SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Help Efficient, Acces-
sible, Low Cost, Timely Health Care (HEALTH) Act of
2002’’.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—
(1) EFFECT
ON
HEALTH
CARE
ACCESS
AND
COSTS.—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) EFFECT
ON
INTERSTATE
COMMERCE.—
Congress finds that the health care and insurance
industries are industries affecting interstate com-
merce and the health care liability litigation systems
existing throughout the United States are activities
that affect interstate commerce by contributing to
the high costs of health care and premiums for
health care liability insurance purchased by health
care system providers.
(3) EFFECT
ON
FEDERAL
SPENDING.—Con-
gress finds that the health care liability litigation
systems existing throughout the United States have
a significant effect on the amount, distribution, and
use of Federal funds because of—
(A) the large number of individuals who
receive health care benefits under programs op-
erated or financed by the Federal Government;
(B) the large number of individuals who
benefit because of the exclusion from Federal
taxes of the amounts spent to provide them
with health insurance benefits; and
(C) the large number of health care pro-
viders who provide items or services for which
the Federal Government makes payments.
(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 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;
(2) 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;
(3) ensure that persons with meritorious health
care injury claims receive fair and adequate com-
pensation, including reasonable noneconomic dam-
ages;
(4) 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
(5) 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 health care lawsuit may be commenced no later
than 3 years after the date of injury or 1 year after the
claimant discovers, or through the use of reasonable dili-
gence should have discovered, the injury, whichever occurs
first. In no event shall the time for commencement of a
health care lawsuit exceed 3 years, except that in the case
of an alleged injury sustained by a minor before the age
of 6, a health care lawsuit may be commenced by or on
behalf 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 HEALTH CARE LAWSUITS.—In any
health care lawsuit, the full amount of a claimant’s eco-
nomic loss may be fully recovered without limitation.
(b) ADDITIONAL NONECONOMIC DAMAGES.—In any
health care lawsuit, the amount of noneconomic damages
recovered may be as much as $250,000, regardless of the
number of parties against whom the action is brought or
the number of separate claims or actions brought with re-
spect to the same occurrence.
(c) NO DISCOUNT OF AWARD FOR NONECONOMIC
DAMAGES.—In any health care lawsuit, an award for fu-
ture noneconomic damages shall not be discounted to
present value. The jury shall not be informed about the
maximum award for noneconomic damages. An award for
noneconomic damages in excess of $250,000 shall be re-
duced either before the entry of judgment, or by amend-
ment of the judgment after entry of judgment, and such
reduction shall be made before accounting 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 reduced first.
(d) FAIR SHARE RULE.—In any health care lawsuit,
each party shall be liable for that party’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 direct proportion to
such party’s percentage of responsibility. A separate judg-
ment shall be rendered against each such party for the
amount allocated to such party. For purposes of this sec-
tion, the trier of fact shall determine the proportion of
responsibility of each party for the claimant’s harm.
SEC. 5. MAXIMIZING PATIENT RECOVERY.
(a) COURT SUPERVISION OF SHARE OF DAMAGES
ACTUALLY PAID TO CLAIMANTS.—In any health care law-
suit, the court shall supervise the arrangements for pay-
ment of damages to protect against conflicts of interest
that may have the effect of reducing the amount of dam-
ages awarded that are actually paid to claimants. In par-
ticular, in any health care lawsuit in which the attorney
for a party claims a financial stake in the outcome by vir-
tue 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 interests of justice and principles
of equity. In no event shall the total of all contingent fees
for representing all claimants in a health care lawsuit ex-
ceed 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, settle-
ment, mediation, arbitration, or any other form of alter-
native dispute resolution. In a health care lawsuit involv-
ing 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 section.
SEC. 6. ADDITIONAL HEALTH BENEFITS.
In any health care lawsuit, any party may introduce
evidence of collateral source benefits. If a party elects to
introduce such evidence, any opposing party may intro-
duce evidence of any amount paid or contributed or rea-
sonably 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 recover any amount against the
claimant or receive any lien or credit against the claim-
ant’s recovery or be equitably or legally subrogated to the
right of the claimant in a health care lawsuit. This section
shall apply to any health care lawsuit that is settled as
well as a health care lawsuit that is resolved by a fact
finder.
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 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 unneces-
sary injury that such person knew the claimant was sub-
stantially certain to suffer. In any 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 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 health care lawsuit, 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, the trier of fact
shall consider only the following:
(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 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 against the manufacturer or distributor of
a medical product based on a claim that such prod-
uct 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 health care provider who prescribes a drug or de-
vice (including blood products) approved by the
Food and Drug Administration 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 manu-
facturer, distributor, or product seller of such drug
or device.
(3) PACKAGING.—In a 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 regula-
tions of the Secretary of Health and Human Serv-
ices (including labeling regulations related to such
packaging), the manufacturer or product seller of
the drug shall not be held liable for punitive dam-
ages 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 regula-
tions.
(4) EXCEPTION.—Paragraph (1) shall not
apply in any 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.
SEC. 8. AUTHORIZATION OF PAYMENT OF FUTURE DAM-
AGES TO CLAIMANTS IN HEALTH CARE LAW-
SUITS.
(a) IN GENERAL.—In any health care lawsuit, if an
award of future damages, without reduction 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 judgment ordering that
the future damages be paid by periodic payments in ac-
cordance with the Uniform Periodic Payment of Judg-
ments Act promulgated by the National Conference 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. DEFINITIONS.
In this Act:
(1) ALTERNATIVE DISPUTE RESOLUTION SYS-
TEM; ADR.—The term ‘‘alternative dispute resolution
system’’ or ‘‘ADR’’ means a system that provides
for the resolution of health care lawsuits in a man-
ner other than through a civil action brought in a
State or Federal court.
(2) CLAIMANT.—The term ‘‘claimant’’ means
any person who brings a health care lawsuit, includ-
ing a person who asserts or claims a right to legal
or equitable contribution, indemnity or subrogation,
arising out of a health care liability claim or action,
and any person on whose behalf such a claim is as-
serted or such an action is brought, whether de-
ceased, incompetent, or a minor.
(3) COLLATERAL
SOURCE
BENEFITS.—The
term ‘‘collateral source benefits’’ means any amount
paid or reasonably 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 claim-
ant, as a result of the injury or wrongful death, pur-
suant to—
(A) any State or Federal health, sickness,
income-disability, accident, or workers’ com-
pensation law;
(B) any health, sickness, income-disability,
or accident insurance that provides health bene-
fits or income-disability coverage;
(C) any contract or agreement of any
group, organization, partnership, or corporation
to provide, pay for, or reimburse the cost of
medical, hospital, dental, or income disability
benefits; and
(D) any other publicly or privately funded
program.
(4) 
COMPENSATORY
DAMAGES.—The 
term
‘‘compensatory 
damages’’ 
means 
objectively
verifiable monetary losses incurred as a result of the
provision of, use of, or payment for (or failure to
provide, use, or pay for) health care services or med-
ical products, such as past and future medical ex-
penses, loss of past and future earnings, cost of ob-
taining domestic services, loss of employment, and
loss of business or employment opportunities, dam-
ages for physical and emotional pain, suffering, in-
convenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of soci-
ety and companionship, loss of consortium (other
than loss of domestic service), hedonic damages, in-
jury to reputation, and all other nonpecuniary losses
of any kind or nature. The term ‘‘compensatory
damages’’ includes economic damages and non-
economic damages, as such terms are defined in this
section.
(5) CONTINGENT FEE.—The term ‘‘contingent
fee’’ includes all compensation to any person or per-
sons which is payable only if a recovery is effected
on behalf of one or more claimants.
(6) ECONOMIC DAMAGES.—The term ‘‘economic
damages’’ means objectively verifiable monetary
losses incurred as a result of the provision of, use
of, or payment for (or failure to provide, use, or pay
for) health care services or medical products, such as
past and future medical expenses, loss of past and
future earnings, cost of obtaining domestic services,
loss of employment, and loss of business or employ-
ment opportunities.
(7) 
HEALTH
CARE
LAWSUIT.—The 
term
‘‘health care lawsuit’’ means any health care liability
claim concerning the provision of health care goods
or services affecting interstate commerce, or any
health care liability action concerning the provision
of health care goods or services affecting interstate
commerce, brought in a State or Federal court or
pursuant to an alternative dispute resolution system,
against a health care provider, a health care organi-
zation, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product,
regardless of the theory of liability on which the
claim is based, or the number of claimants, plain-
tiffs, defendants, or other parties, or the number of
claims or causes of action, in which the claimant al-
leges a health care liability claim.
(8) HEALTH
CARE
LIABILITY
ACTION.—The
term ‘‘health care liability action’’ means a civil ac-
tion brought in a State or Federal Court or pursu-
ant to an alternative dispute resolution system,
against a health care provider, a health care organi-
zation, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product,
regardless of the theory of liability on which the
claim is based, or the number of plaintiffs, defend-
ants, or other parties, or the number of causes of ac-
tion, in which the claimant alleges a health care li-
ability claim.
(9) HEALTH
CARE
LIABILITY
CLAIM.—The
term ‘‘health care liability claim’’ means a demand
by any person, whether or not pursuant to ADR,
against a health care provider, health care organiza-
tion, or the manufacturer, distributor, supplier, mar-
keter, promoter, or seller of a medical product, in-
cluding, but not limited to, third-party claims, cross-
claims, counter-claims, or contribution claims, which
are based upon the provision of, use of, or payment
for (or the failure to provide, use, or pay for) health
care services or medical products, 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.
(10) HEALTH CARE ORGANIZATION.—The term
‘‘health care organization’’ means any person or en-
tity which is obligated to provide or pay for health
benefits under any health plan, including any person
or entity acting under a contract or arrangement
with a health care organization to provide or admin-
ister any health benefit.
(11) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means any person or entity
required by State or Federal laws or regulations to
be licensed, registered, or certified to provide health
care services, and being either so licensed, reg-
istered, or certified, or exempted from such require-
ment by other statute or regulation.
(12) HEALTH CARE GOODS OR SERVICES.—The
term ‘‘health care goods or services’’ means any
goods or services provided by a health care organiza-
tion, provider, or by any individual working under
the supervision of a health care provider, that relates
to the diagnosis, prevention, or treatment of any
human disease or impairment, or the assessment of
the health of human beings.
(13) MALICIOUS
INTENT
TO
INJURE.—The
term ‘‘malicious intent to injure’’ means inten-
tionally causing or attempting to cause physical in-
jury other than providing health care goods or serv-
ices.
(14) 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.
(15) 
NONECONOMIC
DAMAGES.—The 
term
‘‘noneconomic damages’’ means damages for phys-
ical and emotional pain, suffering, inconvenience,
physical impairment, mental anguish, disfigurement,
loss of enjoyment of life, loss of society and compan-
ionship, loss of consortium (other than loss of do-
mestic service), hedonic damages, injury to reputa-
tion, and all other nonpecuniary losses of any kind
or nature.
(16) PUNITIVE DAMAGES.—The term ‘‘punitive
damages’’ means damages awarded, for the purpose
of punishment or deterrence, and not solely for com-
pensatory purposes, against a health care provider,
health care organization, or a manufacturer, dis-
tributor, or supplier of a medical product. Punitive
damages are neither economic nor noneconomic
damages.
(17) RECOVERY.—The term ‘‘recovery’’ means
the net sum recovered after deducting any disburse-
ments or costs incurred in connection with prosecu-
tion or settlement of the claim, including all costs
paid or advanced by any person. Costs of health care
incurred by the plaintiff and the attorneys’ office
overhead costs or charges for legal services are not
deductible disbursements or costs for such purpose.
(18) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands,
Guam, American Samoa, the Northern Mariana Is-
lands, the Trust Territory of the Pacific Islands, and
any other territory or possession of the United
States, or any political subdivision thereof.