II 

110TH CONGRESS 

1ST SESSION S. 1481 

To restore fairness and reliability to the medical justice system and promote 

patient safety by fostering alternatives to current medical tort litigation, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 24, 2007 

Mr. BAUCUS (for himself and Mr. ENZI) introduced the following bill; which 

was read twice and referred to the Committee on Health, Education, 

Labor, and Pensions 

A BILL 

To restore fairness and reliability to the medical justice system and promote patient safety by fostering alternatives 

to current medical tort litigation, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Fair and Reliable Med5 ical Justice Act’’. 

6 SEC. 2. PURPOSES. 

7 The purposes of this Act are— 

8 (1) to restore fairness and reliability to the 

9 medical justice system by fostering alternatives to 


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1 current medical tort litigation that promote early 

2 disclosure of health care errors and provide prompt, 

3 fair, and reasonable compensation to patients who 

4 are injured by health care errors; 

5 (2) to promote patient safety through disclosure 

6 of health care errors; and 

7 (3) to support and assist States in developing 

8 such alternatives. 

9 SEC. 3. STATE DEMONSTRATION PROGRAMS TO EVALUATE 

10 ALTERNATIVES TO CURRENT MEDICAL TORT 

11 LITIGATION. 

12 Part P of title III of the Public Health Service Act 

13 (42 U.S.C. 280g et seq.) is amended by adding at the end 

14 the following: 

15 ‘‘SEC. 399R. STATE DEMONSTRATION PROGRAMS TO EVALU16 ATE ALTERNATIVES TO CURRENT MEDICAL 

17 TORT LITIGATION. 

18 ‘‘(a) IN GENERAL.—The Secretary is authorized to 

19 award demonstration grants to States for the develop20 ment, implementation, and evaluation of alternatives to 

21 current tort litigation for resolving disputes over injuries 

22 allegedly caused by health care providers or health care 

23 organizations. In awarding such grants, the Secretary 

24 shall ensure the diversity of the alternatives so funded. 


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1 ‘‘(b) DURATION.—The Secretary may award up to 10 

2 grants under subsection (a) and each grant awarded under 

3 such subsection may not exceed a period of 5 years. 

4 ‘‘(c) CONDITIONS FOR DEMONSTRATION GRANTS.— 

5 ‘‘(1) REQUIREMENTS.—Each State desiring a 

6 grant under subsection (a) shall— 

7 ‘‘(A) develop an alternative to current tort 

8 litigation for resolving disputes over injuries al9 legedly caused by health care providers or 

10 health care organizations; and 

11 ‘‘(B) promote a reduction of health care 

12 errors by allowing for patient safety data re13 lated to disputes resolved under subparagraph 

14 (A) to be collected and analyzed by organiza15 tions that engage in efforts to improve patient 

16 safety and the quality of health care. 

17 ‘‘(2) ALTERNATIVE TO CURRENT TORT LITIGA18 TION.—Each State desiring a grant under sub19 section (a) shall demonstrate how the proposed al20 ternative described in paragraph (1)(A)— 

21 ‘‘(A) makes the medical liability system 

22 more reliable through prompt and fair resolu23 tion of disputes; 

24 ‘‘(B) encourages the disclosure of health 

25 care errors; 


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1 ‘‘(C) enhances patient safety by detecting, 

2 analyzing, and reducing medical errors and ad3 verse events; 

4 ‘‘(D) maintains access to liability insur5 ance; and 

6 ‘‘(E) provides patients the opportunity to 

7 opt out of or voluntarily withdraw from partici8 pating in the alternative. 

9 ‘‘(3) SOURCES OF COMPENSATION.—Each State 

10 desiring a grant under subsection (a) shall identify 

11 the sources from and methods by which compensa12 tion would be paid for claims resolved under the pro13 posed alternative to current tort litigation, which 

14 may include public or private funding sources, or a 

15 combination of such sources. Funding methods shall 

16 to the extent practicable provide financial incentives 

17 for activities that improve patient safety. 

18 ‘‘(4) SCOPE.— 

19 ‘‘(A) IN GENERAL.—Each State desiring a 

20 grant under subsection (a) may establish a 

21 scope of jurisdiction (such as a designated geo22 graphic region, a designated area of health care 

23 practice, or a designated group of health care 

24 providers or health care organizations) for the 

25 proposed alternative to current tort litigation 


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1 that is sufficient to evaluate the effects of the 

2 alternative. 

3 ‘‘(B) NOTIFICATION OF PATIENTS.—A 

4 State proposing a scope of jurisdiction under 

5 subparagraph (A) shall demonstrate how pa6 tients would be notified that they are receiving 

7 health care services that fall within such scope, 

8 and that they may opt out of or voluntarily 

9 withdraw from participating in the alternative. 

10 ‘‘(5) PREFERENCE IN AWARDING DEMONSTRA11 TION GRANTS.—In awarding grants under sub12 section (a), the Secretary shall give preference to 

13 States— 

14 ‘‘(A) that have developed the proposed al15 ternative through substantive consultation with 

16 relevant stakeholders, including patient advo17 cates, health care providers and health care or18 ganizations, attorneys with expertise in rep19 resenting patients and health care providers, 

20 medical malpractice insurers, and patient safety 

21 experts; 

22 ‘‘(B) that make proposals that are likely to 

23 enhance patient safety by detecting, analyzing, 

24 and reducing medical errors and adverse events; 

25 and 


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1 ‘‘(C) in which State law at the time of the 

2 application would not prohibit the adoption of 

3 an alternative to current tort litigation. 

4 ‘‘(d) APPLICATION.— 

5 ‘‘(1) IN GENERAL.—Each State desiring a 

6 grant under subsection (a) shall submit to the Sec7 retary an application, at such time, in such manner, 

8 and containing such information as the Secretary 

9 may require. 

10 ‘‘(2) REVIEW PANEL.— 

11 ‘‘(A) IN GENERAL.—In reviewing applica12 tions under paragraph (1), the Secretary shall 

13 consult with a review panel composed of rel14 evant experts appointed by the Comptroller 

15 General. 

16 ‘‘(B) COMPOSITION.— 

17 ‘‘(i) NOMINATIONS.—The Comptroller 

18 General shall solicit nominations from the 

19 public for individuals to serve on the re20 view panel. 

21 ‘‘(ii) APPOINTMENT.—The Comp22 troller General shall appoint, at least 14 

23 but not more than 19, highly qualified and 

24 knowledgeable individuals to serve on the 

25 review panel and shall ensure that the folVerDate Aug 31 2005 18:30 May 27, 2007 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481

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1 lowing entities receive fair representation 

2 on such panel: 

3 ‘‘(I) Patient advocates. 

4 ‘‘(II) Health care providers and 

5 health care organizations. 

6 ‘‘(III) Attorneys with expertise in 

7 representing patients and health care 

8 providers. 

9 ‘‘(IV) Medical malpractice insur10 ers. 

11 ‘‘(V) State officials. 

12 ‘‘(VI) Patient safety experts. 

13 ‘‘(C) CHAIRPERSON.—The Comptroller 

14 General, or an individual within the Govern15 ment Accountability Office designated by the 

16 Comptroller General, shall be the chairperson of 

17 the review panel. 

18 ‘‘(D) AVAILABILITY OF INFORMATION.— 

19 The Comptroller General shall make available 

20 to the review panel such information, personnel, 

21 and administrative services and assistance as 

22 the review panel may reasonably require to 

23 carry out its duties. 

24 ‘‘(E) INFORMATION FROM AGENCIES.—The 

25 review panel may request directly from any deVerDate Aug 31 2005 18:30 May 27, 2007 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481

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1 partment or agency of the United States any 

2 information that such panel considers necessary 

3 to carry out its duties. To the extent consistent 

4 with applicable laws and regulations, the head 

5 of such department or agency shall furnish the 

6 requested information to the review panel. 

7 ‘‘(e) REPORTS.— 

8 ‘‘(1) BY STATE.—Each State receiving a grant 

9 under subsection (a) shall submit to the Secretary 

10 an annual report evaluating the effectiveness of ac11 tivities funded with grants awarded under such sub12 section. 

13 ‘‘(2) BY SECRETARY.—The Secretary shall sub14 mit to Congress an annual compendium of the re15 ports submitted under paragraph (1). 

16 ‘‘(f) TECHNICAL ASSISTANCE.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall provide 

18 technical assistance to the States applying for or 

19 awarded grants under subsection (a). 

20 ‘‘(2) REQUIREMENTS.—Technical assistance 

21 under paragraph (1) shall include— 

22 ‘‘(A) guidance on non-economic damages, 

23 including the consideration of individual facts 

24 and circumstances in determining appropriate 

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1 juries, and guidance on disclosure to patients of 

2 health care errors and adverse events; and 

3 ‘‘(B) the development, in consultation with 

4 States, of common definitions, formats, and 

5 data collection infrastructure for States receiv6 ing grants under this section to use in reporting 

7 to facilitate aggregation and analysis of data 

8 both within and between States. 

9 ‘‘(3) USE OF COMMON DEFINITIONS, FORMATS, 

10 AND DATA COLLECTION INFRASTRUCTURE.—States 

11 not receiving grants under this section may also use 

12 the common definitions, formats, and data collection 

13 infrastructure developed under paragraph (2)(B). 

14 ‘‘(g) EVALUATION.— 

15 ‘‘(1) IN GENERAL.—The Secretary, in consulta16 tion with the review panel established under sub17 section (d)(2), shall enter into a contract with an ap18 propriate research organization to conduct an overall 

19 evaluation of the effectiveness of grants awarded 

20 under subsection (a) and to annually prepare and 

21 submit a report to Congress. Such an evaluation 

22 shall begin not later than 18 months following the 

23 date of implementation of the first program funded 

24 by a grant under subsection (a). 


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1 ‘‘(2) CONTENTS.—The evaluation under para2 graph (1) shall include— 

3 ‘‘(A) an analysis of the effects of the 

4 grants awarded under subsection (a) on the 

5 measures described in paragraph (3); 

6 ‘‘(B) a comparison between and among the 

7 alternatives approved under subsection (a) of 

8 the measures described in paragraph (3); and 

9 ‘‘(C) a comparison between and among 

10 States receiving grants approved under sub11 section (a) and similar States not receiving 

12 such grants of the measures described in para13 graph (3). 

14 ‘‘(3) MEASURES.—The evaluations under para15 graph (2) shall analyze and make comparisons on 

16 the basis of— 

17 ‘‘(A) the nature and number of disputes 

18 over injuries allegedly caused by health care 

19 providers or health care organizations; 

20 ‘‘(B) the nature and number of claims in 

21 which tort litigation was pursued despite the ex22 istence of an alternative under subsection (a); 

23 ‘‘(C) the disposition of disputes and claims 

24 described in clauses (i) and (ii), including the 


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1 length of time and estimated costs to all par2 ties; 

3 ‘‘(D) the medical liability environment; 

4 ‘‘(E) health care quality; 

5 ‘‘(F) patient safety in terms of detecting, 

6 analyzing, and reducing medical errors and ad7 verse events; and 

8 ‘‘(G) patient and health care provider and 

9 organization satisfaction with the alternative 

10 under subsection (a) and with the medical li11 ability environment. 

12 ‘‘(4) FUNDING.—The Secretary shall reserve 5 

13 percent of the amount appropriated in each fiscal 

14 year under subsection (j) to carry out this sub15 section. 

16 ‘‘(h) OPTION TO PROVIDE FOR INITIAL PLANNING

17 GRANTS.—Of the funds appropriated pursuant to sub18 section (j), the Secretary may use a portion not to exceed 

19 $500,000 per State to provide planning grants to such 

20 States for the development of demonstration project appli21 cations meeting the criteria described in subsection (c). 

22 In selecting States to receive such planning grants, the 

23 Secretary shall give preference to those States in which 

24 State law at the time of the application would not prohibit 

25 the adoption of an alternative to current tort litigation. 


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1 ‘‘(i) DEFINITIONS.—In this section: 

2 ‘‘(1) HEALTH CARE SERVICES.—The term 

3 ‘health care services’ means any services provided by 

4 a health care provider, or by any individual working 

5 under the supervision of a health care provider, that 

6 relate to— 

7 ‘‘(A) the diagnosis, prevention, or treat8 ment of any human disease or impairment; or 

9 ‘‘(B) the assessment of the health of 

10 human beings. 

11 ‘‘(2) HEALTH CARE ORGANIZATION.—The term 

12 ‘health care organization’ means any individual or 

13 entity which is obligated to provide, pay for, or ad14 minister health benefits under any health plan. 

15 ‘‘(3) HEALTH CARE PROVIDER.—The term 

16 ‘health care provider’ means any individual or enti17 ty— 

18 ‘‘(A) licensed, registered, or certified under 

19 Federal or State laws or regulations to provide 

20 health care services; or 

21 ‘‘(B) required to be so licensed, registered, 

22 or certified but that is exempted by other stat23 ute or regulation. 

24 ‘‘(4) NET ECONOMIC LOSS.—The term ‘net eco25 nomic loss’ means— 


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1 ‘‘(A) reasonable expenses incurred for 

2 products, services, and accommodations needed 

3 for health care, training, and other remedial 

4 treatment and care of an injured individual; 

5 ‘‘(B) reasonable and appropriate expenses 

6 for rehabilitation treatment and occupational 

7 training; 

8 ‘‘(C) 100 percent of the loss of income 

9 from work that an injured individual would 

10 have performed if not injured, reduced by any 

11 income from substitute work actually per12 formed; and 

13 ‘‘(D) reasonable expenses incurred in ob14 taining ordinary and necessary services to re15 place services an injured individual would have 

16 performed for the benefit of the individual or 

17 the family of such individual if the individual 

18 had not been injured. 

19 ‘‘(5) NON-ECONOMIC DAMAGES.—The term 

20 ‘non-economic damages’ means losses for physical 

21 and emotional pain, suffering, inconvenience, phys22 ical impairment, mental anguish, disfigurement, loss 

23 of enjoyment of life, loss of society and companion24 ship, loss of consortium (other than loss of domestic 

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1 cuniary losses of any kind or nature, to the extent 

2 permitted under State law. 

3 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There 

4 are authorized to be appropriated to carry out this section 

5 such sums as may be necessary. Amounts appropriated 

6 pursuant to this subsection shall remain available until ex7 pended.’’. 

Æ 


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