(1) Data elements for use in paper and elec-
tronic claims processing under health insurance
plans, as well as for use in utilization review and
management of care (including data fields, formats,
and medical nomenclature, and including plan bene-
fit and insurance information).
(2) Uniform claims forms (including uniform
procedure and bill codes for use with such forms and
including information on other health insurance
plans that may be liable for benefits).
(3) Uniform electronic transmission of the data
elements (for purposes of billing and utilization re-
view).
Standards under paragraph (3) relating to electronic
transmission of data elements for claims for services shall
supersede (to the extent specified in such standards) the
standards adopted under paragraph (2) relating to the
submission of paper claims for such services. Standards
under paragraph (3) shall include protections to assure
the confidentiality of patient-specific information and to
protect against the unauthorized use and disclosure of in-
formation.
(c) SUBSEQUENT REDUCTION.—In order to achieve
a further paperwork reduction described in subsection
(a)(2), the Secretary shall modify by regulation the stand-
ards adopted under subsection (b). The modification of the
standards may include such recommendations as reported
by the Standardized Form Commission in section 1003,
or any other provisions necessary to meet the goals for
reduction in the paperwork burden of Federal health care
programs.
(d) DEFINITION.—For purposes of this section, the
term ‘‘Federal health care program’’ means all Federal
programs related to health care, including programs de-
scribed in—
(1) title XVIII or XIX of the Social Security
Act,
(2) the Public Health Service Act,
(3) chapter 55 of title 10, United States Code,
(4) chapter 17 of title 38, United States Code,
(5) chapter 89 of title 5, United States Code,
or
(6) the Indian Health Care Improvement Act.
SEC. 1002. STATE PAPERWORK REDUCTION AND EFFI-
CIENCY REQUIREMENTS.
(a) IN GENERAL.—In order to be eligible for Federal
funds in connection with any State-administered health
care program, each State shall standardize the processing
of paper and electronic claims to reduce the administrative
and paperwork burdens on such programs by 75 percent
during the 5-year period following the date of the enact-
ment of this Act.
(b) ENFORCEMENT.—
(1) INTERIM EVALUATION.—If at the end of the
4-year period following the date of the enactment of
this Act the Secretary determines that a State has
not achieved substantial progress toward the reduc-
tions required under subsection (a), the Secretary
shall notify such State regarding the proportion of
required reductions achieved and the further reduc-
tion necessary to achieve compliance with subsection
(a).
(2) FINAL COMPLIANCE.—If at the end of the
5-year period following the date of the enactment of
this Act the Secretary determines that a State has
not achieved the reductions required under sub-
section (a), the Secretary shall reduce Federal pay-
ments for health care programs administered by
such State by 10 percent. For each year that such
State fails to comply with the requirements of sub-
section (a), Federal payments for health care pro-
grams administered by the State shall be reduced by
an additional 10 percent.
(3) WAIVERS OF PAYMENT REDUCTIONS.—Any
State subject to a reduction in Federal payments
under paragraph (2) may appeal to the Secretary for
a 1-year waiver of such reduction. In granting such
a waiver, the Secretary shall make a determination
of the good faith effort of such State to comply with
the requirements of subsection (a), taking into ac-
count the technical, practical, and financial capabili-
ties of the State in meeting such requirements.
SEC. 1003. STANDARDIZED FORMS COMMISSION.
(a) IN GENERAL.—
(1) ESTABLISHMENT.—Not later than 12
months after the date of the enactment of this Act,
the Secretary shall establish a Standardized Forms
Commission (hereafter referred to in this section as
the ‘‘Commission’’) which shall make recommenda-
tions on the standardization of paper and electronic
claims processing so as to reduce the paperwork bur-
den associated with, and enhance the efficiency and
productivity of, such claims processing.
(2) MEMBERSHIP.—
(A) IN GENERAL.—The Commission shall
be composed of at least 12 but not more than
20 representatives of private health care provid-
ers and private insurers.
(B) CHAIR.—The Secretary shall appoint a
Chair of the Commission.
(3) REPORT ON FINDINGS AND RECOMMENDA-
TIONS.—Not later than 24 months after the date of
the enactment of this Act, the Chair of the Commis-
sion shall report to the Secretary on the findings
and recommendations of the Commission.
(4) PROHIBITION
OF
COMPENSATION.—Mem-
bers of the Commission shall serve without pay ex-
cept for reimbursement for travel expenses, includ-
ing per diem in lieu of subsistence, in accordance
with sections 5702 and 5703 of title 5, United
States Code.
(5) STAFF OF FEDERAL AGENCIES.—Upon re-
quest of the Chair, the head of any Federal depart-
ment or agency shall detail any of the personnel of
that department or agency to the Commission to as-
sist it in carrying out its duties under this section.
(6) OBTAINING OFFICIAL DATA.—The Commis-
sion may secure directly from any department or
agency of the United States information necessary
to enable it to carry out this section.
(7) ADMINISTRATIVE
SUPPORT
SERVICES.—
Upon request of the Chair, the Administrator of
General Services shall provide to the Commission the
administrative support services necessary for the
Commission to carry out its responsibilities under
this section.
(b) LEGISLATIVE PROPOSAL.—
(1) IN GENERAL.—
(A) DEVELOPMENT
OF
IMPLEMENTING
BILL.—Not later than 3 months after the Com-
mission has submitted its findings and rec-
ommendations to the Secretary, the Secretary
shall take such recommendations and submit
them to Congress in the form of an implement-
ing bill which contains the provisions necessary
or appropriate to implement the recommenda-
tions by either repealing or amending existing
laws or providing new statutory authority.
(B) CONSIDERATION
OF
IMPLEMENTING
BILL.—The implementing bill described in sub-
paragraph (A) shall be considered by Congress
under the procedures for consideration de-
scribed in paragraph (2).
(2) CONGRESSIONAL CONSIDERATION.—
(A) RULES OF HOUSE OF REPRESENTA-
TIVES
AND
SENATE.—This paragraph is en-
acted by Congress—
(i) as an exercise of the rulemaking
power of the House of Representatives and
the Senate, respectively, and as such is
deemed a part of the rules of each House,
respectively, but applicable only with re-
spect to the procedure to be followed in
that House in the case of an implementing
bill described in paragraph (1)(A), and su-
persedes other rules only to the extent that
such rules are inconsistent therewith; and
(ii) with full recognition of the con-
stitutional right of either House to change
the rules (so far as relating to the proce-
dure of that House) at any time, in the
same manner and to the same extent as in
the case of any other rule of that House.
(B) INTRODUCTION AND REFERRAL.—On
the day on which the implementing bill de-
scribed in paragraph (1)(A) is transmitted to
the House of Representatives and the Senate,
such bill shall be introduced (by request) in the
House of Representatives by the Majority Lead-
er of the House, for himself and the Minority
Leader of the House, or by Members of the
House designated by the Majority Leader and
Minority Leader of the House and shall be in-
troduced (by request) in the Senate by the Ma-
jority Leader of the Senate, for himself and the
Minority Leader of the Senate, or by Members
of the Senate designated by the Majority Lead-
er and Minority Leader of the Senate. If either
House is not in session on the day on which the
implementing bill is transmitted, the bill shall
be introduced in the House, as provided in the
preceding sentence, on the first day thereafter
on which the House is in session. The imple-
menting bill introduced in the House of Rep-
resentatives and the Senate shall be referred to
the appropriate committees of each House.
(C) 
AMENDMENTS
PROHIBITED.—No
amendment to an implementing bill shall be in
order in either the House of Representatives or
the Senate and no motion to suspend the appli-
cation of this paragraph shall be in order in ei-
ther House, nor shall it be in order in either
House for the Presiding Officer to entertain a
request to suspend the application of this para-
graph by unanimous consent.
(D) PERIOD FOR COMMITTEE AND FLOOR
CONSIDERATION.—
(i) IN GENERAL.—Except as provided
in clause (ii), if the committee or commit-
tees of either House to which an imple-
menting bill has been referred have not re-
ported it at the close of the 45th day after
its introduction, such committee or com-
mittees shall be automatically discharged
from further consideration of the imple-
menting bill and it shall be placed on the
appropriate calendar. A vote on final pas-
sage of the implementing bill shall be
taken in each House on or before the close
of the 45th day after the implementing bill
is reported by the committees or committee
of that House to which it was referred, or
after such committee or committees have
been discharged from further consideration
of the implementing bill. If prior to the
passage by 1 House of an implementing
bill of that House, that House receives the
same implementing bill from the other
House then—
(I) the procedure in that House
shall be the same as if no implement-
ing bill had been received from the
other House; but
(II) the vote on final passage
shall be on the implementing bill of
the other House.
(ii) COMPUTATION
OF
DAYS.—For
purposes of clause (i), in computing a
number of days in either House, there
shall be excluded—
(I) the days on which either
House is not in session because of an
adjournment of more than 3 days to
a day certain, or an adjournment of
the Congress sine die, and
(II) any Saturday and Sunday
not excluded under subclause (I) when
either House is not in session.
(E) 
FLOOR
CONSIDERATION
IN
THE
HOUSE OF REPRESENTATIVES.—
(i) MOTION TO PROCEED.—A motion
in the House of Representatives to proceed
to the consideration of an implementing
bill shall be highly privileged and not de-
batable. An amendment to the motion shall
not be in order, nor shall it be in order to
move to reconsider the vote by which the
motion is agreed to or disagreed to.
(ii) DEBATE.—Debate in the House of
Representatives on an implementing bill
shall be limited to not more than 20 hours,
which shall be divided equally between
those favoring and those opposing the bill.
A motion further to limit debate shall not
be debatable. It shall not be in order to
move to recommit an implementing bill or
to move to reconsider the vote by which an
implementing bill is agreed to or disagreed
to.
(iii) MOTION TO POSTPONE.—Motions
to postpone, made in the House of Rep-
resentatives with respect to the consider-
ation of an implementing bill, and motions
to proceed to the consideration of other
business, shall be decided without debate.
(iv) APPEALS.—All appeals from the
decisions of the Chair relating to the appli-
cation of the Rules of the House of Rep-
resentatives to the procedure relating to an
implementing bill shall be decided without
debate.
(v) GENERAL RULES APPLY.—Except
to the extent specifically provided in the
preceding provisions of this subparagraph,
consideration of an implementing bill shall
be governed by the Rules of the House of
Representatives applicable to other bills
and resolutions in similar circumstances.
(F) FLOOR CONSIDERATION IN THE SEN-
ATE.—
(i) MOTION TO PROCEED.—A motion in
the Senate to proceed to the consideration
of an implementing bill shall be privileged
and not debatable. An amendment to the
motion shall not be in order, nor shall it be
in order to move to reconsider the vote by
which the motion is agreed to or disagreed
to.
(ii) GENERAL
DEBATE.—Debate in
the Senate on an implementing bill, and all
debatable motions and appeals in connec-
tion therewith, shall be limited to not more
than 20 hours. The time shall be equally
divided between, and controlled by, the
Majority Leader and the Minority Leader
or their designees.
(iii) DEBATE
OF
MOTIONS
AND
AP-
PEALS.—Debate in the Senate on any de-
batable motion or appeal in connection
with an implementing bill shall be limited
to not more than 1 hour, to be equally di-
vided between, and controlled by, the
mover and the manager of the implement-
ing bill, except that in the event the man-
ager of the implementing bill is in favor of
any such motion or appeal, the time in op-
position thereto, shall be controlled by the
Minority Leader or his designee. Such
leaders, or either of them, may, from time
under their control on the passage of an
implementing bill, allot additional time to
any Senator during the consideration of
any debatable motion or appeal.
(iv) OTHER MOTIONS.—A motion in
the Senate to further limit debate is not
debatable. A motion to recommit an imple-
menting bill is not in order.
(c) FAILURE TO COMPLY WITH RECOMMENDATIONS
ENACTED.—A health care provider or health care insurer
that fails to comply with any recommendations of the
Commission that are enacted in accordance with sub-
section (b) and that are applicable to such provider or in-
surer shall be ineligible for payments of claims submitted
under any provision of the Social Security Act or the Pub-
lic Health Service Act.
TITLE XI—MEANINGFUL
MEDICAL LIABILITY REFORM
SEC. 1101. APPLICABILITY AND PREEMPTION.
(a) APPLICABILITY.—This title shall apply with re-
spect to any medical malpractice liability claim and to any
medical malpractice 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-relat-
ed injury or death to the extent that title XXI of the Pub-
lic Health Service Act applies to the claim or action.
(b) PREEMPTION.—
(1) IN GENERAL.—The provisions of this title
shall preempt any State or local law to the extent
such law is inconsistent with the limitations con-
tained in such provisions. The provisions of this title
shall not preempt any State law that provides for
defenses or places limitations on a person’s liability
in addition to those contained in this title, places
greater limitations on the amount of attorneys’ fees
and expenses that can be collected, or otherwise im-
poses greater restrictions than those provided in this
title.
(2) NEGOTIATED LIABILITY.—The provisions of
this title shall preempt any Federal, State or local
law to the extent that such law prohibits a health
care provider and a purchaser of health care from
voluntarily entering into a contractual agreement in
which the provider offers reduced fees for medical
services in exchange for a prearranged limit on the
amount of any award in a medical malpractice liabil-
ity action resulting from the provision of such serv-
ices or a limit on the cause of action that may be
maintained with respect to such services.
(c) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE
OF LAW OR VENUE.—Nothing in subsection (b) 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 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.
(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. 1102. STATUTE OF LIMITATIONS.
(a) IN GENERAL.—Except as provided in subsection
(b), no medical malpractice liability action shall be initi-
ated after the expiration of the 2-year period that begins
on the later of the date that the alleged injury that is the
subject of the claim was discovered, or the date on which
such injury should reasonably have been discovered. In no
event shall any such action be initiated after the expiration
of the 4-year period that begins on the date on which the
alleged injury occurred.
(b) EXCEPTION FOR CERTAIN MINORS.—In the case
of an alleged injury suffered by a minor who has not at-
tained 6 years of age, no medical malpractice liability ac-
tion shall be initiated after the expiration of the 2-year
100
period that begins on the date on which the alleged injury
was discovered, or the date on which such injury should
reasonably have been discovered. In no event shall any
such action be initiated after the expiration of the 4-year
period that begins on the date on which the alleged injury
occurred, or the date on which the minor attains 8 years
of age, whichever is later.
SEC. 1103. SCOPE OF LIABILITY.
(a) IN GENERAL.—With respect to economic and
noneconomic damages, the liability of each defendant in
a medical malpractice liability action shall be several only
and may not be joint. Such a defendant shall be liable
only for the amount of economic or noneconomic damages
allocated to the defendant in direct proportion to such de-
fendant’s percentage of fault or responsibility for the in-
jury suffered by the claimant.
(b) DETERMINATION OF PERCENTAGE OF LIABIL-
ITY.—The trier of fact in a medical malpractice liability
action shall determine the extent of each defendant’s fault
or responsibility for the economic or noneconomic damages
suffered by the claimant, and shall assign a percentage
of responsibility for such injury to each such defendant.
101
SEC. 1104. DISCOVERY; FAILURE TO MAKE OR COOPERATE
IN DISCOVERY.
(a) IN GENERAL.—All requests for discovery pursu-
ant to a medical malpractice liability action shall identify
the relevant portion of the complaint, answer or other
pleading to which responses to the discovery requests are
expected to relate.
(b) FEES AND EXPENSES.—With respect to any mo-
tion for an order compelling discovery that is made pursu-
ant to a medical malpractice liability action, the court
shall award the prevailing party reasonable fees and other
expenses incurred by that party in bringing or defending
against the motion, including reasonable attorney fees, un-
less the court finds that the position of the unsuccessful
party was substantially justified or that special cir-
cumstances make such an award unjust.
SEC. 1105. LIMITATION ON NONECONOMIC DAMAGES.
The total amount of noneconomic damages that may
be awarded to a claimant and the members of the claim-
ant’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 ac-
tions brought with respect to such injury.
102
SEC. 1106. TREATMENT OF PAYMENTS FOR FUTURE ECO-
NOMIC LOSSES.
(a) PROHIBITING SINGLE LUMP-SUM PAYMENT.—In
any medical malpractice liability action in which the dam-
ages awarded for any economic losses to be incurred after
the date on which the judgment is entered exceeds
$100,000, a defendant may not be required to pay such
damages in a single, lump-sum payment, but shall be per-
mitted to make such payments periodically based on pro-
jections of the amount of damages expected to be incurred
by the claimant at appropriate intervals, as determined by
the court.
(b) USE OF ANNUITIES OR TRUSTS.—The court may
require that a defendant in a medical malpractice liability
action purchase an annuity or fund a reversionary trust
to make periodic payments under subsection as provided
for in subsection (a) if the court determines that a reason-
able basis exists for concluding that the defendant may
be unable or otherwise fail to make the required periodic
payments.
(c) REQUIREMENT OF PERIODIC PAYMENT AS FINAL
ORDER.—A judgment of a court awarding periodic pay-
ments under this section may not be reopened at any time
to contest, amend, or modify the schedule or amount of
the payments in the absence of fraud or any other basis
103
under which a party may obtain relief from a final judg-
ment.
SEC. 1107. TREATMENT OF COSTS AND ATTORNEY’S FEES.
(a) COSTS AND FEES, GENERALLY.—
(1) COURT DISCRETION.—A court in a medical
malpractice liability action may, as a condition of
the initiation of such an action, require an undertak-
ing for the payment of the costs associated with
such action, including reasonable attorneys’ fees.
(2) PAYMENT OF COSTS.—If a judgment in a
medical malpractice liability action is rendered
against a party to such action, upon a motion by the
prevailing party to such action, the court shall re-
quire the party against whom the judgment was ren-
dered to pay to such prevailing party the costs and
fees incurred by such prevailing party under the ac-
tion, including reasonable attorneys’ fees and other
expenses. The court may waive the application of
this paragraph if the court finds that the position
maintained by the party against whom such judg-
ment was rendered under such action was substan-
tially justified or that special circumstances make
such an award unjust.
(3) APPLICATION FOR RECOVERY OF COSTS.—
A party to a medical malpractice liability action who
104
is seeking an award of costs and fees as provided for
in paragraph (2) shall, not later than 30 days after
the date on which the final, nonappealable judgment
in entered with respect to such action, submit to the
appropriate court an application for the recovery of
costs and fees. Such application shall contain—
(A) a certification that the submitting
party is a prevailing party and is eligible to re-
ceive costs and fees under paragraph (2);
(B) a description of the amount of costs
and fees sought, including an itemized state-
ment from any attorney or expert witness rep-
resenting or appearing on behalf of such party
stating the actual time expended and the rate
at which fees and other expenses were com-
puted; and
(C) a description of the reasons why the
position of the party against whom the judg-
ment was rendered was not substantially justi-
fied.
In determining whether or not the position of the
nonprevailing party was substantially justified the
court shall consider only the record presented in the
action maintained for the costs and fees.
105
(4) AMOUNT OF AWARD.—In making a decision
on an application submitted under paragraph (3),
the court may—
(A) assess the amount to be awarded
under this subsection against the party against
whom the judgment was rendered or against
the attorney (or attorneys) of such party; and
(B) reduce the amount to be awarded pur-
suant to this subsection, or deny an award, to
the extent that the prevailing party, during the
course of the proceedings, engaged in conduct
which unnecessarily and unreasonably length-
ened the time for, or increased the costs of, the
final resolution of the matter in controversy.
(b) ATTORNEY’S FEES.—
(1) CONTINGENCY
FEES.—An attorney who
represents, on a contingency fee basis, a claimant in
a medical malpractice liability claim may not charge,
demand, receive, or collect for services rendered in
connection with such claim in excess of the following
amount recovered by judgment or settlement under
such claim:
(A) 25 percent of the first $150,000 (or
portion thereof) recovered; plus
106
(B) 15 percent of any amount in excess of
$150,000 recovered.
(2) RECORDS.—
(A) IN GENERAL.—With respect to a medi-
cal malpractice liability action, in order to re-
ceive an award of attorneys’ fees as provided
for in this title, the attorney of record of a
party to such action shall have maintained ac-
curate, complete records of hours worked on the
action regardless of the fee arrangement en-
tered into by the attorney with such party, in-
cluding records of other attorneys, legal staff,
expert witnesses and others who worked on the
action on behalf of such attorney.
(B) CALCULATION.—The court shall deter-
mine the amount of reasonable attorneys’ fees
and expenses that shall be awarded in a medical
malpractice liability action under this title on
the basis of an hourly rate or as a percentage
of the total damages awarded under such action
for economic and noneconomic losses. Such
amount shall be indexed to account for infla-
tion. The amount of attorneys’ fees and ex-
penses as determined by the court may not ex-
107
ceed an amount that would be considered rea-
sonable based on the following:
(i) The time, labor, and skill nec-
essary to properly perform the legal serv-
ices required by the action.
(ii) The novelty and difficultly of the
questions involved in the action.
(iii) The likelihood, if apparent to the
client, that the acceptance of employment
with respect to the client’s action will pre-
clude other employment by the attorney.
(iv) The fee customarily charged in
the locality for similar legal services.
(v) The amount involved in the action
and the results obtained.
(vi) The time limitations imposed by
the client or by the circumstances of the
action.
(vii) The nature and length of the
professional relationship between the attor-
ney and the client.
(viii) The experience, reputation, and
ability of the attorney performing the serv-
ices in connection with the action.
108
SEC. 1108. CONTRIBUTION AND INDEMNIFICATION.
(a) RECOVERY.—With respect to a medical mal-
practice liability action, each nonsettling party may re-
cover contribution and indemnification from any other
such nonsettling party who, if joined in the original action,
would have been liable for such damages.
(b) RELEASE, DISMISSAL, SETTLEMENT.—A party
who is released or dismissed (with or without prejudice)
from, or who, in good faith prior to a verdict or judgment,
settles a medical malpractice liability action shall, upon
the execution of the release, dismissal or settlement agree-
ment, be discharged from all claims for contribution or
indemnification brought by nonsettling or other settling
parties to such action. Any party to such action who as-
serts a lack of good faith shall have the burden of proof
concerning such good faith issue.
SEC. 1109. COLLATERAL SOURCES.
(a) IN GENERAL.—The total amount of damages re-
ceived by a claimant in a medical malpractice liability ac-
tion shall be reduced, in accordance with subsection (b),
by any other payment that has been made, or that will
be made, to such claimant to compensate such claimant
for an injury that was part of such action, including pay-
ments—
(1) under Federal or State disability or sickness
programs;
109
(2) under Federal, State, or private health in-
surance programs;
(3) under private disability insurance programs;
(4) under employer wage continuation pro-
grams; and
(5) from any other source that are intended to
compensate such claimant for such injury.
(b) AMOUNT OF REDUCTION.—The amount by which
an award of damages to a claimant for an injury shall
be reduced under subsection (a) shall be—
(1) the total amount of any payments (other
than such award) that have been made, or that will
be made, to such claimant to compensate such
claimant for such injury; and
(2) the amount paid by such claimant (or by
the spouse, parent, or legal guardian of such claim-
ant) to secure the payments described in paragraph
(1).
SEC. 1110. DAMAGES RELATING TO MEDICAL PRODUCT LI-
ABILITY CLAIMS.
(a) IN GENERAL.—Noneconomic damages may not
be awarded with respect to any medical product liability
claim alleged against a medical product producer if—
(1) the drug or device that is the subject of
such claim—
110
(A) was subject to approval under section
505, or premarket approval under section 515,
of the Federal Food, Drug, and Cosmetic Act
by the Food and Drug Administration with re-
spect to—
(i) the safety of the formulation or
performance of the aspect of the drug or
device; or
(ii) the adequacy of the packaging or
labeling of the drug or device, and
(B) was approved by the Food and Drug
Administration; or
(2) the drug or device is generally recognized as
safe and effective pursuant to conditions established
by the Food and Drug Administration and applica-
ble regulations, including packaging and labeling
regulations.
(b) EXCEPTION IN CASE OF WITHHELD INFORMA-
TION, MISREPRESENTATION, OR ILLEGAL PAYMENT.—
The provisions of subsection (a) shall not apply if it is
determined on the basis of clear and convincing evidence
that the medical product producer—
(1) withheld from or misrepresented to the
Food and Drug Administration information concern-
ing such drug or device that is required to be sub-
111
mitted under the Federal Food, Drug, and Cosmetic
Act or section 352 of the Public Health Service Act
and that is material and relevant to the action in-
volved; or
(2) made an illegal payment to an official of the
Food and Drug Administration for the purpose of
securing approval of the drug or device.
(c) DEFINITION.—As used in this section, the term
‘‘clear and convincing evidence’’ is that measure 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, except that such measure or de-
gree of proof is more than that required under preponder-
ance of the evidence, but less than that required for proof
beyond a reasonable doubt.
SEC. 1111. CLASS ACTIONS.
(a) RECOVERY BY NAMED CLAIMANTS IN CLASS AC-
TIONS.—In any medical malpractice liability action that
is certified as a class action pursuant to Rule 23 of the
Federal Rules of Civil Procedure, the share of damages
under any final judgment or any settlement that is award-
ed to any party serving as a representative claimant shall
be calculated in the same manner as the shares of the
final judgment or settlement awarded to all other members
of the claimant class. The preceding sentence may not be
112
construed to limit the award to a representative claimant
of reasonable compensation, costs, and expenses relating
to the representation of the class.
(b) PROHIBITION OF CONFLICTS OF INTEREST.—In
any medical malpractice liability action that is certified as
a class action pursuant to Rule 23 of the Federal Rules
of Civil Procedure, if a party is represented by any attor-
ney who has a beneficial interest in the subject of the liti-
gation, the court shall make a determination of whether
such interest constitutes a conflict of interest sufficient to
disqualify the attorney from representing the party.
(c) RECEIPT OF REFERRAL FEES.—In any medical
liability action that is certified as a class action pursuant
to Rule 23 of the Federal Rules of Civil Procedure, an
attorney may not represent the class if the attorney has
paid or is obligated to pay a fee to a third party who as-
sisted the attorney in obtaining the representation of any
party to the action. An attorney who knowingly violates
this subsection shall be barred from representing the party
in such action or any action to which this title applies.
SEC. 1112. DEFINITIONS.
(1) CLAIMANT.—The term ‘‘claimant’’ means
any person who alleges a medical malpractice liabil-
ity claim, and any person on whose behalf such a
claim is alleged, including the decedent in the case
113
of an action brought through or on behalf of an es-
tate.
(2) COMMERCIAL LOSS.—The term ‘‘commercial
loss’’ means loss, including damage to the product
itself, which is not harm described in subparagraph
(A) or (B) of paragraph (5), and which is of a kind
for which there is a remedy under applicable con-
tract or commercial law.
(3) ECONOMIC DAMAGES.—The term ‘‘economic
damages’’ means damages paid to compensate an in-
dividual for hospital and other medical expenses, lost
wages, lost employment, and other pecuniary losses.
(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) HARM.—The term ‘‘harm’’ means—
(A) the personal physical illness, injury, or
death of a claimant;
(B) the mental anguish or emotional harm
of a claimant that is caused by or causing the
claimant personal physical illness or injury; or
114
(C) the physical damage caused by a medi-
cal product to property other than the medical
product itself.
Such term does not include commercial loss or loss
or damage to a medical product.
(6) 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.
(7) 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 liability claim.
(8) 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 or health
care professional in which the plaintiff alleges a
medical malpractice liability claim, but does not in-
clude any action in which the plaintiff’s sole allega-
tion is an allegation of an intentional tort.
115
(9) 
MEDICAL
MALPRACTICE
LIABILITY
CLAIM.—The term ‘‘medical malpractice 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 the use of
a medical product.
(10) MEDICAL PRODUCT.—
(A) IN
GENERAL.—The term ‘‘medical
product’’ means, with respect to the allegation
of a claimant, a drug (as defined in section
201(g)(1) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 321(g)(1)) or a medical
device (as defined in section 201(h) of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C.
321(h)) if—
(i) such drug or device was subject to
premarket approval under section 505,
507, or 515 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355, 357, or
360e) or section 351 of the Public Health
Service Act (42 U.S.C. 262) with respect
to the safety of the formulation or per-
formance of the aspect of such drug or de-
vice which is the subject of the claimant’s
allegation or the adequacy of the packag-
116
ing or labeling of such drug or device, and
such drug or device is approved by the
Food and Drug Administration; or
(ii) the drug or device is generally rec-
ognized as safe and effective under regula-
tions issued by the Secretary of Health
and Human Services under section 201(p)
of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 321(p)).
(B) EXCEPTION
IN
CASE
OF
MISREPRE-
SENTATION OR FRAUD.—Notwithstanding sub-
paragraph (A), the term ‘‘medical product’’
shall not include any product described in such
subparagraph if the claimant shows that the
product is approved by the Food and Drug Ad-
ministration for marketing as a result of with-
held information, misrepresentation, or an ille-
gal payment by manufacturer of the product.
(11) 
NONECONOMIC
DAMAGES.—The 
term
‘‘noneconomic damages’’ means damages paid to
compensate an individual for losses for physical and
emotional pain, suffering, inconvenience, physical
impairment, mental anguish, emotional distress, dis-
figurement, loss of enjoyment of life, loss of society
and companionship, loss of consortium, injury to
117
reputation, humiliation, and other noneconomic in-
jury.
(12) PERSON.—The term ‘‘person’’ means any
individual, corporation, company, association, firm,
partnership, society, joint stock company, or any
other entity, including any governmental entity.
SEC. 1113. SEVERABILITY.
If any provision of this title or the application of any
provision to any person or circumstance is held invalid,
the remainder of this title and the application of such pro-
visions to any other person or circumstance shall not be
affected by such invalidation.
SEC. 1114. EFFECTIVE DATE.
This title shall apply to all medical malpractice liabil-
ity actions commenced on or after the date of enactment
of this Act.
TITLE XII—ANTITRUST
REFORMS
SEC. 1201. ESTABLISHMENT OF LIMITED EXEMPTION PRO-
GRAM FOR HEALTH CARE JOINT VENTURES.
(a) ESTABLISHMENT.—
(1) IN
GENERAL.—Not later than 6 months
after the date of the enactment of this Act, the At-
torney General, after consultation with the Secretary
of Health and Human Services and the Interagency
118
Advisory Committee on Competition, Antitrust Pol-
icy, and Health Care, shall promulgate specific
guidelines under which a health care joint venture
may submit an application requesting that the At-
torney General provide the entities participating in
the joint venture with an exemption under which
(notwithstanding any other provision of law)—
(A) monetary recovery on a claim under
the antitrust laws shall be limited to actual
damages if the claim results from conduct with-
in the scope of the joint venture that occurs
while the exemption is in effect; and
(B) the conduct of the entity in making or
performing a contract to carry out the joint
venture shall not be deemed illegal per se under
the antitrust laws but shall be judged on the
basis of its reasonableness, taking into account
all relevant factors affecting competition, in-
cluding (but not limited to) effects on competi-
tion in properly defined, relevant research, de-
velopment, product, process, and service mar-
kets (taking into consideration worldwide capac-
ity to the extent that it may be appropriate in
the circumstances).
119
(2) DEADLINE FOR RESPONSE.—The Attorney
General, after consultation with the Secretary and
the Advisory Committee, shall approve or disapprove
the application of a health care joint venture for an
exemption under this subsection not later than 30
days after the Attorney General receives the joint
venture’s application.
(3) PROVIDING REASONS FOR DISAPPROVAL.—
If the Attorney General disapproves the application
of a health care joint venture for an exemption
under this subsection, the Attorney General shall
provide the joint venture with a statement explaining
the reasons for the Attorney General’s disapproval.
(b) REQUIREMENTS FOR APPROVAL.—For purposes
of subsection (a), the Attorney General shall approve the
application of a health care joint venture for an exemption
under subsection (a) if an entity participating in the joint
venture submits to the Attorney General an application
not later than 30 days after the entity has entered into
a written agreement to participate in the joint venture (or
not later than 30 days after the date of the enactment
of this Act in the case of a joint venture in effect as of
such date) that contains the following information and as-
surances:
120
(1) The identities of the parties to the joint
venture.
(2) The nature, objectives, and planned activi-
ties of the joint venture.
(3) Assurances that the entities participating in
the joint venture shall notify the Attorney General
of any changes in the information described in para-
graphs (1) and (2) during the period for which the
exemption is in effect.
(c) REVOCATION OF EXEMPTION.—
(1) IN GENERAL.—The Attorney General, after
consultation with the Secretary, may revoke an ex-
emption provided to a health care joint venture
under this section if, at any time during which the
exemption is in effect, the Attorney General finds
that the joint venture no longer meets the applicable
requirements for approval under subsection (b), ex-
cept that the Attorney General may not revoke such
an exemption if the failure of the health care joint
venture to meet such requirements is merely tech-
nical in nature.
(2) TIMING.—The revocation of an exemption
under paragraph (1) shall apply only to conduct of
the health care joint venture occurring after the ex-
emption is no longer in effect.
121
(d) WITHDRAWAL OF APPLICATION.—Any party that
submits an application under this section may withdraw
such application at any time before the Attorney General’s
response to the application.
(e) REQUIREMENTS RELATING TO NOTICE AND PUB-
LICATION
OF EXEMPTIONS
AND RELATED INFORMA-
TION.—
(1) PUBLICATION OF APPROVED APPLICATIONS
FOR EXEMPTIONS IN FEDERAL REGISTER.—
(A) IN GENERAL.—With respect to each
exemption for a health care joint venture pro-
vided under subsection (a), the Attorney Gen-
eral (acting jointly with the Secretary) shall—
(i) prepare a notice with respect to
the joint venture that identifies the parties
to the venture and that describes the
planned activities of the venture;
(ii) submit the notice to the entities
participating in the joint venture; and
(iii) after submitting the notice to
such entities (but not later than 30 days
after approving the application for the ex-
emption for the joint venture), publish the
notice in the Federal Register.
122
(B) EFFECT
OF
PUBLICATION.—An ex-
emption provided by the Attorney General
under subsection (a) shall take effect as of the
date of the publication in the Federal Register
of the notice with respect to the exemption pur-
suant to subparagraph (A).
(2) WAIVER
OF
DISCLOSURE
REQUIREMENTS
FOR INFORMATION RELATING TO APPLICATIONS FOR
EXEMPTIONS.—
(A) IN
GENERAL.—All information and
documentary material submitted as part of an
application of a health care joint venture for an
exemption under subsection (a), together with
any other information obtained by the Attorney
General, the Secretary, or the Advisory Com-
mittee in the course of any investigation, ad-
ministrative proceeding, or case with respect to
a potential violation of the antitrust laws by the
joint venture with respect to which the exemp-
tion applies, shall be exempt from disclosure
under section 552 of title 5, United States
Code, and shall not be made publicly available
by any agency of the United States to which
such section applies, except as relevant to a law
enforcement investigation or in a judicial or ad-
123
ministrative proceeding in which such informa-
tion and material is subject to any protective
order.
(B) EXCEPTION
FOR
INFORMATION
IN-
CLUDED IN FEDERAL REGISTER NOTICE.—Sub-
paragraph (A) shall not apply with respect to
information contained in a notice published in
the Federal Register pursuant to paragraph
(1).
(3) USE OF INFORMATION TO SUPPORT OR AN-
SWER CLAIMS UNDER ANTITRUST LAWS.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), the fact of disclosure of con-
duct under an application for an exemption
under subsection (a) and the fact of publication
of a notice in the Federal Register under para-
graph (1) shall be admissible into evidence in
any judicial or administrative proceeding for the
sole purpose of establishing that a person is en-
titled to the protections provided by an exemp-
tion granted under subsection (a).
(B) EFFECT
OF
REJECTED
APPLICA-
TION.—If the Attorney General denies, in whole
or in part, an application for an exemption
under subsection (a), or revokes an exemption
124
under such section, neither the negative deter-
mination nor the statement of reasons therefor
shall be admissible into evidence in any admin-
istrative or judicial proceeding for the purpose
of supporting or answering any claim under the
antitrust laws.
SEC. 1202. ISSUANCE OF HEALTH CARE CERTIFICATES OF
PUBLIC ADVANTAGE.
(a) ISSUANCE AND EFFECT OF CERTIFICATE.—The
Attorney General, after consultation with the Secretary
and the Advisory Committee, shall issue in accordance
with this section a certificate of public advantage to each
eligible health care joint venture that complies with the
requirements in effect under this section on or after the
expiration of the 1-year period that begins on the date
of the enactment of this Act (without regard to whether
or not the Attorney General has promulgated regulations
to carry out this section by such date). Such venture, and
the parties to such venture, shall not be liable under any
of the antitrust laws for conduct described in such certifi-
cate and engaged in by such venture if such conduct oc-
curs while such certificate is in effect.
(b) REQUIREMENTS APPLICABLE TO ISSUANCE OF
CERTIFICATES.—
125
(1) STANDARDS
TO
BE
MET.—The Attorney
General shall issue a certificate to an eligible health
care joint venture if the Attorney General finds
that—
(A) the benefits that are likely to result
from carrying out the venture outweigh the re-
duction in competition (if any) that is likely to
result from the venture, and
(B) such reduction in competition is rea-
sonably necessary to obtain such benefits.
(2) FACTORS TO BE CONSIDERED.—
(A) WEIGHING OF BENEFITS AGAINST RE-
DUCTION
IN
COMPETITION.—For purposes of
making the finding described in paragraph
(1)(A), the Attorney General shall consider
whether the venture is likely —
(i) to maintain or to increase the
quality of health care,
(ii) to increase access to health care,
(iii) to achieve cost efficiencies that
will be passed on to health care consumers,
such as economies of scale, reduced trans-
action costs, and reduced administrative
costs,
126
(iv) to preserve the operation of
health care facilities located in underserved
geographical areas,
(v) to improve utilization of health
care resources, and
(vi) to reduce inefficient health care
resource duplication.
(B) NECESSITY OF REDUCTION IN COM-
PETITION.—For purposes of making the finding
described in paragraph (1)(B), the Attorney
General shall consider—
(i) the ability of the providers of
health care services that are (or likely to
be) affected by the health care joint ven-
ture and the entities responsible for mak-
ing payments to such providers to nego-
tiate societally optimal payment and serv-
ice arrangements,
(ii) the effects of the health care joint
venture on premiums and other charges
imposed by the entities described in clause
(i), and
(iii) the availability of equally effi-
cient, less restrictive alternatives to achieve
127
the benefits that are intended to be
achieved by carrying out the venture.
(c) ESTABLISHMENT
OF CRITERIA
AND PROCE-
DURES.—Subject to subsections (d) and (e), not later than
1 year after the date of the enactment of this Act, the
Attorney General and the Secretary shall establish jointly
by rule the criteria and procedures applicable to the issu-
ance of certificates under subsection (a). The rules shall
specify the form and content of the application to be sub-
mitted to the Attorney General to request a certificate,
the information required to be submitted in support of
such application, the procedures applicable to denying and
to revoking a certificate, and the procedures applicable to
the administrative appeal (if such appeal is authorized by
rule) of the denial and the revocation of a certificate. Such
information may include the terms of the health care joint
venture (in the case of a venture in existence as of the
time of the application) and implementation plan for the
joint venture.
(d) ELIGIBLE HEALTH CARE JOINT VENTURE.—To
be an eligible health care joint venture for purposes of this
section, a health care joint venture shall submit to the At-
torney General an application that complies with the rules
in effect under subsection (c) and that includes—
128
(1) an agreement by the parties to the venture
that the venture will not foreclose competition by en-
tering into contracts that prevent health care provid-
ers from providing health care in competition with
the venture,
(2) an agreement that the venture will submit
to the Attorney General annually a report that de-
scribes the operations of the venture and informa-
tion regarding the impact of the venture on health
care and on competition in health care, and
(3) an agreement that the parties to the ven-
ture will notify the Attorney General and the Sec-
retary of the termination of the venture not later
than 30 days after such termination occurs.
(e) REVIEW OF APPLICATIONS FOR CERTIFICATES.—
Not later than 30 days after an eligible health care joint
venture submits to the Attorney General an application
that complies with the rules in effect under subsection (c)
and with subsection (d), the Attorney General shall issue
or deny the issuance of such certificate. If, before the expi-
ration of such 30-day period, the Attorney General fails
to issue or deny the issuance of such certificate, the Attor-
ney General shall be deemed to have issued such certifi-
cate.
129
(f) REVOCATION OF CERTIFICATE.—Whenever the
Attorney General finds that a health care joint venture
with respect to which a certificate is in effect does not
meet the standards specified in subsection (b), the Attor-
ney General shall revoke such certificate.
(g) WRITTEN REASONS; JUDICIAL REVIEW.—
(1) DENIAL
AND
REVOCATION
OF
CERTIFI-
CATES.—If the Attorney General denies an applica-
tion for a certificate or revokes a certificate, the At-
torney General shall include in the notice of denial
or revocation a statement of the reasons relied upon
for the denial or revocation of such certificate.
(2) JUDICIAL REVIEW.—
(A) AFTER
ADMINISTRATIVE
PROCEED-
ING.—(i) If the Attorney General denies an ap-
plication submitted or revokes a certificate is-
sued under this section after an opportunity for
hearing on the record, then any party to the
health care joint venture involved may com-
mence a civil action, not later than 60 days
after receiving notice of the denial or revoca-
tion, in an appropriate district court of the
United States for review of the record of such
denial or revocation.
130
(ii) As part of the Attorney General’s an-
swer, the Attorney General shall file in such
court a certified copy of the record on which
such denial or revocation is based. The findings
of fact of the Attorney General may be set aside
only if found to be unsupported by substantial
evidence in such record taken as a whole.
(B) DENIAL OR REVOCATION WITHOUT AD-
MINISTRATIVE
PROCEEDING.—If the Attorney
General denies an application submitted or re-
vokes a certificate issued under this section
without an opportunity for hearing on the
record, then any party to the health care joint
venture involved may commence a civil action,
not later than 60 days after receiving notice of
the denial or revocation, in an appropriate dis-
trict court of the United States for de novo re-
view of such denial or revocation.
(h) EXEMPTION.—A person shall not be liable under
any of the antitrust laws for conduct necessary—
(1) to prepare, agree to prepare, or attempt to
agree to prepare an application to request a certifi-
cate under this section, or
131
(2) to attempt to enter into any health care
joint venture with respect to which such a certificate
is in effect.
SEC. 1203. INTERAGENCY ADVISORY COMMITTEE ON COM-
PETITION, ANTITRUST POLICY, AND HEALTH
CARE.
(a) ESTABLISHMENT.—There is hereby established
the Interagency Advisory Committee on Competition,
Antitrust Policy, and Health Care. The Advisory Commit-
tee shall be composed of—
(1) the Secretary of Health and Human Serv-
ices (or the designee of the Secretary);
(2) the Attorney General (or the designee of the
Attorney General);
(3) the Director of the Office of Management
and Budget (or the designee of the Director); and
(4) a representative of the Federal Trade Com-
mission.
(b) DUTIES.—The duties of the Advisory Committee
are—
(1) to discuss and evaluate competition and
antitrust policy, and their implications with respect
to the performance of health care markets;
(2) to analyze the effectiveness of health care
joint ventures receiving exemptions under the pro-
132
gram established under section 1201(a) or certifi-
cates under section 1202 in reducing the costs of
and expanding access to the health care services that
are the subject of such ventures; and
(3) to make such recommendations to Congress
not later than 2 years after the date of the enact-
ment of this Act (and at such subsequent periods as
the Advisory Committee considers appropriate) re-
garding modifications to the program established
under section 1201(a) or to section 1202 as the Ad-
visory Committee considers appropriate, including
modifications relating to the costs to health care
providers of obtaining an exemption for a joint ven-
ture under such program.
SEC. 1204. DEFINITIONS.
For purposes of this title:
(1) The term ‘‘Advisory Committee’’ means the
Interagency Advisory Committee on Competition,
Antitrust Policy, and Health Care established under
section 1203.
(2) The term ‘‘antitrust laws’’—
(A) has the meaning given it in subsection
(a) of the first section of the Clayton Act (15
U.S.C. 12(a)), except that such term includes
section 5 of the Federal Trade Commission Act
133
(15 U.S.C. 45) to the extent such section ap-
plies to unfair methods of competition; and
(B) includes any State law similar to the
laws referred to in subparagraph (A).
(3) The term ‘‘certificate’’ means a certificate
of public advantage authorized to be issued under
section 1202(a).
(4) The term ‘‘health care joint venture’’ means
an agreement (whether existing or proposed) be-
tween 2 or more providers of health care services
that is entered into solely for the purpose of sharing
in the provision of health care services and that in-
volves substantial integration or financial risk-shar-
ing between the parties, but does not include the ex-
changing of information, the entering into of any
agreement, or the engagement in any other conduct
that is not reasonably required to carry out such
agreement.
(5) The term ‘‘health care services’’ includes
services related to the delivery or administration of
health care services.
(6) The term ‘‘liable’’ means liable for any civil
or criminal violation of the antitrust laws.
(7) The term ‘‘provider of health care services’’
means any individual or entity that is engaged in the
134
delivery of health care services in a State and that
is required by State law or regulation to be licensed
or certified by the State to engage in the delivery of
such services in the State.
TITLE XIII—EXPENDITURE TAR-
GETS 
FOR 
THE 
MEDICAID
AND MEDICARE PROGRAMS
SEC. 1301. DETERMINATION OF EXPENDITURES UNDER
THE MEDICAID AND MEDICARE PROGRAMS.
(a) DETERMINATION OF EXCESS EXPENDITURES.—
(1) IN GENERAL.—Not later than 30 days after
the end of each fiscal year beginning with fiscal year
1995, the Director of the Office of Management and
Budget (hereafter referred to in this title as the
‘‘Director’’), in consultation with the Secretary, shall
determine the amount of medicaid excess expendi-
tures and medicare excess expenditures for such fis-
cal year.
(2) DEFINITIONS.—For purposes of this title—
(A) MEDICAID EXCESS EXPENDITURES.—
The term ‘‘medicaid excess expenditures’’ for a
fiscal year means the amount by which the Fed-
eral expenditures under the medicaid program
for such fiscal year exceed the target expendi-
135
ture for such program as determined under
subsection (b)(1) for such fiscal year.
(B) MEDICARE EXCESS EXPENDITURES.—
The term ‘‘medicare excess expenditures’’ for a
fiscal year means the amount by which the ex-
penditures under the medicare program for
such fiscal year exceed the target expenditure
for such program as determined under sub-
section (b)(2) for such fiscal year.
(C) 
MEDICAID
PROGRAM.—The 
term
‘‘medicaid program’’ means the program under
title XIX of the Social Security Act.
(D) 
MEDICARE
PROGRAM.—The 
term
‘‘medicare program’’ means the program under
title XVIII of the Social Security Act.
(b) TARGET EXPENDITURES.—
(1) MEDICAID PROGRAM.—
(A) IN GENERAL.—The target expenditure
determined under this paragraph for the medic-
aid program for a fiscal year shall be an
amount equal to the applicable percentage of
the total Federal expenditures under the medic-
aid program for the previous fiscal year.
136
(B) MEDICAID
APPLICABLE
PERCENT-
AGE.—For purposes of subparagraph (A), the
medicaid applicable percentage is—
(i) 106.8 percent for the determina-
tion with respect to fiscal year 1995;
(ii) 106.9 percent for the determina-
tion with respect to fiscal year 1996; and
(iii) 107 percent for the determination
with respect to fiscal year 1997 and suc-
ceeding fiscal years.
(2) MEDICARE PROGRAM.—
(A) IN GENERAL.—The target expenditure
determined under this paragraph for the medi-
care program for a fiscal year shall be an
amount equal to the applicable percentage of
the total expenditures under the medicare pro-
gram for the previous fiscal year.
(B) MEDICARE
APPLICABLE
PERCENT-
AGE.—For purposes of subparagraph (A), the
medicare applicable percentage is—
(i) 109.4 percent for the determina-
tion with respect to fiscal year 1995;
(ii) 108.9 percent for the determina-
tion with respect to fiscal year 1996;
137
(iii) 108.5 percent for the determina-
tion with respect to fiscal year 1997; and
(iv) 108 percent for the determination
with respect to fiscal year 1998 and suc-
ceeding fiscal years.
SEC. 1302. DELAY OF HEALTH INSURANCE BENEFITS DUE
TO EXCESS EXPENDITURES.
(a) IN GENERAL.—If the Director determines that
there are medicaid or medicare excess expenditures for a
fiscal year under section 1301, any category of health in-
surance benefit described in subsection (b) that is effective
in the taxable or calendar year (whichever is applicable)
beginning after such fiscal year may be delayed until the
following year. This subsection shall be applied only to so
many of the categories of health insurance benefits de-
scribed in subsection (b) in the order in which such cat-
egories are listed such that the savings resulting from such
delay at least equal the costs of the medicaid and medicare
excess expenditures.
(b) HEALTH INSURANCE BENEFITS.—The categories
of health insurance benefits described in this subsection
are as follows:
(1) The tax credit under section 34A of the In-
ternal Revenue Code of 1986 applicable to individ-
138
uals described in subparagraphs (C) and (D) of sec-
tion 34A(g)(1).
(2) The tax credit under section 34A of the In-
ternal Revenue Code of 1986 applicable to individ-
uals described in subparagraph (B) of section
34A(g)(1).
(3) The tax credit under section 34A of the In-
ternal Revenue Code of 1986 applicable to individ-
uals described in subparagraph (A) of section
34A(g)(1).
(4) The tax exclusion under section 106A of the
Internal Revenue Code of 1986.
(5) Assistance to individuals with preexisting
conditions in purchasing health insurance under sec-
tion 501.
Æ