118
Title IV, Subtitle A
may not be brought in any Federal court unless
the claim has been initially resolved under the
alternative dispute resolution process estab-
lished by the Attorney General under such sub-
paragraph.
(b) INITIAL
RESOLUTION
OF
CLAIMS
UNDER
ADR.—For purposes of subsection (a), an action is ‘‘ini-
tially resolved’’ under an alternative dispute resolution
system if—
(1) the ADR reaches a decision on whether the
defendant is liable to the plaintiff for damages; and
(2) if the ADR determines that the defendant
is liable, the ADR reaches a decision on the amount
of damages assessed against the defendant.
(c) PROCEDURES FOR FILING ACTIONS.—
(1) NOTICE
OF
INTENT
TO
CONTEST
DECI-
SION.—Not later than 60 days after a decision is is-
sued with respect to a medical malpractice liability
claim under an alternative dispute resolution system,
each party affected by the decision shall submit a
sealed statement to a court of competent jurisdiction
indicating whether or not the party intends to con-
test the decision.
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Title IV, Subtitle A
(2) DEADLINE FOR FILING ACTION.—A medical
malpractice liability action may not be brought by a
party unless—
(A) the party has filed the notice of intent
required by paragraph (1); and
(B) the party files the action in a court of
competent jurisdiction not later than 90 days
after the decision resolving the medical mal-
practice liability claim that is the subject of the
action is issued under the applicable alternative
dispute resolution system.
(3) COURT
OF
COMPETENT
JURISDICTION.—
For purposes of this subsection, the term ‘‘court of
competent jurisdiction’’ means—
(A) with respect to actions filed in a State
court, the appropriate State trial court; and
(B) with respect to actions filed in a Fed-
eral court, the appropriate United States dis-
trict court.
(d) LEGAL EFFECT OF UNCONTESTED ADR DECI-
SION.—The decision reached under an alternative dispute
resolution system shall, for purposes of enforcement by a
court of competent jurisdiction, have the same status in
the court as the verdict of a medical malpractice liability
action adjudicated in a State or Federal trial court. The
120
Title IV, Subtitle A
previous sentence shall not apply to a decision that is con-
tested by a party affected by the decision pursuant to sub-
section (c)(1).
SEC. 4003. OPTIONAL APPLICATION OF PRACTICE GUIDE-
LINES.
(a) DEVELOPMENT AND CERTIFICATION OF GUIDE-
LINES.—Each State may develop, for certification by the
Secretary, a set of specialty clinical practice guidelines,
based on recommended guidelines from national specialty
societies, to be updated annually. In the absence of rec-
ommended guidelines from such societies, each State may
develop such guidelines based on such criteria as the State
considers appropriate (including based on recommended
guidelines developed by the Agency for Health Care Policy
and Research).
(b) PROVISION OF HEALTH CARE UNDER GUIDE-
LINES.—Notwithstanding any other provision of law, in
any medical malpractice liability action arising from the
conduct of a health care provider or health care profes-
sional, if such conduct was in accordance with a guideline
developed by the State in which the conduct occurred and
certified by the Secretary under subsection (a), the guide-
line—
121
Title IV, Subtitle A
(1) may be introduced by any party to the ac-
tion (including a health care provider, health care
professional, or patient); and
(2) if introduced, shall establish a rebuttable
presumption that the conduct was in accordance
with the appropriate standard of medical care, which
may only be overcome by the presentation of clear
and convincing evidence on behalf of the party
against whom the presumption operates.
SEC. 4004. TREATMENT OF NONECONOMIC AND PUNITIVE
DAMAGES.
(a) LIMITATION ON NONECONOMIC DAMAGES.—The
total amount of noneconomic damages that may be award-
ed to a claimant and the members of the claimant’s family
for losses resulting from the injury which is the subject
of a medical malpractice liability action may not exceed
$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.
(b) NO AWARD OF PUNITIVE DAMAGES AGAINST
MANUFACTURER OF MEDICAL PRODUCT.—In the case of
a medical malpractice liability action in which the plaintiff
alleges a claim against the manufacturer of a medical
product, no punitive or exemplary damages may be award-
ed against such manufacturer.
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Title IV, Subtitle A
(c) JOINT
AND SEVERAL LIABILITY
FOR NON-
ECONOMIC DAMAGES.—The liability of each defendant for
noneconomic damages shall be several only and shall not
be joint, and each defendant shall be liable only for the
amount of noneconomic damages allocated to the defend-
ant in direct proportion to the defendant’s percentage of
responsibility (as determined by the trier of fact).
(d) USE OF PUNITIVE DAMAGE AWARDS FOR OPER-
ATION OF ADR SYSTEMS IN STATES.—
(1) IN GENERAL.—The total amount of any pu-
nitive damages awarded in a medical malpractice li-
ability action shall be paid to the State in which the
action is brought (or, in a case brought in Federal
court, in the State in which the health care services
that caused the injury that is the subject of the ac-
tion were provided), and shall be used by the State
solely to implement and operate the State alternative
dispute resolution system certified by the Secretary
under section 4022 (except as provided in paragraph
(2)).
(2) USE
OF
REMAINING
AMOUNTS
FOR
PRO-
VIDER LICENSING AND DISCIPLINARY ACTIVITIES.—
If the amount of punitive damages paid to a State
under paragraph (1) for a year is greater than the
State’s costs of implementing and operating the
123
Title IV, Subtitle A
State alternative dispute resolution system during
the year, the balance of such punitive damages paid
to the State shall be used solely to carry out activi-
ties to assure the safety and quality of health care
services provided in the State, including (but not
limited to)—
(A) licensing or certifying health care pro-
fessionals and health care providers in the
State; and
(B) carrying out programs to reduce mal-
practice-related costs for providers volunteering
to provide services in medically underserved
areas.
(3) MAINTENANCE OF EFFORT.—A State shall
use any amounts paid pursuant to paragraph (1) to
supplement and not to replace amounts spent by the
State for implementing and operating the State al-
ternative dispute resolution system or carrying out
the activities described in paragraph (2).
SEC. 4005. PERIODIC PAYMENTS FOR FUTURE LOSSES.
(a) IN GENERAL.—In any medical malpractice liabil-
ity action in which the damages awarded for future eco-
nomic loss exceed $100,000, a defendant may not be re-
quired to pay such damages in a single, lump-sum pay-
ment, but may be permitted to make such payments on
124
Title IV, Subtitle A
a periodic basis. The periods for such payments shall be
determined by the court, based upon projections of when
such expenses are likely to be incurred.
(b) WAIVER.—A court may waive the application of
subsection (a) with respect to a defendant if the court de-
termines that it is not in the best interests of the plaintiff
to receive payments for damages on such a periodic basis.
SEC. 4006. TREATMENT OF ATTORNEY’S FEES AND OTHER
COSTS.
(a) REQUIRING PARTY CONTESTING ADR RULING
TO PAY ATTORNEY’S FEES AND OTHER COSTS.—
(1) IN GENERAL.—The court in a medical mal-
practice liability action shall require the party that
(pursuant to section 4002(c)(1)) contested the ruling
of the alternative dispute resolution system with re-
spect to the medical malpractice liability claim that
is the subject of the action to pay to the opposing
party the costs incurred by the opposing party under
the action, including attorney’s fees, fees paid to ex-
pert witnesses, and other litigation expenses (but not
including court costs, filing fees, or other expenses
paid directly by the party to the court, or any fees
or costs associated with the resolution of the claim
under the alternative dispute resolution system), but
only if—
125
Title IV, Subtitle A
(A) in the case of an action in which the
party that contested the ruling is the claimant,
the amount of damages awarded to the party
under the action is less than the amount of
damages awarded to the party under the ADR
system; and
(B) in the case of an action in which the
party that contested the ruling is the defendant,
the amount of damages assessed against the
party under the action is greater than the
amount of damages assessed under the ADR
system.
(2) EXCEPTIONS.—Paragraph (1) shall not
apply if—
(A) the party contesting the ruling made
under the previous alternative dispute resolu-
tion system shows that—
(i) the ruling was procured by corrup-
tion, fraud, or undue means,
(ii) there was partiality or corruption
under the system,
(iii) there was other misconduct under
the system that materially prejudiced the
party’s rights, or
126
Title IV, Subtitle A
(iv) the ruling was based on an error
of law;
(B) the party contesting the ruling made
under the alternative dispute resolution system
presents new evidence before the trier of fact
that was not available for presentation under
the ADR system;
(C) the medical malpractice liability action
raised a novel issue of law; or
(D) the court finds that the application of
such paragraph to a party would constitute an
undue hardship, and issues an order waiving or
modifying the application of such paragraph
that specifies the grounds for the court’s deci-
sion.
(3) LIMIT ON ATTORNEYS’ FEES PAID.—Attor-
neys’ fees that are required to be paid under para-
graph (1) by the contesting party shall not exceed
the amount of the attorneys’ fees incurred by the
contesting party in the action. If the attorneys’ fees
of the contesting party are based on a contingency
fee agreement, the amount of attorneys’ fees for
purposes of the preceding sentence shall not exceed
the reasonable value of those services.
127
Title IV, Subtitle A
(4) RECORDS.—In order to receive attorneys’
fees under paragraph (1), counsel of record in the
medical malpractice liability action involved shall
maintain accurate, complete records of hours worked
on the action, regardless of the fee arrangement
with the client involved.
(b) CONTINGENCY FEE DEFINED.—As used in this
section, the term ‘‘contingency fee’’ means any fee for pro-
fessional legal services which is, in whole or in part, con-
tingent upon the recovery of any amount of damages,
whether through judgment or settlement.
SEC. 4007. UNIFORM STATUTE OF LIMITATIONS.
(a) IN GENERAL.—Except as provided in subsection
(b), no medical malpractice claim may be initiated after
the expiration of the 2-year period that begins on the date
on which the alleged injury that is the subject of such
claim was discovered, but in no event may such a claim
be initiated after the expiration of the 4-year period that
begins on the date on which the alleged injury that is the
subject of such claim occurred.
(b) EXCEPTION FOR MINORS.—In the case of an al-
leged injury suffered by a minor who has not attained 6
years of age, a medical malpractice claim may not be initi-
ated after the expiration of the 2-year period that begins
on the date on which the alleged injury that is the subject
128
Title IV, Subtitle A
of such claim was discovered or should reasonably have
been discovered, but in no event may such a claim be initi-
ated after the date on which the minor attains 12 years
of age.
SEC. 4008. SPECIAL PROVISION FOR CERTAIN OBSTETRIC
SERVICES.
(a) IN GENERAL.—In the case of a medical mal-
practice claim relating to services provided during labor
or the delivery of a baby, if the health care professional
or health care provider against whom the claim is brought
did not previously treat the claimant for the pregnancy,
the trier of fact may not find that such professional or
provider committed malpractice and may not assess dam-
ages against such professional or provider unless the mal-
practice is proven by clear and convincing evidence.
(b) APPLICABILITY
TO
GROUP
PRACTICES
OR
AGREEMENTS AMONG PROVIDERS.—For purposes of sub-
section (a), a health care professional shall be considered
to have previously treated an individual for a pregnancy
if the professional is a member of a group practice whose
members previously treated the individual for the preg-
nancy or is providing services to the individual during
labor or the delivery of a baby pursuant to an agreement
with another professional.
129
Title IV, Subtitle A
SEC. 4009. JURISDICTION OF FEDERAL COURTS.
Nothing in this part shall be construed to establish
any jurisdiction over any medical malpractice liability ac-
tion in the district courts of the United States on the basis
of section 1331 or 1337 of title 28, United States Code.
SEC. 4010. PREEMPTION.
(a) IN GENERAL.—The provisions of this part shall
preempt any State law to the extent such law is inconsist-
ent with such provisions, except that the provisions of this
part shall not preempt any State law that provides for de-
fenses or places limitations on a person’s liability in addi-
tion to those contained in this part, places greater limita-
tions on the amount of attorneys’ fees that can be col-
lected, or otherwise imposes greater restrictions than those
provided in this part.
(b) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE
OF LAW OR VENUE.—Nothing in this part 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;
130
Title IV, Subtitle A
(4) preempt State choice-of-law rules with re-
spect to claims brought by a foreign nation or a citi-
zen 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.
PART 2—REQUIREMENTS FOR STATE ALTER-
NATIVE 
DISPUTE 
RESOLUTION 
SYSTEMS
(ADR)
SEC. 4021. BASIC REQUIREMENTS.
(a) IN GENERAL.—A State’s alternative dispute reso-
lution system meets the requirements of this section if the
system—
(1) applies to all medical malpractice liability
claims under the jurisdiction of the courts of that
State;
(2) requires that a written opinion resolving the
dispute be issued not later than 6 months after the
date by which each party against whom the claim is
filed has received notice of the claim (other than in
exceptional cases for which a longer period is re-
quired for the issuance of such an opinion), and that
the opinion contain—
131
Title IV, Subtitle A
(A) findings of fact relating to the dispute,
and
(B) a description of the costs incurred in
resolving the dispute under the system (includ-
ing any fees paid to the individuals hearing and
resolving the claim), together with an appro-
priate assessment of the costs against any of
the parties;
(3) requires individuals who hear and resolve
claims under the system to meet such qualifications
as the State may require (in accordance with regula-
tions of the Secretary);
(4) is approved by the State or by local govern-
ments in the State;
(5) with respect to a State system that consists
of multiple dispute resolution procedures—
(A) permits the parties to a dispute to se-
lect the procedure to be used for the resolution
of the dispute under the system, and
(B) if the parties do not agree on the pro-
cedure to be used for the resolution of the dis-
pute, assigns a particular procedure to the par-
ties;
(6) provides for the transmittal to the State
agency responsible for monitoring or disciplining
132
Title IV, Subtitle A
health care professionals and health care providers
of any findings made under the system that such a
professional or provider committed malpractice, un-
less, during the 90-day period beginning on the date
the system resolves the claim against the profes-
sional or provider, the professional or provider
brings an action contesting the decision made under
the system; and
(7) provides for the regular transmittal to the
Administrator for Health Care Policy and Research
of information on disputes resolved under the sys-
tem, in a manner that assures that the identity of
the parties to a dispute shall not be revealed.
(b) APPLICATION
OF
MALPRACTICE
LIABILITY
STANDARDS TO ALTERNATIVE DISPUTE RESOLUTION.—
The provisions of part 1 (other than section 4002) shall
apply with respect to claims brought under a State alter-
native dispute resolution system or the alternative Federal
system in the same manner as such provisions apply with
respect to medical malpractice liability actions brought in
the State.
SEC. 4022. CERTIFICATION OF STATE SYSTEMS; APPLICA-
BILITY OF ALTERNATIVE FEDERAL SYSTEM.
(a) CERTIFICATION.—
133
Title IV, Subtitle A
(1) IN GENERAL.—Not later than October 1 of
each year (beginning with 1995), the Secretary, in
consultation with the Attorney General, shall deter-
mine whether a State’s alternative dispute resolution
system meets the requirements of this part for the
following calendar year.
(2) BASIS FOR CERTIFICATION.—The Secretary
shall certify a State’s alternative dispute resolution
system under this subsection for a calendar year if
the Secretary determines under paragraph (1) that
the system meets the requirements of section 4021,
including the requirement described in section 4004
that punitive damages awarded under the system are
paid to the State for the uses described in such sec-
tion.
(b) APPLICABILITY OF ALTERNATIVE FEDERAL SYS-
TEM.—
(1) ESTABLISHMENT
AND
APPLICABILITY.—
Not later than October 1, 1995, the Secretary, in
consultation with the Attorney General, shall estab-
lish by rule an alternative Federal ADR system for
the resolution of medical malpractice liability claims
during a calendar year in States that do not have
in effect an alternative dispute resolution system
certified under subsection (a) for the year.
134
Title IV, Subtitle A
(2) REQUIREMENTS FOR SYSTEM.—Under the
alternative Federal ADR system established under
paragraph (1)—
(A) paragraphs (1), (2), (6), and (7) of
section 4021(a) shall apply to claims brought
under the system;
(B) if the system provides for the resolu-
tion of claims through arbitration, the claims
brought under the system shall be heard and
resolved by arbitrators appointed by the Sec-
retary in consultation with the Attorney Gen-
eral; and
(C) with respect to a State in which the
system is in effect, the Secretary may (at the
State’s request) modify the system to take into
account the existence of dispute resolution pro-
cedures in the State that affect the resolution
of medical malpractice liability claims.
(3) TREATMENT
OF
STATES
WITH
ALTER-
NATIVE SYSTEM IN EFFECT.—If the alternative Fed-
eral ADR system established under this subsection is
applied with respect to a State for a calendar year,
the State shall make a payment to the United States
(at such time and in such manner as the Secretary
may require) in an amount equal to 110 percent of
135
Title IV, Subtitle A
the costs incurred by the United States during the
year as a result of the application of the system with
respect to the State.
SEC. 4023. REPORTS ON IMPLEMENTATION AND EFFEC-
TIVENESS OF ALTERNATIVE DISPUTE RESO-
LUTION SYSTEMS.
(a) IN GENERAL.—Not later than 5 years after the
date of the enactment of this Act, the Secretary shall pre-
pare and submit to the Congress a report describing and
evaluating State alternative dispute resolution systems op-
erated pursuant to this part and the alternative Federal
system established under section 4022(b).
(b) CONTENTS OF REPORT.—The Secretary shall in-
clude in the report prepared and submitted under sub-
section (a)—
(1) information on—
(A) the effect of the alternative dispute
resolution systems on the cost of health care
within each State,
(B) the impact of such systems on the ac-
cess of individuals to health care within the
State, and
(C) the effect of such systems on the qual-
ity of health care provided within the State; and