Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2016

To improve patient access to health care services and provide improved medical care by reducing the excessive burden the liability system places on the health care delivery system. 1. Short title; table of contents (a) Short title This Act may be cited as the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2016 (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Findings and purpose. Sec. 3. Encouraging speedy resolution of claims. Sec. 4. Compensating patient injury. Sec. 5. Maximizing patient recovery. Sec. 6. Punitive damages. Sec. 7. Authorization of payment of future damages to claimants in health care lawsuits. Sec. 8. Definitions. Sec. 9. Effect on other laws. Sec. 10. State flexibility and protection of States’ rights. Sec. 11. Applicability; effective date. 2. Findings and purpose (a) Findings (1) Effect on health care access and costs Congress finds that our current civil justice system is adversely affecting patient access to health care services, better patient care, and cost-efficient health care, in that the health care liability system is a costly and ineffective mechanism for resolving claims of health care liability and compensating injured patients, and is a deterrent to the sharing of information among health care professionals which impedes efforts to improve patient safety and quality of care. (2) Effect on interstate commerce Congress finds that the health care and insurance industries are industries affecting interstate commerce and the health care liability litigation systems existing throughout the United States are activities that affect interstate commerce by contributing to the high costs of health care and premiums for health care liability insurance purchased by health care system providers. (3) Effect on federal spending Congress finds that the health care liability litigation systems existing throughout the United States have a significant effect on the amount, distribution, and use of Federal funds because of— (A) the large number of individuals who receive health care benefits under programs operated or financed by the Federal Government; (B) the large number of individuals who benefit because of the exclusion from Federal taxes of the amounts spent to provide them with health insurance benefits; and (C) the large number of health care providers who provide items or services for which the Federal Government makes payments. (b) Purpose It is the purpose of this Act to implement reasonable, comprehensive, and effective health care liability reforms designed to— (1) improve the availability of health care services in cases in which health care liability actions have been shown to be a factor in the decreased availability of services; (2) reduce the incidence of defensive medicine (3) ensure that persons with meritorious health care injury claims receive fair and adequate compensation, including reasonable noneconomic damages; (4) improve the fairness and cost-effectiveness of our current health care liability system to resolve disputes over, and provide compensation for, health care liability by reducing uncertainty in the amount of compensation provided to injured individuals; and (5) provide an increased sharing of information in the health care system which will reduce unintended injury and improve patient care. 3. Encouraging speedy resolution of claims The time for the commencement of a health care lawsuit shall be 3 years after the date of manifestation of injury or 1 year after the claimant discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first. In no event shall the time for commencement of a health care lawsuit exceed 3 years after the date of manifestation of injury unless tolled for any of the following— (1) upon proof of fraud; (2) intentional concealment; or (3) the presence of a foreign body, which has no therapeutic or diagnostic purpose or effect, in the person of the injured person. Actions by a minor shall be commenced within 3 years from the date of the alleged manifestation of injury except that actions by a minor under the full age of 6 years shall be commenced within 3 years of manifestation of injury or prior to the minor’s 8th birthday, whichever provides a longer period. Such time limitation shall be tolled for minors for any period during which a parent or guardian and a health care provider or health care organization have committed fraud or collusion in the failure to bring an action on behalf of the injured minor. 4. Compensating patient injury (a) Unlimited Amount of Damages for Actual Economic Losses in Health Care Lawsuits In any health care lawsuit, nothing in this Act shall limit a claimant’s recovery of the full amount of the available economic damages, notwithstanding the limitation in subsection (b) (b) Additional Noneconomic Damages In any health care lawsuit, the amount of noneconomic damages, if available, may be as much as $250,000, regardless of the number of parties against whom the action is brought or the number of separate claims or actions brought with respect to the same injury. (c) No Discount of Award for Noneconomic Damages For purposes of applying the limitation in subsection (b) (d) Fair Share Rule In any health care lawsuit, each party shall be liable for that party’s several share of any damages only and not for the share of any other person. Each party shall be liable only for the amount of damages allocated to such party in direct proportion to such party’s percentage of responsibility. Whenever a judgment of liability is rendered as to any party, a separate judgment shall be rendered against each such party for the amount allocated to such party. For purposes of this section, the trier of fact shall determine the proportion of responsibility of each party for the claimant’s harm. 5. Maximizing patient recovery (a) Court Supervision of Share of Damages Actually Paid to Claimants In any health care lawsuit, the court shall supervise the arrangements for payment of damages to protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants. In particular, in any health care lawsuit in which the attorney for a party claims a financial stake in the outcome by virtue of a contingent fee, the court shall have the power to restrict the payment of a claimant’s damage recovery to such attorney, and to redirect such damages to the claimant based upon the interests of justice and principles of equity. In no event shall the total of all contingent fees for representing all claimants in a health care lawsuit exceed the following limits: (1) Forty percent of the first $50,000 recovered by the claimant(s). (2) Thirty-three and one-third percent of the next $50,000 recovered by the claimant(s). (3) Twenty-five percent of the next $500,000 recovered by the claimant(s). (4) Fifteen percent of any amount by which the recovery by the claimant(s) is in excess of $600,000. (b) Applicability The limitations in this section shall apply whether the recovery is by judgment, settlement, mediation, arbitration, or any other form of alternative dispute resolution. In a health care lawsuit involving a minor or incompetent person, a court retains the authority to authorize or approve a fee that is less than the maximum permitted under this section. The requirement for court supervision in the first two sentences of subsection (a) 6. Punitive damages (a) In General Punitive damages may, if otherwise permitted by applicable State or Federal law, be awarded against any person in a health care lawsuit only if it is proven by clear and convincing evidence that such person acted with malicious intent to injure the claimant, or that such person deliberately failed to avoid unnecessary injury that such person knew the claimant was substantially certain to suffer. In any health care lawsuit where no judgment for compensatory damages is rendered against such person, no punitive damages may be awarded with respect to the claim in such lawsuit. No demand for punitive damages shall be included in a health care lawsuit as initially filed. A court may allow a claimant to file an amended pleading for punitive damages only upon a motion by the claimant and after a finding by the court, upon review of supporting and opposing affidavits or after a hearing, after weighing the evidence, that the claimant has established by a substantial probability that the claimant will prevail on the claim for punitive damages. At the request of any party in a health care lawsuit, the trier of fact shall consider in a separate proceeding— (1) whether punitive damages are to be awarded and the amount of such award; and (2) the amount of punitive damages following a determination of punitive liability. If a separate proceeding is requested, evidence relevant only to the claim for punitive damages, as determined by applicable State law, shall be inadmissible in any proceeding to determine whether compensatory damages are to be awarded. (b) Determining Amount of Punitive Damages (1) Factors considered In determining the amount of punitive damages, if awarded, in a health care lawsuit, the trier of fact shall consider only the following— (A) the severity of the harm caused by the conduct of such party; (B) the duration of the conduct or any concealment of it by such party; (C) the profitability of the conduct to such party; (D) the number of products sold or medical procedures rendered for compensation, as the case may be, by such party, of the kind causing the harm complained of by the claimant; (E) any criminal penalties imposed on such party, as a result of the conduct complained of by the claimant; and (F) the amount of any civil fines assessed against such party as a result of the conduct complained of by the claimant. (2) Maximum award The amount of punitive damages, if awarded, in a health care lawsuit may be as much as $250,000 or as much as two times the amount of economic damages awarded, whichever is greater. The jury shall not be informed of this limitation. (c) No Punitive Damages for Products That Comply With FDA Standards (1) In general (A) No punitive damages may be awarded against the manufacturer or distributor of a medical product, or a supplier of any component or raw material of such medical product, based on a claim that such product caused the claimant’s harm where— (i) (I) such medical product was subject to premarket approval, clearance, or licensure by the Food and Drug Administration with respect to the safety of the formulation or performance of the aspect of such medical product which caused the claimant’s harm or the adequacy of the packaging or labeling of such medical product; and (II) such medical product was so approved, cleared, or licensed; or (ii) such medical product is generally recognized among qualified experts as safe and effective pursuant to conditions established by the Food and Drug Administration and applicable Food and Drug Administration regulations, including without limitation those related to packaging and labeling, unless the Food and Drug Administration has determined that such medical product was not manufactured or distributed in substantial compliance with applicable Food and Drug Administration statutes and regulations. (B) Rule of construction Subparagraph (A) (2) Liability of health care providers A health care provider who prescribes, or who dispenses pursuant to a prescription, a medical product approved, licensed, or cleared by the Food and Drug Administration shall not be named as a party to a product liability lawsuit involving such product and shall not be liable to a claimant in a class action lawsuit against the manufacturer, distributor, or seller of such product. Nothing in this paragraph prevents a court from consolidating cases involving health care providers and cases involving products liability claims against the manufacturer, distributor, or product seller of such medical product. (3) Packaging In a health care lawsuit for harm which is alleged to relate to the adequacy of the packaging or labeling of a drug which is required to have tamper-resistant packaging under regulations of the Secretary of Health and Human Services (including labeling regulations related to such packaging), the manufacturer or product seller of the drug shall not be held liable for punitive damages unless such packaging or labeling is found by the trier of fact by clear and convincing evidence to be substantially out of compliance with such regulations. (4) Exception Paragraph (1) (A) a person, before or after premarket approval, clearance, or licensure of such medical product, knowingly misrepresented to or withheld from the Food and Drug Administration information that is required to be submitted under the Federal Food, Drug, and Cosmetic Act 21 U.S.C. 301 et seq. Public Health Service Act 42 U.S.C. 262 (B) a person made an illegal payment to an official of the Food and Drug Administration for the purpose of either securing or maintaining approval, clearance, or licensure of such medical product. 7. Authorization of payment of future damages to claimants in health care lawsuits (a) In General In any health care lawsuit, if an award of future damages, without reduction to present value, equaling or exceeding $50,000 is made against a party with sufficient insurance or other assets to fund a periodic payment of such a judgment, the court shall, at the request of any party, enter a judgment ordering that the future damages be paid by periodic payments, in accordance with the Uniform Periodic Payment of Judgments Act promulgated by the National Conference of Commissioners on Uniform State Laws. (b) Applicability This section applies to all actions which have not been first set for trial or retrial before the effective date of this Act. 8. Definitions In this Act: (1) Alternative dispute resolution system; ADR The term alternative dispute resolution system ADR (2) Claimant The term claimant (3) Compensatory damages The term compensatory damages compensatory damages (4) Contingent fee The term contingent fee (5) Economic damages The term economic damages (6) Health care lawsuit The term health care lawsuit (7) Health care liability action The term health care liability action (8) Health care liability claim The term health care liability claim (9) Health care organization The term health care organization (10) Health care provider The term health care provider (11) Health care goods or services The term health care goods or services (12) Malicious intent to injure The term malicious intent to injure (13) Medical product The term medical product drug device biological product 21 U.S.C. 321(g)(1) Public Health Service Act 42 U.S.C. 262(a) (14) Noneconomic damages The term noneconomic damages (15) Punitive damages The term punitive damages (16) Recovery The term recovery (17) State The term State 9. Effect on other laws (a) Vaccine Injury (1) To the extent that title XXI of the Public Health Service Act (A) this Act does not affect the application of the rule of law to such an action; and (B) any rule of law prescribed by this Act in conflict with a rule of law of such title XXI shall not apply to such action. (2) If there is an aspect of a civil action brought for a vaccine-related injury or death to which a Federal rule of law under title XXI of the Public Health Service Act (b) Other Federal Law Except as provided in this section, nothing in this Act shall be deemed to affect any defense available to a defendant in a health care lawsuit or action under any other provision of Federal law. 10. State flexibility and protection of States’ rights (a) Health Care Lawsuits The provisions governing health care lawsuits set forth in this Act preempt, subject to subsections (b) and (c), State law to the extent that State law prevents the application of any provisions of law established by or under this Act. The provisions governing health care lawsuits set forth in this Act supersede chapter 171 (1) provides for a greater amount of damages or contingent fees, a longer period in which a health care lawsuit may be commenced, or a reduced applicability or scope of periodic payment of future damages, than provided in this Act; or (2) prohibits the introduction of evidence regarding collateral source benefits, or mandates or permits subrogation or a lien on collateral source benefits. (b) Protection of States’ Rights and Other Laws (1) Any issue that is not governed by any provision of law established by or under this Act (including State standards of negligence) shall be governed by otherwise applicable State or Federal law. (2) This Act shall not preempt or supersede any State or Federal law that imposes greater procedural or substantive protections for health care providers and health care organizations from liability, loss, or damages than those provided by this Act or create a cause of action. (c) State Flexibility No provision of this Act shall be construed to preempt— (1) any State law (whether effective before, on, or after the date of the enactment of this Act) that specifies a particular monetary amount of compensatory or punitive damages (or the total amount of damages) that may be awarded in a health care lawsuit, regardless of whether such monetary amount is greater or lesser than is provided for under this Act, notwithstanding section 4(a) (2) any defense available to a party in a health care lawsuit under any other provision of State or Federal law. 11. Applicability; effective date This Act shall apply to any health care lawsuit brought in a Federal or State court, or subject to an alternative dispute resolution system, that is initiated on or after the date of the enactment of this Act, except that any health care lawsuit arising from an injury occurring prior to the date of the enactment of this Act shall be governed by the applicable statute of limitations provisions in effect at the time the injury occurred.

Summary: Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2016 This bill sets conditions for lawsuits arising from health care liability claims regarding health care goods or services or any medical product affecting interstate commerce.Additionally, the bill sets a statute of limitations of three years after the date of manifestation of injury or one-year after the claimant discovers the injury, with certain exceptions. The bill revises other provisions related to health care lawsuits including: (1)limiting noneconomic damages, (2)mandating joint and several liability, (3)limiting attorney contingency fees, (4) limiting punitive damages, and (5)denying punitive damages in the case of products approved by the Food and Drug Administration.