II 

111TH CONGRESS 

1ST SESSION S. 2662 

To establish Federal standards for the resolution of health care malpractice 

claims, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 2, 2009 

Mr. GRAHAM (for himself and Mr. CHAMBLISS) introduced the following bill; 

which was read twice and referred to the Committee on the Judiciary 

A BILL 

To establish Federal standards for the resolution of health 

care malpractice claims, 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 Resolution of 

5 Medical Liability Disputes Act of 2009’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds that— 

8 (1) the health care and insurance industries are 

9 industries affecting interstate commerce, and the 

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1 out the United States affect interstate commerce by 

2 contributing to the high cost of health care and pre3 miums for malpractice insurance purchased by 

4 health care providers; and 

5 (2) the Federal Government, as a direct pro6 vider of health care and as a source of payment for 

7 health care, has a major interest in health care and 

8 a demonstrated interest in assessing the quality of 

9 care, access to care, and the costs of care through 

10 the evaluative activities of several Federal agencies. 

11 SEC. 3. DEFINITIONS. 

12 In this Act: 

13 (1) ALTERNATIVE DISPUTE RESOLUTION SYS14 TEM; ADR.—The term ‘‘alternative dispute resolution 

15 system’’ or ‘‘ADR’’ means a system established 

16 under this Act that provides for the resolution of 

17 covered health care malpractice claims in a manner 

18 other than through a civil action in Federal or State 

19 court. 

20 (2) COVERED HEALTH CARE MALPRACTICE AC21 TION.—The term ‘‘covered health care malpractice 

22 action’’ means a civil action in which a covered 

23 health care malpractice claim is made against a 

24 health care provider or health care professional. 


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1 (3) COVERED HEALTH CARE MALPRACTICE

2 CLAIM.—The term ‘‘covered health care malpractice 

3 claim’’ means a malpractice claim (excluding product 

4 liability claims) relating to the provision of, or the 

5 failure to provide, health care services involving a 

6 defendant covered health care professional or pro7 vider. 

8 (4) COVERED HEALTH CARE PROFESSIONAL.— 

9 The term ‘‘covered health care professional’’ means 

10 an individual, including a physician, nurse, chiro11 practor, nurse midwife, physical therapist, social 

12 worker, or physician assistant— 

13 (A) who provides health care services in a 

14 State; 

15 (B) for whom individuals entitled to, or en16 rolled for, benefits under part A of title XVIII 

17 of the Social Security Act (42 U.S.C. 1395c et 

18 seq.), or enrolled for benefits under part B of 

19 such Act (42 U.S.C. 1395j et seq.) comprise 

20 not less than 25 percent of the total patients of 

21 such professional, as determined by the Sec22 retary; and 

23 (C) who is required by State law or regula24 tion to be licensed or certified by a State a con25 dition for providing such services in the State. 


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1 (5) COVERED HEALTH CARE PROVIDER.—The 

2 term ‘‘covered health care provider’’ means an orga3 nization or institution— 

4 (A) that is engaged in the delivery of 

5 health care services in a State; 

6 (B) for which individuals entitled to, or en7 rolled for, benefits under part A of title XVIII 

8 of the Social Security Act (42 U.S.C. 1395c et 

9 seq.), or enrolled for benefits under part B of 

10 such Act (42 U.S.C. 1395j et seq.) comprise 

11 not less than 25 percent of the total patients of 

12 such organization or institution, as determined 

13 by the Secretary; and 

14 (C) that is required by State law or regula15 tion to be licensed or certified by the State as 

16 a condition for engaging in the delivery of such 

17 services in the State. 

18 (6) SECRETARY.—The term ‘‘Secretary’’ means 

19 the Secretary of Health and Human Services. 

20 (7) STATE.—The term ‘‘State’’ means each of 

21 the several States, the District of Columbia, Puerto 

22 Rico, the Virgin Islands, Guam, American Samoa, 

23 and the Northern Mariana Islands. 


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1 SEC. 4. REQUIREMENT FOR INITIAL RESOLUTION OF AC2 TION THROUGH ALTERNATIVE DISPUTE RES3 OLUTION. 

4 (a) IN GENERAL.— 

5 (1) STATE CASES.—A covered health care mal6 practice action may not be brought in any State 

7 court during a calendar year unless the covered 

8 health care malpractice claim that is the subject of 

9 the action has been initially resolved under an alter10 native dispute resolution system certified for the 

11 year by the Attorney General under section 6(a), or, 

12 in the case of a State in which such a system is not 

13 in effect for the year, under the alternative Federal 

14 system established under section 6(b). 

15 (2) FEDERAL DIVERSITY ACTIONS.—A covered 

16 health care malpractice action may not be brought 

17 in a Federal court under section 1332 of title 28, 

18 United States Code, during a calendar year unless 

19 the covered health care malpractice claim that is the 

20 subject of the action has been initially resolved 

21 under the alternative dispute resolution system de22 scribed in paragraph (1) that applied in the State 

23 whose law applies in such action. 

24 (b) INITIAL RESOLUTION OF CLAIMS UNDER

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1 tially resolved’’ under an alternative dispute resolution 

2 system if— 

3 (1) the ADR reaches a decision on whether the 

4 defendant is liable to the plaintiff for damages; and 

5 (2) if the ADR determines that the defendant 

6 is liable, the ADR reaches a decision regarding the 

7 amount of damages assessed against the defendant. 

8 (c) PROCEDURES FOR FILING ACTIONS.— 

9 (1) NOTICE OF INTENT TO CONTEST DECI10 SION.— 

11 (A) IN GENERAL.—Not later than 60 days 

12 after a decision is issued with respect to a cov13 ered health care malpractice claim under an al14 ternative dispute resolution system, each party 

15 affected by the decision shall submit a sealed 

16 statement to a court of competent jurisdiction, 

17 selected by the arbitrator, indicating whether 

18 the party intends to contest the decision. 

19 (B) SEALED STATEMENTS.—Each sealed 

20 statement submitted to a court under subpara21 graph (A) shall remain sealed until the earlier 

22 of— 

23 (i) the date on which all affected par24 ties have submitted such statement; or 


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1 (ii) the submission deadline described 

2 in subparagraph (A). 

3 (2) REQUIREMENTS FOR FILING ACTION.—A 

4 covered health care malpractice action may not be 

5 brought by a party unless— 

6 (A) such party files the action in a court 

7 of competent jurisdiction not later than 90 days 

8 after the decision resolving the covered health 

9 care malpractice claim that is the subject of the 

10 action is issued under the applicable alternative 

11 dispute resolution system; and 

12 (B) any party has filed the notice of intent 

13 required by paragraph (1). 

14 (3) COURT OF COMPETENT JURISDICTION.— 

15 For purposes of this subsection, the term ‘‘court of 

16 competent jurisdiction’’ means— 

17 (A) with respect to actions filed in a State 

18 court, the appropriate State trial court; and 

19 (B) with respect to actions filed in a Fed20 eral court, the appropriate United States dis21 trict court. 

22 (d) LEGAL EFFECT OF UNCONTESTED ADR DECI23 SION.—A decision reached under an alternative dispute 

24 resolution system that is not contested under subsection 

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1 petent jurisdiction, have the same status in the court as 

2 the verdict of a covered health care malpractice action ad3 judicated in a State or Federal trial court. 

4 (e) STANDARD OF JUDICIAL REVIEW.—The standard 

5 of judicial review of a claim filed under subsection (c) shall 

6 be de novo. 

7 (f) AWARD OF COSTS AND ATTORNEYS’ FEES AFTER

8 INITIAL ADR RESOLUTION.— 

9 (1) IN GENERAL.—In the case of a covered 

10 health care malpractice action brought in any State 

11 or Federal court after ADR, if the final judgment or 

12 order issued (exclusive of costs, expenses, and attor13 neys’ fees incurred after judgment or trial) in the 

14 action is not more favorable to a party contesting 

15 the ADR decision than the ADR decision, the oppos16 ing party may file with the court, not later than 10 

17 days after the final judgment or order is issued, a 

18 petition for payment of costs and expenses, including 

19 attorneys’ fees, incurred with respect to the claim or 

20 claims after the date of the ADR decision. 

21 (2) AWARD OF COSTS AND EXPENSES.—If the 

22 court finds, under a petition filed under paragraph 

23 (1), with respect to a claim or claims, that the judg24 ment or order finally obtained is not more favorable 

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1 spect to the claim or claims than the ADR decision, 

2 the court shall order the contesting party to pay the 

3 costs and expenses of the opposing party, including 

4 attorneys’ fees, incurred with respect to the claim or 

5 claims after the date of the ADR decision, unless the 

6 court finds that requiring the payment of such costs 

7 and expenses would be manifestly unjust. 

8 (3) LIMITATION.—Attorneys’ fees awarded 

9 under this subsection shall be in an amount reason10 ably attributable to the claim or claims involved, cal11 culated on the basis of an hourly rate of the attor12 ney, which may not exceed that which the court con13 siders acceptable in the community in which the at14 torney practices law, taking into account the attor15 ney’s qualifications and experience and the com16 plexity of the case. Attorneys’ fees under this sub17 section may not exceed— 

18 (A) the actual cost incurred by the party 

19 for attorneys’ fees payable to an attorney for 

20 services in connection with the claim or claims; 

21 or 

22 (B) if no such cost was incurred by the 

23 party due to a contingency fee agreement, a 

24 reasonable cost that would have been incurred 

25 by the party for noncontingent attorneys’ fees 


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1 payable to an attorney for services in connec2 tion with the claim or claims. 

3 (g) APPLICABILITY.—The requirements of this sec4 tion shall apply only to each covered health care mal5 practice claim arising out of an event (or events) occurring 

6 on or after the date that is 270 days after the date of 

7 enactment of this Act. 

8 SEC. 5. BASIC REQUIREMENTS FOR STATE ALTERNATIVE 

9 DISPUTE RESOLUTION SYSTEMS. 

10 The alternative dispute resolution system of a State 

11 meets the requirements of this section if the system— 

12 (1) applies to all covered health care mal13 practice claims under the jurisdiction of the courts 

14 of such State; 

15 (2) requires that a written opinion resolving the 

16 dispute be issued not later than 180 days after the 

17 date on which each party against whom the claim is 

18 filed has received notice of the claim (other than in 

19 exceptional cases for which a longer period is re20 quired for the issuance of such an opinion), and that 

21 the opinion contain— 

22 (A) findings of fact relating to the dispute; 

23 and 

24 (B) a description of the costs incurred in 

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1 ing any fees paid to the individuals hearing and 

2 resolving the claim), together with an appro3 priate assessment of the costs against any of 

4 the parties; 

5 (3) requires individuals who hear and resolve 

6 claims under the system to meet such qualifications 

7 as the State may require (in accordance with regula8 tions of the Attorney General); 

9 (4) is approved by the State or by local govern10 ments in the State; 

11 (5) with respect to a State system that consists 

12 of multiple dispute resolution procedures— 

13 (A) permits the parties to a dispute to se14 lect the procedure to be used for the resolution 

15 of the dispute under the system; and 

16 (B) if the parties do not agree on the pro17 cedure to be used for the resolution of the dis18 pute, assigns a particular procedure to the par19 ties; 

20 (6) provides for the transmittal to the State 

21 agency responsible for monitoring or disciplining 

22 health care professionals and health care providers 

23 of any findings made under the system that such a 

24 professional or provider committed malpractice, un25 less, during the 90-day period beginning on the date 


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1 the system resolves the claim against the profes2 sional or provider, the professional or provider 

3 brings an action contesting the decision made under 

4 the system; and 

5 (7) provides for the regular transmittal to the 

6 Administrator of the Agency for Healthcare Re7 search and Quality of information on disputes re8 solved under the system, in a manner that assures 

9 that the identity of the parties to a dispute shall not 

10 be revealed. 

11 SEC. 6. CERTIFICATION OF STATE SYSTEMS; APPLICA12 BILITY OF ALTERNATIVE FEDERAL SYSTEM. 

13 (a) CERTIFICATION.— 

14 (1) IN GENERAL.—Not later than 270 days 

15 after the date of enactment of this Act and periodi16 cally thereafter, the Attorney General, in consulta17 tion with the Secretary, shall determine whether the 

18 alternative dispute resolution systems of each State 

19 meet the requirements of this Act. 

20 (2) BASIS FOR CERTIFICATION.—The Attorney 

21 General shall certify the alternative dispute resolu22 tion system of a State under this subsection for a 

23 calendar year if the Attorney General determines 

24 under paragraph (1) that such system meets the re25 quirements of section 5. 


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1 (b) APPLICABILITY OF ALTERNATIVE FEDERAL SYS2 TEM.— 

3 (1) ESTABLISHMENT AND APPLICABILITY.— 

4 Not later than 270 days after the date of enactment 

5 of this Act, the Attorney General, in consultation 

6 with the Secretary, shall establish by rulemaking an 

7 alternative Federal ADR system for the resolution of 

8 covered health care malpractice claims during a cal9 endar year, to be used for a calendar year in States 

10 that do not have an alternative dispute resolution 

11 system that is certified under subsection (a) for such 

12 year. 

13 (2) REQUIREMENTS FOR SYSTEM.—Under the 

14 alternative Federal ADR system established under 

15 paragraph (1)— 

16 (A) paragraphs (1), (2), (6), and (7) of 

17 section 5 shall apply to claims brought under 

18 such system; 

19 (B) the claims brought under such system 

20 shall be heard and resolved by medical and legal 

21 experts appointed as arbitrators by the Attor22 ney General, in consultation with the Secretary; 

23 and 

24 (C) with respect to a State in which such 

25 system is in effect, the Attorney General may 


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1 (at the request of such State) modify the sys2 tem to take into account the existence of dis3 pute resolution procedures in the State that af4 fect the resolution of health care malpractice 

5 claims. 

6 (3) TREATMENT OF STATES WITH ALTER7 NATIVE SYSTEM IN EFFECT.—If the alternative Fed8 eral ADR system established under this subsection is 

9 applied with respect to a State for a calendar year 

10 such State shall reimburse the United States, at 

11 such time and in such manner as the Secretary may 

12 require, for the costs incurred by the United States 

13 during such year as a result of the application of the 

14 system with respect to the State. 

15 SEC. 7. GAO STUDY OF PRIVATE LITIGATION INSURANCE. 

16 The Comptroller General of the United States shall— 

17 (1) undertake a study of the effectiveness of 

18 private litigation insurance markets, such as those in 

19 the United Kingdom and Germany, in providing af20 fordable access to courts, evaluating the merit of 

21 prospective claims, and ensuring that prevailing par22 ties in ‘‘loser pays’’ systems are reimbursed for at23 torneys’ fees; and 


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1 (2) not later than 270 days after the date of 

2 enactment of this Act, submit to Congress a report 

3 describing the results of such study. 

Æ 


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