Calendar No. 110

104TH CONGRESS

1ST SESSION S. 454

[Report No. 104–83]

A BILL

To reform the health care liability system and imother purposes. ment of quality assurance programs, and for prove health care quality through the establishMAY 16 (legislative day, MAY 15), 1995

Reported with an amendment
II

Calendar No. 110

104TH CONGRESS

1ST SESSION S. 454

[Report No. 104–83]

To reform the health care liability system and improve health care quality

through the establishment of quality assurance programs, and for other

purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 16 (legislative day, JANUARY 30), 1995

Mr. MCCONNELL (for himself, Mr. LIEBERMAN, and Mrs. KASSEBAUM) introduced the following bill; which was read twice and referred to the Committee on Labor and Human Resources

MAY 16 (legislative day, MAY 15), 1995

Reported by Mrs. KASSEBAUM, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To reform the health care liability system and improve health

care quality through the establishment of quality assurance programs, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•S 454 RS

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

3 ‘‘Health Care Liability Reform and Quality Assurance Act

4 of 1995’’.

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

6 as follows:

Sec. 1. Short title; table of contents.

TITLE I—HEALTH CARE LIABILITY REFORM

Subtitle A—Liability Reform

Sec. 101. Findings and purpose.

Sec. 102. Definitions.

Sec. 103. Applicability.

Sec. 104. Statute of limitations.

Sec. 105. Reform of punitive damages.

Sec. 106. Periodic payments.

Sec. 107. Scope of liability.

Sec. 108. Mandatory offsets for damages paid by a collateral source.

Sec. 109. Treatment of attorneys’ fees and other costs.

Sec. 110. Obstetric cases.

Sec. 111. State-based alternative dispute resolution mechanisms.

Sec. 112. Requirement of certificate of merit.

Subtitle B—Biomaterials Access Assurance

Sec. 121. Short title.

Sec. 122. Findings.

Sec. 123. Definitions.

Sec. 124. General requirements; applicability; preemption.

Sec. 125. Liability of biomaterials suppliers.

Sec. 126. Procedures for dismissal of civil actions against biomaterials suppliers.

Subtitle C—Applicability

Sec. 131. Applicability.

TITLE II—PROTECTION OF THE HEALTH AND SAFETY OF

PATIENTS

Sec. 201. Health care quality assurance program.

Sec. 202. Risk management programs.

Sec. 203. National practitioner data bank.

TITLE III—SEVERABILITY

Sec. 301. Severability.
3

•S 454 RS

1 TITLE I—HEALTH CARE

2 LIABILITY REFORM

3 Subtitle A—Liability Reform

4 SEC. 101. FINDINGS AND PURPOSE.

5 (a) FINDINGS.—Congress finds the following:

6 (1) EFFECT ON HEALTH CARE ACCESS AND

7 COSTS.—That the civil justice system of the United

8 States is a costly and inefficient mechanism for re9 solving claims of health care liability and compensat10 ing injured patients and that the problems associ11 ated with the current system are having an adverse

12 impact on the availability of, and access to, health

13 care services and the cost of health care in this

14 country.

15 (2) EFFECT ON INTERSTATE COMMERCE.—

16 That the health care and insurance industries are

17 industries affecting interstate commerce and the

18 health care liability litigation systems existing

19 throughout the United States affect interstate com20 merce by contributing to the high cost of health care

21 and premiums for health care liability insurance pur22 chased by participants in the health care system.

23 (3) EFFECT ON FEDERAL SPENDING.—That

24 the health care liability litigation systems existing

25 throughout the United States have a significant ef-
4

•S 454 RS

1 fect on the amount, distribution, and use of Federal

2 funds because of—

3 (A) the large number of individuals who

4 receive health care benefits under programs op5 erated or financed by the Federal Government;

6 (B) the large number of individuals who

7 benefit because of the exclusion from Federal

8 taxes of the amounts spent to provide them

9 with health insurance benefits; and

10 (C) the large number of health care provid11 ers who provide items or services for which the

12 Federal Government makes payments.

13 (b) PURPOSE.—It is the purpose of this Act to imple14 ment reasonable, comprehensive, and effective health care

15 liability reform that is designed to—

16 (1) ensure that individuals with meritorious

17 health care injury claims receive fair and adequate

18 compensation, including reasonable non-economic

19 damages;

20 (2) improve the availability of health care serv21 ice in cases in which health care liability actions

22 have been shown to be a factor in the decreased

23 availability of services; and

24 (3) improve the fairness and cost-effectiveness

25 of our current health care liability system to resolve
5

•S 454 RS

1 disputes over, and provide compensation for, health

2 care liability by reducing uncertainty and unpredict3 ability in the amount of compensation provided to

4 injured individuals.

5 SEC. 102. DEFINITIONS.

6 As used in this subtitle:

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

8 any person who commences a health care liability ac9 tion, and any person on whose behalf such an action

10 is commenced, including the decedent in the case of

11 an action brought through or on behalf of an estate.

12 (2) CLEAR AND CONVINCING EVIDENCE.—The

13 term ‘‘clear and convincing evidence’’ is that meas14 ure or degree of proof that will produce in the mind

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

16 the truth of the allegations sought to be established,

17 except that such measure or degree of proof is more

18 than that required under preponderance of the evi19 dence, but less than that required for proof beyond

20 a reasonable doubt.

21 (3) HEALTH CARE LIABILITY ACTION.—The

22 term ‘‘health care liability action’’ means a civil ac23 tion in a State or Federal court—

24 (A) against a health care provider, health

25 care professional, or other defendant joined in
6

•S 454 RS

1 the action (regardless of the theory of liability

2 on which the action is based) in which the

3 claimant alleges injury related to the provision

4 of, or the failure to provide, health care serv5 ices; or

6 (B) against a health care payor, a health

7 maintenance organization, insurance company,

8 or any other individual, organization, or entity

9 that provides payment for health care benefits

10 in which the claimant alleges that injury was

11 caused by the payment for, or the failure to

12 make payment for, health care benefits, except

13 to the extent such actions are subject to the

14 Employee Retirement Income Security Act of

15 1974.

16 (4) HEALTH CARE PROFESSIONAL.—The term

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

18 provides health care services in a State and who is

19 required by Federal or State laws or regulations to

20 be licensed, registered or certified to provide such

21 services or who is certified to provide health care

22 services pursuant to a program of education, train23 ing and examination by an accredited institution,

24 professional board, or professional organization.
7

•S 454 RS

1 (5) HEALTH CARE PROVIDER.—The term

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

3 institution that is engaged in the delivery of health

4 care items or services in a State and that is required

5 by Federal or State laws or regulations to be li6 censed, registered or certified to engage in the deliv7 ery of such items or services.

8 (6) HEALTH CARE SERVICES.—The term

9 ‘‘health care services’’ means any services provided

10 by a health care professional or health care provider,

11 or any individual working under the supervision of

12 a health care professional, that relate to the diag13 nosis, prevention, or treatment of any disease or im14 pairment, or the assessment of the health of human

15 beings.

16 (7) INJURY.—The term ‘‘injury’’ means any ill17 ness, disease, or other harm that is the subject of

18 a health care liability action.

19 (8) NONECONOMIC LOSSES.—The term ‘‘non20 economic losses’’ means losses for physical and emo21 tional pain, suffering, inconvenience, physical im22 pairment, mental anguish, disfigurement, loss of en23 joyment of life, loss of consortium, and other

24 nonpecuniary losses incurred by an individual with
8

•S 454 RS

1 respect to which a health care liability action is

2 brought.

3 (9) PUNITIVE DAMAGES.—The term ‘‘punitive

4 damages’’ means damages awarded, for the purpose

5 of punishment or deterrence, and not for compen6 satory purposes, against a health care provider,

7 health care organization, or other defendant in a

8 health care liability action. Punitive damages are

9 neither economic nor noneconomic damages.

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

11 means the Secretary of Health and Human Services.

12 SEC. 103. APPLICABILITY.

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

14 (c), this subtitle shall apply with respect to any health care

15 liability action brought in any Federal or State court, ex16 cept that this section shall not apply to an action for dam17 ages arising from a vaccine-related injury or death to the

18 extent that title XXI of the Public Health Service Act ap19 plies to the action.

20 (b) PREEMPTION.—The provisions of this subtitle

21 shall preempt any State law to the extent such law is in22 consistent with the limitations contained in such provi23 sions. The provisions of this subtitle shall not preempt any

24 State law that—
9

•S 454 RS

1 (1) provides for defenses in addition to those

2 contained in this subtitle, places greater limitations

3 on the amount of attorneys’ fees that can be col4 lected, or otherwise imposes greater restrictions on

5 non-economic or punitive damages than those pro6 vided in this subtitle;

7 (2) permits State officials to commence health

8 care liability actions as a representative of an indi9 vidual; or

10 (3) permits provider-based dispute resolution.

11 (c) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE

12 OF LAW OR VENUE.—Nothing in this subtitle shall be con13 strued to—

14 (1) waive or affect any defense of sovereign im15 munity asserted by any State under any provision of

16 law;

17 (2) waive or affect any defense of sovereign im18 munity asserted by the United States;

19 (3) affect the applicability of any provision of

20 the Foreign Sovereign Immunities Act of 1976;

21 (4) preempt State choice-of-law rules with re22 spect to actions brought by a foreign nation or a cit23 izen of a foreign nation; or

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

25 venue or to apply the law of a foreign nation or to
10

•S 454 RS

1 dismiss an action of a foreign nation or of a citizen

2 of a foreign nation on the ground of inconvenient

3 forum.

4 (d) FEDERAL COURT JURISDICTION NOT ESTAB5 LISHED ON FEDERAL QUESTION GROUNDS.—Nothing in

6 this subtitle shall be construed to establish any jurisdiction

7 in the district courts of the United States over health care

8 liability actions on the basis of sections 1331 or 1337 of

9 title 28, United States Code.

10 SEC. 104. STATUTE OF LIMITATIONS.

11 A health care liability action that is subject to this

12 Act may not be initiated unless a complaint with respect

13 to such action is filed within the 2-year period beginning

14 on the date on which the claimant discovered or, in the

15 exercise of reasonable care, should have discovered the

16 harm and its cause, except that such an action relating

17 to a claimant under legal disability may be filed within

18 2 years after the date on which the disability ceases. If

19 the commencement of a health care liability action is

20 stayed or enjoined, the running of the statute of limita21 tions under this section shall be suspended for the period

22 of the stay or injunction.

23 SEC. 105. REFORM OF PUNITIVE DAMAGES.

24 (a) LIMITATION.—With respect to a health care li25 ability action, an award for punitive damages may only
11

•S 454 RS

1 be made, if otherwise permitted by applicable law, if it

2 is proven by clear and convincing evidence that the defend3 ant—

4 (1) intended to injure the claimant for a reason

5 unrelated to the provision of health care services;

6 (2) understood the claimant was substantially

7 certain to suffer unnecessary injury, and in provid8 ing or failing to provide health care services, the de9 fendant deliberately failed to avoid such injury; or

10 (3) acted with a conscious disregard of a sub11 stantial and unjustifiable risk of unnecessary injury

12 which the defendant failed to avoid in a manner

13 which constitutes a gross deviation from the normal

14 standard of conduct in such circumstances.

15 (b) PUNITIVE DAMAGES NOT PERMITTED.—Not16 withstanding the provisions of subsection (a), punitive

17 damages may not be awarded against a defendant with

18 respect to any health care liability action if no judgment

19 for compensatory damages, including nominal damages

20 (under $500), is rendered against the defendant.

21 (c) REQUIREMENTS FOR PLEADING OF PUNITIVE

22 DAMAGES.—

23 (1) IN GENERAL.—No demand for punitive

24 damages shall be included in a health care liability

25 action as initially filed.
12

•S 454 RS

1 (2) AMENDED PLEADING.—A court may allow a

2 claimant to file an amended complaint or pleading

3 for punitive damages in a health care liability action

4 if—

5 (A) the claimant submits a motion to

6 amend the complaint or pleading within the

7 earlier of—

8 (i) 2 years after the complaint or ini9 tial pleading is filed, or

10 (ii) 9 months before the date the mat11 ter is first set for trial; and

12 (B) after a finding by a court upon review

13 of supporting and opposing affidavits or after a

14 hearing, that after weighing the evidence the

15 claimant has established by a substantial prob16 ability that the claimant will prevail on the

17 claim for punitive damages.

18 (d) SEPARATE PROCEEDING.—

19 (1) IN GENERAL.—At the request of any de20 fendant in a health care liability action, the trier of

21 fact shall consider in a separate proceeding—

22 (A) whether punitive damages are to be

23 awarded and the amount of such award, or

24 (B) the amount of punitive damages fol25 lowing a determination of punitive liability.
13

•S 454 RS

1 (2) ONLY RELEVANT EVIDENCE ADMISSIBLE.—

2 If a defendant requests a separate proceeding under

3 paragraph (1), evidence relevant only to the claim of

4 punitive damages in a health care liability action, as

5 determined by applicable State law, shall be inadmis6 sible in any proceeding to determine whether com7 pensatory damages are to be awarded.

8 (e) DETERMINING AMOUNT OF PUNITIVE DAM9 AGES.—In determining the amount of punitive damages

10 in a health care liability action, the trier of fact shall con11 sider only the following:

12 (1) The severity of the harm caused by the con13 duct of the defendant.

14 (2) The duration of the conduct or any conceal15 ment of it by the defendant.

16 (3) The profitability of the conduct of the de17 fendant.

18 (4) The number of products sold or medical

19 procedures rendered for compensation, as the case

20 may be, by the defendant of the kind causing the

21 harm complained of by the claimant.

22 (5) Awards of punitive or exemplary damages

23 to persons similarly situated to the claimant, when

24 offered by the defendant.
14

•S 454 RS

1 (6) Prospective awards of compensatory dam2 ages to persons similarly situated to the claimant.

3 (7) Any criminal penalties imposed on the de4 fendant as a result of the conduct complained of by

5 the claimant, when offered by the defendant.

6 (8) The amount of any civil fines assessed

7 against the defendant as a result of the conduct

8 complained of by the claimant, when offered by the

9 defendant.

10 (f) LIMITATION AMOUNT.—The amount of damages

11 that may be awarded as punitive damages in any health

12 care liability action shall not exceed 3 times the amount

13 awarded to the claimant for the economic injury on which

14 such claim is based, or $250,000, whichever is greater.

15 This subsection shall be applied by the court and shall

16 not be disclosed to the jury.

17 (g) RESTRICTIONS PERMITTED.—Nothing in this

18 section shall be construed to imply a right to seek punitive

19 damages where none exists under Federal or State law.

20 SEC. 106. PERIODIC PAYMENTS.

21 With respect to a health care liability action, no per22 son may be required to pay more than $100,000 for future

23 damages in a single payment of a damages award, but

24 a person shall be permitted to make such payments of the

25 award on a periodic basis. The periods for such payments
15

•S 454 RS

1 shall be determined by the adjudicating body, based upon

2 projections of future losses and shall be reduced to present

3 value. The adjudicating body may waive the requirements

4 of this section if such body determines that such a waiver

5 is in the interests of justice.

6 SEC. 107. SCOPE OF LIABILITY.

7 (a) IN GENERAL.—With respect to punitive and non8 economic damages, the liability of each defendant in a

9 health care liability action shall be several only and may

10 not be joint. Such a defendant shall be liable only for the

11 amount of punitive or noneconomic damages allocated to

12 the defendant in direct proportion to such defendant’s per13 centage of fault or responsibility for the injury suffered

14 by the claimant.

15 (b) DETERMINATION OF PERCENTAGE OF LIABIL16 ITY.—The trier of fact in a health care liability action

17 shall determine the extent of each defendant’s fault or re18 sponsibility for injury suffered by the claimant, and shall

19 assign a percentage of responsibility for such injury to

20 each such defendant.

21 (c) PROHIBITION ON VICARIOUS LIABILITY.—A de22 fendant in a health care liability action may not be held

23 vicariously liable for the direct actions or omissions of

24 other individuals.
16

•S 454 RS

1 SEC. 108. MANDATORY OFFSETS FOR DAMAGES PAID BY A

2 COLLATERAL SOURCE.

3 (a) IN GENERAL.—With respect to a health care li4 ability action, the total amount of damages received by

5 an individual under such action shall be reduced, in ac6 cordance with subsection (b), by any other payment that

7 has been, or will be, made to an individual to compensate

8 such individual for the injury that was the subject of such

9 action.

10 (b) AMOUNT OF REDUCTION.—The amount by which

11 an award of damages to an individual for an injury shall

12 be reduced under subsection (a) shall be—

13 (1) the total amount of any payments (other

14 than such award) that have been made or that will

15 be made to such individual to pay costs of or com16 pensate such individual for the injury that was the

17 subject of the action; minus

18 (2) the amount paid by such individual (or by

19 the spouse, parent, or legal guardian of such individ20 ual) to secure the payments described in paragraph

21 (1).

22 (c) PRETRIAL DETERMINATION OF AMOUNTS FROM

23 COLLATERAL SERVICES.—The reductions required under

24 subsection (b)(2) shall be determined by the court in a

25 pretrial proceeding. At such proceeding—
17

•S 454 RS

1 (1) no evidence shall be admitted as to the

2 amount of any charge, payments, or damage for

3 which a claimant—

4 (A) has received payment from a collateral

5 source or the obligation for which has been as6 sured by a third party; or

7 (B) is, or with reasonable certainty, will be

8 eligible to receive payment from a collateral

9 source of the obligation which will, with reason10 able certainty be assumed by a third party; and

11 (2) the jury, if any, shall be advised that—

12 (A) except for damages as to which the

13 court permits the introduction of evidence, the

14 claimant’s medical expenses and lost income

15 have been or will be paid by a collateral source

16 or third party; and

17 (B) the claimant shall receive no award for

18 any damages that have been or will be paid by

19 a collateral source or third party.

20 SEC. 109. TREATMENT OF ATTORNEYS’ FEES AND OTHER

21 COSTS.

22 (a) LIMITATION ON AMOUNT OF CONTINGENCY

23 FEES.—

24 (1) IN GENERAL.—An attorney who represents,

25 on a contingency fee basis, a claimant in a health
18

•S 454 RS

1 care liability action may not charge, demand, re2 ceive, or collect for services rendered in connection

3 with such action in excess of the following amount

4 recovered by judgment or settlement under such ac5 tion:

(A) 331 6 ⁄3 percent of the first $150,000 (or

7 portion thereof) recovered, based on after-tax

8 recovery, plus

9 (B) 25 percent of any amount in excess of

10 $150,000 recovered, based on after-tax recov11 ery.

12 (2) CALCULATION OF PERIODIC PAYMENTS.—In

13 the event that a judgment or settlement includes

14 periodic or future payments of damages, the amount

15 recovered for purposes of computing the limitation

16 on the contingency fee under paragraph (1) shall be

17 based on the cost of the annuity or trust established

18 to make the payments. In any case in which an an19 nuity or trust is not established to make such pay20 ments, such amount shall be based on the present

21 value of the payments.

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

23 section, the term ‘‘contingency fee’’ means any fee for pro24 fessional legal services which is, in whole or in part, con-
19

•S 454 RS

1 tingent upon the recovery of any amount of damages,

2 whether through judgment or settlement.

3 SEC. 110. OBSTETRIC CASES.

4 With respect to a health care liability action relating

5 to services provided during labor or the delivery of a baby,

6 if the health care professional against whom the action

7 is brought did not previously treat the pregnant woman

8 for the pregnancy, the trier of fact may not find that the

9 defendant committed malpractice and may not assess

10 damages against the health care professional unless the

11 malpractice is proven by clear and convincing evidence.

12 SEC. 111. STATE-BASED ALTERNATIVE DISPUTE RESOLU13 TION MECHANISMS.

14 (a) APPLICATION TO HEALTH CARE LIABILITY

15 CLAIMS UNDER HEALTH PLANS.—Prior to or immediately

16 following the commencement of any health care liability

17 action, the parties shall participate in the alternative dis18 pute resolution system administered by the State under

19 subsection (b). Such participation shall be in lieu of any

20 other provision of Federal or State law applicable to the

21 parties prior to the commencement of the health care li22 ability action.

23 (b) ADOPTION OF MECHANISM BY STATE.—Each

24 State shall—
20

•S 454 RS

1 (1) maintain or adopt at least one of the alter2 native dispute resolution methods satisfying the re3 quirements specified under subsection (c) and (d) for

4 the resolution of health care liability claims arising

5 from the provision of (or failure to provide) health

6 care services to individuals enrolled in a health plan;

7 and

8 (2) clearly disclose to enrollees in health plans

9 (and potential enrollees) the availability and proce10 dures for consumer grievances, including a descrip11 tion of the alternative dispute resolution method or

12 methods adopted under this subsection.

13 (c) SPECIFICATION OF PERMISSIBLE ALTERNATIVE

14 DISPUTE RESOLUTION METHODS.—

15 (1) IN GENERAL.—The Attorney General, in

16 consultation with the Secretary and the Administra17 tive Conference of the United States, shall, by regu18 lation, develop alternative dispute resolution methods

19 for the use by States in resolving health care liability

20 claims under subsection (a). Such methods shall in21 clude at least the following:

22 (A) ARBITRATION.—The use of arbitra23 tion, a nonjury adversarial dispute resolution

24 process which may, subject to subsection (d),

25 result in a final decision as to facts, law, liabil-
21

•S 454 RS

1 ity or damages. The parties may elect binding

2 arbitration.

3 (B) MEDIATION.—The use of mediation, a

4 settlement process coordinated by a neutral

5 third party without the ultimate rendering of a

6 formal opinion as to factual or legal findings.

7 (C) EARLY NEUTRAL EVALUATION.—The

8 use of early neutral evaluation, in which the

9 parties make a presentation to a neutral attor10 ney or other neutral evaluator for an assess11 ment of the merits, to encourage settlement. If

12 the parties do not settle as a result of assess13 ment and proceed to trial, the neutral eval14 uator’s opinion shall be kept confidential.

15 (D) EARLY OFFER AND RECOVERY MECHA16 NISM.—

17 (i) IN GENERAL.—The use of early

18 offer and recovery mechanisms under

19 which a health care provider, health care

20 organization, or any other alleged respon21 sible defendant may offer to compensate a

22 claimant for his or her reasonable eco23 nomic damages, including future economic

24 damages, less amounts available from col25 lateral sources.
22

•S 454 RS

1 (ii) BINDING ARBITRATION.—If, after

2 an offer is made under clause (i), the

3 claimant alleges that payment of economic

4 damages under the offer has not been rea5 sonably made, or the participants in the

6 offer dispute their relative contributions to

7 the payments to be made to the claimant,

8 such disputes shall be resolved through

9 binding arbitration in accordance with ap10 plicable rules and procedures established

11 by the State involved.

12 (2) STANDARDS FOR ESTABLISHING METH13 ODS.—In developing alternative dispute resolution

14 methods under paragraph (1), the Attorney General

15 shall assure that the methods promote the resolution

16 of health care liability claims in a manner that—

17 (A) is affordable for the parties involved;

18 (B) provides for timely resolution of

19 claims;

20 (C) provides for the consistent and fair

21 resolution of claims; and

22 (D) provides for reasonably convenient ac23 cess to dispute resolution for individuals en24 rolled in plans.
23

•S 454 RS

1 (3) WAIVER AUTHORITY.—Upon application of

2 a State, the Attorney General, in consultation with

3 the Secretary, may grant the State the authority to

4 fulfill the requirement of subsection (b) by adopting

5 a mechanism other than a mechanism established by

6 the Attorney General pursuant to this subsection,

7 except that such mechanism must meet the stand8 ards set forth in paragraph (2).

9 (d) FURTHER REDRESS.—Except with respect to the

10 claimant-requested binding arbitration method set forth in

11 subsection (c)(1)(A), a claimant who is dissatisfied with

12 the determination reached as a result of an alternative dis13 pute resolution method applied under this section may,

14 after the final resolution of the claimant’s claim under the

15 method, initiate or resume a cause of action to seek dam16 ages or other redress with respect to the claim to the ex17 tent otherwise permitted under State law. State law shall

18 govern the admissibility of results of any alternative dis19 pute resolution procedure and all statements, offers, and

20 other communications made during such procedures, at

21 any subsequent trial. An individual who initiates or re22 sumes a health care liability action shall only prevail if

23 such individual proves each element of the action beyond

24 a reasonable doubt, including proving that the defendant

25 was grossly negligent or intentionally caused injury.
24

•S 454 RS

1 SEC. 112. REQUIREMENT OF CERTIFICATE OF MERIT.

2 (a) REQUIRING SUBMISSION WITH COMPLAINT.—Ex3 cept as provided in subsection (b) and subject to the pen4 alties of subsection (d), no health care liability action may

5 be brought by any individual unless, at the time the indi6 vidual commences such action, the individual or the indi7 vidual’s attorney submits an affidavit declaring that—

8 (1) the individual (or the individual’s attorney)

9 has consulted and reviewed the facts of the claim

10 with a qualified specialist (as defined in subsection

11 (c));

12 (2) the individual or the individual’s attorney

13 has obtained a written report by a qualified special14 ist that clearly identifies the individual and that in15 cludes the specialist’s determination that, based

16 upon a review of the available medical record and

17 other relevant material, a reasonable medical inter18 pretation of the facts supports a finding that the

19 claim against the defendant is meritorious and based

20 on good cause; and

21 (3) on the basis of the qualified specialist’s re22 view and consultation, the individual, and if rep23 resented, the individual’s attorney, have concluded

24 that the claim is meritorious and based on good

25 cause.

26 (b) EXTENSION IN CERTAIN INSTANCES.—
25

•S 454 RS

1 (1) IN GENERAL.—Subject to paragraph (2),

2 subsection (a) shall not apply with respect to an in3 dividual who brings a health care liability action

4 without submitting an affidavit described in such

5 subsection if—

6 (A) despite good faith efforts, the individ7 ual is unable to obtain the written report before

8 the expiration of the applicable statute of limi9 tations;

10 (B) despite good faith efforts, at the time

11 the individual commences the action, the indi12 vidual has been unable to obtain medical

13 records or other information necessary, pursu14 ant to any applicable law, to prepare the writ15 ten report requested; or

16 (C) the court of competent jurisdiction de17 termines that the affidavit requirement shall be

18 extended upon a showing of good cause.

19 (2) DEADLINE FOR SUBMISSION WHERE EX20 TENSION APPLIES.—In the case of an individual who

21 brings an action to which paragraph (1) applies, the

22 action shall be dismissed unless the individual sub23 mits the affidavit described in subsection (a) not

24 later than—
26

•S 454 RS

1 (A) in the case of an action to which sub2 paragraph (A) of paragraph (1) applies, 90

3 days after commencing the action; or

4 (B) in the case of an action to which sub5 paragraph (B) of paragraph (1) applies, 90

6 days after obtaining the information described

7 in such subparagraph or when good cause for

8 an extension no longer exists.

9 (c) QUALIFIED SPECIALIST DEFINED.—

10 (1) IN GENERAL.—As used in subsection (a),

11 the term ‘‘qualified specialist’’ means, with respect

12 to a health care liability action, a health care profes13 sional who has expertise in the same or substantially

14 similar area of practice to that involved in the

15 action.

16 (2) EVIDENCE OF EXPERTISE.—For purposes

17 of paragraph (1), evidence of required expertise may

18 include evidence that the individual—

19 (A) practices (or has practiced) or teaches

20 (or has taught) in the same or substantially

21 similar area of health care or medicine to that

22 involved in the action; or

23 (B) is otherwise qualified by experience or

24 demonstrated competence in the relevant prac25 tice area.
27

•S 454 RS

1 (d) SANCTIONS FOR SUBMITTING FALSE AFFIDA2 VIT.—Upon the motion of any party or on its own initia3 tive, the court in a health care liability action may impose

4 a sanction on a party, the party’s attorney, or both, for—

5 (1) any knowingly false statement made in an

6 affidavit described in subsection (a);

7 (2) making any false representations in order to

8 obtain a qualified specialist’s report; or

9 (3) failing to have the qualified specialist’s writ10 ten report in his or her custody and control;

11 and may require that the sanctioned party reimburse the

12 other party to the action for costs and reasonable attor13 ney’s fees.

14 Subtitle B—Biomaterials Access

15 Assurance

16 SEC. 121. SHORT TITLE.

17 This subtitle may be cited as the ‘‘Biomaterials Ac18 cess Assurance Act of 1995’’.

19 SEC. 122. FINDINGS.

20 Congress finds that—

21 (1) each year millions of citizens of the United

22 States depend on the availability of lifesaving or life23 enhancing medical devices, many of which are per24 manently implantable within the human body;
28

•S 454 RS

1 (2) a continued supply of raw materials and

2 component parts is necessary for the invention, de3 velopment, improvement, and maintenance of the

4 supply of the devices;

5 (3) most of the medical devices are made with

6 raw materials and component parts that—

7 (A) are not designed or manufactured spe8 cifically for use in medical devices; and

9 (B) come in contact with internal human

10 tissue;

11 (4) the raw materials and component parts also

12 are used in a variety of nonmedical products;

13 (5) because small quantities of the raw mate14 rials and component parts are used for medical de15 vices, sales of raw materials and component parts

16 for medical devices constitute an extremely small

17 portion of the overall market for the raw materials

18 and medical devices;

19 (6) under the Federal Food, Drug, and Cos20 metic Act (21 U.S.C. 301 et seq.), manufacturers of

21 medical devices are required to demonstrate that the

22 medical devices are safe and effective, including

23 demonstrating that the products are properly de24 signed and have adequate warnings or instructions;
29

•S 454 RS

1 (7) notwithstanding the fact that raw materials

2 and component parts suppliers do not design,

3 produce, or test a final medical device, the suppliers

4 have been the subject of actions alleging inad5 equate—

6 (A) design and testing of medical devices

7 manufactured with materials or parts supplied

8 by the suppliers; or

9 (B) warnings related to the use of such

10 medical devices;

11 (8) even though suppliers of raw materials and

12 component parts have very rarely been held liable in

13 such actions, such suppliers have ceased supplying

14 certain raw materials and component parts for use

15 in medical devices because the costs associated with

16 litigation in order to ensure a favorable judgment for

17 the suppliers far exceeds the total potential sales

18 revenues from sales by such suppliers to the medical

19 device industry;

20 (9) unless alternate sources of supply can be

21 found, the unavailability of raw materials and com22 ponent parts for medical devices will lead to unavail23 ability of lifesaving and life-enhancing medical de24 vices;
30

•S 454 RS

1 (10) because other suppliers of the raw mate2 rials and component parts in foreign nations are re3 fusing to sell raw materials or component parts for

4 use in manufacturing certain medical devices in the

5 United States, the prospects for development of new

6 sources of supply for the full range of threatened

7 raw materials and component parts for medical de8 vices are remote;

9 (11) it is unlikely that the small market for

10 such raw materials and component parts in the

11 United States could support the large investment

12 needed to develop new suppliers of such raw mate13 rials and component parts;

14 (12) attempts to develop such new suppliers

15 would raise the cost of medical devices;

16 (13) courts that have considered the duties of

17 the suppliers of the raw materials and component

18 parts have generally found that the suppliers do not

19 have a duty—

20 (A) to evaluate the safety and efficacy of

21 the use of a raw material or component part in

22 a medical device; and

23 (B) to warn consumers concerning the

24 safety and effectiveness of a medical device;
31

•S 454 RS

1 (14) attempts to impose the duties referred to

2 in subparagraphs (A) and (B) of paragraph (13) on

3 suppliers of the raw materials and component parts

4 would cause more harm than good by driving the

5 suppliers to cease supplying manufacturers of medi6 cal devices; and

7 (15) in order to safeguard the availability of a

8 wide variety of lifesaving and life-enhancing medical

9 devices, immediate action is needed—

10 (A) to clarify the permissible bases of li11 ability for suppliers of raw materials and com12 ponent parts for medical devices; and

13 (B) to provide expeditious procedures to

14 dispose of unwarranted suits against the suppli15 ers in such manner as to minimize litigation

16 costs.

17 SEC. 123. DEFINITIONS.

18 As used in this subtitle:

19 (1) BIOMATERIALS SUPPLIER.—

20 (A) IN GENERAL.—The term ‘‘biomaterials

21 supplier’’ means an entity that directly or indi22 rectly supplies a component part or raw mate23 rial for use in the manufacture of an implant.

24 (B) PERSONS INCLUDED.—Such term in25 cludes any person who—
32

•S 454 RS

1 (i) has submitted master files to the

2 Secretary for purposes of premarket ap3 proval of a medical device; or

4 (ii) licenses a biomaterials supplier to

5 produce component parts or raw materials.

6 (2) CLAIMANT.—

7 (A) IN GENERAL.—The term ‘‘claimant’’

8 means any person who brings a civil action, or

9 on whose behalf a civil action is brought, aris10 ing from harm allegedly caused directly or indi11 rectly by an implant, including a person other

12 than the individual into whose body, or in con13 tact with whose blood or tissue, the implant is

14 placed, who claims to have suffered harm as a

15 result of the implant.

16 (B) ACTION BROUGHT ON BEHALF OF AN

17 ESTATE.—With respect to an action brought on

18 behalf or through the estate of an individual

19 into whose body, or in contact with whose blood

20 or tissue the implant is placed, such term in21 cludes the decedent that is the subject of the

22 action.

23 (C) ACTION BROUGHT ON BEHALF OF A

24 MINOR.—With respect to an action brought on
33

•S 454 RS

1 behalf or through a minor, such term includes

2 the parent or guardian of the minor.

3 (D) EXCLUSIONS.—Such term does not in4 clude—

5 (i) a provider of professional services,

6 in any case in which—

7 (I) the sale or use of an implant

8 is incidental to the transaction; and

9 (II) the essence of the trans10 action is the furnishing of judgment,

11 skill, or services; or

12 (ii) a manufacturer, seller, or

13 biomaterials supplier.

14 (3) COMPONENT PART.—

15 (A) IN GENERAL.—The term ‘‘component

16 part’’ means a manufactured piece of an im17 plant.

18 (B) CERTAIN COMPONENTS.—Such term

19 includes a manufactured piece of an implant

20 that—

21 (i) has significant nonimplant applica22 tions; and

23 (ii) alone, has no implant value or

24 purpose, but when combined with other
34

•S 454 RS

1 component parts and materials, constitutes

2 an implant.

3 (4) HARM.—

4 (A) IN GENERAL.—The term ‘‘harm’’

5 means—

6 (i) any injury to or damage suffered

7 by an individual;

8 (ii) any illness, disease, or death of

9 that individual resulting from that injury

10 or damage; and

11 (iii) any loss to that individual or any

12 other individual resulting from that injury

13 or damage.

14 (B) EXCLUSION.—The term does not in15 clude any commercial loss or loss of or damage

16 to an implant.

17 (5) IMPLANT.—The term ‘‘implant’’ means—

18 (A) a medical device that is intended by

19 the manufacturer of the device—

20 (i) to be placed into a surgically or

21 naturally formed or existing cavity of the

22 body for a period of at least 30 days; or

23 (ii) to remain in contact with bodily

24 fluids or internal human tissue through a
35

•S 454 RS

1 surgically produced opening for a period of

2 less than 30 days; and

3 (B) suture materials used in implant pro4 cedures.

5 (6) MANUFACTURER.—The term ‘‘manufac6 turer’’ means any person who, with respect to an im7 plant—

8 (A) is engaged in the manufacture, prepa9 ration, propagation, compounding, or processing

10 (as defined in section 510(a)(1) of the Federal

11 Food, Drug, and Cosmetic Act (21 U.S.C.

12 360(a)(1)) of the implant; and

13 (B) is required—

14 (i) to register with the Secretary pur15 suant to section 510 of the Federal Food,

16 Drug, and Cosmetic Act (21 U.S.C. 360)

17 and the regulations issued under such sec18 tion; and

19 (ii) to include the implant on a list of

20 devices filed with the Secretary pursuant

21 to section 510(j) of such Act (21 U.S.C.

22 360(j)) and the regulations issued under

23 such section.

24 (7) MEDICAL DEVICE.—The term ‘‘medical de25 vice’’ means a device, as defined in section 201(h)
36

•S 454 RS

1 of the Federal Food, Drug, and Cosmetic Act (21

2 U.S.C. 321(h)).

3 (8) QUALIFIED SPECIALIST.—With respect to

4 an action, the term ‘‘qualified specialist’’ means a

5 person who is qualified by knowledge, skill, experi6 ence, training, or education in the specialty area

7 that is the subject of the action.

8 (9) RAW MATERIAL.—The term ‘‘raw material’’

9 means a substance or product that—

10 (A) has a generic use; and

11 (B) may be used in an application other

12 than an implant.

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

14 means the Secretary of Health and Human Services.

15 (11) SELLER.—

16 (A) IN GENERAL.—The term ‘‘seller’’

17 means a person who, in the course of a business

18 conducted for that purpose, sells, distributes,

19 leases, packages, labels, or otherwise places an

20 implant in the stream of commerce.

21 (B) EXCLUSIONS.—The term does not in22 clude—

23 (i) a seller or lessor of real property;

24 (ii) a provider of professional services,

25 in any case in which the sale or use of an
37

•S 454 RS

1 implant is incidental to the transaction and

2 the essence of the transaction is the fur3 nishing of judgment, skill, or services; or

4 (iii) any person who acts in only a fi5 nancial capacity with respect to the sale of

6 an implant.

7 SEC. 124. GENERAL REQUIREMENTS; APPLICABILITY; PRE8 EMPTION.

9 (a) GENERAL REQUIREMENTS.—

10 (1) IN GENERAL.—In any civil action covered

11 by this subtitle, a biomaterials supplier may raise

12 any defense set forth in section 125.

13 (2) PROCEDURES.—Notwithstanding any other

14 provision of law, the Federal or State court in which

15 a civil action covered by this subtitle is pending

16 shall, in connection with a motion for dismissal or

17 judgment based on a defense described in paragraph

18 (1), use the procedures set forth in section 126.

19 (b) APPLICABILITY.—

20 (1) IN GENERAL.—Except as provided in para21 graph (2), notwithstanding any other provision of

22 law, this subtitle applies to any civil action brought

23 by a claimant, whether in a Federal or State court,

24 against a manufacturer, seller, or biomaterials sup-
38

•S 454 RS

1 plier, on the basis of any legal theory, for harm al2 legedly caused by an implant.

3 (2) EXCLUSION.—A civil action brought by a

4 purchaser of a medical device for use in providing

5 professional services against a manufacturer, seller,

6 or biomaterials supplier for loss or damage to an im7 plant or for commercial loss to the purchaser—

8 (A) shall not be considered an action that

9 is subject to this subtitle; and

10 (B) shall be governed by applicable com11 mercial or contract law.

12 (c) SCOPE OF PREEMPTION.—

13 (1) IN GENERAL.—This subtitle supersedes any

14 State law regarding recovery for harm caused by an

15 implant and any rule of procedure applicable to a

16 civil action to recover damages for such harm only

17 to the extent that this subtitle establishes a rule of

18 law applicable to the recovery of such damages.

19 (2) APPLICABILITY OF OTHER LAWS.—Any

20 issue that arises under this subtitle and that is not

21 governed by a rule of law applicable to the recovery

22 of damages described in paragraph (1) shall be gov23 erned by applicable Federal or State law.

24 (d) STATUTORY CONSTRUCTION.—Nothing in this

25 subtitle may be construed—
39

•S 454 RS

1 (1) to affect any defense available to a defend2 ant under any other provisions of Federal or State

3 law in an action alleging harm caused by an im4 plant; or

5 (2) to create a cause of action or Federal court

6 jurisdiction pursuant to section 1331 or 1337 of title

7 28, United States Code, that otherwise would not

8 exist under applicable Federal or State law.

9 SEC. 125. LIABILITY OF BIOMATERIALS SUPPLIERS.

10 (a) IN GENERAL.—

11 (1) EXCLUSION FROM LIABILITY.—Except as

12 provided in paragraph (2), a biomaterials supplier

13 shall not be liable for harm to a claimant caused by

14 an implant.

15 (2) LIABILITY.—A biomaterials supplier that—

16 (A) is a manufacturer may be liable for

17 harm to a claimant described in subsection (b);

18 (B) is a seller may be liable for harm to

19 a claimant described in subsection (c); and

20 (C) furnishes raw materials or component

21 parts that fail to meet applicable contractual re22 quirements or specifications may be liable for a

23 harm to a claimant described in subsection (d).

24 (b) LIABILITY AS MANUFACTURER.—
40

•S 454 RS

1 (1) IN GENERAL.—A biomaterials supplier may,

2 to the extent required and permitted by any other

3 applicable law, be liable for harm to a claimant

4 caused by an implant if the biomaterials supplier is

5 the manufacturer of the implant.

6 (2) GROUNDS FOR LIABILITY.—The

7 biomaterials supplier may be considered the manu8 facturer of the implant that allegedly caused harm

9 to a claimant only if the biomaterials supplier—

10 (A)(i) has registered with the Secretary

11 pursuant to section 510 of the Federal Food,

12 Drug, and Cosmetic Act (21 U.S.C. 360) and

13 the regulations issued under such section; and

14 (ii) included the implant on a list of de15 vices filed with the Secretary pursuant to sec16 tion 510(j) of such Act (21 U.S.C. 360(j)) and

17 the regulations issued under such section; or

18 (B) is the subject of a declaration issued

19 by the Secretary pursuant to paragraph (3)

20 that states that the supplier, with respect to the

21 implant that allegedly caused harm to the

22 claimant, was required to—

23 (i) register with the Secretary under

24 section 510 of such Act (21 U.S.C. 360),
41

•S 454 RS

1 and the regulations issued under such sec2 tion, but failed to do so; or

3 (ii) include the implant on a list of de4 vices filed with the Secretary pursuant to

5 section 510(j) of such Act (21 U.S.C.

6 360(j)) and the regulations issued under

7 such section, but failed to do so.

8 (3) ADMINISTRATIVE PROCEDURES.—

9 (A) IN GENERAL.—The Secretary may

10 issue a declaration described in paragraph

11 (2)(B) on the motion of the Secretary or on pe12 tition by any person, after providing—

13 (i) notice to the affected persons; and

14 (ii) an opportunity for an informal

15 hearing.

16 (B) DOCKETING AND FINAL DECISION.—

17 Immediately upon receipt of a petition filed

18 pursuant to this paragraph, the Secretary shall

19 docket the petition. Not later than 180 days

20 after the petition is filed, the Secretary shall

21 issue a final decision on the petition.

22 (C) APPLICABILITY OF STATUTE OF LIMI23 TATIONS.—Any applicable statute of limitations

24 shall toll during the period during which a
42

•S 454 RS

1 claimant has filed a petition with the Secretary

2 under this paragraph.

3 (c) LIABILITY AS SELLER.—A biomaterials supplier

4 may, to the extent required and permitted by any other

5 applicable law, be liable as a seller for harm to a claimant

6 caused by an implant if the biomaterials supplier—

7 (1) held title to the implant that allegedly

8 caused harm to the claimant as a result of purchas9 ing the implant after—

10 (A) the manufacture of the implant; and

11 (B) the entrance of the implant in the

12 stream of commerce; and

13 (2) subsequently resold the implant.

14 (d) LIABILITY FOR VIOLATING CONTRACTUAL RE15 QUIREMENTS OR SPECIFICATIONS.—A biomaterials sup16 plier may, to the extent required and permitted by any

17 other applicable law, be liable for harm to a claimant

18 caused by an implant, if the claimant in an action shows,

19 by a preponderance of the evidence, that—

20 (1) the raw materials or component parts deliv21 ered by the biomaterials supplier either—

22 (A) did not constitute the product de23 scribed in the contract between the biomaterials

24 supplier and the person who contracted for de25 livery of the product; or
43

•S 454 RS

1 (B) failed to meet any specifications that

2 were—

3 (i) provided to the biomaterials sup4 plier and not expressly repudiated by the

5 biomaterials supplier prior to acceptance of

6 delivery of the raw materials or component

7 parts;

8 (ii)(I) published by the biomaterials

9 supplier;

10 (II) provided to the manufacturer by

11 the biomaterials supplier; or

12 (III) contained in a master file that

13 was submitted by the biomaterials supplier

14 to the Secretary and that is currently

15 maintained by the biomaterials supplier for

16 purposes of premarket approval of medical

17 devices; or

18 (iii)(I) included in the submissions for

19 purposes of premarket approval or review

20 by the Secretary under section 510, 513,

21 515, or 520 of the Federal Food, Drug,

22 and Cosmetic Act (21 U.S.C. 360, 360c,

23 360e, or 360j); and

24 (II) have received clearance from the

25 Secretary,
44

•S 454 RS

1 if such specifications were provided by the man2 ufacturer to the biomaterials supplier and were

3 not expressly repudiated by the biomaterials

4 supplier prior to the acceptance by the manu5 facturer of delivery of the raw materials or

6 component parts; and

7 (2) such conduct was an actual and proximate

8 cause of the harm to the claimant.

9 SEC. 126. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS

10 AGAINST BIOMATERIALS SUPPLIERS.

11 (a) MOTION TO DISMISS.—In any action that is sub12 ject to this subtitle, a biomaterials supplier who is a de13 fendant in such action may, at any time during which a

14 motion to dismiss may be filed under an applicable law,

15 move to dismiss the action on the grounds that—

16 (1) the defendant is a biomaterials supplier;

17 and

18 (2)(A) the defendant should not, for the pur19 poses of—

20 (i) section 125(b), be considered to be a

21 manufacturer of the implant that is subject to

22 such section; or

23 (ii) section 125(c), be considered to be a

24 seller of the implant that allegedly caused harm

25 to the claimant; or
45

•S 454 RS

1 (B)(i) the claimant has failed to establish, pur2 suant to section 125(d), that the supplier furnished

3 raw materials or component parts in violation of

4 contractual requirements or specifications; or

5 (ii) the claimant has failed to comply with the

6 procedural requirements of subsection (b).

7 (b) PROCEDURAL REQUIREMENTS.—

8 (1) IN GENERAL.—The procedural requirements

9 described in paragraphs (2) and (3) shall apply to

10 any action by a claimant against a biomaterials sup11 plier that is subject to this subtitle.

12 (2) MANUFACTURER OF IMPLANT SHALL BE

13 NAMED A PARTY.—The claimant shall be required to

14 name the manufacturer of the implant as a party to

15 the action, unless—

16 (A) the manufacturer is subject to service

17 of process solely in a jurisdiction in which the

18 biomaterials supplier is not domiciled or subject

19 to a service of process; or

20 (B) an action against the manufacturer is

21 barred by applicable law.

22 (3) AFFIDAVIT.—At the time the claimant

23 brings an action against a biomaterials supplier the

24 claimant shall be required to submit an affidavit

25 that—
46

•S 454 RS

1 (A) declares that the claimant has con2 sulted and reviewed the facts of the action with

3 a qualified specialist, whose qualifications the

4 claimant shall disclose;

5 (B) includes a written determination by a

6 qualified specialist that the raw materials or

7 component parts actually used in the manufac8 ture of the implant of the claimant were raw

9 materials or component parts described in sec10 tion 125(d)(1), together with a statement of the

11 basis for such a determination;

12 (C) includes a written determination by a

13 qualified specialist that, after a review of the

14 medical record and other relevant material, the

15 raw material or component part supplied by the

16 biomaterials supplier and actually used in the

17 manufacture of the implant was a cause of the

18 harm alleged by claimant, together with a state19 ment of the basis for the determination; and

20 (D) states that, on the basis of review and

21 consultation of the qualified specialist, the

22 claimant (or the attorney of the claimant) has

23 concluded that there is a reasonable and meri24 torious cause for the filing of the action against

25 the biomaterials supplier.
47

•S 454 RS

1 (c) PROCEEDING ON MOTION TO DISMISS.—The fol2 lowing rules shall apply to any proceeding on a motion

3 to dismiss filed under this section:

4 (1) AFFIDAVITS RELATING TO LISTING AND

5 DECLARATIONS.—

6 (A) IN GENERAL.—The defendant in the

7 action may submit an affidavit demonstrating

8 that defendant has not included the implant on

9 a list, if any, filed with the Secretary pursuant

10 to section 510(j) of the Federal Food, Drug,

11 and Cosmetic Act (21 U.S.C. 360(j)).

12 (B) RESPONSE TO MOTION TO DISMISS.—

13 In response to the motion to dismiss, the claim14 ant may submit an affidavit demonstrating

15 that—

16 (i) the Secretary has, with respect to

17 the defendant and the implant that alleg18 edly caused harm to the claimant, issued a

19 declaration pursuant to section

20 125(b)(2)(B); or

21 (ii) the defendant who filed the mo22 tion to dismiss is a seller of the implant

23 who is liable under section 125(c).

24 (2) EFFECT OF MOTION TO DISMISS ON DIS25 COVERY.—
48

•S 454 RS

1 (A) IN GENERAL.—If a defendant files a

2 motion to dismiss under paragraph (1) or (3) of

3 subsection (a), no discovery shall be permitted

4 in connection to the action that is the subject

5 of the motion, other than discovery necessary

6 to determine a motion to dismiss for lack of ju7 risdiction, until such time as the court rules on

8 the motion to dismiss in accordance with the

9 affidavits submitted by the parties in accord10 ance with this section.

11 (B) DISCOVERY.—If a defendant files a

12 motion to dismiss under subsection (a)(2) on

13 the grounds that the biomaterials supplier did

14 not furnish raw materials or component parts

15 in violation of contractual requirements or spec16 ifications, the court may permit discovery, as

17 ordered by the court. The discovery conducted

18 pursuant to this subparagraph shall be limited

19 to issues that are directly relevant to—

20 (i) the pending motion to dismiss; or

21 (ii) the jurisdiction of the court.

22 (3) AFFIDAVITS RELATING STATUS OF DEFEND23 ANT.—

24 (A) IN GENERAL.—Except as provided in

25 clauses (i) and (ii) of subparagraph (B), the
49

•S 454 RS

1 court shall consider a defendant to be a

2 biomaterials supplier who is not subject to an

3 action for harm to a claimant caused by an im4 plant, other than an action relating to liability

5 for a violation of contractual requirements or

6 specifications described in subsection (d).

7 (B) RESPONSES TO MOTION TO DISMISS.—

8 The court shall grant a motion to dismiss any

9 action that asserts liability of the defendant

10 under subsection (b) or (c) of section 125 on

11 the grounds that the defendant is not a manu12 facturer subject to such subsection 125(b) or

13 seller subject to subsection 125(c), unless the

14 claimant submits a valid affidavit that dem15 onstrates that—

16 (i) with respect to a motion to dismiss

17 contending the defendant is not a manu18 facturer, the defendant meets the applica19 ble requirements for liability as a manufac20 turer under section 125(b); or

21 (ii) with respect to a motion to dis22 miss contending that the defendant is not

23 a seller, the defendant meets the applicable

24 requirements for liability as a seller under

25 section 125(c).
50

•S 454 RS

1 (4) BASIS OF RULING ON MOTION TO DIS2 MISS.—

3 (A) IN GENERAL.—The court shall rule on

4 a motion to dismiss filed under subsection (a)

5 solely on the basis of the pleadings of the par6 ties made pursuant to this section and any affi7 davits submitted by the parties pursuant to this

8 section.

9 (B) MOTION FOR SUMMARY JUDGMENT.—

10 Notwithstanding any other provision of law, if

11 the court determines that the pleadings and af12 fidavits made by parties pursuant to this sec13 tion raise genuine issues as concerning material

14 facts with respect to a motion concerning con15 tractual requirements and specifications, the

16 court may deem the motion to dismiss to be a

17 motion for summary judgment made pursuant

18 to subsection (d).

19 (d) SUMMARY JUDGMENT.—

20 (1) IN GENERAL.—

21 (A) BASIS FOR ENTRY OF JUDGMENT.—A

22 biomaterials supplier shall be entitled to entry

23 of judgment without trial if the court finds

24 there is no genuine issue as concerning any ma-
51

•S 454 RS

1 terial fact for each applicable element set forth

2 in paragraphs (1) and (2) of section 125(d).

3 (B) ISSUES OF MATERIAL FACT.—With re4 spect to a finding made under subparagraph

5 (A), the court shall consider a genuine issue of

6 material fact to exist only if the evidence sub7 mitted by claimant would be sufficient to allow

8 a reasonable jury to reach a verdict for the

9 claimant if the jury found the evidence to be

10 credible.

11 (2) DISCOVERY MADE PRIOR TO A RULING ON

12 A MOTION FOR SUMMARY JUDGMENT.—If, under ap13 plicable rules, the court permits discovery prior to a

14 ruling on a motion for summary judgment made

15 pursuant to this subsection, such discovery shall be

16 limited solely to establishing whether a genuine issue

17 of material fact exists.

18 (3) DISCOVERY WITH RESPECT TO A

19 BIOMATERIALS SUPPLIER.—A biomaterials supplier

20 shall be subject to discovery in connection with a

21 motion seeking dismissal or summary judgment on

22 the basis of the inapplicability of section 125(d) or

23 the failure to establish the applicable elements of

24 section 125(d) solely to the extent permitted by the
52

•S 454 RS

1 applicable Federal or State rules for discovery

2 against nonparties.

3 (e) STAY PENDING PETITION FOR DECLARATION.—

4 If a claimant has filed a petition for a declaration pursu5 ant to section 125(b) with respect to a defendant, and the

6 Secretary has not issued a final decision on the petition,

7 the court shall stay all proceedings with respect to that

8 defendant until such time as the Secretary has issued a

9 final decision on the petition.

10 (f) MANUFACTURER CONDUCT OF PROCEEDING.—

11 The manufacturer of an implant that is the subject of an

12 action covered under this subtitle shall be permitted to file

13 and conduct a proceeding on any motion for summary

14 judgment or dismissal filed by a biomaterials supplier who

15 is a defendant under this section if the manufacturer and

16 any other defendant in such action enter into a valid and

17 applicable contractual agreement under which the manu18 facturer agrees to bear the cost of such proceeding or to

19 conduct such proceeding.

20 (g) ATTORNEY FEES.—The court shall require the

21 claimant to compensate the biomaterials supplier (or a

22 manufacturer appearing in lieu of a supplier pursuant to

23 subsection (f)) for attorney fees and costs, if—

24 (1) the claimant named or joined the

25 biomaterials supplier; and
53

•S 454 RS

1 (2) the court found the claim against the

2 biomaterials supplier to be without merit and frivo3 lous.

4 Subtitle C—Applicability

5 SEC. 131. APPLICABILITY.

6 This title shall apply to all civil actions covered under

7 this title that are commenced on or after the date of enact8 ment of this Act, including any such action with respect

9 to which the harm asserted in the action or the conduct

10 that caused the harm occurred before the date of enact11 ment of this Act.

12 TITLE II—PROTECTION OF THE

13 HEALTH AND SAFETY OF PA14 TIENTS

15 SEC. 201. HEALTH CARE QUALITY ASSURANCE PROGRAM.

16 (a) FUND.—Each State shall establish a health care

17 quality assurance program, to be approved by the Sec18 retary, and a fund consisting of such amounts as are

19 transferred to the fund under subsection (b).

20 (b) TRANSFER OF AMOUNTS.—Each State shall re21 quire that 50 percent of all awards of punitive damages

22 resulting from all health care liability actions in that State

23 be transferred to the fund established under subsection

24 (a) in the State.
54

•S 454 RS

1 (c) OBLIGATIONS FROM FUND.—The chief executive

2 officer of a State shall obligate such sums as are available

3 in the fund established in that State under subsection (a)

4 to—

5 (1) license and certify health care professionals

6 in the State;

7 (2) implement health care quality assurance

8 programs; and

9 (3) carry out programs to reduce malpractice10 related costs for health care providers volunteering

11 to provide health care services in medically under12 served areas.

13 SEC. 202. RISK MANAGEMENT PROGRAMS.

14 (a) REQUIREMENTS FOR PROVIDERS.—Each State

15 shall require each health care professional and health care

16 provider providing services in the State to participate in

17 a risk management program to prevent and provide early

18 warning of practices which may result in injuries to pa19 tients or which otherwise may endanger patient safety.

20 (b) REQUIREMENTS FOR INSURERS.—Each State

21 shall require each entity which provides health care profes22 sional or provider liability insurance to health care profes23 sionals and health care providers in the State to—

24 (1) establish risk management programs based

25 on data available to such entity or sanction pro-
55

•S 454 RS

1 grams of risk management for health care profes2 sionals and health care providers provided by other

3 entities; and

4 (2) require each such professional or provider,

5 as a condition of maintaining insurance, to partici6 pate in one program described in paragraph (1) at

7 least once in each 3-year period.

8 SEC. 203. NATIONAL PRACTITIONER DATA BANK.

9 Section 427 of the Health Care Quality Improvement

10 Act of 1986 (42 U.S.C. 11137) is amended—

11 (1) by redesignating subsections (b) through (d)

12 as subsections (c) through (e), respectively;

13 (2) by inserting after subsection (a), the follow14 ing new subsection:

15 ‘‘(b) DISCLOSURE OF INFORMATION.—The Secretary

16 shall promulgate regulations providing for the disclosure

17 of information reported to the Secretary under sections

18 422 and 423, upon request, to any individual.’’; and

19 (3) in subsection (c) (as so redesignated)—

20 (A) in the first sentence of paragraph (1),

21 by striking ‘‘under this part’’ and inserting

22 ‘‘under section 421’’; and

23 (B) in paragraph (3), by striking ‘‘sub24 section (a)’’ and inserting ‘‘subsections (a) and

25 (b)’’.
56

•S 454 RS

1 TITLE III—SEVERABILITY

2 SEC. 301. SEVERABILITY.

3 If any provision of this Act, an amendment made by

4 this Act, or the application of such provision or amend5 ment to any person or circumstance is held to be unconsti6 tutional, the remainder of this Act, the amendments made

7 by this Act, and the application of the provisions of such

8 to any person or circumstance shall not be affected

9 thereby.

10 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

12 ‘‘Health Care Liability Reform and Quality Assurance Act

13 of 1995’’.

14 (b) TABLE OF CONTENTS.—The table of contents is as

15 follows:

Sec. 1. Short title; table of contents.

TITLE I—HEALTH CARE LIABILITY REFORM

Subtitle A—Liability Reform

Sec. 101. Findings and purpose.

Sec. 102. Definitions.

Sec. 103. Applicability.

Sec. 104. Statute of limitations.

Sec. 105. Reform of punitive damages.

Sec. 106. Periodic payments.

Sec. 107. Scope of liability.

Sec. 108. Mandatory offsets for damages paid by a collateral source.

Sec. 109. Treatment of attorneys’ fees and other costs.

Sec. 110. State-based alternative dispute resolution mechanisms.

Subtitle B—Biomaterials Access Assurance

Sec. 121. Short title.

Sec. 122. Findings.

Sec. 123. Definitions.

Sec. 124. General requirements; applicability; preemption.
57

•S 454 RS

Sec. 125. Liability of biomaterials suppliers.

Sec. 126. Procedures for dismissal of civil actions against biomaterials suppliers.

Subtitle C—Applicability

Sec. 131. Applicability.

TITLE II—PROTECTION OF THE HEALTH AND SAFETY OF

PATIENTS

Sec. 201. Additional resources for State health care quality assurance and access

activities.

Sec. 202. Quality assurance, patient safety, and consumer information.

TITLE III—SEVERABILITY

Sec. 301. Severability.

1 TITLE I—HEALTH CARE

2 LIABILITY REFORM

3 Subtitle A—Liability Reform

4 SEC. 101. FINDINGS AND PURPOSE.

5 (a) FINDINGS.—Congress finds the following:

6 (1) EFFECT ON HEALTH CARE ACCESS AND

7 COSTS.—The civil justice system of the United States

8 is a costly and inefficient mechanism for resolving

9 claims of health care liability and compensating in10 jured patients and the problems associated with the

11 current system are having an adverse impact on the

12 availability of, and access to, health care services and

13 the cost of health care in the United States.

14 (2) EFFECT ON INTERSTATE COMMERCE.—The

15 health care and insurance industries are industries

16 affecting interstate commerce and the health care li17 ability litigation systems existing throughout the

18 United States affect interstate commerce by contribut-
58

•S 454 RS

1 ing to the high cost of health care and premiums for

2 health care liability insurance purchased by partici3 pants in the health care system.

4 (3) EFFECT ON FEDERAL SPENDING.—The health

5 care liability litigation systems existing throughout

6 the United States have a significant effect on the

7 amount, distribution, and use of Federal funds be8 cause of—

9 (A) the large number of individuals who re10 ceive health care benefits under programs oper11 ated or financed by the Federal Government;

12 (B) the large number of individuals who

13 benefit because of the exclusion from Federal

14 taxes of the amounts spent to provide such indi15 viduals with health insurance benefits; and

16 (C) the large number of health care provid17 ers who provide items or services for which the

18 Federal Government makes payments.

19 (b) PURPOSE.—It is the purpose of this Act to imple20 ment reasonable, comprehensive, and effective health care

21 liability reform that is designed to—

22 (1) ensure that individuals with meritorious

23 health care injury claims receive fair and adequate

24 compensation;
59

•S 454 RS

1 (2) improve the availability of health care service

2 in cases in which health care liability actions have

3 been shown to be a factor in the decreased availability

4 of services; and

5 (3) improve the fairness and cost-effectiveness of

6 the current health care liability system of the United

7 States to resolve disputes over, and provide compensa8 tion for, health care liability by reducing uncertainty

9 and unpredictability in the amount of compensation

10 provided to injured individuals.

11 SEC. 102. DEFINITIONS.

12 As used in this subtitle:

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

14 any person who commences a health care liability ac15 tion, and any person on whose behalf such an action

16 is commenced, including the decedent in the case of

17 an action brought through or on behalf of an estate.

18 (2) CLEAR AND CONVINCING EVIDENCE.—The

19 term ‘‘clear and convincing evidence’’ means that

20 measure or degree of proof that will produce in the

21 mind of the trier of fact a firm belief or conviction

22 as to the truth of the allegations sought to be estab23 lished, except that such measure or degree of proof is

24 more than that required under preponderance of the
60

•S 454 RS

1 evidence, but less than that required for proof beyond

2 a reasonable doubt.

3 (3) COLLATERAL SOURCE RULE.—The term ‘‘col4 lateral source rule’’ means a rule, either statutorily

5 established or established at common law, that pre6 vents the introduction of evidence regarding collateral

7 source benefits or that prohibits the deduction of col8 lateral source benefits from an award of damages in

9 a health care liability action.

10 (4) ECONOMIC LOSSES.—The term ‘‘economic

11 losses’’ means objectively verifiable monetary losses in12 curred as a result of the provision of (or failure to

13 provide or pay for) health care services or the use of

14 a medical product, including past and future medical

15 expenses, loss of past and future earnings, cost of ob16 taining replacement services in the home (including

17 child care, transportation, food preparation, and

18 household care), cost of making reasonable accom19 modations to a personal residence, loss of employ20 ment, and loss of business or employment opportuni21 ties. Economic losses are neither noneconomic losses

22 nor punitive damages.

23 (5) HEALTH CARE LIABILITY ACTION.—The term

24 ‘‘health care liability action’’ means a civil action

25 against a health care provider, health care profes-
61

•S 454 RS

1 sional, health plan, or other defendant, including a

2 right to legal or equitable contribution, indemnity,

3 subrogation, third-party claims, cross claims, or

4 counter-claims, in which the claimant alleges injury

5 related to the provision of, payment for, or the failure

6 to provide or pay for, health care services or medical

7 products, regardless of the theory of liability on which

8 the action is based. Such term does not include a

9 product liability action, except where such an action

10 is brought as part of a broader health care liability

11 action.

12 (6) HEALTH PLAN.—The term ‘‘health plan’’

13 means any person or entity which is obligated to pro14 vide or pay for health benefits under any health in15 surance arrangement, including any person or entity

16 acting under a contract or arrangement to provide,

17 arrange for, or administer any health benefit.

18 (7) HEALTH CARE PROFESSIONAL.—The term

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

20 provides health care services in a State and who is

21 required by Federal or State laws or regulations to be

22 licensed, registered or certified to provide such services

23 or who is certified to provide health care services pur24 suant to a program of education, training and exam-
62

•S 454 RS

1 ination by an accredited institution, professional

2 board, or professional organization.

3 (8) HEALTH CARE PROVIDER.—The term ‘‘health

4 care provider’’ means any organization or institution

5 that is engaged in the delivery of health care items or

6 services in a State and that is required by Federal or

7 State laws or regulations to be licensed, registered or

8 certified to engage in the delivery of such items or

9 services.

10 (9) HEALTH CARE SERVICES.—The term ‘‘health

11 care services’’ means any services provided by a

12 health care professional, health care provider, or

13 health plan or any individual working under the su14 pervision of a health care professional, that relate to

15 the diagnosis, prevention, or treatment of any disease

16 or impairment, or the assessment of the health of

17 human beings.

18 (10) INJURY.—The term ‘‘injury’’ means any ill19 ness, disease, or other harm that is the subject of a

20 health care liability action.

21 (11) MEDICAL PRODUCT.—The term ‘‘medical

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

23 201(g)(1) of the Federal Food, Drug, and Cosmetic

24 Act (21 U.S.C. 321(g)(1)) or a medical device as de25 fined in section 201(h) of such Act (21 U.S.C.
63

•S 454 RS

1 321(h)), including any component or raw material

2 used therein, but excluding health care services, as de3 fined in paragraph (9).

4 (12) NONECONOMIC LOSSES.—The term ‘‘non5 economic losses’’ means losses for physical and emo6 tional pain, suffering, inconvenience, physical im7 pairment, mental anguish, disfigurement, loss of en8 joyment of life, loss of consortium, loss of society or

9 companionship (other than loss of domestic services),

10 and other nonpecuniary losses incurred by an indi11 vidual with respect to which a health care liability

12 action is brought. Noneconomic losses are neither eco13 nomic losses nor punitive damages.

14 (13) PUNITIVE DAMAGES.—The term ‘‘punitive

15 damages’’ means damages awarded, for the purpose of

16 punishment or deterrence, and not for compensatory

17 purposes, against a health care professional, health

18 care provider, or other defendant in a health care li19 ability action. Punitive damages are neither economic

20 nor noneconomic damages.

21 (14) SECRETARY.—The term ‘‘Secretary’’ means

22 the Secretary of Health and Human Services.

23 (15) STATE.—The term ‘‘State’’ means each of

24 the several States of the United States, the District of

25 Columbia, and the Commonwealth of Puerto Rico.
64

•S 454 RS

1 SEC. 103. APPLICABILITY.

2 (a) IN GENERAL.—Except as provided in subsections

3 (c) and (d), this subtitle shall apply with respect to any

4 health care liability action brought in any Federal or State

5 court, except that this subtitle shall not apply to an action

6 for damages arising from a vaccine-related injury or death

7 to the extent that title XXI of the Public Health Service

8 Act applies to the action.

9 (b) PREEMPTION.—

10 (1) IN GENERAL.—The provisions of this subtitle

11 shall preempt any State law existing on, or enacted

12 subsequent to, the date of enactment of this Act, only

13 to the extent that such law is inconsistent with the

14 limitations contained in such provisions and shall

15 not preempt State law to the extent that such law—

16 (A) places greater restrictions on the

17 amount of or standards for awarding non18 economic or punitive damages;

19 (B) places greater limitations on the award20 ing of attorneys fees for awards in excess of

21 $150,000;

22 (C) permits a lower threshold for the peri23 odic payment of future damages;

24 (D) establishes a shorter period during

25 which a health care liability action may be initi26 ated or a more restrictive rule with respect to the
65

•S 454 RS

1 time at which the period of limitations begins to

2 run; or

3 (E) implements collateral source rule reform

4 that either permits the introduction of evidence

5 of collateral source benefits or provides for the

6 mandatory offset of collateral source benefits

7 from damage awards.

8 (2) RULES OF CONSTRUCTION.—The provisions

9 of this subtitle shall not be construed to preempt any

10 State law that—

11 (A) permits State officials to commence

12 health care liability actions as a representative

13 of an individual;

14 (B) permits provider-based dispute resolu15 tion;

16 (C) places a maximum limit on the total

17 damages in a health care liability action;

18 (D) places a maximum limit on the time in

19 which a health care liability action may be initi20 ated; or

21 (E) provides for defenses in addition to

22 those contained in this Act.

23 (c) STATE OPTION.—

24 (1) IN GENERAL.—With respect to a provision of

25 this subtitle, such provision shall not apply to a
66

•S 454 RS

1 health care liability action involving parties that are

2 residents of the same State if the action is brought

3 in a court of that State and the State has enacted

4 a law—

5 (A) specifically citing the authority of this

6 subsection; and

7 (B)(i) proclaiming that the State has deter8 mined that such provision shall not apply to

9 such actions; or

10 (ii) establishing provisions that specifically

11 contradict the provisions of this subtitle.

12 (2) MULTIPLE STATES.—With respect to a health

13 care liability action involving parties that are resi14 dents of more than one State, if each such State has

15 enacted a law described in paragraph (1), the choice16 of-law rules of each such State shall govern the rules

17 and procedures applicable in the action.

18 (3) CORPORATE ENTITY.—For purposes of this

19 subsection, a corporate entity shall be deemed to be a

20 resident of the State in which such entity is incor21 porated and the State in which the principal place of

22 business of the entity is located.

23 (4) RULE OF CONSTRUCTION.—Nothing in this

24 subsection shall be construed as requiring a State to

25 reenact any provision of State law if such law existed
67

•S 454 RS

1 on the date of enactment of this Act and such law is

2 not otherwise preempted under the provisions of sub3 section (b).

4 (d) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE OF

5 LAW OR VENUE.—Nothing in this subtitle shall be construed

6 to—

7 (1) waive or affect any defense of sovereign im8 munity asserted by any State under any provision of

9 law;

10 (2) waive or affect any defense of sovereign im11 munity asserted by the United States;

12 (3) affect the applicability of any provision of

13 the Foreign Sovereign Immunities Act of 1976;

14 (4) preempt State choice-of-law rules with re15 spect to actions brought by a foreign nation or a citi16 zen of a foreign nation;

17 (5) affect the right of any court to transfer venue

18 or to apply the law of a foreign nation or to dismiss

19 an action of a foreign nation or of a citizen of a for20 eign nation on the ground of inconvenient forum; or

21 (6) supersede any provision of Federal law.

22 (e) FEDERAL COURT JURISDICTION NOT ESTAB23 LISHED ON FEDERAL QUESTION GROUNDS.—Nothing in

24 this subtitle shall be construed to establish any jurisdiction

25 in the district courts of the United States over health care
68

•S 454 RS

1 liability actions on the basis of section 1331 or 1337 of title

2 28, United States Code.

3 SEC. 104. STATUTE OF LIMITATIONS.

4 A health care liability action that is subject to this

5 Act may not be initiated unless a complaint with respect

6 to such action is filed within the 2-year period beginning

7 on the date on which the claimant discovered or, in the exer8 cise of reasonable care, should have discovered the injury

9 and its cause, except that such an action relating to a

10 claimant under legal disability may be filed within 2 years

11 after the date on which the disability ceases. If the com12 mencement of a health care liability action is stayed or en13 joined, the running of the statute of limitations under this

14 section shall be suspended for the period of the stay or in15 junction.

16 SEC. 105. REFORM OF PUNITIVE DAMAGES.

17 (a) LIMITATION.—With respect to a health care liabil18 ity action, an award for punitive damages may only be

19 made, if otherwise permitted by applicable law, if it is

20 proven by clear and convincing evidence that the defend21 ant—

22 (1) intended to injure the claimant for a reason

23 unrelated to the provision of health care services;

24 (2) understood the claimant was substantially

25 certain to suffer unnecessary injury, and in providing
69

•S 454 RS

1 or failing to provide health care services, the defend2 ant deliberately failed to avoid such injury; or

3 (3) acted with a conscious, flagrant disregard of

4 a substantial and unjustifiable risk of unnecessary in5 jury which the defendant failed to avoid in a manner

6 which constitutes a gross deviation from the normal

7 standard of conduct in such circumstances.

8 (b) PUNITIVE DAMAGES NOT PERMITTED.—Notwith9 standing the provisions of subsection (a), punitive damages

10 may not be awarded against a defendant with respect to

11 any health care liability action if no judgment for compen12 satory damages, including nominal damages (under $500),

13 is rendered against the defendant.

14 (c) PROCEDURE FOR DETERMINING PUNITIVE DAM15 AGES.—

16 (1) IN GENERAL.—In any health care liability

17 action subject to this subtitle in which punitive dam18 ages are recoverable, the trier of fact shall determine,

19 concurrent with all other issues presented in such ac20 tion, whether such damages shall be allowed. If the

21 trier of fact determines that such damages are al22 lowed, a separate proceeding shall be conducted by the

23 court to determine the amount of such damages to be

24 awarded.
70

•S 454 RS

1 (2) SEPARATE PROCEEDING.—At a separate pro2 ceeding to determine the amount of punitive damages

3 to be awarded under paragraph (1), the court shall

4 consider the following:

5 (A) The severity of the harm caused by the

6 conduct of the defendant.

7 (B) The duration of the conduct or any con8 cealment of such conduct by the defendant.

9 (C) The profitability of the conduct of the

10 defendant.

11 (D) The number of products sold or medical

12 procedures rendered for compensation, as the

13 case may be, by the defendant of the kind caus14 ing the harm complained of by the claimant.

15 (E) The total deterrent effect of other dam16 ages and punishment imposed upon the defend17 ant as a result of the misconduct, including com18 pensatory, exemplary and punitive damage

19 awards to individuals in situations similar to

20 those of the claimant and the severity of any

21 criminal or administrative penalties, or civil

22 fines, to which the defendant has been or may be

23 subjected.

24 (3) DETERMINATION.—At the conclusion of a

25 separate proceeding under paragraph (1), the court
71

•S 454 RS

1 shall determine the amount of punitive damages to be

2 awarded with respect to the health care liability ac3 tion involved and shall enter judgment for that

4 amount. The court shall clearly state its reasons for

5 setting the amount of such award in findings of fact

6 and conclusions of law, demonstrating consideration

7 of each of the factors described in paragraph (2).

8 (d) RESTRICTIONS PERMITTED.—Nothing in this Act

9 shall be construed to imply a right to seek punitive damages

10 where none exists under Federal or State law.

11 SEC. 106. PERIODIC PAYMENTS.

12 With respect to a health care liability action, if the

13 award of future damages exceeds $100,000, the adjudicating

14 body shall, at the request of either party, enter a judgment

15 ordering that future damages be paid on a periodic basis

16 in accordance with the guidelines contained in the Uniform

17 Periodic Payments of Judgments Act, as promulgated by

18 the National Conference of Commissioners on Uniform

19 State Laws in July of 1990. The adjudicating body may

20 waive the requirements of this section if such body deter21 mines that such a waiver is in the interests of justice.

22 SEC. 107. SCOPE OF LIABILITY.

23 (a) IN GENERAL.—With respect to punitive and non24 economic damages, the liability of each defendant in a

25 health care liability action shall be several only and may
72

•S 454 RS

1 not be joint. Such a defendant shall be liable only for the

2 amount of punitive or noneconomic damages allocated to

3 the defendant in direct proportion to such defendant’s per4 centage of fault or responsibility for the injury suffered by

5 the claimant.

6 (b) DETERMINATION OF PERCENTAGE OF LIABILITY.—

7 With respect to punitive or noneconomic damages, the trier

8 of fact in a health care liability action shall determine the

9 extent of each party’s fault or responsibility for injury suf10 fered by the claimant, and shall assign a percentage of re11 sponsibility for such injury to each such party.

12 SEC. 108. MANDATORY OFFSETS FOR DAMAGES PAID BY A

13 COLLATERAL SOURCE.

14 (a) IN GENERAL.—With respect to a health care liabil15 ity action, the total amount of damages received by an indi16 vidual under such action shall be reduced, in accordance

17 with subsection (b), by any other payment that has been,

18 or will be, made to an individual to compensate such indi19 vidual for the injury that was the subject of such action.

20 (b) AMOUNT OF REDUCTION.—The amount by which

21 an award of damages to an individual for an injury shall

22 be reduced under subsection (a) shall be—

23 (1) the total amount of any payments (other

24 than such award) that have been made or that will

25 be made to such individual to pay costs of or com-
73

•S 454 RS

1 pensate such individual for the injury that was the

2 subject of the action; minus

3 (2) the amount paid by such individual (or by

4 the spouse, parent, or legal guardian of such individ5 ual) to secure the payments described in paragraph

6 (1).

7 (c) DETERMINATION OF AMOUNTS FROM COLLATERAL

8 SERVICES.—The reductions required under subsection (b)

9 shall be determined by the court in a pretrial proceeding.

10 At the subsequent trial—

11 (1) no evidence shall be admitted as to the

12 amount of any charge, payments, or damage for

13 which a claimant—

14 (A) has received payment from a collateral

15 source or the obligation for which has been as16 sured by a third party; or

17 (B) is, or with reasonable certainty, will be

18 eligible to receive payment from a collateral

19 source of the obligation which will, with reason20 able certainty be assumed by a third party; and

21 (2) the jury, if any, shall be advised that—

22 (A) except for damages as to which the

23 court permits the introduction of evidence, the

24 claimant’s medical expenses and lost income
74

•S 454 RS

1 have been or will be paid by a collateral source

2 or third party; and

3 (B) the claimant shall receive no award for

4 any damages that have been or will be paid by

5 a collateral source or third party.

6 SEC. 109. TREATMENT OF ATTORNEYS’ FEES AND OTHER

7 COSTS.

8 (a) LIMITATION ON AMOUNT OF CONTINGENCY

9 FEES.—

10 (1) IN GENERAL.—An attorney who represents,

11 on a contingency fee basis, a claimant in a health

12 care liability action may not charge, demand, receive,

13 or collect for services rendered in connection with such

14 action in excess of the following amount recovered by

15 judgment or settlement under such action:

(A) 331 16 ⁄3 percent of the first $150,000 (or

17 portion thereof) recovered, based on after-tax re18 covery, plus

19 (B) 25 percent of any amount in excess of

20 $150,000 recovered, based on after-tax recovery.

21 (2) CALCULATION OF PERIODIC PAYMENTS.—In

22 the event that a judgment or settlement includes peri23 odic or future payments of damages, the amount re24 covered for purposes of computing the limitation on

25 the contingency fee under paragraph (1) shall be
75

•S 454 RS

1 based on the cost of the annuity or trust established

2 to make the payments. In any case in which an an3 nuity or trust is not established to make such pay4 ments, such amount shall be based on the present

5 value of the payments.

6 (b) CONTINGENCY FEE DEFINED.—As used in this sec7 tion, the term ‘‘contingency fee’’ means any fee for profes8 sional legal services which is, in whole or in part, contin9 gent upon the recovery of any amount of damages, whether

10 through judgment or settlement.

11 SEC. 110. STATE-BASED ALTERNATIVE DISPUTE RESOLU12 TION MECHANISMS.

13 (a) ESTABLISHMENT BY STATES.—Each State is en14 couraged to establish or maintain alternative dispute reso15 lution mechanisms that promote the resolution of health

16 care liability claims in a manner that—

17 (1) is affordable for the parties involved in the

18 claims;

19 (2) provides for the timely resolution of claims;

20 and

21 (3) provides the parties with convenient access to

22 the dispute resolution process.

23 (b) GUIDELINES.—The Attorney General, in consulta24 tion with the Secretary and the Administrative Conference

25 of the United States, shall develop guidelines with respect
76

•S 454 RS

1 to alternative dispute resolution mechanisms that may be

2 established by States for the resolution of health care liabil3 ity claims. Such guidelines shall include procedures with

4 respect to the following methods of alternative dispute reso5 lution:

6 (1) ARBITRATION.—The use of arbitration, a

7 nonjury adversarial dispute resolution process which

8 may, subject to subsection (c), result in a final deci9 sion as to facts, law, liability or damages. The parties

10 may elect binding arbitration.

11 (2) MEDIATION.—The use of mediation, a settle12 ment process coordinated by a neutral third party

13 without the ultimate rendering of a formal opinion as

14 to factual or legal findings.

15 (3) EARLY NEUTRAL EVALUATION.—The use of

16 early neutral evaluation, in which the parties make

17 a presentation to a neutral attorney or other neutral

18 evaluator for an assessment of the merits, to encour19 age settlement. If the parties do not settle as a result

20 of assessment and proceed to trial, the neutral eval21 uator’s opinion shall be kept confidential.

22 (4) EARLY OFFER AND RECOVERY MECHANISM.—

23 The use of early offer and recovery mechanisms under

24 which a health care provider, health care organiza25 tion, or any other alleged responsible defendant may
77

•S 454 RS

1 offer to compensate a claimant for his or her reason2 able economic damages, including future economic

3 damages, less amounts available from collateral

4 sources.

5 (5) CERTIFICATE OF MERIT.—The requirement

6 that a claimant in a health care liability action sub7 mit to the court before trial a written report by a

8 qualified specialist that includes the specialist’s deter9 mination that, after a review of the available medical

10 record and other relevant material, there is a reason11 able and meritorious cause for the filing of the action

12 against the defendant.

13 (6) NO FAULT.—The use of a no-fault statute

14 under which certain health care liability actions are

15 barred and claimants are compensated for injuries

16 through their health plans or through other appro17 priate mechanisms.

18 (c) FURTHER REDRESS.—

19 (1) IN GENERAL.—The extent to which any

20 party may seek further redress (subsequent to a deci21 sion of an alternative dispute resolution method) con22 cerning a health care liability claim in a Federal or

23 State court shall be dependent upon the methods of al24 ternative dispute resolution adopted by the State.
78

•S 454 RS

1 (2) CLAIMANT.—With respect to further redress

2 described in paragraph (1), if the party initiating

3 such court action is the claimant and the claimant

4 receives a level of damages that is at least 25 percent

5 less under the decision of the court than under the

6 State alternative dispute resolution method, such

7 party shall bear the reasonable costs, including legal

8 fees, incurred in the court action by the other party

9 or parties to such action.

10 (3) PROVIDER OR OTHER DEFENDANT.—With re11 spect to further redress described in paragraph (1), if

12 the party initiating a court action is the health care

13 professional, health care provider health plan, or

14 other defendant in a health care liability action and

15 the health care professional, health care provider,

16 health plan or other defendant is found liable for a

17 level of damages that is at least 25 percent more

18 under the decision of the court than under the State

19 alternative dispute resolution method, such party

20 shall bear the reasonable costs, including legal fees,

21 incurred in the court action by the other party or

22 parties to such action.

23 (d) TECHNICAL ASSISTANCE AND EVALUATIONS.—

24 (1) TECHNICAL ASSISTANCE.—The Attorney

25 General may provide States with technical assistance
79

•S 454 RS

1 in establishing or maintaining alternative dispute

2 resolution mechanisms under this section.

3 (2) EVALUATIONS.—The Attorney General, in

4 consultation with the Secretary and the Administra5 tive Conference of the United States, shall monitor

6 and evaluate the effectiveness of State alternative dis7 pute resolution mechanisms established or maintained

8 under this section.

9 Subtitle B—Biomaterials Access

10 Assurance

11 SEC. 121. SHORT TITLE.

12 This subtitle may be cited as the ‘‘Biomaterials Access

13 Assurance Act of 1995’’.

14 SEC. 122. FINDINGS.

15 Congress finds that—

16 (1) each year millions of citizens of the United

17 States depend on the availability of lifesaving or life18 enhancing medical devices, many of which are perma19 nently implantable within the human body;

20 (2) a continued supply of raw materials and

21 component parts is necessary for the invention, devel22 opment, improvement, and maintenance of the supply

23 of the devices;

24 (3) most of the medical devices are made with

25 raw materials and component parts that—
80

•S 454 RS

1 (A) are not designed or manufactured spe2 cifically for use in medical devices; and

3 (B) come in contact with internal human

4 tissue;

5 (4) the raw materials and component parts also

6 are used in a variety of nonmedical products;

7 (5) because small quantities of the raw materials

8 and component parts are used for medical devices,

9 sales of raw materials and component parts for medi10 cal devices constitute an extremely small portion of

11 the overall market for the raw materials and medical

12 devices;

13 (6) under the Federal Food, Drug, and Cosmetic

14 Act (21 U.S.C. 301 et seq.), manufacturers of medical

15 devices are required to demonstrate that the medical

16 devices are safe and effective, including demonstrating

17 that the products are properly designed and have ade18 quate warnings or instructions;

19 (7) notwithstanding the fact that raw materials

20 and component parts suppliers do not design,

21 produce, or test a final medical device, the suppliers

22 have been the subject of actions alleging inadequate—

23 (A) design and testing of medical devices

24 manufactured with materials or parts supplied

25 by the suppliers; or
81

•S 454 RS

1 (B) warnings related to the use of such med2 ical devices;

3 (8) even though suppliers of raw materials and

4 component parts have very rarely been held liable in

5 such actions, such suppliers have ceased supplying

6 certain raw materials and component parts for use in

7 medical devices because the costs associated with liti8 gation in order to ensure a favorable judgment for the

9 suppliers far exceeds the total potential sales revenues

10 from sales by such suppliers to the medical device in11 dustry;

12 (9) unless alternate sources of supply can be

13 found, the unavailability of raw materials and com14 ponent parts for medical devices will lead to unavail15 ability of lifesaving and life-enhancing medical de16 vices;

17 (10) because other suppliers of the raw materials

18 and component parts in foreign nations are refusing

19 to sell raw materials or component parts for use in

20 manufacturing certain medical devices in the United

21 States, the prospects for development of new sources of

22 supply for the full range of threatened raw materials

23 and component parts for medical devices are remote;

24 (11) it is unlikely that the small market for such

25 raw materials and component parts in the United
82

•S 454 RS

1 States could support the large investment needed to

2 develop new suppliers of such raw materials and com3 ponent parts;

4 (12) attempts to develop such new suppliers

5 would raise the cost of medical devices;

6 (13) courts that have considered the duties of the

7 suppliers of the raw materials and component parts

8 have generally found that the suppliers do not have

9 a duty—

10 (A) to evaluate the safety and efficacy of the

11 use of a raw material or component part in a

12 medical device; and

13 (B) to warn consumers concerning the safe14 ty and effectiveness of a medical device;

15 (14) attempts to impose the duties referred to in

16 subparagraphs (A) and (B) of paragraph (13) on

17 suppliers of the raw materials and component parts

18 would cause more harm than good by driving the sup19 pliers to cease supplying manufacturers of medical

20 devices; and

21 (15) in order to safeguard the availability of a

22 wide variety of lifesaving and life-enhancing medical

23 devices, immediate action is needed—
83

•S 454 RS

1 (A) to clarify the permissible bases of liabil2 ity for suppliers of raw materials and compo3 nent parts for medical devices; and

4 (B) to provide expeditious procedures to dis5 pose of unwarranted suits against the suppliers

6 in such manner as to minimize litigation costs.

7 SEC. 123. DEFINITIONS.

8 As used in this subtitle:

9 (1) BIOMATERIALS SUPPLIER.—

10 (A) IN GENERAL.—The term ‘‘biomaterials

11 supplier’’ means an entity that directly or indi12 rectly supplies a component part or raw mate13 rial for use in the manufacture of an implant.

14 (B) PERSONS INCLUDED.—Such term in15 cludes any person who—

16 (i) has submitted master files to the

17 Secretary for purposes of premarket ap18 proval of a medical device; or

19 (ii) licenses a biomaterials supplier to

20 produce component parts or raw materials.

21 (2) CLAIMANT.—

22 (A) IN GENERAL.—The term ‘‘claimant’’

23 means any person who brings a civil action, or

24 on whose behalf a civil action is brought, arising

25 from harm allegedly caused directly or indirectly
84

•S 454 RS

1 by an implant, including a person other than

2 the individual into whose body, or in contact

3 with whose blood or tissue, the implant is placed,

4 who claims to have suffered harm as a result of

5 the implant.

6 (B) ACTION BROUGHT ON BEHALF OF AN

7 ESTATE.—With respect to an action brought on

8 behalf or through the estate of an individual into

9 whose body, or in contact with whose blood or

10 tissue the implant is placed, such term includes

11 the decedent that is the subject of the action.

12 (C) ACTION BROUGHT ON BEHALF OF A

13 MINOR.—With respect to an action brought on

14 behalf or through a minor, such term includes

15 the parent or guardian of the minor.

16 (D) EXCLUSIONS.—Such term does not in17 clude—

18 (i) a provider of professional services,

19 in any case in which—

20 (I) the sale or use of an implant

21 is incidental to the transaction; and

22 (II) the essence of the transaction

23 is the furnishing of judgment, skill, or

24 services; or
85

•S 454 RS

1 (ii) a manufacturer, seller, or

2 biomaterials supplier.

3 (3) COMPONENT PART.—

4 (A) IN GENERAL.—The term ‘‘component

5 part’’ means a manufactured piece of an im6 plant.

7 (B) CERTAIN COMPONENTS.—Such term in8 cludes a manufactured piece of an implant

9 that—

10 (i) has significant nonimplant appli11 cations; and

12 (ii) alone, has no implant value or

13 purpose, but when combined with other

14 component parts and materials, constitutes

15 an implant.

16 (4) HARM.—

17 (A) IN GENERAL.—The term ‘‘harm’’

18 means—

19 (i) any injury to or damage suffered

20 by an individual;

21 (ii) any illness, disease, or death of

22 that individual resulting from that injury

23 or damage; and
86

•S 454 RS

1 (iii) any loss to that individual or any

2 other individual resulting from that injury

3 or damage.

4 (B) EXCLUSION.—The term does not in5 clude any commercial loss or loss of or damage

6 to an implant.

7 (5) IMPLANT.—The term ‘‘implant’’ means—

8 (A) a medical device that is intended by the

9 manufacturer of the device—

10 (i) to be placed into a surgically or

11 naturally formed or existing cavity of the

12 body for a period of at least 30 days; or

13 (ii) to remain in contact with bodily

14 fluids or internal human tissue through a

15 surgically produced opening for a period of

16 less than 30 days; and

17 (B) suture materials used in implant proce18 dures.

19 (6) MANUFACTURER.—The term ‘‘manufacturer’’

20 means any person who, with respect to an implant—

21 (A) is engaged in the manufacture, prepara22 tion, propagation, compounding, or processing

23 (as defined in section 510(a)(1) of the Federal

24 Food, Drug, and Cosmetic Act (21 U.S.C.

25 360(a)(1)) of the implant; and
87

•S 454 RS

1 (B) is required—

2 (i) to register with the Secretary pur3 suant to section 510 of the Federal Food,

4 Drug, and Cosmetic Act (21 U.S.C. 360)

5 and the regulations issued under such sec6 tion; and

7 (ii) to include the implant on a list of

8 devices filed with the Secretary pursuant to

9 section 510(j) of such Act (21 U.S.C. 360(j))

10 and the regulations issued under such sec11 tion.

12 (7) MEDICAL DEVICE.—The term ‘‘medical de13 vice’’ means a device, as defined in section 201(h) of

14 the Federal Food, Drug, and Cosmetic Act (21 U.S.C.

15 321(h)).

16 (8) QUALIFIED SPECIALIST.—With respect to an

17 action, the term ‘‘qualified specialist’’ means a person

18 who is qualified by knowledge, skill, experience, train19 ing, or education in the specialty area that is the sub20 ject of the action.

21 (9) RAW MATERIAL.—The term ‘‘raw material’’

22 means a substance or product that—

23 (A) has a generic use; and

24 (B) may be used in an application other

25 than an implant.
88

•S 454 RS

1 (10) SECRETARY.—The term ‘‘Secretary’’ means

2 the Secretary of Health and Human Services.

3 (11) SELLER.—

4 (A) IN GENERAL.—The term ‘‘seller’’ means

5 a person who, in the course of a business con6 ducted for that purpose, sells, distributes, leases,

7 packages, labels, or otherwise places an implant

8 in the stream of commerce.

9 (B) EXCLUSIONS.—The term does not in10 clude—

11 (i) a seller or lessor of real property;

12 (ii) a provider of professional services,

13 in any case in which the sale or use of an

14 implant is incidental to the transaction and

15 the essence of the transaction is the furnish16 ing of judgment, skill, or services; or

17 (iii) any person who acts in only a fi18 nancial capacity with respect to the sale of

19 an implant.

20 SEC. 124. GENERAL REQUIREMENTS; APPLICABILITY; PRE21 EMPTION.

22 (a) GENERAL REQUIREMENTS.—

23 (1) IN GENERAL.—In any civil action covered by

24 this subtitle, a biomaterials supplier may raise any

25 defense set forth in section 125.
89

•S 454 RS

1 (2) PROCEDURES.—Notwithstanding any other

2 provision of law, the Federal or State court in which

3 a civil action covered by this subtitle is pending shall,

4 in connection with a motion for dismissal or judg5 ment based on a defense described in paragraph (1),

6 use the procedures set forth in section 126.

7 (b) APPLICABILITY.—

8 (1) IN GENERAL.—Except as provided in para9 graph (2), notwithstanding any other provision of

10 law, this subtitle applies to any civil action brought

11 by a claimant, whether in a Federal or State court,

12 against a manufacturer, seller, or biomaterials sup13 plier, on the basis of any legal theory, for harm alleg14 edly caused by an implant.

15 (2) EXCLUSION.—A civil action brought by a

16 purchaser of a medical device for use in providing

17 professional services against a manufacturer, seller, or

18 biomaterials supplier for loss or damage to an im19 plant or for commercial loss to the purchaser—

20 (A) shall not be considered an action that

21 is subject to this subtitle; and

22 (B) shall be governed by applicable commer23 cial or contract law.

24 (c) SCOPE OF PREEMPTION.—
90

•S 454 RS

1 (1) IN GENERAL.—This subtitle supersedes any

2 State law regarding recovery for harm caused by an

3 implant and any rule of procedure applicable to a

4 civil action to recover damages for such harm only to

5 the extent that this subtitle establishes a rule of law

6 applicable to the recovery of such damages.

7 (2) APPLICABILITY OF OTHER LAWS.—Any issue

8 that arises under this subtitle and that is not gov9 erned by a rule of law applicable to the recovery of

10 damages described in paragraph (1) shall be governed

11 by applicable Federal or State law.

12 (d) STATUTORY CONSTRUCTION.—Nothing in this sub13 title may be construed—

14 (1) to affect any defense available to a defendant

15 under any other provisions of Federal or State law in

16 an action alleging harm caused by an implant; or

17 (2) to create a cause of action or Federal court

18 jurisdiction pursuant to section 1331 or 1337 of title

19 28, United States Code, that otherwise would not exist

20 under applicable Federal or State law.

21 SEC. 125. LIABILITY OF BIOMATERIALS SUPPLIERS.

22 (a) IN GENERAL.—

23 (1) EXCLUSION FROM LIABILITY.—Except as

24 provided in paragraph (2), a biomaterials supplier
91

•S 454 RS

1 shall not be liable for harm to a claimant caused by

2 an implant.

3 (2) LIABILITY.—A biomaterials supplier that—

4 (A) is a manufacturer may be liable for

5 harm to a claimant described in subsection (b);

6 (B) is a seller may be liable for harm to a

7 claimant described in subsection (c); and

8 (C) furnishes raw materials or component

9 parts that fail to meet applicable contractual re10 quirements or specifications may be liable for a

11 harm to a claimant described in subsection (d).

12 (b) LIABILITY AS MANUFACTURER.—

13 (1) IN GENERAL.—A biomaterials supplier may,

14 to the extent required and permitted by any other ap15 plicable law, be liable for harm to a claimant caused

16 by an implant if the biomaterials supplier is the

17 manufacturer of the implant.

18 (2) GROUNDS FOR LIABILITY.—The biomaterials

19 supplier may be considered the manufacturer of the

20 implant that allegedly caused harm to a claimant

21 only if the biomaterials supplier—

22 (A)(i) has registered with the Secretary

23 pursuant to section 510 of the Federal Food,

24 Drug, and Cosmetic Act (21 U.S.C. 360) and the

25 regulations issued under such section; and
92

•S 454 RS

1 (ii) included the implant on a list of devices

2 filed with the Secretary pursuant to section

3 510(j) of such Act (21 U.S.C. 360(j)) and the

4 regulations issued under such section; or

5 (B) is the subject of a declaration issued by

6 the Secretary pursuant to paragraph (3) that

7 states that the supplier, with respect to the im8 plant that allegedly caused harm to the claim9 ant, was required to—

10 (i) register with the Secretary under

11 section 510 of such Act (21 U.S.C. 360),

12 and the regulations issued under such sec13 tion, but failed to do so; or

14 (ii) include the implant on a list of de15 vices filed with the Secretary pursuant to

16 section 510(j) of such Act (21 U.S.C. 360(j))

17 and the regulations issued under such sec18 tion, but failed to do so.

19 (3) ADMINISTRATIVE PROCEDURES.—

20 (A) IN GENERAL.—The Secretary may issue

21 a declaration described in paragraph (2)(B) on

22 the motion of the Secretary or on petition by

23 any person, after providing—

24 (i) notice to the affected persons; and
93

•S 454 RS

1 (ii) an opportunity for an informal

2 hearing.

3 (B) DOCKETING AND FINAL DECISION.—Im4 mediately upon receipt of a petition filed pursu5 ant to this paragraph, the Secretary shall docket

6 the petition. Not later than 180 days after the

7 petition is filed, the Secretary shall issue a final

8 decision on the petition.

9 (C) APPLICABILITY OF STATUTE OF LIMITA10 TIONS.—Any applicable statute of limitations

11 shall toll during the period during which a

12 claimant has filed a petition with the Secretary

13 under this paragraph.

14 (c) LIABILITY AS SELLER.—A biomaterials supplier

15 may, to the extent required and permitted by any other ap16 plicable law, be liable as a seller for harm to a claimant

17 caused by an implant if the biomaterials supplier—

18 (1) held title to the implant that allegedly caused

19 harm to the claimant as a result of purchasing the

20 implant after—

21 (A) the manufacture of the implant; and

22 (B) the entrance of the implant in the

23 stream of commerce; and

24 (2) subsequently resold the implant.
94

•S 454 RS

1 (d) LIABILITY FOR VIOLATING CONTRACTUAL RE2 QUIREMENTS OR SPECIFICATIONS.—A biomaterials sup3 plier may, to the extent required and permitted by any

4 other applicable law, be liable for harm to a claimant

5 caused by an implant, if the claimant in an action shows,

6 by a preponderance of the evidence, that—

7 (1) the raw materials or component parts deliv8 ered by the biomaterials supplier either—

9 (A) did not constitute the product described

10 in the contract between the biomaterials supplier

11 and the person who contracted for delivery of the

12 product; or

13 (B) failed to meet any specifications that

14 were—

15 (i) provided to the biomaterials sup16 plier and not expressly repudiated by the

17 biomaterials supplier prior to acceptance of

18 delivery of the raw materials or component

19 parts;

20 (ii)(I) published by the biomaterials

21 supplier;

22 (II) provided to the manufacturer by

23 the biomaterials supplier; or

24 (III) contained in a master file that

25 was submitted by the biomaterials supplier
95

•S 454 RS

1 to the Secretary and that is currently main2 tained by the biomaterials supplier for pur3 poses of premarket approval of medical de4 vices; or

5 (iii)(I) included in the submissions for

6 purposes of premarket approval or review

7 by the Secretary under section 510, 513,

8 515, or 520 of the Federal Food, Drug, and

9 Cosmetic Act (21 U.S.C. 360, 360c, 360e, or

10 360j); and

11 (II) have received clearance from the

12 Secretary,

13 if such specifications were provided by the man14 ufacturer to the biomaterials supplier and were

15 not expressly repudiated by the biomaterials sup16 plier prior to the acceptance by the manufac17 turer of delivery of the raw materials or compo18 nent parts; and

19 (2) such conduct was an actual and proximate

20 cause of the harm to the claimant.

21 SEC. 126. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS

22 AGAINST BIOMATERIALS SUPPLIERS.

23 (a) MOTION TO DISMISS.—In any action that is sub24 ject to this subtitle, a biomaterials supplier who is a defend25 ant in such action may, at any time during which a motion
96

•S 454 RS

1 to dismiss may be filed under an applicable law, move to

2 dismiss the action on the grounds that—

3 (1) the defendant is a biomaterials supplier; and

4 (2)(A) the defendant should not, for the purposes

5 of—

6 (i) section 125(b), be considered to be a

7 manufacturer of the implant that is subject to

8 such section; or

9 (ii) section 125(c), be considered to be a

10 seller of the implant that allegedly caused harm

11 to the claimant; or

12 (B)(i) the claimant has failed to establish, pur13 suant to section 125(d), that the supplier furnished

14 raw materials or component parts in violation of con15 tractual requirements or specifications; or

16 (ii) the claimant has failed to comply with the

17 procedural requirements of subsection (b).

18 (b) PROCEDURAL REQUIREMENTS.—

19 (1) IN GENERAL.—The procedural requirements

20 described in paragraphs (2) and (3) shall apply to

21 any action by a claimant against a biomaterials sup22 plier that is subject to this subtitle.

23 (2) MANUFACTURER OF IMPLANT SHALL BE

24 NAMED A PARTY.—The claimant shall be required to
97

•S 454 RS

1 name the manufacturer of the implant as a party to

2 the action, unless—

3 (A) the manufacturer is subject to service of

4 process solely in a jurisdiction in which the

5 biomaterials supplier is not domiciled or subject

6 to a service of process; or

7 (B) an action against the manufacturer is

8 barred by applicable law.

9 (3) AFFIDAVIT.—At the time the claimant brings

10 an action against a biomaterials supplier the claim11 ant shall be required to submit an affidavit that—

12 (A) declares that the claimant has consulted

13 and reviewed the facts of the action with a quali14 fied specialist, whose qualifications the claimant

15 shall disclose;

16 (B) includes a written determination by a

17 qualified specialist that the raw materials or

18 component parts actually used in the manufac19 ture of the implant of the claimant were raw

20 materials or component parts described in sec21 tion 125(d)(1), together with a statement of the

22 basis for such a determination;

23 (C) includes a written determination by a

24 qualified specialist that, after a review of the

25 medical record and other relevant material, the
98

•S 454 RS

1 raw material or component part supplied by the

2 biomaterials supplier and actually used in the

3 manufacture of the implant was a cause of the

4 harm alleged by claimant, together with a state5 ment of the basis for the determination; and

6 (D) states that, on the basis of review and

7 consultation of the qualified specialist, the claim8 ant (or the attorney of the claimant) has con9 cluded that there is a reasonable and meritorious

10 cause for the filing of the action against the

11 biomaterials supplier.

12 (c) PROCEEDING ON MOTION TO DISMISS.—The fol13 lowing rules shall apply to any proceeding on a motion to

14 dismiss filed under this section:

15 (1) AFFIDAVITS RELATING TO LISTING AND DEC16 LARATIONS.—

17 (A) IN GENERAL.—The defendant in the ac18 tion may submit an affidavit demonstrating that

19 defendant has not included the implant on a list,

20 if any, filed with the Secretary pursuant to sec21 tion 510(j) of the Federal Food, Drug, and Cos22 metic Act (21 U.S.C. 360(j)).

23 (B) RESPONSE TO MOTION TO DISMISS.—In

24 response to the motion to dismiss, the claimant

25 may submit an affidavit demonstrating that—
99

•S 454 RS

1 (i) the Secretary has, with respect to

2 the defendant and the implant that alleg3 edly caused harm to the claimant, issued a

4 declaration pursuant to section

5 125(b)(2)(B); or

6 (ii) the defendant who filed the motion

7 to dismiss is a seller of the implant who is

8 liable under section 125(c).

9 (2) EFFECT OF MOTION TO DISMISS ON DISCOV10 ERY.—

11 (A) IN GENERAL.—If a defendant files a

12 motion to dismiss under paragraph (1) or (3) of

13 subsection (a), no discovery shall be permitted in

14 connection to the action that is the subject of the

15 motion, other than discovery necessary to deter16 mine a motion to dismiss for lack of jurisdiction,

17 until such time as the court rules on the motion

18 to dismiss in accordance with the affidavits sub19 mitted by the parties in accordance with this

20 section.

21 (B) DISCOVERY.—If a defendant files a mo22 tion to dismiss under subsection (a)(2) on the

23 grounds that the biomaterials supplier did not

24 furnish raw materials or component parts in

25 violation of contractual requirements or speci-
100

•S 454 RS

1 fications, the court may permit discovery, as or2 dered by the court. The discovery conducted pur3 suant to this subparagraph shall be limited to is4 sues that are directly relevant to—

5 (i) the pending motion to dismiss; or

6 (ii) the jurisdiction of the court.

7 (3) AFFIDAVITS RELATING STATUS OF DEFEND8 ANT.—

9 (A) IN GENERAL.—Except as provided in

10 clauses (i) and (ii) of subparagraph (B), the

11 court shall consider a defendant to be a

12 biomaterials supplier who is not subject to an

13 action for harm to a claimant caused by an im14 plant, other than an action relating to liability

15 for a violation of contractual requirements or

16 specifications described in subsection (d).

17 (B) RESPONSES TO MOTION TO DISMISS.—

18 The court shall grant a motion to dismiss any

19 action that asserts liability of the defendant

20 under subsection (b) or (c) of section 125 on the

21 grounds that the defendant is not a manufac22 turer subject to such subsection 125(b) or seller

23 subject to subsection 125(c), unless the claimant

24 submits a valid affidavit that demonstrates

25 that—
101

•S 454 RS

1 (i) with respect to a motion to dismiss

2 contending the defendant is not a manufac3 turer, the defendant meets the applicable re4 quirements for liability as a manufacturer

5 under section 125(b); or

6 (ii) with respect to a motion to dismiss

7 contending that the defendant is not a sell8 er, the defendant meets the applicable re9 quirements for liability as a seller under

10 section 125(c).

11 (4) BASIS OF RULING ON MOTION TO DISMISS.—

12 (A) IN GENERAL.—The court shall rule on

13 a motion to dismiss filed under subsection (a)

14 solely on the basis of the pleadings of the parties

15 made pursuant to this section and any affidavits

16 submitted by the parties pursuant to this section.

17 (B) MOTION FOR SUMMARY JUDGMENT.—

18 Notwithstanding any other provision of law, if

19 the court determines that the pleadings and affi20 davits made by parties pursuant to this section

21 raise genuine issues as concerning material facts

22 with respect to a motion concerning contractual

23 requirements and specifications, the court may

24 deem the motion to dismiss to be a motion for
102

•S 454 RS

1 summary judgment made pursuant to subsection

2 (d).

3 (d) SUMMARY JUDGMENT.—

4 (1) IN GENERAL.—

5 (A) BASIS FOR ENTRY OF JUDGMENT.—A

6 biomaterials supplier shall be entitled to entry of

7 judgment without trial if the court finds there is

8 no genuine issue as concerning any material fact

9 for each applicable element set forth in para10 graphs (1) and (2) of section 125(d).

11 (B) ISSUES OF MATERIAL FACT.—With re12 spect to a finding made under subparagraph (A),

13 the court shall consider a genuine issue of mate14 rial fact to exist only if the evidence submitted

15 by claimant would be sufficient to allow a rea16 sonable jury to reach a verdict for the claimant

17 if the jury found the evidence to be credible.

18 (2) DISCOVERY MADE PRIOR TO A RULING ON A

19 MOTION FOR SUMMARY JUDGMENT.—If, under appli20 cable rules, the court permits discovery prior to a rul21 ing on a motion for summary judgment made pursu22 ant to this subsection, such discovery shall be limited

23 solely to establishing whether a genuine issue of mate24 rial fact exists.
103

•S 454 RS

1 (3) DISCOVERY WITH RESPECT TO A

2 BIOMATERIALS SUPPLIER.—A biomaterials supplier

3 shall be subject to discovery in connection with a mo4 tion seeking dismissal or summary judgment on the

5 basis of the inapplicability of section 125(d) or the

6 failure to establish the applicable elements of section

7 125(d) solely to the extent permitted by the applicable

8 Federal or State rules for discovery against

9 nonparties.

10 (e) STAY PENDING PETITION FOR DECLARATION.—If

11 a claimant has filed a petition for a declaration pursuant

12 to section 125(b) with respect to a defendant, and the Sec13 retary has not issued a final decision on the petition, the

14 court shall stay all proceedings with respect to that defend15 ant until such time as the Secretary has issued a final deci16 sion on the petition.

17 (f) MANUFACTURER CONDUCT OF PROCEEDING.—The

18 manufacturer of an implant that is the subject of an action

19 covered under this subtitle shall be permitted to file and

20 conduct a proceeding on any motion for summary judgment

21 or dismissal filed by a biomaterials supplier who is a de22 fendant under this section if the manufacturer and any

23 other defendant in such action enter into a valid and appli24 cable contractual agreement under which the manufacturer
104

•S 454 RS

1 agrees to bear the cost of such proceeding or to conduct such

2 proceeding.

3 (g) ATTORNEY FEES.—The court shall require the

4 claimant to compensate the biomaterials supplier (or a

5 manufacturer appearing in lieu of a supplier pursuant to

6 subsection (f)) for attorney fees and costs, if—

7 (1) the claimant named or joined the

8 biomaterials supplier; and

9 (2) the court found the claim against the

10 biomaterials supplier to be without merit and frivo11 lous.

12 Subtitle C—Applicability

13 SEC. 131. APPLICABILITY.

14 This title shall apply to all civil actions covered under

15 this title that are commenced on or after the date of enact16 ment of this Act, including any such action with respect

17 to which the harm asserted in the action or the conduct

18 that caused the injury occurred before the date of enactment

19 of this Act.
105

•S 454 RS

1 TITLE II—PROTECTION OF THE

2 HEALTH AND SAFETY OF PA3 TIENTS

4 SEC. 201. ADDITIONAL RESOURCES FOR STATE HEALTH

5 CARE QUALITY ASSURANCE AND ACCESS AC6 TIVITIES.

7 Each State shall require that not less than 50 percent

8 of all awards of punitive damages resulting from all health

9 care liability actions in that State, if punitive damages are

10 otherwise permitted by applicable law, be used for activities

11 relating to—

12 (1) the licensing, investigating, disciplining, and

13 certification of health care professionals in the State;

14 and

15 (2) the reduction of malpractice-related costs for

16 health care providers volunteering to provide health

17 care services in medically underserved areas.

18 SEC. 202. QUALITY ASSURANCE, PATIENT SAFETY, AND

19 CONSUMER INFORMATION.

20 (a) ADVISORY PANEL.—

21 (1) IN GENERAL.—Not later than 90 days after

22 the date of enactment of this Act, the Administrator

23 of the Agency for Health Care Policy and Research

24 (hereafter referred to in this section as the ‘‘Adminis25 trator’’) shall establish an advisory panel to coordi-
106

•S 454 RS

1 nate and evaluate, methods, procedures, and data to

2 enhance the quality, safety, and effectiveness of health

3 care services provided to patients.

4 (2) PARTICIPATION.—In establishing the advi5 sory panel under paragraph (1), the Administrator

6 shall ensure that members of the panel include rep7 resentatives of public and private sector entities hav8 ing expertise in quality assurance, risk assessment,

9 risk management, patient safety, and patient satisfac10 tion.

11 (3) OBJECTIVES.—In carrying out the duties de12 scribed in this section, the Administrator, acting

13 through the advisory panel established under para14 graph (1), shall conduct a survey of public and pri15 vate entities involved in quality assurance, risk as16 sessment, patient safety, patient satisfaction, and

17 practitioner licensing. Such survey shall include the

18 gathering of data with respect to—

19 (A) performance measures of quality for

20 health care providers and health plans;

21 (B) developments in survey methodology,

22 sampling, and audit methods;

23 (C) methods of medical practice and pat24 terns, and patient outcomes; and
107

•S 454 RS

1 (D) methods of disseminating information

2 concerning successful health care quality im3 provement programs, risk management and pa4 tient safety programs, practice guidelines, pa5 tient satisfaction, and practitioner licensing.

6 (b) GUIDELINES.—Not later than 2 years after the date

7 of enactment of this Act, the Administrator shall, in accord8 ance with chapter 5 of title 5, United States Code, establish

9 health care quality assurance, patient safety and consumer

10 information guidelines. Such guidelines shall be modified

11 periodically when determined appropriate by the Adminis12 trator. Such guidelines shall be advisory in nature and not

13 binding.

14 (c) REPORTS.—

15 (1) INITIAL REPORT.—Not later than 6 months

16 after the date of enactment of this Act, the Adminis17 trator shall prepare and submit to the Committee on

18 Labor and Human Resources of the Senate and the

19 Committee on Commerce of the House of Representa20 tives, a report that contains—

21 (A) data concerning the availability of in22 formation relating to risk management, quality

23 assessment, patient safety, and patient satisfac24 tion;
108

•S 454 RS

1 (B) an estimation of the degree of consensus

2 concerning the accuracy and content of the infor3 mation available under subparagraph (A);

4 (C) a summary of the best practices used in

5 the public and private sectors for disseminating

6 information to consumers; and

7 (D) an evaluation of the National Practi8 tioner Data Bank (as established under the

9 Health Quality Improvement Act of 1986), for

10 reliability and validity of the data and the effec11 tiveness of the Data Bank in assisting hospitals

12 and medical groups in overseeing the quality of

13 practitioners.

14 (2) INTERIM REPORT.—Not later than 1 year

15 after the date of enactment of this Act, the Adminis16 trator shall prepare and submit to the Committees re17 ferred to in paragraph (1) a report, based on the re18 sults of the advisory panel survey conducted under

19 subsection (a)(3), concerning—

20 (A) the consensus of indicators of patient

21 safety and risk;

22 (B) an assessment of the consumer perspec23 tive on health care quality that includes an ex24 amination of—
109

•S 454 RS

1 (i) the information most often re2 quested by consumers;

3 (ii) the types of technical quality infor4 mation that consumers find compelling;

5 (iii) the amount of information that

6 consumers consider to be sufficient and the

7 amount of such information considered

8 overwhelming; and

9 (iv) the manner in which such infor10 mation should be presented;

11 and recommendations for increasing the aware12 ness of consumers concerning such information;

13 (C) proposed methods, building on existing

14 data gathering and dissemination systems, for

15 ensuring that such data is available and acces16 sible to consumers, employers, hospitals, and pa17 tients;

18 (D) the existence of legal, regulatory, and

19 practical obstacles to making such data available

20 and accessible to consumers;

21 (E) privacy or proprietary issues involving

22 the dissemination of such data;

23 (F) an assessment of the appropriateness of

24 collecting such data at the Federal or State level;
110

•S 454 RS

1 (G) an evaluation of the value of permitting

2 consumers to have access to information con3 tained in the National Practitioner Data Bank

4 and recommendations to improve the reliability

5 and validity of the information; and

6 (H) the reliability and validity of data col7 lected by the State medical boards and rec8 ommendations for developing investigation pro9 tocols.

10 (3) ANNUAL REPORT.—Not later than 1 year

11 after the date of the submission of the report under

12 paragraph (2), and each year thereafter, the Adminis13 trator shall prepare and submit to the Committees re14 ferred to in paragraph (1) a report concerning the

15 progress of the advisory panel in the development of

16 a consensus with respect to the findings of the panel

17 and in the development and modification of the

18 guidelines required under subsection (b).

19 (4) TERMINATION.—The advisory panel shall ter20 minate on the date that is 3 years after the date of

21 enactment of this Act.

22 TITLE III—SEVERABILITY

23 SEC. 301. SEVERABILITY.

24 If any provision of this Act, an amendment made by

25 this Act, or the application of such provision or amendment
111

•S 454 RS

1 to any person or circumstance is held to be unconstitu2 tional, the remainder of this Act, the amendments made by

3 this Act, and the application of the provisions of such to

4 any person or circumstance shall not be affected thereby.

S 454 RS——2

S 454 RS——3

S 454 RS——4

S 454 RS——5

S 454 RS——6

S 454 RS——7

S 454 RS——8