and for a part-time doctoral degree program not
more than 7 years.
‘‘(b) ELIGIBILITY.—To be eligible to receive a schol-
arship or stipend under this section, an individual shall—
‘‘(1) submit an application to the Secretary at
such time, in such manner, and containing such in-
formation as the Secretary may reasonably require;
‘‘(2) be accepted for enrollment, or be enrolled,
in an accredited school of nursing, on a full- or part-
time basis to take courses leading to a masters de-
gree or doctoral degree;
‘‘(3) enter into an agreement with the Sec-
retary, at the time of submittal of such application,
to—
‘‘(A) accept the conditions of the scholar-
ship and remain enrolled in a school of nursing;
‘‘(B) maintain an acceptable level of aca-
demic standing; and
‘‘(C) maintain enrollment in a course of
study until the individual completes the course
of study; and
‘‘(4) teach at an accredited school of nursing
for 1 year for each year of assistance with a course
load determined by the school of nursing where the
teaching will take place, and the individual may
complete such required period of service on a part-
time basis subject to—
‘‘(A) an agreement entered into by the fa-
cility and the individual which is approved by
the Secretary; and
‘‘(B) the individual agrees in writing that
the period of obligated service will be extended
so that the aggregate amount of less than full-
time service will equal the amount of service
that would be performed through full-time serv-
ice.
‘‘(c) APPLICATION.—The Secretary shall disseminate
application forms to individuals and in such forms,
include—
‘‘(1) a summary of the rights and liabilities of
an individual whose application is approved by the
Secretary; and
‘‘(2) information respecting meeting the service
obligation described in subsection (b)(4).
‘‘(d) SCHOLARSHIP.—
‘‘(1) IN GENERAL.—A scholarship provided to a
student for a school year under a written contract
under the program shall consist of—
‘‘(A) payment to, or (in accordance with
paragraph (2)) on behalf of the student of—
‘‘(i) the tuition of the student in such
school year; and
‘‘(ii) all other reasonable educational
expenses and support services, including
fees, books, and laboratory expenses in-
curred by the student in such school year;
and
‘‘(B) payment to the student of a stipend
of $400 per month (adjusted in accordance with
paragraph (3)) for each month that the student
is enrolled.
‘‘(2) CONTRACTS.—
‘‘(A) WITH A SCHOOL OF NURSING.—The
Secretary may contract with a school of nurs-
ing, in which a participant in the program is
enrolled, for the payment to the school of nurs-
ing of the amounts of tuition and other reason-
able educational expenses described in para-
graph (1)(A).
‘‘(B) WITH
AN
INDIVIDUAL.—The Sec-
retary shall prepare a written contract for the
program that shall be provided to any indi-
vidual who is enrolled or accepted for enroll-
ment at a school of nursing and who desires to
participate in the program at the time that an
application is provided to such individual. The
contract described in this paragraph shall con-
tain a provision that any financial obligation of
the United States arising out of a contract en-
tered into under this section and any obligation
of the individual which is conditioned thereon,
is contingent upon funds being appropriated for
scholarships under this section.
‘‘(3) MONTHLY STIPEND.—The amount of the
monthly stipend for each month that a student is
enrolled, specified in paragraph (1)(B) and as pre-
viously adjusted (if at all) in accordance with this
paragraph, shall be increased by the Secretary as
the Secretary determines to be reasonable.
‘‘(e) BREACH OF AGREEMENT.—In the case of an in-
dividual who enters into an agreement under this section
to provide service as a nurse in consideration for receiving
a scholarship, such individual is liable to the Federal Gov-
ernment in accordance with sections 338E and 338F as
amended in the future. If the individual begins providing
less than full-time service but fails to begin or complete
the period of obligated service, the methods stated in sec-
tion 338E(c) for determining the damages for breech of
the individual’s written contract will be used after con-
verting periods of obligated service or of service performed
into their full-time equivalence.
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$10,000,000 for fiscal year 2003 and such sums as may
be necessary for fiscal years 2004 through 2007.’’.
TITLE 
III—MEDICAL 
MAL-
PRACTICE 
LIABILITY 
RE-
FORM
SEC. 301. DEFINITIONS.
In this title, the following definitions apply:
(1) ALTERNATIVE DISPUTE RESOLUTION SYS-
TEM.—The term ‘‘alternative dispute resolution sys-
tem’’ means a system that provides for the resolu-
tion of medical malpractice claims in a manner other
than through medical malpractice liability actions.
(2) CLAIMANT.—The term ‘‘claimant’’ means
any person who alleges a medical malpractice claim,
and any person on whose behalf such a claim is al-
leged, including the decedent in the case of an action
brought through or on behalf of an estate.
(3) FUTURE
DAMAGES.—The term ‘‘future
damages’’ means damages for economic or non-
economic loss incurred after the time of judgment.
(4) HEALTH CARE PROFESSIONAL.—The term
‘‘health care professional’’ means any individual who
provides health care services in a State and who is
required by the laws or regulations of the State to
be licensed or certified by the State to provide such
services in the State.
(5) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means any organization or
institution that is engaged 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 cer-
tified by the State to engage in the delivery of such
services in the State.
(6) INJURY.—The term ‘‘injury’’ means any ill-
ness, disease, or other harm that is the subject of
a medical malpractice liability action or a medical
malpractice claim.
(7) 
MANDATORY.—The 
term 
‘‘mandatory’’
means required to be used by the parties to attempt
to resolve a medical malpractice claim notwith-
standing any other provision of an agreement, State
law, or Federal law.
(8) MEDIATION.—The term ‘‘mediation’’ means
a settlement process coordinated by a neutral third
party and without the ultimate rendering of a formal
opinion as to factual or legal findings.
(9) MEDICAL MALPRACTICE CLAIM.—The term
‘‘medical malpractice claim’’ means a claim against
a health care provider, a health care professional, or
a blood or tissue bank licensed or registered by the
Food and Drug Administration in which a claimant
alleges that injury was caused by the provision of (or
the failure to provide) health care services, except
that such term does not include—
(A) any claim based on an allegation of an
intentional tort; or
(B) any claim based on an allegation that
a product is defective or unreasonably dan-
gerous.
(10) MEDICAL
MALPRACTICE
LIABILITY
AC-
TION.—The term ‘‘medical malpractice liability ac-
tion’’ means a civil action brought in a State or Fed-
eral court against a health care provider, a health
care professional, or a blood or tissue bank licensed
or registered by the Food and Drug Administration
in which the plaintiff alleges a medical malpractice
claim.
SEC. 302. FEDERAL TORT REFORM.
(a) IN GENERAL.—Except as provided in section 303,
this title shall apply with respect to any medical mal-
practice liability action brought in any State or Federal
court, except that this title shall not apply to a claim or
action for damages arising from a vaccine-related injury
or death to the extent that title XXI of the Public Health
Service Act applies to the claim or action.
(b) PREEMPTION.—The provisions of this title shall
preempt any State law to the extent such law relates to
a type of tort reform included under this title and is incon-
sistent with such provisions.
(c) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE
OF LAW OR VENUE.—Nothing in this title shall be con-
strued 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.
(d) FEDERAL COURT JURISDICTION NOT ESTAB-
LISHED ON FEDERAL QUESTION GROUNDS.—Nothing in
this title shall be construed to establish any jurisdiction
in the district courts of the United States over medical
malpractice liability actions on the basis of section 1331
or 1337 of title 28, United States Code.
SEC. 303. ALTERNATIVE DISPUTE RESOLUTION METHODS.
(a) MANDATORY MEDIATION.—In any medical mal-
practice liability action, before such action comes to trial,
mediation shall be required. Such mediation shall be con-
ducted by one or more mediators who are selected by
agreement of the parties or, if the parties do not agree,
who are qualified under applicable State law and selected
by the court.
(b) REQUIREMENTS.—Mediation under subsection
(a) shall be made available by a State subject to the fol-
lowing requirements:
(1) Participation in such mediation shall be in
lieu of any alternative dispute resolution method re-
quired by any other law or by any contractual ar-
rangement made by or on behalf of the parties be-
fore the commencement of the action.
(2) Each State shall disclose to residents of the
State the availability and procedures for resolution
of consumer grievances regarding the provision of
(or failure to provide) health care services, including
such mediation.
(3) Each State shall provide that such medi-
ation may begin before or after, at the option of the
claimant, the commencement of a medical mal-
practice liability action.
(4) The Attorney General, in consultation with
the Secretary of Health and Human Services, shall,
by regulation, develop requirements with respect to
such mediation to ensure that it is carried out in a
manner that—
(A) is affordable for the parties involved;
(B) encourages timely resolution of claims;
(C) encourages the consistent and fair res-
olution of claims; and
(D) provides for reasonably convenient ac-
cess to dispute resolution.
(c) FURTHER REDRESS AND ADMISSIBILITY.—Any
party dissatisfied with a determination reached with re-
spect to a medical malpractice claim as a result of an al-
ternative dispute resolution method applied under this sec-
tion shall not be bound by such determination. The results
of any alternative dispute resolution method applied under
this section, and all statements, offers, and communica-
tions made during the application of such method, shall
be inadmissible for purposes of adjudicating the claim.
SEC. 304. PREVENTING FRIVOLOUS MALPRACTICE SUITS.
(a) CERTIFICATION.—The signatures of attorneys or
parties constitute a certificate by them that they have read
the pleading that to the best of their knowledge, informa-
tion, and belief formed after reasonable inquiry the med-
ical malpractice claim is not groundless and brought in
bad faith or groundless and groundless and brought for
the purpose of harassment. Attorneys or parties who shall
bring a fictitious suit as an experiment to get an opinion
of the court, or who shall file any fictitious pleading in
a cause for such a purpose, or shall make statements in
a pleading which they know to be groundless and false,
for the purpose of securing a delay of the trial of the
cause, shall be held guilty of contempt. If a pleading is
signed in violation of this subsection, the court, upon mo-
tion or upon its own initiative, after notice and hearing,
shall impose an appropriate sanction, such as striking the
pleadings, dismissing the suit, and requiring payment of
costs, attorneys fees, and sanctions (if appropriate) plus
interest, upon the person who signed it, a represented
party, or both.
(b) PROCESS; RULES.—Courts shall presume that
pleadings are filed in good faith. No sanctions under this
section may be imposed except for good cause, the particu-
lars of which must be stated in the sanction order. The
term ‘‘groundless’’ means, for purposes of this section,
having no basis in law or fact and not warranted by good
faith argument for the extension, modification, or reversal
of existing law. A general denial does not constitute a vio-
lation of this subsection (a). The amount requested in
damages, if any, does not constitute a violation of sub-
section (a).
SEC. 305. REQUIREMENT FOR AFFIDAVIT OF MERIT.
(a) REQUIRING SUBMISSION WITH COMPLAINT.—No
medical malpractice liability action may be brought by any
individual unless, at the time the individual brings the ac-
tion (except as provided in subsection (b)(1)), the indi-
vidual (or the individual’s attorney) submits an affidavit
declaring that—
(1) the individual (or the individual’s attorney)
has consulted and reviewed the facts of the action
with a qualified specialist;
(2) the individual (or the individual’s attorney)
has obtained a written report by a qualified spe-
cialist that clearly identifies the individual and that
includes the specialist’s statement of belief that,
based on a review of the available medical record
and other relevant material, there is a reasonable
and meritorious cause for the filing of the action
against the defendant; and
(3) on the basis of the qualified specialist’s re-
view and consultation, that the individual (or the in-
dividual’s attorney) has concluded that there is a
reasonable and meritorious cause for the filing of the
action.
(b) EXTENSION IN CERTAIN INSTANCES.—
(1) IN GENERAL.—Subject to paragraph (2),
subsection (a) shall not apply with respect to an in-
dividual who brings a medical malpractice liability
action without submitting an affidavit described in
such subsection if—
(A) the individual is unable to obtain the
affidavit before the expiration of the applicable
statute of limitations;
(B) as of the time the individual brings the
action, the individual has been unable to obtain
adequate medical records or other information
necessary to prepare the affidavit; or
(C) other good cause exists for failing to
submit the affidavit.
(2) DEADLINE
FOR
SUBMISSION
WHERE
EX-
TENSION APPLIES.—In the case of an individual who
brings an action for which paragraph (1) applies,
the action shall be dismissed unless the individual
(or the individual’s attorney) submits the affidavit
described in subsection (a) not later than—
(A) in the case of an action for which sub-
paragraph (A) of paragraph (1) applies, 90
days after bringing the action;
(B) in the case of an action for which sub-
paragraph (B) of paragraph (1) applies, 90
days after obtaining the information described
in such subparagraph; or
(C) in the case of an action for which sub-
paragraph (C) of paragraph (1) applies, 90
days after the good cause involved ceases to
exist.
(c) QUALIFIED
SPECIALIST
DEFINED.—In sub-
section (a), a ‘‘qualified specialist’’ means, with respect
to a medical malpractice liability action, a health care pro-
fessional who is reasonably believed by the individual
bringing the action (or the individual’s attorney)—
(1) to be knowledgeable in the relevant issues
involved in the action,
(2) to practice (or to have practiced) or to teach
(or to have taught) in the same area of health care
or medicine that is at issue in the action, and
(3) in the case of an action against a physician,
to be board certified in a specialty relating to that
area of medicine.
(d) SANCTIONS FOR SUBMITTING FALSE ALLEGA-
TIONS.—Upon the motion of any party or its own initia-
tive, the court in a medical malpractice liability action may
impose a sanction on a party or the party’s attorney (or
both), including a requirement that the party reimburse
the other party to the action for costs and a reasonable
attorney’s fee, if an affidavit described in subsection (a)
is submitted without reasonable cause and is found to be
untrue.
(e) CONFIDENTIALITY
OF
SPECIALIST.—Upon a
showing of good cause by a defendant, the court may as-
certain the identity of a specialist referred to in subsection
(a) while preserving confidentiality.
SEC. 306. PERIODIC PAYMENT OF AWARDS.
(a) AUTHORITY TO PERMIT PERIODIC PAYMENTS.—
The court may instruct the trier of fact to find, or may
otherwise order that, part or all of future damages that
exceed $250,000 be paid on an appropriate periodic basis.
The court shall ensure that the amount and present value
of periodic payments constitute full recovery of the dam-
ages awarded for the claimant’s injury and that the pay-
ment schedule is found to be in the best interests of all
the parties to the action.
(b) BOND OR SECURITY FOR FUTURE DAMAGES.—
If future damages are awarded on a periodic basis, the
court shall require the defendant to post security or a
bond, or otherwise ensure the full payment of such dam-
ages.
(c) MODIFICATION OF PAYMENT SCHEDULE.—Ex-
cept where the parties agree otherwise, in a medical mal-
practice liability action, the court shall retain authority to
modify, on the basis of changed circumstances, the pay-
ment schedule of any periodic payments of future damages
awarded in the action.
(d) DEATH OF PLAINTIFF.—Except where the par-
ties agree otherwise, if a plaintiff to whom future damages
are awarded in a medical malpractice liability action and
made payable on a periodic basis dies before completion
of the payment of such damages, the court shall order the
payment of any remaining portion of such damages be
paid to the estate of the plaintiff. Insofar as damages in
a medical malpractice liability action include payment for
future medical expenses for the plaintiff, the previous sen-
tence shall not apply and no such payments shall be made
for expenses incurred after the date of death of the plain-
tiff.
TITLE 
IV—MEDICAL 
MAL-
PRACTICE 
INSURANCE 
RE-
FORMS
SEC. 401. ADVISORY COMMISSION ON MEDICAL MAL-
PRACTICE.
(a) APPOINTMENT.—
(1) IN GENERAL.—Not later than 90 days after
the date of the enactment of this Act, the Secretary
of Health and Human Services, in consultation with
the Congress, shall appoint an Advisory Commission
on Medical Malpractice (in this section referred to as
the ‘‘Commission’’).
(2) COMPOSITION.—The Commission shall con-
sist of 11 members, appointed without regard to the
civil service laws. Seven members shall be represent-
atives of health care professional organizations, 2 of
whom shall be self-employed physicians (allopathic
or osteopathic). The remaining members shall have
expertise in health care quality or economics, but 2
shall have expertise in insurance and at least 1 shall
be a representative of patients.
(3) TERMS; QUORUM.—The members of the
Commission shall serve until submission of the re-
port pursuant to subsection (d), at which time the
Commission shall terminate. A vacancy arising in
the Commission shall be filled in the same manner
as the original appointment is made. A majority of
members shall constitute a quorum, and action shall
be taken only by a majority vote of those present
and voting.
(b) DUTIES.—The Commission shall examine the
causes of the medical malpractice crisis. As part of such
examination, the Commission shall study and examine the
following issues:
(1) The financial statements and information
submitted to regulators by insurance companies that
offer medical malpractice insurance, as well as any
other information maintained by regulators that may
be relevant to this issue.
(2) How reductions in the investment income of
insurers may be adversely affecting the financial
outlook of these companies, thus increasing physi-
cian premiums to compensate for any declines.
(3) The underwriting history of medical mal-
practice insurance to determine whether premiums
have historically experienced similar increases and
also determine whether current market conditions
are in some way unique.
(4) The competitiveness of markets, particularly
in those areas experiencing the sharpest premium in-
creases. For example, has the lack of competition in
the medical malpractice insurance market adversely
affected physician premiums?
(5) How malpractice settlements and judgments
compare to premiums earned for medical malpractice
lines of insurance. In particular, how incurred but
not yet reported holdings have affected the reserve
practices of medical malpractice insurers.
(6) The effect of current laws (at both the Fed-
eral and State levels) on medical malpractice insur-
ance rates.
(7) The underlying causes of changes in med-
ical malpractice insurance premiums.
(c) STAFFING; COMPENSATION.—
(1) STAFFING.—The Secretary of Health and
Human Services shall furnish to the Commission an
executive secretary and such secretarial, clerical, and
other services as may be necessary to conduct its
business, and may call upon other agencies of the
Government for statistical data, reports, and other
information which will assist the Commission in the
performance of its duties.
(2) COMPENSATION.—Members of the Commis-
sion, while serving on business of the Commission
(inclusive of travel time), shall be entitled to receive
the daily equivalent of the annual rate of basic max-
imum rate of pay payable from time to time under
section 5376 of title 5, United States Code, for each
day and, while so serving away from their homes or
regular places of business, may be allowed travel ex-
penses, including per diem in lieu of subsistence, in
the same manner as provided in section 5703 of title
5, United States Code, for individuals in the Govern-
ment employed intermittently.
(d) REPORT.—Not later than one year after the date
the Commission is appointed, the Commission shall submit
to Congress a report that provides specific legislative
changes that would address the problems the Commission
found, including a proposal for the reduction of medical
malpractice insurance rates.
(e) RESPONSE TO REPORT.—The appropriate com-
mittees of the House of Representatives and the Senate
shall hold hearings on the Commission’s report and con-
sider legislation to address these problems.
SEC. 402. FREEZE IN MEDICAL MALPRACTICE INSURANCE
RATES.
(a) DECLARATION
OF INTERSTATE COMMERCE.—
Congress finds that medical malpractice insurance cov-
erage affects interstate commerce.
(b) FREEZE.—Notwithstanding any other provision
of law, effective on the date of the enactment of this Act,
the rates charged for medical malpractice insurance cov-
erage during the period beginning on the day after the
date of the enactment of this Act and ending on the date
that is 6 months after the date the Commission files its
report under section 401(d) shall not exceed the rates in
effect for such coverage as of January 1, 2002 (or, in the
case of coverage not offered as of such date, such com-
parable rate as is approved by the Secretary of Health
and Human Services).
(c) EXCEPTION.—Any entity which can demonstrate
to the Secretary of Health and Human Services that
under the terms of subsection (b) it would be unable to
earn a fair rate of return shall be exempt from the freeze
in rates under such subsection.
SEC. 403. WITHDRAWAL FROM MEDICAL MALPRACTICE IN-
SURANCE MARKET.
(a) LIMITATION.—Any entity that discontinues writ-
ing medical malpractice insurance coverage in a State
shall also discontinue the writing of any other line of in-
surance in such State.
(b) ORDERLY WITHDRAWAL.—If an entity discon-
tinues writing medical malpractice insurance coverage in
a State, it shall file with the insurance commissioner of
that State a plan of orderly withdrawal, pursuant to which
the insurer shall make such arrangements as are nec-
essary to ensure that any person insured by the entity
shall continue to be insured until the end of the term of
the policy held by such person.
(c) SUNSET.—Subsections (a) and (b) shall only
apply during the 3-year period beginning on the date of
the enactment of this Act.
SEC. 404. GUARANTEED RENEWABILITY OF COVERAGE.
(a) IN GENERAL.—Subject to subsection (b), all med-
ical malpractice insurance coverage shall be guaranteed re-
newable. Rates for such coverage shall increase by no more
than the rate of increase in the health care component
of the consumer price index for all urban consumers.
(b) EXCEPTIONS.—
(1) RATE FREEZE.—Subsection (a) shall not af-
fect or supersede the application of section 402.
(2) LIMITATION.—An entity is not required to
renew medical malpractice insurance coverage in the
case of fraud, excessive claims on which indemnity
has been paid, or nonpayment of premiums by the
insured health care provider.
SEC. 405. GUARANTEED COVERAGE FOR CERTAIN HEALTH
CARE PROVIDERS.
Any entity that is licensed to offer medical mal-
practice insurance coverage shall offer medical malpractice
insurance coverage to any health care provider that has
zero medical malpractice claims (as defined in section
301(10)) on which indemnity has been paid during the
previous 3 years.
SEC. 406. MEDICAL MALPRACTICE INSURANCE DISCLO-
SURE.
(a) IN GENERAL.—Annually on or before March 1,
every insurer writing medical malpractice insurance cov-
erage to a health care provider shall file with the Secretary
of Health and Human Services a copy of the Annual
Statement it files with the Department of Insurance in
the State in which it is domiciled. Every such insurer shall
also file the following information with the Secretary:
(1) INFORMATION ON CLOSED CLAIMS.—
(A) The number of new claims reported
during the preceding year, and the total
amounts reserved for such claims and for allo-
cated loss adjustment expenses in connection
with such claims.
(B) The number of claims closed during
the preceding year, and the amount paid on
such claims, broken out as follows:
(i) The number of claims closed each
year with payment, and the amount paid
on such claims and on allocated loss ad-
justment expenses in connection with such
claims.
(ii) The number of claims closed each
year without payment, and the amount of
allocated loss adjustment expenses in con-
nection with such claims.
(2) INFORMATION REGARDING VERDICTS, PAY-
MENT, AND SEVERITY OF INJURY IN CONNECTION
WITH VERDICTS.—For each verdict rendered against
the insurer for more than $100,000, the amount of
the verdict, the amount paid to the plaintiff, and the
category of injury suffered by the plaintiff, cat-
egorized as follows:
(A) TEMPORARY INJURY.—
(i) Emotional distress.
(ii) lacerations, contusions, minor
scars, and rash not resulting in permanent
scarring or disfigurement.
(iii) Non-life-threatening infections.
(iv) Falls not resulting in fractures.
(v) Medication errors.
(B) PERMANENT INJURY.—
(i) Major injury, including loss of one
or more fingers, organs, limbs, deafness,
loss of sight, loss of fertility, permanent
scarring or disfigurement, and brain dam-
age.
(ii) Catastrophic injury requiring life-
long care or having a fatal prognosis.
(C) DEATH.—Death.
(3) INFORMATION ON RATE CHANGES.—Each
rate change implemented during the preceding five-
year period, by state and by medical specialty.
(4) INFORMATION ON PREMIUMS AND LOSSES
BY MEDICAL SPECIALTY.—
(A) Written premiums and paid losses for
the preceding year, and earned premiums and
incurred losses for the preceding year, broken
out by medical specialty.
(B) Number of providers insured in each
medical specialty.
(5) INFORMATION ON PREMIUMS AND LOSSES
BY EXPERIENCE OF THE INSURED.—
(A) Written premiums and paid losses for
the preceding year, and earned premiums and
incurred losses for the preceding year, broken
out as follows:
(i) All insureds with no incidents
within the preceding five-year period.
(ii) All insureds with one incident
within the preceding five-year period.
(iii) All insureds with two incidents
within the preceding five-year period.
(iv) All insureds with three or more
incidents within the preceding five-year pe-
riod.
(B) Number of providers insured—
(i) with no incidents within the pre-
ceding five-year period;
(ii) with one incident within the pre-
ceding five-year period;
(iii) with two incidents within the pre-
ceding five-year period; or
(iv) with three or more incidents with-
in the preceding five-year period.
(6) INFORMATION ON THE PERFORMANCE OF
THE INVESTMENTS OF THE INSURER.—The value of
the investments held in the investment portfolio of
the insurer as of December 31 of the preceding cal-
endar year, and the rate of return earned on such
investments, broken down by category of investment,
as follows:
(A) United States government bonds.
(B) Bonds exempt from tax by the United
States.
(C) Other bonds (unaffiliated).
(D) bonds of affiliates.
(E) Preferred stocks (unaffiliated),
(F) Preferred stocks of affiliates.
(G) Common stock (unaffiliated).
(H) Common stock of affiliates.
(I) Mortgage loans.
(J) Real estate.
(K) Any additional categories of invest-
ments specified by the Secretary.
(b) ANNUAL REPORT.—The Secretary shall submit
to Congress by July 1 of each year a report on the per-
formance of the medical malpractice insurance market
during the preceding year. Such report shall be based on
the information submitted pursuant to this section.
(c) RULES.—The Secretary shall promulgate rules to
carry out the purposes of this section.
(d) INSURER DEFINED.—For purposes of this sec-
tion, the term ‘‘insurer’’ includes every insurance company
authorized to transact insurance business in any State,
every risk retention group, every insurance company
issuing insurance to or through a purchasing group, and
any other person providing insurance coverage.
SEC. 407. MEDICAL MALPRACTICE INSURANCE PRICE COM-
PARISON.
(a) INTERNET SITE.—Not later than July 1, 2003,
and after consultation with the medical malpractice insur-
ance industry, the Secretary of Health and Human Serv-
ices shall establish an interactive, secure internet site (in
this section referred to as the ‘‘internet site’’) which shall
enable any health care provider licensed in the United
States to obtain a quote from each medical malpractice
insurer licensed to write the type of coverage sought by
the provider.
(b) ONLINE FORMS.—
(1) IN GENERAL.—The internet site shall en-
able health care providers to complete an online
form that shall capture a comprehensive set of infor-
mation sufficient to generate a quote for each in-
surer. The Secretary shall develop transmission soft-
ware components which allow such information to be
formatted for delivery to each medical malpractice
insurer based on the requirements of the computer
system of the insurer.
(2) PROTECTION OF CONFIDENTIALITY OF IN-
FORMATION
DISCLOSED.—All information provided
by a health care provider for purposes of generating
a quote through the internet site shall be used only
for that purpose and shall not be used in connection
with the National Physician’s Data Bank or for any
other purposes, including in connection with any
legal action.
(c) INTEGRATION OF RATING CRITERIA.—The Sec-
retary shall integrate the rating criteria of each insurer
into its online form after consultation with each insurer.
The Secretary shall integrate such criteria using one of
the following methods:
(1) Developing a customized interface with the
insurer’s own rating engine.
(2) Accessing a third-party rating engine of the
insurer’s choice.
(3) Loading the carrier’s rating information
into a rating engine operated by the Secretary.
(4) Any other method agreed on between the
Secretary and the insurer.
(d) PRESENTATION OF QUOTES.—After a health care
provider has answered all the questions appearing on the
online form, such provider will be presented with quotes
from each medical malpractice insurer licensed to write
the coverage requested by the provider.
(e) ACCURACY OF QUOTES.—Quotes provided at the
internet site shall at all times be accurate. Whenever any
insurer changes its rates, such rate changes shall be imple-
mented at the internet site by the Secretary, in consulta-
tion with the insurer, as soon as practicable, but in no
event later than 10 days after such changes take effect.
During any period during which an insurer has changed
its rates but the Secretary has not yet implemented such
changed rates on the internet site, quotes for that insurer
shall not be obtainable at the internet site.
(f) USER-FRIENDLY
FEATURES.—The Secretary
shall design the internet site to incorporate user-friendly
formats and self-help guidance materials, and shall de-
velop a user-friendly internet user-interface.
(g) CONTACT INFORMATION.—The internet site shall
also provide contact information, including address and
telephone number, for each medical malpractice insurer
for which a provider obtains a quote at the site.
(h) REPORT.—Not later than December 31, 2004,
the Secretary shall submit a report to the Congress on
the development, implementation and effects of the inter-
net site. Such report shall be based on—
(1) the Secretary’s consultation with health
care providers, medical malpractice insurers, State
insurance commissioners, and other interested par-
ties; and
(2) the Secretary’s analysis of other informa-
tion available to the Secretary.
The report shall describe the Secretary’s views concerning
the extent to which this section has contributed to increas-
ing the availability of medical malpractice insurance cov-
erage, and the effect this section has had on the cost of
medical malpractice insurance coverage.
TITLE V—ADDITIONAL
PROVISIONS
SEC. 501. STATE CONSIDERATION OF ADDITIONAL AND AL-
TERNATIVE METHODS.
It is the sense of Congress that the States, as primary
regulators of the insurance industry, should consider the
following additional and alternative methods for dealing
with the rates and availability of medical malpractice in-
surance:
(1) Using claims history as a rating factor in
establishing premiums and requiring each medical
malpractice insurer to offer its lowest rate to all doc-
tors in a State meeting its eligibility criteria for such
rate.
(2) Limiting the percentage of an insurer’s as-
sets that can be invested in stocks or other high-risk
investments and preventing insurers from seeking to
recoup losses on their investments by raising rates.
(3) Requiring prior approval by the state insur-
ance regulators of any medical malpractice insurance
rates and allowing health care providers to intervene
in proceedings regarding rate changes.
(4) Establishing new medical malpractice insur-
ance entities, using loans authorized by States, simi-
lar to the model (enacted in Missouri) that estab-
lished a new workers compensation insurer.
(5) Setting up a fund to address birth-related
neurological injury compensation.
SEC. 502. MANDATING EQUAL TREATMENT BETWEEN TRA-
DITIONAL INSURERS AND RISK RETENTION
GROUPS, 
INCLUDING 
MEDICAL 
MAL-
PRACTICE RISK RETENTION GROUPS.
(a) RISK RETENTION GROUPS.—Section 3 of the Li-
ability Risk Retention Act of 1986 (15 U.S.C. 3902) is
amended—
(1) in subsection (a)(1), in the matter before
subparagraph (A), by inserting ‘‘or have a disparate
impact on,’’ after ‘‘directly or indirectly’’; and
(2) in subsection (c), by inserting ‘‘or has a dis-
parate impact on’’ after ‘‘which discriminates
against’’.
(b) PURCHASING GROUPS.—Section 4 of such Act
(15 U.S.C. 3903) is amended—
(1) in subsection (a)—
(A) by striking ‘‘or’’ at the end of para-
graph (7);
(B) by redesignating paragraph (8) as
paragraph (9); and
(C) by inserting after paragraph (7) the
following new paragraph:
‘‘(8) have a disparate impact on a purchasing
group; or’’; and
(2) in subsection (c), by inserting ‘‘or has a dis-
parate impact on’’ after ‘‘which discriminates
against’’.
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