improve the adverse effects of the medical liability
environment; however, more data and analysis is
necessary to fully understand the benefits of various
procedural devices.
(b) PURPOSE.—It is the purpose of this Act to—
(1) provide incentives to States to develop alter-
native dispute resolution procedures to attain a more
efficient, expeditious, and equitable resolution of
health care malpractice disputes;
(2) enhance general knowledge concerning the
benefits of different forms of alternative dispute res-
olution mechanisms; and
(3) establish uniformity and curb excesses in
the State-based medical liability systems through
federally-mandated reforms.
SEC. 3. DEFINITIONS.
As used in this Act:
(1) ALTERNATIVE DISPUTE RESOLUTION SYS-
TEM.—The term ‘‘alternative dispute resolution sys-
tem’’ means a system that is enacted or adopted by
a State to resolve medical malpractice claims or
medical product liability claims instead of resorting
to a judicial proceeding in a State court.
(2) CLAIMANT.—The term ‘‘claimant’’ means
any person who brings a health care liability action
and, in the case of an individual who is deceased, in-
competent, or a minor, the person on whose behalf
such an action is brought.
(3) CLEAR AND CONVINCING EVIDENCE.—The
term ‘‘clear and convincing evidence’’ is that meas-
ure 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 degree of proof is more
than that required under preponderance of the evi-
dence, but less than that required for proof beyond
a reasonable doubt.
(4) ECONOMIC LOSSES.—The term ‘‘economic
losses’’ means losses for hospital and other medical
expenses, lost wages, lost employment, and other pe-
cuniary losses.
(5) HEALTH
CARE
LIABILITY
ACTION.—The
term ‘‘health care liability action’’ means any civil
action brought pursuant to State law in which a
plaintiff alleges a medical malpractice claim against
a health care provider, health care professional, or
medical product producer.
(6) HEALTH CARE PROFESSIONAL.—The term
‘‘health care professional’’ means any individual who
provides health care services in a State and who is
required by State law or regulation to be licensed or
certified by the State to provide such services in the
State.
(7) 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 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.
(8) INJURY.—The term ‘‘injury’’ means any ill-
ness, disease, or other harm that is the subject of
a medical malpractice claim or a medical product
liability claim.
(9) MEDICAL MALPRACTICE CLAIM.—The term
‘‘medical malpractice claim’’ means any claim relat-
ing to the provision of (or the failure to provide)
health care services without regard to the theory of
liability asserted, and includes any third-party claim,
cross-claim, counterclaim, or contribution claim in a
health care liability action.
(10) MEDICAL PRODUCT.—The term ‘‘medical
product’’ means a device (as defined in section
201(h) of the Federal Food, Drug, and Cosmetic
Act) or a drug (as defined in section 201(g)(1) of
the Federal Food, Drug, and Cosmetic Act).
(11) MEDICAL
PRODUCT
LIABILITY
CLAIM.—
The term ‘‘medical product liability claim’’ means
any claim in which a claimant alleges an injury aris-
ing from or relating to the use of a medical product.
(12) MEDICAL PRODUCT PRODUCER.—The term
‘‘medical product producer’’ means any entity that is
the designer, manufacturer, producer, or seller of a
medical product that is the subject of a medical
product liability claim.
(13) NONECONOMIC LOSSES.—The term ‘‘non-
economic losses’’ means losses for physical and emo-
tional pain, suffering, inconvenience, physical im-
pairment, mental anguish, disfigurement, loss of en-
joyment of life, loss of consortium, and other
nonpecuniary losses.
(14) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Health and Human Services.
(15) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands,
and Guam.
TITLE 
I—GRANTS 
TO 
STATES
FOR ALTERNATIVE DISPUTE
RESOLUTION SYSTEMS
SEC. 101. GRANTS TO STATES.
(a) IN GENERAL.—The Secretary shall make grants
to States for the implementation and evaluation of alter-
native dispute resolution systems.
(b) ELIGIBILITY.—A State is eligible to receive a
grant under this section if the State submits to the Sec-
retary an application at such time, in such form, and con-
taining such information and assurances as the Secretary
may require, including—
(1) a description of the alternative dispute reso-
lution system that the State intends to implement
with amounts received under the grant;
(2) assurances that the State will comply with
all data gathering requirements promulgated by the
Secretary under section 102(a); and
(3) any information and assurances necessary
to enable the Secretary to determine whether the
State’s alternative dispute resolution system meets
the qualification standards for such systems devel-
oped by the Secretary under section 102(a).
(c) NUMBER OF GRANTS.—
SEC. 102. ADMINISTRATION.
(a) STANDARDS
AND REGULATIONS
FOR ALTER-
NATIVE DISPUTE RESOLUTION GRANT PROGRAM.—
(1) IN GENERAL.—In consultation with the Di-
rector of the Agency for Health Care Policy and Re-
search, the Secretary shall develop and promulgate
standards and regulations necessary to carry out the
grant program established under section 101, includ-
ing—
(A) qualification standards for alternative
dispute resolution systems that States must
meet in order to receive grants under such
section; and
(B) regulations establishing data gathering
requirements for States receiving grants under
such section.
(2) CRITERIA FOR PROGRAMS.—In developing
qualification standards for alternative dispute resolu-
tion systems under paragraph (1)(A), the Secretary
shall take into account the effectiveness of such
systems in—
(A) supporting access to health care;
(B) encouraging improvements in the qual-
ity of health care;
(C) enhancing and not impairing the physi-
cian-patient relationship;
(D) encouraging innovation that leads to
an improved level of health care;
(E) compensating for avoidable medical in-
jury due to provider fault and not compensating
for injury which is unavoidable by standard
medical practice;
(F) resolving claims promptly and in
amounts proportional to the injury;
(G) providing predictable outcomes; and
(H) operating efficiently in terms of finan-
cial costs, professional energies, and govern-
mental processes.
(b) TECHNICAL ASSISTANCE.—The Secretary shall
provide States with technical assistance to enable States
to submit applications for grants under section 101, in-
cluding information on the establishment and operation of
alternative dispute resolution systems.
(c) EVALUATION OF ALTERNATIVE DISPUTE RESO-
LUTION SYSTEMS.—Not later than 4 years after awarding
the first grant to a State under section 101, the Secretary
shall prepare and submit to Congress a report describing
and evaluating the alternative dispute resolution systems
implemented by States with funds provided under such
grants, and shall include in the report—
(1) information on—
(A) the effect of such systems on the cost
of health care within the 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 such State;
and
(2) an analysis of the feasibility and desirability
of establishing a national alternative dispute resolu-
tion system.
TITLE II—UNIFORM STANDARDS
FOR MALPRACTICE CLAIMS
SEC. 201. APPLICABILITY.
Except as provided in section 209, this title shall
apply to any health care liability action brought in a Fed-
eral or State court and to any medical malpractice claim
or medical product liability claim subject to an alternative
dispute resolution system.
SEC. 202. CALCULATION AND PAYMENT OF DAMAGES.
(a) PERIODIC PAYMENTS FOR FUTURE LOSSES.—No
person may be required to pay more than $100,000 in a
single payment in damages (whether for economic or non-
economic losses) for expenses to be incurred in the future,
but shall be permitted to make such payments on a peri-
odic basis. The periods for such payments shall be deter-
mined by the court, based upon projections of when such
expenses are likely to be incurred.
(b) LIMITATION ON NONECONOMIC LOSSES.—The
total amount of damages that may be awarded to an indi-
vidual and the family members of such individual for non-
economic losses resulting from an injury which is the sub-
ject of an action or claim may not exceed $250,000, re-
gardless of the number of health care professionals, health
care providers, and health care producers against whom
the action or claim is brought or the number of actions
or claims brought with respect to the injury.
(c) MANDATORY OFFSETS FOR DAMAGES PAID BY A
COLLATERAL SOURCE.—
(1) IN GENERAL.—The total amount of dam-
ages received by an individual shall be reduced (in
accordance with paragraph (2)) by any other pay-
ment that has been or will be made to the individual
to compensate the individual for the injury that was
the subject of the action or claim.
(2) AMOUNT OF REDUCTION.—The amount by
which an award of damages to an individual shall be
reduced under paragraph (1) shall be—
(A) the total amount of any payments
(other than such award) that have been made
or that will be made to the individual to com-
pensate the individual for the injury that was
the subject of the action or claim; minus
(B) the amount paid by the individual (or
by the spouse, parent, or legal guardian of the
individual) to secure the payments described in
subparagraph (A).
(d) ATTORNEY’S FEES.—A claimant’s attorney’s fees
may not exceed—
(1) 25 percent of the first $150,000 of any
award or settlement paid to the claimant; or
(2) 15 percent of any additional amounts paid
to the claimant.
(e) LIMITATION ON PUNITIVE DAMAGES.—The total
amount of punitive damages that may be assessed with
respect to an action or claim may not exceed twice the
total amount of the damages awarded to compensate the
claimant for losses resulting from the injury which is the
subject of the claim or action, regardless of the number
of health care professionals, health care providers, and
health care producers against whom the action or claim
is brought or the number of actions or claims brought with
respect to the injury.
SEC. 203. JOINT AND SEVERAL LIABILITY FOR NON-
ECONOMIC LOSSES.
The liability of each defendant for noneconomic losses
shall be several only and shall not be joint, and each de-
fendant shall be liable only for the amount of noneconomic
losses allocated to the defendant in direct proportion to
the defendant’s percentage of responsibility (as deter-
mined by the trier of fact).
SEC. 204. UNIFORM STATUTE OF LIMITATIONS.
(a) IN GENERAL.—No medical malpractice claim or
medical product liability claim may be initiated after the
expiration of the 2-year period that begins on the earlier
of the date which the alleged injury that is the subject
of such action was discovered or the date on which such
injury should reasonably have been discovered, but in no
event after the expiration of the 4-year period that begins
on the date the alleged injury 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, no medical malpractice liability claim or med-
ical product liability claim may be brought after the expi-
ration of the 2-year period that begins on the date the
alleged injury that is the subject of the action should rea-
sonably have been discovered, but in no event after the
date on which the minor attains 10 years of age.
SEC. 205. SPECIAL PROVISION FOR CERTAIN OBSTETRIC
SERVICES.
(a) IN GENERAL.—In the case of a medical mal-
practice claim or medical product liability claim relating
to services provided during labor or the delivery of a baby,
if the defendant health care professional did not previously
treat the plaintiff for the pregnancy, the trier of fact may
not find that the defendant committed malpractice and
may not assess damages against the defendant unless the
malpractice 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.
SEC. 206. UNIFORM STANDARD FOR DETERMINING NEG-
LIGENCE.
(a) STANDARD
OF REASONABLENESS.—Except as
provided in subsection (b), a defendant may not be found
to have committed malpractice unless the defendant’s con-
duct at the time of providing the health care services that
are the subject of the action was not reasonable.
(b) ACTIONS BROUGHT UNDER STRICT LIABILITY.—
Subsection (a) shall not apply to any action in which the
claimant asserts that the defendant is liable under a
theory of strict liability.
SEC. 207. RESTRICTIONS ON PUNITIVE DAMAGES RELAT-
ING 
TO 
MEDICAL 
PRODUCT 
LIABILITY
CLAIMS.
(a) RESTRICTIONS FOR APPROVED PRODUCTS OR
DEVICES.—
(1) IN GENERAL.—Punitive damages otherwise
permitted by applicable law shall not be awarded
with respect to any medical product liability claim
alleged against a medical product producer if—
(A) the drug or device that is the subject
of such claim—
(i) was subject to approval under sec-
tion 505 or premarket approval under sec-
tion 515 of the Federal Food, Drug, and
Cosmetic Act by the Food and Drug
Administration with respect to—
(I) the safety of the formulation
or performance of the aspect of the
drug or device; or
(II) the adequacy of the packag-
ing or labeling of the drug or device,
and
(ii) was approved by the Food and
Drug Administration; or
(B) the drug or device is generally recog-
nized as safe and effective pursuant to condi-
tions established by the Food and Drug Admin-
istration and applicable regulations, including
packaging and labeling regulations.
(2) EXCEPTION IN CASE OF WITHHELD INFOR-
MATION, MISREPRESENTATION, OR
ILLEGAL
PAY-
MENT.—The provisions of paragraph (1) shall not
apply if it is determined on the basis of clear and
convincing evidence that the medical product pro-
ducer—
(A) withheld from or misrepresented to the
Food and Drug Administration information
concerning such drug or device that is required
to be submitted under the Federal Food, Drug,
and Cosmetic Act or section 352 of the Public
Health Service Act that is material and relevant
to the action; or
(B) made an illegal payment to an official
of the Food and Drug Administration for the
purpose of securing approval of the drug or
device.
(b) SEPARATE PROCEEDING TO DETERMINE PUNI-
TIVE DAMAGES.—
(1) CONSIDERATIONS.—At the request of a
medical product producer in a health care liability
action in which a medical product liability claim is
alleged against the producer, the trier of fact shall
consider in a separate proceeding—
(A) whether punitive damages are to be
awarded and the amount of the award; or
(B) the amount of punitive damages fol-
lowing a determination of punitive liability.
(2) EVIDENCE.—If a separate proceeding is re-
quested in accordance with paragraph (1), evidence
relevant only to the claim of punitive damages (as
determined by applicable State law) shall be inad-
missible in any proceeding to determine whether
compensatory damages are to be awarded to the
claimant.
(c) CRITERIA FOR DETERMINING AMOUNT OF PUNI-
TIVE DAMAGES.—Subject to the limitation on punitive
damages provided in section 202(e), all relevant evidence
shall be considered in determining the amount of punitive
damages assessed with respect to a medical product liabil-
ity claim, including—
(1) the financial condition of the medical prod-
uct producer;
(2) the severity of the harm caused by the con-
duct of the medical product producer;
(3) the duration of the conduct or any conceal-
ment of the conduct by the medical product pro-
ducer;
(4) the profitability of the conduct to the medi-
cal product producer;
(5) the number of products sold by the medical
product producer of the kind causing the harm com-
plained of by the claimant;
(6) awards of punitive or exemplary damages to
persons similarly situated to the claimant;
(7) prospective awards of compensatory dam-
ages to persons similarly situated to the claimant;
(8) any criminal penalties imposed on the medi-
cal product producer as a result of the conduct com-
plained of by the claimant; and
(9) the amount of any civil fines assessed
against the defendant as a result of the conduct
complained of by the claimant.