR693.007
18


Insert offset folio 19 here HR693.008
19

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee held a legislative hearing and 

made findings that are reflected in this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVE

To improve patient access to health care services and provide improved medical care by reducing the excessive burden the liability 

system places on the health care delivery system. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 4600, the 

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

(HEALTH) Act of 2002, would result in no new or increased budget 

authority, entitlement authority, or tax expenditures or revenues. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974:

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, September 25, 2002. 

Hon. W.J. ‘‘BILLY’’ TAUZIN, 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4600, the Help Efficient, 

Accessible, Low Cost, Timely Health Care (HEALTH) Act of 2002. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Alexis Ahlstrom (for 

federal revenues and spending), and Stuart Hagen (for the privatesector impact). 

Sincerely, 

STEVEN LIEBERMAN

(For Dan L. Crippen, Director). 

Enclosure. 

H.R. 4600—Help Efficient, Accessible, Low Cost, Timely Health 

Care (HEALTH) Act of 2002

Summary: H.R. 4600 would impose limits on medical malpractice 

litigation in state and federal courts by capping awards and attorney fees, reducing the statute of limitations, eliminating joint and 

20

several liability, and changing the way collateral-source benefits 

are treated. 

Those changes would lower the cost of malpractice insurance for 

physicians, hospitals, and other health care providers and organizations. That reduction in insurance costs would, in turn, lead to 

lower charges for health care services and procedures, and ultimately, to a decrease in rates for health insurance premiums. 

Because employers would pay less for health insurance for employees, more of their employees’ compensation would be in the 

form of taxable wages and fringe benefits. As a result, CBO estimates that enacting H.R. 4600 would increase federal revenues by 

$40 million in 2003 and by $2.4 billion over the 2003–2012 period. 

Enacting H.R. 4600 also would reduce federal direct spending for 

Medicare, Medicaid, the government’s share of premiums for annuitants under the Federal Employees Health Benefits (FEHB) program, and other federal health benefits programs. CBO estimates 

that direct spending would decline by $11.3 billion over the 2004– 2012 period. Because the bill would affect revenues and direct 

spending, pay-as-you-go procedures would apply. 

Federal spending for active workers participating in the FEHB 

program is included in the appropriations for federal agencies, and 

therefore is discretionary. CBO estimates that enactment of H.R. 

4600 would reduce discretionary spending for the FEHB program 

by about $400 million over the 2004–2012 period.

The bill would preempt state laws that provide less protection for 

health care providers and organizations from liability, loss, or damages (other than caps on awards for damages). That preemption 

would be an intergovernmental mandate as defined in the Unfunded Mandates Reform Act (UMRA). Such a preemption would 

limit the application of state law, but it would require no action by 

states that would result in additional spending or a loss of revenue. 

Thus, the threshold established by UMRA for intergovernmental 

mandates ($58 million in 2002, adjusted annually for inflation) 

would not be exceeded. 

H.R. 4600 would impose a private-sector mandate on attorneys 

in malpractice cases by limiting the size of the awards they could 

receive. CBO estimates that the direct cost of that mandate would 

exceed the annual threshold specified in UMRA ($115 million in 

2002, adjusted annually for inflation) in each of the first five years 

the mandate would be effective. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 4600 is shown in the following table. The effects of this legislation on direct spending fall within budget functions 550 (health) and 570 (Medicare). The effects on spending subject to appropriation fall within multiple budget functions.

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003–2012

CHANGES IN REVENUES

Income and HI Payroll 

Taxes (on-budget) ... 30 80 130 160 170 180 190 210 240 260 1,650

Social Security Payroll 

Taxes (off-budget) .. 10 30 60 70 80 90 90 100 110 110 750

Total ............... 40 110 190 230 250 270 280 310 350 370 2,400

CHANGES IN DIRECT SPENDING

Estimated Budget Authority ...................... 0 ¥250 ¥390 ¥690 ¥1,220 ¥1,520 ¥1,660 ¥1,770 ¥1,880 ¥1,920 ¥11,300

21

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003–2012

Estimated Outlays ....... 0 ¥250 ¥390 ¥690 ¥1,220 ¥1,520 ¥1,660 ¥1,770 ¥1,880 ¥1,920 ¥11,300

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level ........................ 0 ¥20 ¥40 ¥40 ¥40 ¥50 ¥50 ¥50 ¥50 ¥60 ¥400

Estimated Outlays ....... 0 ¥20 ¥40 ¥40 ¥40 ¥50 ¥50 ¥50 ¥50 ¥60 ¥400

Note.—HI = Medicare Hospital Insurance program. 

Basis of estimate: This estimate assumes that H.R. 4600 will be 

enacted in October 2002. It would apply to lawsuits initiated on or 

after the date of enactment. 

Major provisions of the bill 

H.R. 4600 would place caps on awards by limiting non-economic damages, such as pain and suffering, to $250,000, and punitive 

damages to twice the amount of economic damages or $250,000, 

whichever is greater. Punitive damages would be further constrained by limiting the circumstances under which they may be 

sought. Economic, or compensatory, damages would not be limited. 

Attorney fees would be restricted as follows: 40 percent of the first 

$50,000 of the award, 33.3 percent of the next $50,000 of the 

award, 25 percent of the next $500,000, and 15 percent of that portion of the award in excess of $600,000. The caps on attorney fees 

would apply regardless of whether the award was determined in 

the courts or settled privately, and could be reduced further at the 

discretion of the court. (The court could not, however, increase attorney fees beyond the caps.) For awards of future damages equal 

to or exceeding $50,000, any party to the lawsuit could request that 

future damages be paid by periodic payments. 

The bill would impose a statute of limitations requiring that lawsuits begin within three years after the injury alleged to have happened as a result of malpractice occurs or one year after the claimant discovers, or should have discovered, the injury, whichever occurs first. Under the joint and several liability provisions of current 

law, defendants found negligent in a lawsuit are each liable for the 

full amount of damages, regardless of their proportionate share of 

responsibility for the injury. H.R. 4600 would limit the liability of 

each defendant to the share of damages attributable to his or her 

responsibility. 

Collateral-source benefits are other sources of compensation a 

claimant may have access to in the event of an injury. A common 

source of such benefits is the claimant’s health insurance, which 

would likely pay for a portion of the medical costs arising from the 

injury. Other sources include disability insurance payments, workers’ compensation, and life insurance payments. The bill would 

allow evidence of such benefits to be introduced at trial by either 

claimants or defendants. In addition, providers of collateral-source 

benefits would not be allowed to place a lien on the claimant’s 

award or recover any amount from the claimant, whether or not 

the case goes to trial.

Impact on medical malpractice insurance premiums 

CBO’s estimate of the impact of this bill is based on a statistical 

analysis of historical premiums for medical malpractice insurance 

coverage in states that have and have not enacted medical malVerDate Sep 04 2002 05:27 Sep 26, 2002 Jkt 081872 PO 00000 Frm 00021 Fmt 6659 Sfmt 6602 E:\HR\OC\HR693P2.XXX HR693P2
22

practice tort limitations. We conducted another analysis using medical malpractice claims data provided by the Physician Insurers Association of America. CBO also considered the impact of factors not 

directly related to trends in malpractice claim payments that may 

have contributed to recent increases in medical malpractice premiums. Those factors include reduced investment income of insurers, the need of insurers to replenish depleted reserves, and recent 

increases in reinsurance costs for all types of insurance. 

CBO’s analysis indicated that certain tort limitations, primarily 

caps on awards and rules governing offsets from collateral-source 

benefits, effectively reduce average premiums for medical malpractice insurance. Consequently, CBO estimates that, in states 

that currently do not have controls on malpractice torts, H.R. 4600 

would significantly lower premiums for medical malpractice insurance from what they would otherwise be under current law. That 

effect would increase somewhat over the ten-year time horizon of 

this estimate because caps on awards would not be indexed to increase with inflation. As a result, the caps on awards would become 

more constraining in later years. 

CBO estimates that, under this bill, premiums for medical malpractice insurance ultimately would be an average of 25 percent to 

30 percent below what they would be under current law. However, 

other factors discussed above may exert upward pressure on future 

premiums, possibly obscuring at least some of the anticipated effect 

of the legislation. The effect of H.R. 4600 would vary substantially 

across states, depending on the extent to which a state already limits malpractice litigation. There would be almost no effect on malpractice premiums in about one-quarter of the states, while reductions in premiums would be substantially larger than the overall 

average in about one-third of the states. 

Impact on health insurance premiums 

The percentage effect of H.R. 4600 on overall health insurance 

premiums would be far smaller than the percentage impact on 

medical malpractice insurance premiums. Malpractice cost account 

for a very small fraction of total health care spending; even a very 

large reduction in malpractice costs would have a relatively small 

effect on total health plan premiums. In addition, some of the savings leading to lower medical malpractice rpemiums—those savings 

arising from changes in the treatment of collateral-source benefits—would represent a shift in costs from medical malpractice insurance to health insurance. Because providers of collateral-source 

benefits would be prevented from recovering their costs arising 

from the malpractice injury, some of the costs that would be borne 

by malpractice insurance under current law would instead be borne 

by the providers of collateral-source benefits. Most such providers 

are health insurers. 

CBO’s estimate does not include savings from reductions in the 

practice of defensive medicine—services and procedures that are 

provided largely or entirely to avoid potential liability. Estimating 

the amount of health care spending attributable to defense medicine is difficult. Most estimates are speculative in nature, relying, 

for the most part, on surveys of physicians’ responses to hypothetical clinical situations, and clinical studies of the effectiveness 

of certain intensive treatments. Compounding the uncertainty 

23

about the magnitude of spending for defensive medicine, there is 

little empirical evidence on the effect of medical malpractice tort 

controls on spending for defensive medicine and, more generally, on 

overall health care spending. 

A small number of studies have observed reductions in health 

care spending correlated with changes in tort law, but that research was based largely on a narrow part of the population and 

considered only hospital spending for a small number of ailments 

that are disproportionately likely to experience malpractice claims. 

Using broader measures of spending, CBO’s initial analysis could 

find no statistically significant connection between malpractice tort 

limits and overall health care spending. Although the provisions of 

H.R. 4600 could result in the initiation of fewer lawsuits, the economic incentives for individual physicians or hospitals to practice 

defensive medicine would appear to be little changed. 

Nonetheless, while there is insufficient evidence to justify including a defensive medicine adjustment in the estimate, the promising 

nature of the studies’ results merits further analysis. CBO has obtained a person-based longitudinal database that contains detailed 

claims information on Medicare spending for covered services used 

by a random sample of fee-for-service beneficiaries between 1989 

and 1997. Using these data, CBO hopes to expand the analysis of 

earlier researchers to include broader measures of spending (including hospital services, physician care, post-acute care, and ancillary services) and a larger number of conditions, to help determine 

the extent to which the results of the earlier studies may apply to 

overall health care spending. 

Federal revenues 

CBO estimates that, over a three-year period, enacting H.R. 4600 

would lower the price employers, state and local governments, and 

individuals pay for health insurance by about 0.4 percent, before 

accounting for the responses of health plans, employers, and workers to the lower premiums. Those responses would include an increase in the number of employers offering insurance to their employees and in the number of employees enrolling in employersponsored insurance, changes in the types of health plans that are 

offered, and increases in the scope or generosity of health insurance benefits. CBO assumes that these behavioral responses would 

offset 60 percent of the potential impact of the bill on the total 

costs of health plans. 

The remaining 40 percent of the potential reduction in premium 

costs, or about 0.2 percent of group health insurance premiums, 

would occur in the form of lower spending for health insurance. 

Those savings would be passed through to workers, increasing both 

their taxable compensation and other fringe benefits. For employees of private firms, CBO assumes that all of that savings would 

ultimately be passed through to workers. We assume that state, 

local, and tribal governments would absorb 75 percent of the decrease and would increase their workers’ taxable income and other 

fringe benefits to offset the remaining one-quarter of the decrease. 

CBO estimates that the resulting increase in taxable income would 

grow from $126 million in calendar year 2003 to $1.1 billion in 

2012. 

24

Those increases in workers’ taxable compensation would lead to 

more federal tax revenues. The estimate assumes an average marginal rate of about 20 percent for income taxes and the current-law 

rates for the Hospital Insurance and Social Security payroll taxes 

(2.9 percent and 12.4 percent, respectively). CBO further assumes 

that 15 percent of the change in taxable compensation would not 

be subject to the Social Security payroll tax. As a result, we estimate that federal tax revenues would increase by $40 million in 

2003 and by a total of $2.4 billion over the 2003–2012 period if 

H.R. 4600 were enacted. Social Security payroll taxes, which are 

off-budget, account for about 30 percent of those totals. 

Federal spending 

CBO estimates that H.R. 4600 would reduce direct spending for federal health insurance programs by $11.3 billion over the 2004– 2012 period. Those totals reflect reductions in spending resulting 

from the effect of lower premiums for malpractice insurance, partially offset by increases in direct spending because federal programs could no longer collect collateral-source benefits. 

CBO estimates that premiums for the Federal Employees Health 

Benefits (FEHB) program would decline by the same 0.4 percent as 

the estimated average change in premiums for private health insurance. (That estimate includes the effects of H.R. 4600 on both 

premiums for malpractice insurance and the collection of collateralsource benefits.) We assume that participants in the FEHB program would offset 60 percent of that reduction by choosing more 

expensive plans, so that spending for the FEHB program would decline by about 0.2 percent. The 2003 premiums for FEHB plans 

have already been announced, so there would be no effect on FEHB 

spending in 2003. Federal spending for annuitants in the FEHB 

program is considered direct spending. CBO estimates that H.R. 

4600 would reduce direct spending for annuitants in FEHB by $270 

million over the 2004–2012 period. Federal spending for active 

workers participating in the FEHB program is included in the appropriations for federal agencies, and therefore is discretionary. 

CBO estimates that enactment of H.R. 4600 would reduce discretionary spending for FEHB by about $400 million over the 2004–

2012 period. Spending for postal workers and postal annuitants 

participating in the FEHB program is off-budget. CBO estimates 

that changes in spending for Postal Service participants would be 

offset by changes in the prices of postal services, and therefore 

would net to zero. 

Each year, the Centers for Medicare & Medicaid Services sets 

Medicare payment rates for physician services and hospital services that include explicit adjustments for changes in the cost of 

malpractice premiums. CBO estimates that H.R. 4600 would have 

no effect on Medicare spending in 2003, because payment rates 

have already been set for hospital services and will be set for physician services before the effects of the bill could be incorporated in 

the rate-setting process. CBO estimates that incorporating lower 

malpractice premiums in Medicare payment rates would reduce 

Medicare spending by $10.8 billion over the 2004–2012 period. 

CBO assumes that the rates that state Medicaid programs pay 

for hospital and physician services would change in proportion to 

the changes in Medicare payments. In addition, lower Medicare 

25

payment rates would result in lower payments by beneficiaries for 

cost sharing and premiums. Therefore, H.R. 4600 would reduce 

spending by federal programs that pay premiums and cost sharing 

for certain Medicare beneficiaries—Medicaid and the Tricare for 

Life program of the Department of Defense (DoD). CBO estimates 

that H.R. 4600 would reduce direct spending for Medicaid and DoD 

by $3.6 billion over the 2004–2012 period. 

Under current law, Medicare and Medicaid pay the medical costs 

arising from medical malpractice injuries. In the event that a patient wins a settlement, the programs require reimbursement for 

the costs they incurred. H.R. 4600 would prohibit Medicare and 

Medicaid from making any future collections. CBO estimates that 

implementing this provision would increase outlays by $3.4 billion 

over the 2004–2012 period. 

Pay-as-you-go considerations: The Balanced Budget and Emergency Deficit Control Act sets up pay-as-you-go procedures for legislation affecting direct spending or receipts. The net changes in 

outlays and governmental receipts that are subject to pay-as-yougo procedures are shown in the following table. For the purposes 

of enforcing pay-as-you-go procedures, only the effects through 

2006 are counted.

By fiscal year, in millions of dollars

—

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Changes in receipts .................................................................................................................................... 0 30 80 130 160 170 180 190 210 240 Changes in outlays ..................................................................................................................................... 0 0 ¥250 ¥390 ¥690 ¥1,220 ¥1,520 ¥1,660 ¥1,770 ¥1,880 

27

Intergovernmental and private-sector impacts: The Unfunded 

Mandates Reform Act defines a mandate as legislation that ‘‘would 

impose an enforceable duty’’ upon the private sector or a state, 

local, or tribal government. CBO believes that UMRA’s definition 

of a mandate does not include legislation that would, for example, 

impose requirements or limitations on recoveries, address burdens 

of proof, or modify evidentiary rules because such changes would 

be methods of enforcing existing duties, rather than new duties 

themselves as contemplated by UMRA. The provisions of H.R. 4600 

would not impose or change the underlying enforceable duties or 

standards of care applicable to those providing medical items and 

services under current law. Rather, they would address the enforcement of existing standards of professional behavior through tort 

litigation procedures. 

Clearly, a cap on recoveries of damages from medical malpractice 

would lower recoveries by future plaintiffs while reducing the costs 

borne by potential defendants. This cost effect, however, would not 

itself establish a new mandate. It would be more reasonably viewed 

as part of the process for enforcing the professional duties of medical providers, rather than an enforceable duty as defined by 

UMRA. 

Intergovernmental mandates and other public-sector impacts 

Intergovernmental mandates. The bill would preempt state laws 

that would prevent the application of any provisions of the bill, but 

it would not preempt any state law that provides greater protections for health care providers and organizations from liability, 

loss, or damages. Those that provide a lesser degree of protection 

would be preempted. (State laws governing damage awards would 

not be preempted, regardless of whether they were higher or lower 

than the caps provided for in the bill.) These preemptions would 

limit the application of state law, but they would require no action 

by states that would result in additional spending or a loss of revenue. Thus, the threshold established by UMRA for intergovernmental mandates ($58 million in 2002, adjusted annually for inflation) would not be exceeded.

Other Public-Sector Impacts. State, local, and tribal governments 

would realize net savings as a result of provisions of H.R. 4600. 

State, local, and tribal governments that assess income taxes also 

would realize increased tax revenues as a result of increases in 

workers’ taxable income. CBO has not estimated the magnitude of 

those increased revenues. 

State, local, and tribal government would save money as a result 

of lower health insurance premiums precipitated by the bill. Based 

on information from the Bureau of the Census and the Joint Committee on Taxation and on our estimates of the effect of the bill on 

health care premiums, CBO estimated that state and local governments would save about $5 billion over the 2003–2012 period as a 

result of lower premiums for health care benefits they provide to 

their employees. That figure is based on estimates of state and 

local spending for health care growing from about $95 billion in 

2003 to $189 billion in 2012 and an expectation that savings would 

phase in over a three-year period. The estimate accounts for some 

loss in receipts because state health, sickness, income-disability, acVerDate Sep 04 2002 05:27 Sep 26, 2002 Jkt 081872 PO 00000 Frm 00027 Fmt 6659 Sfmt 6602 E:\HR\OC\HR693P2.XXX HR693P2
28

cident, and workers’ compensation programs would no longer be 

able to recover a share of malpractice damage awards. 

State and local governments also would save Medicaid costs as 

a result of lower health care spending, CBO estimates that state 

Medicaid spending would decrease by about $2 billion over the 

2003–2012 period. 

Private-sector mandates and other impacts 

The bill would impose a private-sector mandate on attorneys in 

malpractice cases by limiting the size of the awards they could receive. CBO estimates that the direct cost of that mandate to affected attorneys would amount to about $140 million in 2003, rising to about $320 million in 2007. Those costs would exceed the annual threshold specified in UMRA ($115 million in 2002, adjusted 

annually for inflation) in each of the first five years the mandate 

would be effective. 

Previous CBO estimate: On September 24, 2002, CBO produced 

a cost estimate for H.R. 4600 as ordered reported by the House 

Committee on the Judiciary on September 10, 2002. The two bills 

are identical with the exception of a minor difference in the set of 

exceptions to the statute of limitations. That difference does not effect CBO’s estimate of the impact of the bill in premiums for health 

insurance, on federal revenues and spending, on state, local, or 

tribal governments, or on the private sector. 

Estimate prepared by: Federal Revenues: Alexis Ahlstrom. Federal Outlays: Medicaid—Jeanne De Sa and Eric Rollins; Medicare—Julia Christensen and Alexis Ahlstrom; and FEHB—Alexis 

Ahlstrom. Impact on State Local, and Tribal Governments: Leo 

Lex. Impact on the Private Sector: Stuart Hagen. 

Estimate approved by: Robert A. Sunshine, Assistant Director for 

Budget Analysis.

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional authority for this legislation is provided in Article I, section 8, clause 

3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

29

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 establishes the short title of the bill as the ‘‘Help Efficient, Accessible, Low Cost, Timely Health Care (HEALTH) Act of 

2002’’. 

Section 2. Findings and purpose 

Section 2 states the findings and purpose of the bill. 

Section 3. Encouraging speedy resolution of claims 

Section 3 states that a health care lawsuit shall be commenced 

3 years after the date of injury or 1 year after the claimant discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first. A health care lawsuit is 

defined in the legislation as meaning ‘‘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 good 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, marketers, 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.’’ In no event shall the 

time for commencement of a health care lawsuit exceed 3 years 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. There is an exception for alleged injuries sustained by a minor before the age of 6, in which case a health care 

lawsuit may be commenced by or on behalf of the minor until the 

later of 3 years from the date of injury, or the date on which the 

minor attains the age of 8. This time period is 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. 

Section 4. Compensating patient injury 

Section 4 provides that a claimant’s economic loss may be fully 

recovered, without limitation. Economic loss includes, for example, 

objectively verifiable monetary losses, 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. In addition to unlimited recovery of economic loss, a 

claimant may recover up to $250,000 in non-economic damages. 

Non-economic 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, hedonic damages, injury to reputation, and all other nonpecuniary losses of any kind or nature. 

In any healthcare lawsuit, an award for future noneconomic damages can not be discounted to present value. Juries are not to be 

30

informed about the maximum award for noneconomic damages. An 

award for noneconomic damages in excess of $250,000 shall be reduced either before the entry of the judgment, or by amendment of 

the judgment after entry. This section also establishes a fair share 

rule, thereby abolishing joint and several liability, that apportions 

damages in proportion to a defendant’s degree of fault. 

Section 5. Maximizing patient recovery 

Section 5 requires that courts 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. This section establishes a sliding fee schedule for the payment of contingency fees from a claimant’s damage recovery as follows: 40 percent of the first $50,000 recovered by the claimant; 33 1⁄3 percent of the next $50,000 recov- ered by the claimant; 25 percent of the next $500,000 recovered by 

the claimant; and 15 percent of any amount by which the recovery 

by the claimant(s) is in excess of $600,000. 

Section 6. Additional health benefits 

Section 6 clarifies that in any health care lawsuit, any party may 

introduce evidence of collateral source benefits received or reasonably likely to be received from other parties (and which benefits 

would cover the same injuries). 

Section 7. Punitive damages 

Section 7 states that punitive damages may be awarded, if otherwise permitted by applicable state or federal law, against any person in a health care lawsuit. The amount of punitive damages 

awarded may be as much as two times the amount of economic 

damages awarded or $250,000, whichever is greater. Juries are not 

to be informed of the formula. Punitive damages may only be 

awarded if it is first proven by clear and convincing evidence that 

a defendant 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. This section states that no demand for punitive damages 

shall be included in a health care lawsuit as initially filed. Punitive 

damages in healthcare lawsuits may not be awarded if compensatory damages are not awarded. This section allows for bifurcation 

procedures, at either party’s request, so that the proceedings on punitive damages would be separate from and subsequent to the proceedings on compensatory damages. 

This section does not permit the award of punitive damages 

against the manufacturer or distributor of a medical product based 

on a claim that the product caused the harm where: the product 

was subject to premarket approval or clearance by the Food and 

Drug Administration (FDA) with respect to the safety of the formulation or performance of the product or the adequacy of the labeling 

of the product, and the product was approved and cleared by the 

FDA; or, the medical product is generally recognized among qualified experts as safe and effective pursuant to conditions established 

by the FDA and applicable regulations. This section prohibits a 

health care provider from being named as a party in a product liability lawsuit for prescribing a drug or device that is approved by 

31

the Food and Drug Administration. Punitive damages may be 

awarded against a manufacturer or distributor of a medical product, however, if a person, before or after premarket approval or 

clearance of the product knowingly misrepresented or withheld information from the FDA that is required to be submitted that is 

material and causally related to the harm which the claimant allegedly suffered. Punitive damages may also be awarded if a person 

made an illegal payment to an FDA official for the purpose of either securing or maintaining approval or clearance. 

Section 8. Authorization of payment of future damages to claimants 

in health care lawsuits 

Section 8 requires the court, at the request of any party, to order that the award of future damages equaling or exceeding $50,000 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. 

Section 9. Definitions 

Section 9 defines the terms included in the legislation. 

Section 10. Effect on other laws 

Section 10 states that this legislation does not apply to civil actions brought for a vaccine-related injury or death which is covered 

under provisions of the Public Health Service Act. It also states 

that nothing in the Act should affect any defense available to a defendant in a health care lawsuit or action under any other provision of federal law. 

Section 11. State flexibility and protection of State’s rights 

Section 11 states that the provisions governing health care lawsuits outlined in the legislation preempt State law to the extent 

that State law prevents the application of these provisions. The legislation also supersedes the Federal Tort Claims Act (FTCA) to the 

extent that the FTCA 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 application of periodic payments of future damages. The FTCA is also superseded if it prohibits the introduction of evidence regarding collateral source benefits, or mandates or permits subrogation or a lien on collateral source benefits. 

Section 11 states that any issue that is not governed by any provision of law established by the legislation is governed by otherwise 

applicable state or federal law. The legislation does not preempt or 

supersede any law that imposes greater protections for health care 

providers and health care organizations from liability, loss, or damages. 

Section 11 also states that this legislation does not preempt any 

state statutory limit (enacted before, on, or after the date of enactment of H.R. 4600) on the amount of compensatory or punitive 

damages (or the total amount of damages) that may be awarded in 

a health care lawsuit. 

Section 12. Applicability; effective date 

Section 12 states that the provisions of the legislation apply to 

any health care lawsuit brought in federal or state court, or subject 

32

to alternative dispute resolutions system, that is initiated on or 

after the date of the enactment of the Act, except that any health 

care lawsuit arising from an injury occurring prior to the date of 

the enactment of the Act is governed by the applicable statute of 

limitations provisions in effect at the time the injury occurred.

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DISSENTING VIEWS 

We are concerned that many health care providers face difficulty 

obtaining reasonably priced medical malpractice insurance; this is 

a serious problem that merits attention. But this legislation was 

rushed through in a partisan fashion, and does not reflect a deliberative effort to craft a comprehensive and workable legislative solution in Committee. 

The Subcommittee on Health held only one hearing on this matter in July. Despite testimony about the detrimental effect of this 

legislation on injured patients and about the need to more fully understand factors contributing to the insurance premium increases, 

not a single substantive change was made to the legislation. And 

a subcommittee markup was bypassed altogether. Instead, Members were given less than two days notice of a Full Committee 

markup. Every one of over a dozen amendments offered by the Minority was defeated on a partisan basis. Debate was limited after 

it was announced that the Republican leadership in the House had 

required the legislation to be reported after only just one afternoon’s consideration. Clearly, this was not a process of bipartisan 

collaboration or one that would lend itself to addressing the problem thoroughly. The legislation is now being rushed to the Floor 

just one week after being reported, at the end of the session. Much 

less severe legislation against injured victims has already been defeated in the Senate, and with multiple necessary appropriations 

bills awaiting consideration on the Floor, the timing of this action 

is most curious. 

The bill offers a ‘‘solution’’ prior to having discovered the root of 

the problem. Merely attacking injured patients’ right of redress 

under the judicial system, as this bill does, is short-sighted, meanspirited, and ultimately will do little to address providers’ concerns 

with malpractice insurance. 

We do not dispute that there is a problem. Providers have seen 

insurance rates increase dramatically in recent years, and some 

specialties are finding it impossible to secure coverage. The situation is leaving doctors with few options. Those who can afford it 

will pay the increased cost of providing medical services. Those who 

cannot afford the increase are forced to assume significant personal 

liability, leave high-risk specialties, or leave the profession altogether. At best, health care will become more expensive for patients. At worst, in addition to higher prices, patients will be denied access to care, and lifesaving treatments will not be provided. 

But while the rising cost of malpractice insurance is a very real 

concern for doctors and patients alike, we have serious reservations 

about this proposed ‘‘solution’’ for two primary reasons. First, what 

has caused the increase in malpractice insurance premiums is not 

easily identified. Moreover, it is not clear that this legislation will 

reduce the medical malpractice premiums that providers must pay 

34

1 Center for Justice and Democracy, Premium Deceit—the Failure of Tort Reform to Cut Insurance Rates. 2Testimony of Travis Plunkett, before the Subcommittee on Health of the Committee on Energy and Commerce, July 17, 2001. 3Medical Liability Monitor, 2001. 

4Testimony of Jamie Court, before the Subcommittee on Health of the Committee on Energy 

and Commerce, July 17, 2001. 5Testimony of Travis Plunkett, before the Subcommittee on Health of the Committee on Energy and Commerce, July 17, 2001. 6Public Citizen, Equal Opportunity Rate Hikes, July 2002. 

to insurance companies. Second, the scope and severity of the provisions in H.R. 4600 impose unreasonable restrictions on an injured 

patient’s ability to hold wrongdoers accountable. The legislation 

provides nothing more than a shield for bad actors rather than 

meaningful reforms for overburdened doctors and providers. 

To find an effective solution, we must closely examine the insurance industry and how its conduct affects medical malpractice premiums, an activity not undertaken by this Committee. Are medical 

malpractice insurers properly pricing their product? Are they accounting for their income and expenses while planning for expected 

downturns in the economy? Or, are they raising rates on doctors 

to compensate for questionable business judgments and accounting 

practices? 

We know that many factors completely unrelated to jury verdicts 

and the civil justice system affect insurance rates: changes in state 

law and regulatory requirements; competitiveness of the insurance 

market; the types of policies issued within the industry; interest 

rates; and national economic trends. Moreover, there is scant evidence to date that various state tort reforms have realized appreciable premium savings. In a comparison of states that enacted severe tort restrictions during the mid-1980’s and those that resisted 

enacting tort reform, a recent study found no correlation between 

tort reform and insurance rates.1 Inflation adjusted premiums per 

doctor have actually declined over the past decade.2 In California, 

which has one of the most restrictive malpractice laws in the country, the Medical Injury Compensation Reform Act (MICRA), premiums are 8% higher than premiums in states without non-economic damage caps.3 At the same time, medical malpractice insurers in California are paying out in claims less than 50 cents on 

every dollar they have taken in through premiums.4

Insurance markets are subject to cycles, periods of underpricing 

of premiums to increase market share and book premium dollars, 

followed by a hardening of the market. Once the market hardens, 

competition intensifies, underwriting results deteriorate, and investment incomes fall. Insurance companies then need to raise premiums to cover losses. For example, as a result of the underpricing 

of insurance policies over the past decade, it would take a 50% hike 

in rates to increase inflation- adjusted rates to the same level as 

existed ten years ago.5 We are now in the midst of a ‘hard’ phase 

of the insurance cycle and increases in malpractice premiums are 

consistent with overall market trends. This problem is not unique 

to malpractice insurance. While medical malpractice insurance premiums for the three riskiest specialties increased 10% from 2000 

to 2001, auto insurance premiums saw similar increases of 8.4% 

during that same period.6

35

A serious effort to provide relief to providers from high malpractice premiums would have looked at these and other issues. A 

number of Congressional Democrats have requested the General 

Accounting Office look into these questions so that we may make 

informed decisions about any federal action needed. The Committee, however, chose to take a one-sided approach. 

In addition to the above mentioned concerns that H.R. 4600 is 

premature and may not remedy the current problem, draconian 

provisions in the legislation make it even more unpalatable. There 

are many flaws in the legislation, but our dissenting views will 

focus on four of the most egregious: the cap on non-economic damages; the cap on punitive damages; the ‘‘FDA defense’’; and the 

overly restrictive statute of limitations. 

Non-economic damages 

H.R. 4600 limits non-economic damages to $250,000 for all 

claims against negligent hospitals and doctors, drug and device 

manufacturers, nursing homes, HMOs and other insurers. This cap 

is an aggregate cap; no matter how many defendants participated 

in causing the injury or the severity of the injury, the most an injured patient can recover is $250,000. Non-economic damages compensate patients for very real injuries such as the loss of a limb 

or eyesight, the loss of mobility, the loss of brain or organ function, 

the loss of fertility, severe disfigurement and excruciating, chronic 

pain Juries are not allowed to be told of this cap, presumably because proponents of this legislation do not want them to try to compensate for such a harsh limit in other areas. 

The severity of this cap is astounding. The intent is to parallel 

the cap in California’s MICRA law, which was enacted in 1975 and 

never indexed to inflation. The value of this cap has declined to a 

mere $40,389 in 2002 dollars. Using the Consumer Price Index for 

medical care, this cap today would be more than $1.5 million. In 

addition, the California law only applies to medical malpractice 

cases and not claims against drug and device manufacturers, 

HMOs, insurance companies, or nursing homes covered under H.R. 

4600. 

In addition, by capping non-economic damages, H.R. 4600 discriminates against women, children, the elderly, minorities, the unemployed and others who cannot show substantial economic loss 

(i.e., lost wages or salary). A child who suffers brain damage or 

other catastrophically debilitating injury would recoup little in economic damages, and would be left with a maximum of $250,000 for 

the remainder of his life, which could exceed 70 or 80 years. 

Non-economic damages are also an important measure of compensatory damages for older persons, and in particular nursing facility residents. These individuals have neither long life 

expectancies nor large earning capacities, the traditional measures 

of economic damages. By so stringently limiting non-economic damages, H.R. 4600 would remove a strong financial incentive to nursing facilities to provide residents with decent care. 

Punitive damages 

The legislation sets a nearly impossible standard for awarding 

punitive damages and then limits such damages to twice economic 

36

damages or $250,000, whichever is greater. By basing punitive 

damages on the level of economic losses, the bill discriminates 

against injured women, children, elderly and others who tend to 

have lower incomes. For example, if Ken Lay were injured while 

CEO of Enron, his economic damages would have been worth millions upon millions of dollars. If a stay-at-home mother were injured, she would have minimal economic damages awarded to her. 

In order to assess punitive damages, H.R. 4600 imposes a federal 

standard of ‘‘clear and convincing’’ evidence that (1) the defendant 

acted with malicious intent to injure or (2) the defendant understood the plaintiff was substantially certain to suffer unnecessary 

injury yet deliberately failed to avoid such injury. This standard of 

‘‘malicious intent’’ requires more than criminal misconduct; such a 

standard would likely protect a drunk doctor who kills a patient because a court would likely hold that the doctor was unable to form 

the necessary intent. 

The bill also could increase the length and cost of malpractice actions because it prohibits plaintiffs from seeking punitive damages 

in an initial suit. Only at the court’s discretion, after a finding by 

the court that there is a substantial probability that the plaintiff 

will prevail, may the plaintiff file an amended proceeding to request punitive damages be awarded. This requirement for a separate proceeding in essence turns one trial into two. 

FDA defense 

H.R. 4600 goes beyond protecting providers from malpractice 

awards; it also provides immunity from punitive damages to manufacturers of drugs and devices that are approved or cleared by the 

FDA as well as those that are not FDA-approved but are ‘‘generally 

recognized as safe and effective,’’ and to products that comply with 

packaging regulations. This is akin to arguing that because someone drives at the speed limit, they cannot be negligent or reckless. 

It is clearly possible to obey the speed limit, yet still act in a negligent or reckless manner. 

Approval of drugs and devices by the FDA provides no guarantee 

that a particular device is not defective, that the manufacturer has 

continued to maintain safety after approval, or that all problems 

are discovered before approval. This topic was the subject of considerable debate in Committee. Proponents of the provision argued 

that because the bill includes an exception for cases where information was knowingly misrepresented or withheld from the FDA and 

the FDA requires manufacturers to report certain items to the 

FDA, if a manufacturer did not report problems, such manufacturer would not be exempted from punitive damages. 

Notwithstanding the fact that the exception referenced only applies to withholding or misrepresenting information to the FDA, 

and thus protecting a manufacturer from punitive damages if it 

blatantly misrepresented its product to the public, there are numerous other problems with this provision. Manufacturers are not 

required to report all problems with manufacturing or changes in 

their process to the FDA. Moreover, some of the reports are only 

filed annually. What of patients injured before the report is filed? 

After approval, the FDA does not review individual drugs for 

manufacturing defects and the FDA does not have nearly enough 

37

resources to continuously monitor the conditions in every facility 

here and abroad. And, in particular now that approvals have been 

accelerated, the FDA ends up withdrawing approved drugs from 

the market for safety problems discovered after the approval. Also, 

dozens of cleared devices are recalled from the market each year 

for safety or effectiveness problems not identified in the clearance 

process. In the meantime, patients have been injured. The FDA 

cannot be omnipresent, nor should it be. 

If enacted this provision could have the perverse incentive of encouraging manufacturers to be disengaged in quality monitoring in 

their manufacturing process. If a manufacturer does not know 

about problems, they cannot be accused of failing to report the 

problems to the FDA. Basically, what they don’t know can’t hurt 

them, but could surely hurt consumers. 

Ultimately, by shielding manufacturers of dangerous or defective 

drugs from exposure to punitive damages, this bill would remove 

incentives for manufacturers to make the safest products and to 

quickly withdraw dangerous products from the market. Congress 

should not reduce any incentives for the industry to police itself 

above and beyond government regulation. 

Statute of limitations 

H.R. 4600 also sets a stringent federal statute of limitations on 

state tort cases. The statute of limitations for bringing an action 

is the earlier of three years after the date of injury or one year 

after the date of discovery, but in no event shall the time for commencement of a lawsuit exceed three years. This provision also was 

subject to considerable debate in Committee, with particular focus 

of the effect of this absolute time limit. While some injuries are 

manifested immediately, many times malpractice or product defects 

are not manifested or diagnosed for some time, for example, a hemophiliac who contracts HIV from tainted blood may not learn of 

the disease until five years later. By establishing a absolute time 

limit for filing a case this legislation would completely preclude 

many injured patients from any recourse and would therefore 

shield negligent practitioners, facilities, and manufacturers from 

any liability whatsoever. 

To conclude, the legislation before us today focuses on drastic reforms of the judicial system and extends those draconian reforms 

beyond the realm of medical malpractice rather than focusing on 

the underlying causes of the medical malpractice premium increases facing providers. While inefficiencies in our courts may be 

a contributing factor to the current crisis, they are by no means the 

only cause—or even the single largest cause—of the current crisis. 

Moreover, even if we accepted the notion that verdicts and settlements benefitting injured patients have increased significantly, 

which is less than clear, it is our responsibility to examine why 

judgments favorable to victims are on the rise—a factor this legislation does not even touch upon. Are there fatal flaws with our 

health care delivery system and HMO’s that cause more medical 

errors and patient injuries? Failure to examine all aspects of the 

problem is irresponsible, and in this instance will wind up disproportionately hurting women, children, elderly, and others who 

38

are injured as a result of the few careless or even malicious health 

care providers 

The rise in malpractice premiums is a real problem that calls for 

real reform. All aspects of this crisis should be examined thoroughly and responsibly. And above all, any legislative solution 

should strike a careful balance preserving an injured patient’s right 

to just compensation and the delivery of health care without unreasonable costs of insurance. 

JOHN D. DINGELL. TED STRICKLAND. ALBERT R. WYNN. MIKE DOYLE. KAREN MCCARTHY. EDWARD J. MARKEY. RICK BOUCHER. BOBBY L. RUSH. SHERROD BROWN. BART STUPAK. ELIOT L. ENGEL. PETER DEUTSCH. TOM SAWYER.

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DISSENTING VIEWS 

We believe that H.R. 4600 is a gross violation of the constitutional concept of federalism. H.R. 4600 would make many changes 

to the common law that severally limit the traditional rights of 

plaintiffs seeking damages from the malpractice of physicians and 

negligence from a variety of health related entities including 

Health Maintenance Organizations and pharmaceutical manufacturers and distributors. This bill is not a matter to be decided by 

Congress because it proposes tort reforms that are traditionally, 

and possibly constitutionally, areas for decisions by state legislatures. 

Many of the supporters of H.R. 4600 have stated that the bill is 

similar to California’s Medical Injury Compensation Reform Act 

(MICRA), and that MICRA has been successful for California. 

MICRA is a law that the California state legislature enacted based 

on the particular needs of California and its citizens. Even assuming that MICRA has been successful for California, Congress cannot determine that a blanket one-size-fits-all medical malpractice 

bill based on MICRA will be successful for any other state. 

Yet another reason a federal one-size-fits-all approach to medical 

malpractice reform is not warranted is that all fifty states have already addressed medical malpractice to varying degrees. About half 

of all states are either reviewing their medical malpractice laws or 

are expected to review their laws this year. Not only are states 

dealing with medical malpractice on their own, many state courts 

have held various portions of state medical malpractice laws unconstitutional. In twenty states, courts have ruled that caps on damages are unconstitutional and eighteen state courts have ruled that 

their statutes of limitations are unconstitutional. Since the issue of 

medical malpractice reform is under consideration in the states, 

there is no rationale for federal action. 

Furthermore, H.R. 4600 would make sweeping changes to common law traditions by eliminating joint and several liability, capping the amount of non-economic damages, limiting punitive damages, and severely restricting the time for recovery by victims of 

medical malpractice. Under common law, defendants are joint and 

severally liable for harm to plaintiffs to ensure that the victims can 

actually recover damages for their injuries. Yet, H.R. 4600 entirely 

eliminates joint and several liability for medical malpractice lawsuits, which means victims are less likely to receive compensation 

for their injuries and the defendants who caused harm are insulated from having to pay for their mistakes. Additionally, H.R. 4600 caps non-economic damages at $250,000 

in the aggregate. Non-economic damages compensate victims for injuries that are very real. These are injuries like the loss of a leg, 

disfigurement, pain and suffering, and the loss of fertility. Under 

common law, non-economic damages are not capped. By limiting 

40

non-economic damages to $250,000, H.R. 4600 insures that victims 

receive arbitrary compensation for the horrendous and oftentimes 

permanent injuries they suffer, rather than allowing a jury to determine the appropriate level of compensation in each individual 

case. 

H.R. 4600 also severely limits the awarding of punitive damages. 

According to common law, a plaintiff must prove ‘‘reckless indifference,’’ in order to win punitive damages. Yet, H.R. 4600 would require plaintiffs to prove ‘‘malicious intent to injure,’’ which is much 

more difficult to prove. This ensures that only in the most egregious cases will punitive damages be imposed. Additionally, the bill 

would protect manufacturers and distributors of medical products 

by shielding them from punitive damages if their products were approved by the Federal Drug Administration or, even more problematic, if their products were ‘‘generally recognized among qualified 

experts as safe and effective.’’ H.R. 4600 is an affront to states’ rights. Congress should not become an uber-state legislature by passing a bill to significantly restructure what is most appropriately a matter for state governments. 

DIANA DEGETTE. TOM SAWYER. EDWARD J. MARKEY. GENE GREEN.

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