I
107TH CONGRESS
2D SESSION
H. R. 4942
To improve patient access to health care services, extend the solvency of
the Medicare Trust Fund, and provide improved medical care by reducing
the excessive burden the liability system places on the health care delivery
system.
IN THE HOUSE OF REPRESENTATIVES
JUNE 13, 2002
Mr. WELDON of Florida (for himself and Mr. GREENWOOD) introduced the
following bill; which was referred to the Committee on the Judiciary, and
in addition to the Committees on Ways and Means and Energy and Com-
merce, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To improve patient access to health care services, extend
the solvency of the Medicare Trust Fund, and provide
improved medical care by reducing the excessive burden
the liability system places on the health care delivery
system.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medicare Solvency and
Enhanced Benefits Act of 2002’’.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—
(1) Congress finds that our current civil justice
system is adversely affecting patient access to health
care services, better patient care, and cost-efficient
health care, in that the health care liability system
is a costly and ineffective mechanism for resolving
claims of health care liability and compensating in-
jured patients, and is a deterrent to the sharing of
information among health care professionals which
impedes efforts to improve patient safety and quality
of care.
(2) Congress finds that the current health care
liability system encourages health care providers to
practice defensive medicine to protect themselves
from lawsuits. These additional tests and procedures
result in additional costs to senior citizens and too
often provide little to improve the health of the pa-
tient. Their sole purposes in too many instances
serves the purpose of protecting against possible
lawsuits.
(3) Congress finds that the current health care
liability system encourages health care providers to
practice defensive medicine, which results in added
costs to the Medicare Trust Fund. Health care pro-
viders often order tests to rule out any possible seri-
ous illness. Often these tests provide little benefit to
the patient.
(4) Congress finds that the current liability sys-
tem diverts valuable resources away from improved
patient care and expanded Medicare benefits and in-
stead misdirects them toward tests and procedures
that do little to improve patient health, but serve
primarily to protect the health care provider from
excessive lawsuits.
(5) Congress finds that when the State of Cali-
fornia enacted medical malpractice reform legislation
(MICRA), Medicare benefited in that unnecessary
procedures and tests were not ordered.
(6) Congress finds that senior citizens spend a
larger portion of their income on health care than
other age groups, and that it is in the best interest
of senior citizens to help lower the cost of health
care and make the Medicare Trust Fund more sol-
vent.
(b) PURPOSE.—It is the purpose of this Act to imple-
ment reasonable, comprehensive, and effective health care
liability reforms designed to—
(1) improve the solvency of and extend the life
of the Medicare Trust Fund by reducing the costs
associated with defensive medicine and excessive
malpractice awards;
(2) improve the availability of health care serv-
ices in cases in which health care liability actions
have been shown to be a factor in the decreased
availability of services;
(3) reduce the incidence of ‘‘defensive medi-
cine’’ and lower the cost of health care liability in-
surance, all of which contribute to the escalation of
health care costs;
(4) ensure that persons with meritorious health
care injury claims receive fair, adequate, and timely
compensation, including reasonable noneconomic
damages;
(5) improve the fairness and cost-effectiveness
of our current health care liability system to resolve
disputes over, and provide compensation for, health
care liability by reducing uncertainty in the amount
of compensation provided to injured individuals; and
(6) provide an increased sharing of information
in the health care system which will reduce unin-
tended injury and improve patient care.
SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.
A medicare-related health care lawsuit may be com-
menced no later than 3 years after the date of injury or
1 year after the claimant discovers, or through the use
of reasonable diligence should have discovered, the injury,
whichever occurs first. In no event shall the time for com-
mencement of a medicare-related health care lawsuit ex-
ceed 3 years, except that in the case of an alleged injury
sustained by a minor before the age of 6, a medicare-re-
lated health care lawsuit may be commenced by or on be-
half of the minor until the later of 3 years from the date
of injury, or the date on which the minor attains the age
of 8.
SEC. 4. COMPENSATING PATIENT INJURY.
(a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL
ECONOMIC LOSSES.—In any medicare-related health care
lawsuit, the full amount of a claimant’s economic loss may
be fully recovered without limitation.
(b) ADDITIONAL NONECONOMIC DAMAGES.—In any
medicare-related health care lawsuit, the amount of non-
economic damages recovered by a claimant may be as
much as $250,000, regardless of the number of parties
against whom the action is brought or the number of sepa-
rate claims or actions brought with respect to the same
occurrence.
(c) NO DISCOUNT OF AWARD FOR NONECONOMIC
DAMAGES.—In any medicare-related health care lawsuit,
an award for future noneconomic damages shall not be
discounted to present value. The jury shall not be in-
formed about the maximum award for noneconomic dam-
ages. An award for noneconomic damages in excess of
$250,000 shall be reduced either before the entry of judg-
ment, or by amendment of the judgment after entry of
judgment, and such reduction shall be made before ac-
counting for any other reduction in damages required by
law. If separate awards are rendered for past and future
noneconomic damages and the combined awards exceed
$250,000, the future noneconomic damages shall be re-
duced first.
(d) FAIR SHARE RULE.—In any medicare-related
health care lawsuit, each party shall be liable for that par-
ty’s several share of any damages only and not for the
share of any other person. Each party shall be liable only
for the amount of damages allocated to such party in di-
rect proportion to such party’s percentage of responsi-
bility. A separate judgment shall be rendered against each
such party for the amount allocated to such party. For
purposes of this section, the trier of fact shall determine
the proportion of responsibility of each party for the claim-
ant’s harm.
SEC. 5. MAXIMIZING PATIENT RECOVERY.
(a) COURT SUPERVISION OF SHARE OF DAMAGES
ACTUALLY PAID TO CLAIMANTS.—In any medicare-re-
lated health care lawsuit, the court shall supervise the ar-
rangements for payment of damages to protect against
conflicts of interest that may have the effect of reducing
the amount of damages awarded that are actually paid
to claimants. In particular, in any medicare-related health
care lawsuit in which the attorney for a party claims a
financial stake in the outcome by virtue of a contingent
fee, the court shall have the power to restrict the payment
of a claimant’s damage recovery to such attorney, and to
redirect such damages to the claimant based upon the in-
terests of justice and principles of equity. In no event shall
the total of all contingent fees for representing all claim-
ants in a medicare-related health care lawsuit exceed the
following limits:
(1) 40 percent of the first $50,000 recovered by
the claimant(s).
(2) 331⁄3 percent of the next $50,000 recovered
by the claimant(s).
(3) 25 percent of the next $500,000 recovered
by the claimant(s).
(4) 15 percent of any amount by which the re-
covery by the claimant(s) is in excess of $600,000.
(b) APPLICABILITY.—The limitations in this section
shall apply whether the recovery is by judgment or settle-
ment, or by mediation, arbitration, or any other form of
alternative dispute resolution. In a medicare-related health
care lawsuit involving a minor or incompetent person, a
court retains the authority to authorize or approve a fee
that is less than the maximum permitted under this sec-
tion.
(c) DEFINITION.—In this section, the term ‘‘contin-
gent fee’’ includes all compensation to any person or per-
sons which is payable only if a recovery is effected on be-
half of one or more claimants.
SEC. 6. ADDITIONAL HEALTH BENEFITS.
(a) IN GENERAL.—In any medicare-related health
care lawsuit, any party may introduce evidence of collat-
eral source benefits. If a party elects to introduce such
evidence, any opposing party may introduce evidence of
any amount paid or contributed or reasonably likely to be
paid or contributed in the future by or on behalf of the
opposing party to secure the right to such collateral source
benefits. No provider of collateral source benefits shall re-
cover any amount against the claimant or receive any lien
or credit against the claimant’s recovery or be equitably
or legally subrogated to the right of the claimant in a
medicare-related health care lawsuit. This section shall
apply to any medicare-related health care lawsuit that is
settled as well as a medicare-related health care lawsuit
that is resolved by a fact finder.
(b) DEFINITION.—In this section, the term ‘‘collat-
eral source benefits’’ means any amount paid or reason-
ably likely to be paid in the future to or on behalf of the
claimant, or any service, product or other benefit provided
or reasonably likely to be provided in the future to or on
behalf of the claimant, as a result of the injury or wrongful
death, pursuant to—
(1) any State or Federal health, sickness, in-
come-disability, accident, or workers’ compensation
law;
(2) any health, sickness, income-disability, or
accident insurance that provides health benefits or
income-disability coverage;
(3) any contract or agreement of any group, or-
ganization, partnership, or corporation to provide,
pay for, or reimburse the cost of medical, hospital,
dental, or income disability benefits; and
(4) any other publicly or privately funded pro-
gram.
SEC. 7. PUNITIVE DAMAGES.
(a) IN GENERAL.—Punitive damages may, if other-
wise permitted by applicable State or Federal law, be
awarded against any person in a medicare-related health
care lawsuit only if it is proven by clear and convincing
evidence that such person acted with malicious intent to
injure the claimant, or that such person deliberately failed
to avoid unnecessary injury that such person knew the
claimant was substantially certain to suffer. In any medi-
care-related health care lawsuit where no judgment for
compensatory damages is rendered against such person,
no punitive damages may be awarded with respect to the
claim in such lawsuit. No demand for punitive damages
shall be included in a medicare-related health care lawsuit
as initially filed. A court may allow a claimant to file an
amended pleading for punitive damages only upon a mo-
tion by the claimant and after a finding by the court, upon
review of supporting and opposing affidavits or after a
hearing, after weighing the evidence, that the claimant has
established by a substantial probability that the claimant
will prevail on the claim for punitive damages. At the re-
quest of any party in a medicare-related health care law-
suit, the trier of fact shall consider in a separate
proceeding—
(1) whether punitive damages are to be award-
ed and the amount of such award; and
(2) the amount of punitive damages following a
determination of punitive liability.
If a separate proceeding is requested, evidence relevant
only to the claim for punitive damages, as determined by
applicable State law, shall be inadmissible in any pro-
ceeding to determine whether compensatory damages are
to be awarded.
(b) DETERMINING AMOUNT
OF PUNITIVE DAM-
AGES.—
(1) FACTORS
CONSIDERED.—In determining
the amount of punitive damages under subsection
(a), the trier of fact shall consider only the fol-
lowing:
(A) the severity of the harm caused by the
conduct of such party;
(B) the duration of the conduct or any
concealment of it by such party;
(C) the profitability of the conduct to such
party;
(D) the number of products sold or med-
ical procedures rendered for compensation, as
the case may be, by such party, of the kind
causing the harm complained of by the claim-
ant;
(E) any criminal penalties imposed on such
party, as a result of the conduct complained of
by the claimant; and
(F) the amount of any civil fines assessed
against such party as a result of the conduct
complained of by the claimant.
(2) MAXIMUM AWARD.—The amount of punitive
damages awarded in a medicare-related health care
lawsuit may be up to as much as two times the
amount of economic damages awarded or $250,000,
whichever is greater. The jury shall not be informed
of this limitation.
(c) NO CIVIL MONETARY PENALTIES FOR PRODUCTS
THAT COMPLY WITH FDA STANDARDS.—
(1) IN GENERAL.—No punitive damages may be
awarded in a medicare-related health care lawsuit
against the manufacturer or distributor of a medical
product based on a medicare-related liability claim
that such product caused the claimant’s harm
where—
(A)(i) such medical product was subject to
premarket approval or clearance by the Food
and Drug Administration with respect to the
safety of the formulation or performance of the
aspect of such medical product which caused
the claimant’s harm or the adequacy of the
packaging or labeling of such medical product;
and
(ii) such medical product was so approved
or cleared; or
(B) such medical product is generally rec-
ognized among qualified experts as safe and ef-
fective pursuant to conditions established by the
Food and Drug Administration and applicable
Food and Drug Administration regulations, in-
cluding without limitation those related to pack-
aging and labeling.
(2) LIABILITY OF HEALTH CARE PROVIDERS.—
A person who prescribes a drug or device (including
blood products) approved by the Food and Drug Ad-
ministration that constitutes a medicare-related item
or service shall not be named as a party to a product
liability lawsuit involving such drug or device and
shall not be liable to a claimant in a class action
lawsuit against the manufacturer, distributor, or
product seller of such drug or device.
(3) PACKAGING.—In a medicare-related health
care lawsuit for harm which is alleged to relate to
the adequacy of the packaging or labeling of a drug
which is required to have tamper-resistant packaging
under regulations of the Secretary of Health and
Human Services (including labeling regulations re-
lated to such packaging), the manufacturer or prod-
uct seller of the drug shall not be held liable for pu-
nitive damages unless such packaging or labeling is
found by the trier of fact by clear and convincing
evidence to be substantially out of compliance with
such regulations.
(4) EXCEPTION.—Paragraph (1) shall not
apply in any medicare-related health care lawsuit in
which—
(A) a person, before or after premarket ap-
proval or clearance of such medical product,
knowingly misrepresented to or withheld from
the Food and Drug Administration information
that is required to be submitted under the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C.
301 et seq.) or section 351 of the Public Health
Service Act (42 U.S.C. 262) that is material
and is causally related to the harm which the
claimant allegedly suffered; or
(B) a person made an illegal payment to
an official of the Food and Drug Administra-
tion for the purpose of either securing or main-
taining approval or clearance of such medical
product.
(d) DEFINITIONS.—In this section:
(2) MALICIOUS INTENT TO INJURE.—The term
‘‘malicious intent to injure’’ means intentionally
causing or attempting to cause physical injury other
than providing health care goods or services.
(3) MEDICAL
PRODUCT.—The term ‘‘medical
product’’ means a drug or device intended for hu-
mans, and the terms ‘‘drug’’ and ‘‘device’’ have the
meanings given such terms in sections 201(g)(1) and
201(h) of the Federal Food, Drug and Cosmetic Act
(21 U.S.C. 321), respectively, including any compo-
nent or raw material used therein, but excluding
health care services.
SEC. 8. AUTHORIZATION OF PAYMENT OF FUTURE DAM-
AGES TO CLAIMANTS IN MEDICARE-RELATED
HEALTH CARE LAWSUITS.
(a) IN GENERAL.—In any medicare-related health
care lawsuit, if an award of future damages, without re-
duction to present value, equaling or exceeding $50,000
is made against a party with sufficient insurance or other
assets to fund a periodic payment of such a judgment,
the court shall, at the request of any party, enter a judg-
ment ordering that the future damages be paid by periodic
payments in accordance with the Uniform Periodic Pay-
ment of Judgments Act promulgated by the National Con-
ference of Commissioners on Uniform State Laws.
(b) APPLICABILITY.—This section applies to all ac-
tions which have not been first set for trial or retrial be-
fore the effective date of this Act.
SEC. 9. EFFECT ON OTHER LAWS.
(a) VACCINE INJURY.—
(1) To the extent that title XXI of the Public
Health Service Act establishes a Federal rule of law
applicable to a civil action brought for a vaccine-re-
lated injury or death—
(A) this Act does not affect the application
of the rule of law to such an action; and
(B) any rule of law prescribed by this Act
in conflict with a rule of law of such title XXI
shall not apply to such action.
(2) If there is an aspect of a civil action
brought for a vaccine-related injury or death to
which a Federal rule of law under title XXI of the
Public Health Service Act does not apply, then this
Act or otherwise applicable law (as determined
under this Act) will apply to such aspect of such ac-
tion.
(b) OTHER FEDERAL LAW.—Except as provided in
this section, nothing in this Act shall be deemed to affect
any defense available to a defendant in a medicare-related
health care lawsuit or action under any other provision
of Federal law.
SEC. 10. STATE FLEXIBILITY AND PROTECTION OF STATES’
RIGHTS.
(a) HEALTH CARE LAWSUITS.—The provisions gov-
erning medicare-related health care lawsuits set forth in
this Act preempt, subject to subsections (b) and (c), State
law to the extent that State law prevents the application
of any provisions of law established by or under this Act.
The provisions governing medicare-related health care
lawsuits set forth in this Act supersede chapter 171 of
title 28, United States Code, to the extent that such
chapter—
(1) provides for a greater amount of damages
or contingent fees, a longer period in which a medi-
care-related health care lawsuit may be commenced,
or a reduced applicability or scope of periodic pay-
ment of future damages, than provided in this Act;
or
(2) prohibits the introduction of evidence re-
garding collateral source benefits, or mandates or
permits subrogation or a lien on collateral source
benefits.
(b) PROTECTION OF STATES’ RIGHTS.—Any issue
that is not governed by any provision of law established
by or under this Act (including State standards of neg-
ligence) shall be governed by otherwise applicable State
or Federal law. This Act does not preempt or supersede
any law that imposes greater protections (such as a short-
er statute of limitations) for health care providers and
health care organizations from liability, loss, or damages
than those provided by this Act.
(c) STATE FLEXIBILITY.—No provision of this Act
shall be construed to preempt—
(1) any State statutory limit (whether enacted
before, on, or after the date of the enactment of this
Act) on the amount of compensatory or punitive
damages (or the total amount of damages) that may
be awarded in a medicare-related health care law-
suit, whether or not such State limit permits the re-
covery of a specific dollar amount of damages that
is greater or lesser than is provided for under this
Act, notwithstanding section 4(a); or
(2) any defense available to a party in a medi-
care-related health care lawsuit under any other pro-
vision of State or Federal law.
SEC. 11. NO MEDICARE+CHOICE CAUSE OF ACTION.
No provision of this Act may be construed to create
a cause of action against a Medicare+Choice plan under
part C of title XVIII of the Social Security Act.
SEC. 12. DEFINITIONS.
In this Act:
(1) MEDICARE-RELATED
HEALTH
CARE
LAW-
SUIT.—The term ‘‘medicare-related health care law-
suit’’ means any action concerning medicare-related
items or services, brought in a State or Federal
court or pursuant to alternative dispute resolution,
against any person, regardless of the theory of liabil-
ity on which the claim is based, in which the claim-
ant alleges a medicare-related liability claim.
(2) MEDICARE-RELATED
LIABILITY
CLAIM.—
The term ‘‘medicare-related liability claim’’ means a
demand by any person, whether or not pursuant to
alternative dispute resolution, against any person,
based upon the provision of, use of, or payment for
(or the failure to provide, use, or pay for) medicare-
related items or services, regardless of the theory of
liability on which the claim is based, or the number
of plaintiffs, defendants, or other parties, or the
number of causes of action.
(3) MEDICARE-RELATED ITEMS OR SERVICES.—
The term ‘‘medicare-related items or services’’
means items or services for which payment may be
made under title XVIII of the Social Security Act
(including under a Medicare+Choice plan under
part C of such title).