I
106TH CONGRESS
1ST SESSION
H. R. 2242
To establish limits on medical malpractice claims, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 16, 1999
Mr. GREENWOOD (for himself, Mr. SHAYS, Mr. SENSENBRENNER, Mrs. JOHN-
SON of Connecticut, Mr. DEAL of Georgia, Mr. WHITFIELD, Mr. NOR-
WOOD, Mr. SMITH of New Jersey, and Mr. COOKSEY) introduced the fol-
lowing bill; which was referred to the Committee on the Judiciary, and
in addition to the Committee on Commerce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To establish limits on medical malpractice claims, and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medical Malpractice
Rx Act’’.
SEC. 2. FEDERAL REFORM OF HEALTH CARE LIABILITY AC-
TIONS.
(a) APPLICABILITY.—This Act shall apply with re-
spect to any health care liability action brought in any
State or Federal court and to any health care liability
claim subject to an ADR, except that this Act shall not
apply to—
(1) an action for damages arising from a vac-
cine-related injury or death to the extent that title
XXI of the Public Health Service Act applies to the
action, or
(2) an action under the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1001 et
seq.).
(b) PREEMPTION.—This Act shall not preempt any
State law that—
(1) provides for defenses or places limitations
on a person’s liability in addition to those contained
in this Act or otherwise imposes greater restrictions
than those provided in this Act; or
(2) imposes greater restrictions on liability or
damages than those provided in this Act.
No provision of this Act shall be construed to preempt or
displace the implementation of any State sponsored or pri-
vate ADR system.
(c) LIMITATIONS.—This Act supersedes chapter 171
of title 28, United States Code, (relating to tort claims
procedure) and preempts State law with respect to both
procedural and substantive matters only to the extent that
such chapter or State law differs from any provision of
this Act or provision established under this Act. Section
5 shall supersede or preempt any provision of such chapter
or State law which prohibits the introduction of evidence
regarding collateral source benefits or mandates or per-
mits subrogation or a lien on the plaintiff’s award for the
cost of providing collateral source benefits. Any issue that
is not governed by any provision of this Act shall be gov-
erned by otherwise applicable Federal or State law.
(d) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE
OF LAW OR VENUE.—Nothing in subsection (c) shall be
construed to—
(1) waive or affect any defense of sovereign im-
munity asserted by any State under any provision of
law;
(2) waive or affect any defense of sovereign im-
munity asserted by the United States;
(3) affect the applicability of any provision of
the Foreign Sovereign Immunities Act of 1976;
(4) preempt State choice-of-law rules with re-
spect to claims brought by a foreign nation or a cit-
izen of a foreign nation; or
(5) affect the right of any court to transfer
venue or to apply the law of a foreign nation or to
dismiss a claim of a foreign nation or of a citizen
of a foreign nation on the ground of inconvenient
forum.
(e) AMOUNT
IN CONTROVERSY.—In an action to
which this Act applies and which is brought under section
1332 of title 28, United States Code, the amount of non-
economic damages or punitive damages, and attorneys’
fees or costs, shall not be included in determining whether
the matter in controversy exceeds the sum or value of
$50,000.
(f) FEDERAL COURT JURISDICTION NOT ESTAB-
LISHED ON FEDERAL QUESTION GROUNDS.—Nothing in
this Act shall be construed to establish any jurisdiction
in the district courts of the United States over health care
liability actions on the basis of section 1331 or 1337 of
title 28, United States Code.
SEC. 3. STATUTE OF LIMITATIONS.
A health care liability action may not be brought
after the expiration of the 2-year period that begins on
the date on which the alleged injury that is the subject
of the action was discovered or should reasonably have
been discovered, but in no case after the expiration of the
5-year period that begins on the date the alleged injury
occurred.
SEC. 4. CALCULATION AND PAYMENT OF DAMAGES.
(a) JOINT AND SEVERAL LIABILITY.—In any health
care liability action, a defendant shall be liable only for
the amount of noneconomic damages attributable to such
defendant in direct proportion to such defendant’s share
of fault or responsibility for the claimant’s actual dam-
ages, as determined by the trier of fact. In all such cases,
the liability of a defendant for noneconomic damages shall
be several and not joint.
(b) LIMITATION ON NONECONOMIC DAMAGES.—
(1) IN GENERAL.—The total amount of non-
economic damages that may be awarded to a claim-
ant for losses resulting from the injury which is the
subject of a health care liability action may not ex-
ceed $250,000, regardless of the number of parties
against whom the action is brought or the number
of actions brought with respect to the injury. The
limitation under this paragraph shall not apply to an
action for damages based solely on intentional denial
of medical treatment necessary to preserve a pa-
tient’s life that the patient is otherwise qualified to
receive, against the wishes of a patient, or if the pa-
tient is incompetent, against the wishes of the pa-
tient’s guardian, on the basis of the patient’s
present or predicated age, disability, degree of med-
ical dependency, or quality of life.
(2) CAP
INCREASE.—The limit prescribed by
paragraph (1) on the total amount of noneconomic
damages that may be awarded shall be adjusted an-
nually by changes in the Consumer Price Index for
all urban consumers published by the Department of
Labor.
(c) TREATMENT OF PUNITIVE DAMAGES.—
(1) GENERAL RULE.—Punitive damages may,
to the extent permitted by applicable State law, be
awarded in any health care liability action for harm
in any Federal or State court against a defendant if
the claimant establishes by clear and convincing evi-
dence that the harm suffered was the result of
conduct—
(A) specifically intended to cause harm, or
(B) conduct manifesting a conscious, fla-
grant indifference to the rights or safety of oth-
ers.
(2) 
APPLICABILITY.—This 
subsection 
shall
apply to any health care liability action brought in
any Federal or State court on any theory where pu-
nitive damages are sought. This subsection does not
create a cause of action for punitive damages. This
subsection does not preempt or supersede any State
or Federal law to the extent that such law would
further limit the award of punitive damages.
(3) BIFURCATION.—At the request of any
party, the trier of fact shall consider in a separate
proceeding whether punitive damages are to be
awarded and the amount of such award. If a sepa-
rate proceeding is requested, evidence relevant only
to the claim of punitive damages, as determined by
applicable State law, shall be inadmissible in any
proceeding to determine whether actual damages are
to be awarded.
(4) DRUGS AND DEVICES.—
(A) IN
GENERAL.—(i) Punitive damages
shall not be awarded against a manufacturer or
product seller of a drug or medical device which
caused the claimant’s harm where—
(I) such drug or device was subject to
premarket approval by the Food and Drug
Administration with respect to the safety
of the formulation or performance of the
aspect of such drug or device which caused
the claimant’s harm, or the adequacy of
the packaging or labeling of such drug or
device which caused the harm, and such
drug, device, packaging, or labeling was
approved by the Food and Drug Adminis-
tration; or
(II) the drug is generally recognized
as safe and effective pursuant to conditions
established by the Food and Drug Admin-
istration and applicable regulations, includ-
ing packaging and labeling regulations.
(ii) Clause (i) shall not apply in any case
in which the defendant, before or after pre-
market approval of a drug or device—
(I) intentionally and wrongfully with-
held from or misrepresented to the Food
and Drug Administration information con-
cerning such drug or device required to be
submitted under the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 301 et seq.)
or section 351 of the Public Health Service
Act (42 U.S.C. 262) that is material and
relevant to the harm suffered by the claim-
ant, or
(II) made an illegal payment to an of-
ficial or employee of the Food and Drug
Administration for the purpose of securing
or maintaining approval of such drug or
device.
(B) PACKAGING.—In a health care liability
action 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 court
by clear and convincing evidence to be substan-
tially out of compliance with such regulations.
(d) PERIODIC PAYMENTS FOR FUTURE LOSSES.—
(1) GENERAL RULE.—In any health care liabil-
ity action in which the damages awarded for future
economic and noneconomic loss exceeds $50,000, a
person shall not be required to pay such damages in
a single, lump-sum payment, but shall be permitted
to make such payments periodically based on when
the damages are found likely to occur, as such pay-
ments are determined by the court.
(2) FINALITY OF JUDGMENT.—The judgment
of the court awarding periodic payments under this
subsection may not, in the absence of fraud, be re-
opened at any time to contest, amend, or modify the
schedule or amount of the payments.
(3) 
LUMP-SUM
SETTLEMENTS.—This 
sub-
section shall not be construed to preclude a settle-
ment providing for a single, lump-sum payment.
(e) TREATMENT
OF COLLATERAL SOURCE PAY-
MENTS.—
(1) INTRODUCTION
INTO
EVIDENCE.—In any
health care liability action, any defendant may intro-
duce evidence of collateral source payments. If any
defendant elects to introduce such evidence, the
claimant may introduce evidence of any amount paid
or contributed or reasonably likely to be paid or con-
tributed in the future by or on behalf of the claim-
ant to secure the right to such collateral source pay-
ments.
(2) NO SUBROGATION.—No provider of collat-
eral source payments shall recover any amount
against the claimant or receive any lien or credit
against the claimant’s recovery or be equitably or le-
gally subrogated the right of the claimant in a
health care liability action.
(3) APPLICATION TO SETTLEMENTS.—This sub-
section shall apply to an action that is settled as well
as an action that is resolved by a fact finder.
SEC. 5. AWARD OF ATTORNEY’S FEES.
(a) GENERAL RULE.—If the claimant in a health
care liability action seeks noneconomic damages in excess
of $250,000 (or the cap in effect under section 4(b)(2))
or 3 times the economic damages, whichever is lesser, and
the request for such damages in such amount is made be-
fore the determination of liability of one party or another
by verdict or order of judgment, the prevailing party in
such action shall be entitled to attorney’s fees from the
non-prevailing party, except that the sum of the attorney’s
fees to which the prevailing party is entitled shall not ex-
ceed the attorney’s fees of the non-prevailing party.
(b) LIMITATION.—The court in a health care liability
action may, in its discretion, limit the fees authorized to
be recovered under subsection (a) if the amount of such
fees is deemed unjust.
(c) LIMITATIONS ON CONTINGENT FEES.—
(1) IN GENERAL.—The total of all contingent
fees for representing all claimants in a health care
liability claim or action shall not exceed the following
limits:
(A) 40 percent of the first $50,000 recov-
ered by the claimant.
(B) 331⁄3 percent of the next $50,000 re-
covered by the claimant.
(C) 25 percent of the next $50,000 recov-
ered by the claimant.
(D) 15 percent of any amount by which
the recovery by the claimant exceeds $600,000.
(2) APPLICABILITY.—The limitations prescribed
by paragraph (1) shall apply whether the recovery is
by judgment, settlement, mediation, arbitration, or
any other form of ADR. A court acting in a health
care liability claim or action involving a minor or in-
competent person retains the authority to authorize
or approve a fee that is less than the maximum per-
mitted under paragraph (1).
(3) DEFINITIONS.—For purposes of this sub-
section:
(A) CONTINGENT FEE.—The term ‘‘contin-
gent fee’’ includes all compensation to any per-
son which is payable only if a recovery is ef-
fected on behalf of one or more claimants.
(B) RECOVERY.—The term ‘‘recovery’’
means the net sum recovered after deducting
any disbursements or costs incurred in connec-
tion with prosecution or settlement of the claim,
including all costs paid or advanced by any per-
son. Costs of health care incurred by the plain-
tiff and the attorney’s office overhead costs or
charges for legal services are not deductible dis-
bursements of costs for such purpose.
(d) HOURS WORKED.—Counsel of record in a health
care liability action shall maintain accurate and up-to-date
records of hours worked for such action regardless of the
fee arrangement with the attorney’s client.
(e) COSTS.—Nothing in this section shall affect the
right of a prevailing party to be awarded costs under ap-
plicable law.
(f) EFFECTIVE DATE.—This section shall apply with
respect to a health care liability action which is brought
after the date of the enactment of this Act for a claim
arising from an injury occurring after such date of enact-
ment.
SEC. 6. ALTERNATIVE DISPUTE RESOLUTION.
Any ADR used to resolve a health care liability action
or claim shall contain provisions relating to statute of limi-
tations, noneconomic damages, joint and several liability,
punitive damages, collateral source rule, periodic pay-
ments, and award of attorney’s fees which are consistent
with the provisions relating to such matters in this Act.
SEC. 7. DEFINITIONS.
As used in this Act:
(1) ACTUAL DAMAGES.—The term ‘‘actual dam-
ages’’ means damages awarded to pay for economic
loss.
(2) ADR.—The term ‘‘ADR’’ means an alter-
native dispute resolution system established under
Federal or State law that provides for the resolution
of health care liability claims in a manner other than
through health care liability actions.
(3) CLAIMANT.—The term ‘‘claimant’’ means
any person who brings a health care liability action
and any person on whose behalf such an action is
brought. If such action is brought through or on be-
half of an estate, the term includes the claimant’s
decedent. If such action is brought through or on be-
half of a minor or incompetent, the term includes
the claimant’s legal guardian.
(4) CLEAR AND CONVINCING EVIDENCE.—The
term ‘‘clear and convincing evidence’’ is that meas-
ure or degree of proof that will produce in the mind
of the trier of fact a firm belief or conviction as to
the truth of the allegations sought to be established.
Such measure or degree of proof is more than that
required under preponderance of the evidence but
less than that required for proof beyond a reason-
able doubt.
(5) COLLATERAL
SOURCE
PAYMENTS.—The
term ‘‘collateral source payments’’ means any
amount paid or reasonably likely to be paid in the
future to or on behalf of a claimant, or any service,
product, or other benefit provided or reasonably like-
ly to be provided in the future to or on behalf of a
claimant, as a result of an injury or wrongful death,
pursuant to—
(A) any State or Federal health, sickness,
income-disability, accident or workers’ com-
pensation Act;
(B) any health, sickness, income-disability,
or accident insurance that provides health bene-
fits or income-disability coverage;
(C) any contract or agreement of any
group, organization, partnership, or corporation
to provide, pay for, or reimburse the cost of
medical, hospital, dental, or income disability
benefits; and
(D) any other publicly or privately funded
program.
(6) DRUG.—The term ‘‘drug’’ has the meaning
given such term in section 201(g)(1) of the Federal
Food, 
Drug, 
and 
Cosmetic 
Act 
(21 
U.S.C.
321(g)(1)).
(7) ECONOMIC DAMAGES.—The term ‘‘economic
damages’’ means objectively verifiable monetary
losses incurred as a result of the provision of, use
of, or payment for (or failure to provide, use, or pay
for) health care services or medical products such as
past and future medical expenses, loss of past and
future earnings, cost of obtaining domestic services,
loss of employment, loss due to death, burial costs,
and loss of business or employment opportunities.
(8) HARM.—The term ‘‘harm’’ means any le-
gally cognizable wrong or injury for which punitive
damages may be imposed.
(9) 
HEALTH
BENEFIT
PLAN.—The 
term
‘‘health benefit plan’’ means—
(A) a hospital or medical expense incurred
policy or certificate,
(B) a hospital or medical service plan con-
tract,
(C) a health maintenance subscriber con-
tract, or
(D) a Medicare+Choice product (offered
under part C of title XVIII of the Social Secu-
rity Act),
that provides benefits with respect to health care
services.
(10) HEALTH
CARE
LIABILITY
ACTION.—The
term ‘‘health care liability action’’ means a civil ac-
tion brought in a State or Federal court or pursuant
to alternative dispute resolution against a health
care provider, an entity which is obligated to provide
or pay for health benefits under any health benefit
plan (including any person or entity acting under a
contract or arrangement to provide or administer
any health benefit), or the manufacturer, distributor,
supplier, marketer, promoter, or seller of a medical
product, in which the claimant alleges a claim (in-
cluding third party claims, cross claims, counter
claims, or contribution claims) based upon the provi-
sion of (or the failure to provide or pay for) health
care services or the use of a medical product, re-
gardless of the theory of liability on which the claim
is based or the number of plaintiffs, defendants, or
causes of action.
(11) HEALTH
CARE
LIABILITY
CLAIM.—The
term ‘‘health care liability claim’’ means a claim in
which the claimant alleges that injury was caused by
the provision of (or the failure to provide) health
care services or medical products.
(12) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means any person that is en-
gaged in the delivery of health care services in a
State and that is required by the laws or regulations
of the State to be licensed or certified by the State
to engage in the delivery of such services in the
State.
(13) 
HEALTH
CARE
SERVICE.—The 
term
‘‘health care service’’ means any service for which
payment may be made under a health benefit plan
including services related to the delivery or adminis-
tration of such service.
(14) MEDICAL PRODUCT.—The term ‘‘medical
product’’ means a drug (as defined in section
201(g)(1)) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 321(g)(1)) or a medical device (as
defined in section 201(h)) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 321(h)), includ-
ing any component or raw material used in a drug
or device but excluding health care services.
(15) 
NONECONOMIC
DAMAGES.—The 
term
‘‘noneconomic damages’’ means damages paid to an
individual for pain and suffering, inconvenience,
emotional distress, mental anguish, loss of consor-
tium, injury to reputation, humiliation, and other
nonpecuniary losses.
(16) PERSON.—The term ‘‘person’’ means any
individual, corporation, company, association, firm,
partnership, society, joint stock company, or any
other entity, including any governmental entity.
(17) PREVAILING
PARTY.—The term ‘‘pre-
vailing party’’ means a party to a health care liabil-
ity action who obtains a final judgment (other than
by settlement) exclusive of interest on all or a por-
tion of the claims asserted during the litigation.
(18) PRODUCT SELLER.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘‘product seller’’ means a
person who, in the course of a business con-
ducted for that purpose—
(i) sells, distributes, rents, leases, pre-
pares, blends, packages, labels, or is other-
wise involved in placing, a product in the
stream of commerce, or
(ii) installs, repairs, or maintains the
harm-causing aspect of a product.
(B) EXCLUSION.—Such term does not
include—
(i) a seller or lessor of real property;
(ii) a provider of professional services
in any case in which the sale or use of a
product is incidental to the transaction and
the essence of the transaction is the fur-
nishing of judgment, skill, or services; or
(iii) any person who—
(I) acts in only a financial capac-
ity with respect to the sale of a prod-
uct; or
(II) leases a product under a
lease arrangement in which the selec-
tion, possession, maintenance, and op-
eration of the product are controlled
by a person other than the lessor.
(19) PUNITIVE DAMAGES.—The term ‘‘punitive
damages’’ means damages awarded against any per-
son not to compensate for actual injury suffered, but
to punish or deter such person or others from en-
gaging in similar behavior in the future.