half of the opposing party to secure the right to the collat-
eral source benefits. 
(b) NO RECOVERY BY PROVIDER OF COLLATERAL 
SOURCE BENEFITS.—No provider of collateral source ben-
efits may recover any amount against the claimant or re-
ceive any lien or credit against the claimant’s recovery or 
be equitably or legally subrogated to the right of the claim-
ant in a health care lawsuit involving injury or wrongful 
death. 
(c) APPLICABILITY.—This section applies to any 
health care lawsuit that is settled and to any health care 
lawsuit that is resolved by a fact finder. This section shall 
not apply to section 1862(b) (42 U.S.C. 1395y(b)) or sec-
tion 1902(a)(25) (42 U.S.C. 1396a(a)(25)) of the Social 
Security Act. 
SEC. 7. PUNITIVE DAMAGES. 
(a) IN GENERAL.— 
(1) LIMITATIONS.—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 the person acted with malicious intent 
to injure the claimant, or that the person delib-
erately failed to avoid unnecessary injury that the 
person knew the claimant was substantially certain 
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to suffer. In any health care lawsuit in which no 
judgment for compensatory damages is rendered 
against a person, no punitive damages may be 
awarded with respect to the claim in such lawsuit. 
(2) PROCEDURES.—No demand for punitive 
damages may 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 oppos-
ing affidavits or after a hearing, after weighing the 
evidence, that the claimant has established by a sub-
stantial probability that the claimant will prevail on 
the claim for punitive damages. 
(3) SEPARATE PROCEEDING.—At the request of 
any party in a health care lawsuit, the trier of fact 
shall consider in a separate proceeding— 
(A) whether punitive damages are to be 
awarded and the amount of such award; and 
(B) the amount of punitive damages fol-
lowing 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 pro-
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ceeding to determine whether compensatory damages are 
to be awarded. 
(b) DETERMINING AMOUNT
OF PUNITIVE DAM-
AGES.— 
(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 the party against whom the lawsuit 
is brought. 
(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 med-
ical procedures rendered for compensation, as 
the case may be, by such party, of the kind 
causing the harm complained of by the claim-
ant. 
(E) Any criminal penalties imposed on 
such party, as a result of the conduct com-
plained of by the claimant. 
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(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 
not exceed $250,000 or 2 times the amount of eco-
nomic damages awarded, whichever amount is great-
er. The jury shall not be informed of the limitation 
under this paragraph. 
SEC. 8. AUTHORIZATION OF PAYMENT OF FUTURE DAM-
AGES TO CLAIMANTS IN HEALTH CARE LAW-
SUITS. 
(a) IN GENERAL.—In any health care lawsuit, if an 
award of future damages, without reduction to present 
value, of $50,000 or more is made against a party with 
sufficient insurance or other assets to fund a periodic pay-
ment 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 any health care 
lawsuit, the court may be guided by the Uniform Periodic 
Payment of Judgments Act promulgated by the National 
Conference of Commissioners on Uniform State Laws. 
(b) APPLICABILITY.—This section applies to any ac-
tion that has not been first set for trial or retrial before 
the effective date of this Act. 
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SEC. 9. DEFINITIONS. 
In this Act: 
(1) ALTERNATIVE DISPUTE RESOLUTION SYS-
TEM; ADR.—The term ‘‘alternative dispute resolution 
system’’ or ‘‘ADR’’ means a system that provides 
for the resolution of health care lawsuits in a man-
ner other than through a civil action brought in a 
Federal court. 
(2) CLAIMANT.—The term ‘‘claimant’’ means 
any person who brings a health care lawsuit, includ-
ing a person who asserts or claims a right to legal 
or equitable contribution, indemnity or subrogation, 
arising out of a health care liability claim or a 
health care liability action, and any person on whose 
behalf such a claim is asserted or such an action is 
brought, whether deceased, incompetent, or a minor. 
(3) COLLATERAL
SOURCE
BENEFITS.—The 
term ‘‘collateral source benefits’’ means any amount 
paid or reasonably likely to be paid in the future to 
or on behalf of the claimant, or any service, product, 
or other benefit provided or reasonably likely to be 
provided in the future to or on behalf of the claim-
ant, as a result of the injury or wrongful death, pur-
suant to— 
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(A) any State or Federal health, sickness, 
income-disability, accident, or workers’ com-
pensation law; 
(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. 
(4) 
COMPENSATORY
DAMAGES.—The 
term 
‘‘compensatory damages’’— 
(A) 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 ex-
penses, loss of past and future earnings, cost of 
obtaining domestic services, loss of employment, 
and loss of business or employment opportuni-
ties, damages for physical and emotional pain, 
suffering, inconvenience, physical impairment, 
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mental anguish, disfigurement, loss of enjoy-
ment of life, loss of society and companionship, 
loss of consortium (other than loss of domestic 
service), hedonic damages, injury to reputation, 
and all other nonpecuniary losses of any kind or 
nature; and 
(B) includes economic damages and non-
economic damages. 
(5) 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, and loss of business or employ-
ment opportunities. 
(6) HEALTH CARE LAWSUIT.— 
(A) IN GENERAL.—The term ‘‘health care 
lawsuit’’ means— 
(i) any health care liability claim; or 
(ii) any health care liability action. 
(B) EXCLUSIONS.—The term ‘‘health care 
lawsuit’’ does not include a claim or action 
that— 
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(i) is based on criminal liability; 
(ii) seeks civil fines or penalties paid 
to the Federal Government or a State or 
local government; or 
(iii) is grounded in antitrust. 
(7) 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 an alternative dispute resolution system, in which 
a claimant alleges a health care liability claim. 
(8) HEALTH
CARE
LIABILITY
CLAIM.—The 
term ‘‘health care liability claim’’ means a demand 
by any person, whether or not pursuant to ADR, 
against a health care provider, health care organiza-
tion, or the manufacturer, distributor, supplier, mar-
keter, promoter, or seller of a medical product, in-
cluding, but not limited to, third-party claims, cross- 
claims, counter-claims, or contribution claims, which 
is based upon the provision of, use of, or payment 
for (or the failure to provide, use, or pay for) health 
care services or medical products that are provided 
pursuant to any Federal program, including the 
Medicare program (under title XVIII of the Social 
Security Act), the Medicaid program (under title 
XIX of the Social Security Act), and the State Chil-
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dren’s Health Insurance Program (under title XXI 
of the Social Security Act), or are required to be 
provided under section 1867 of the Social Security 
Act (relating to examination and treatment for 
emergency medical conditions and women in labor 
and popularly known as EMTALA), regardless of 
the theory of liability on which the claim is based, 
or the number of plaintiffs, defendants, or other par-
ties, or the number of causes of action. 
(9) HEALTH CARE ORGANIZATION.—The term 
‘‘health care organization’’ means any person or en-
tity which is obligated to provide or pay for health 
benefits under any health plan, including any person 
or entity acting under a contract or arrangement 
with a health care organization to provide or admin-
ister any health benefit. 
(10) HEALTH
CARE
PROVIDER.—The term 
‘‘health care provider’’ means any person or entity 
that— 
(A) is required by State or Federal law or 
regulation to be licensed, registered, or certified 
to provide health care services; and 
(B) either is so licensed, registered, or cer-
tified, or is exempted from such requirement by 
other statute or regulation. 
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(11) HEALTH
CARE
SERVICES.—The term 
‘‘health care services’’ means any services provided 
by a health care organization or health care pro-
vider, or by any individual working under the super-
vision of a health care provider, that relates to— 
(A) the diagnosis, prevention, or treatment 
of any human disease or impairment; or 
(B) the assessment or care of the health of 
human beings. 
(12) MALICIOUS
INTENT
TO
INJURE.—The 
term ‘‘malicious intent to injure’’ means inten-
tionally causing or attempting to cause physical in-
jury other than providing health care services or 
medical products. 
(13) MEDICAL PRODUCT.— 
(A) IN
GENERAL.—The term ‘‘medical 
product’’— 
(i) means a drug, device, or biological 
product intended for humans; 
(ii) includes any component or raw 
material used in a drug, device, or biologi-
cal product intended for humans; and 
(iii) does not include health care serv-
ices. 
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(B) DRUG, DEVICE, BIOLOGICAL
PROD-
UCT.— 
(i) DRUG.—The term ‘‘drug’’ has the 
meaning given that term in sections 
201(g)(1) and 201(h) of the Federal Food, 
Drug and Cosmetic Act (21 U.S.C. 
321(g)(1)). 
(ii) DEVICE.—The term ‘‘device’’ has 
the meaning given that term in section 
201(h) of the Federal Food, Drug and 
Cosmetic Act (21 U.S.C. 321(h)). 
(iii) 
BIOLOGICAL
PRODUCT.—The 
term ‘‘biological product’’ has the meaning 
given that term in section 351(i) of the 
Public Health Service Act (42 U.S.C. 
262(i)). 
(14) 
NONECONOMIC
DAMAGES.—The 
term 
‘‘noneconomic damages’’ means damages for phys-
ical and emotional pain, suffering, inconvenience, 
physical impairment, mental anguish, disfigurement, 
loss of enjoyment of life, loss of society and compan-
ionship, loss of consortium (other than loss of do-
mestic service), hedonic damages, injury to reputa-
tion, and all other nonpecuniary losses of any kind 
or nature. 
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