A bill to reform the health care liability system.

MECHANISMS.

    (a) Establishment by States.--Each State is encouraged to establish 
or maintain alternative dispute resolution mechanisms that promote the 
resolution of health care liability claims in a manner that--
            (1) is affordable for the parties involved in the claims;
            (2) provides for the timely resolution of claims; and
            (3) provides the parties with convenient access to the 
        dispute resolution process.
    (b) Guidelines.--The Attorney General, in consultation with the 
Secretary and the Administrative Conference of the United States, shall 
develop guidelines with respect to alternative dispute resolution 
mechanisms that may be established by States for the resolution of 
health care liability claims. Such guidelines shall include procedures 
with respect to the following methods of alternative dispute 
resolution:
            (1) Arbitration.--The use of arbitration, a nonjury 
        adversarial dispute resolution process which may, subject to 
        subsection (d), result in a final decision as to facts, law, 
        liability or damages. The parties may elect binding 
        arbitration.
            (2) Mediation.--The use of mediation, a settlement process 
        coordinated by a neutral third party without the ultimate 
        rendering of a formal opinion as to factual or legal findings.
            (3) Early neutral evaluation.--The use of early neutral 
        evaluation, in which the parties make a presentation to a 
        neutral attorney or other neutral evaluator for an assessment 
        of the merits, to encourage settlement. If the parties do not 
        settle as a result of assessment and proceed to trial, the 
        neutral evaluator's opinion shall be kept confidential.
            (4) Early offer and recovery mechanism.--The use of early 
        offer and recovery mechanisms under which a health care 
        provider, health care organization, or any other alleged 
        responsible defendant may offer to compensate a claimant for 
        his or her reasonable economic damages, including future 
        economic damages, less amounts available from collateral 
        sources.
            (5) Certificate of merit.--The requirement that a claimant 
        in a health care liability action submit to the court before 
        trial a written report by a qualified specialist that includes 
        the specialist's determination that, after a review of the 
        available medical record and other relevant material, there is 
        a reasonable and meritorious cause for the filing of the action 
        against the defendant.
            (6) No-fault.--The use of a no-fault statute under which 
        certain health care liability actions are barred and claimants 
        are compensated for injuries through their health plans or 
        through other appropriate mechanisms.
    (c) Further Redress.--
            (1) In general.--The extent to which any party may seek 
        further redress (subsequent to a decision of an alternative 
        dispute resolution method established by a State under this 
        section) concerning a health care liability claim in a Federal 
        or State court shall be dependent upon the methods of 
        alternative dispute resolution adopted by the State involved.
            (2) Claimant.--With respect to further redress described in 
        paragraph (1), if the party initiating such court action is the 
        claimant and the claimant receives a level of damages that is 
        at least 25 percent less under the decision of the court than 
        under the State alternative dispute resolution method, such 
        party shall bear the reasonable costs, including legal fees, 
        incurred in the court action by the other party or parties to 
        such action.
            (3) Provider or other defendant.--With respect to further 
        redress described in paragraph (1), if the party initiating a 
        court action is the health care professional or health care 
        provider, or other defendant in a health care liability action 
        and the health care professional, health care provider, or 
        other defendant is found liable for a level of damages that is 
        at least 25 percent more under the decision of the court than 
        under the State alternative dispute resolution method, such 
        party shall bear the reasonable costs, including legal fees, 
        incurred in the court action by the other party or parties to 
        such action.
    (d) Technical Assistance and Evaluations.--
            (1) Technical assistance.--The Attorney General may provide 
        States with technical assistance in establishing or maintaining 
        alternative dispute resolution mechanisms under this section.
            (2) Evaluations.--The Attorney General, in consultation 
        with the Secretary and the Administrative Conference of the 
        United States, shall monitor and evaluate the effectiveness of 
        State alternative dispute resolution mechanisms established or 
        maintained under this section.

SEC. 13. APPLICABILITY.

    This Act shall apply to all civil actions covered under this Act 
that are commenced on or after the date of enactment of this Act, 
including any such action with respect to which the harm asserted in 
the action or the conduct that caused the harm occurred before the date 
of enactment of this Act.

SEC. 14. SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of the provisions 
of such to any person or circumstance shall not be affected thereby.

Summary: Common Sense Medical Malpractice Reform Act of 2001 - Declares that, in a health care liability action that is subject to this Act: (1) the action may not be initiated unless a complaint is filed within two years, with exceptions; (2) the amount of non-economic damages shall not exceed $250,000; and (3) an award for punitive damages may only be made if proven by clear and convincing evidence that the defendant intended to injure the claimant for a reason unrelated to the provision of health care services; understood the claimant was substantially certain to suffer unnecessary injury and deliberately failed to avoid such injury; or acted with a conscious disregard of a substantial and unjustifiable risk of unnecessary injury which the defendant failed to avoid in a manner which constitutes a gross deviation from the normal standard of conduct.Establishes additional limitations on punitive damages, including specified requirements for the pleading of punitive damages, and a requirement (at the request of any defendant in a health care liability action) that the trier of fact consider the issue of punitive damages in a separate proceeding.Sets forth provisions regarding periodic payments, the scope of liability (the liability of each defendant shall be several only and not joint), mandatory offsets for damages paid by a collateral source, and a cap on attorney's fees (limited to 25 percent of any judgement or settlement recovered).Encourages each State to establish or maintain ADR mechanisms. Directs the Attorney General to develop guidelines regarding such mechanisms.