A bill to establish Federal standards for the resolution of health care malpractice claims, and for other purposes.

OF ACTION THROUGH 
              ALTERNATIVE DISPUTE RESOLUTION.

    (a) In General.--
            (1) State cases.--A covered health care malpractice action 
        may not be brought in any State court during a calendar year 
        unless the covered health care malpractice claim that is the 
        subject of the action has been initially resolved under an 
        alternative dispute resolution system certified for the year by 
        the Attorney General under section 6(a), or, in the case of a 
        State in which such a system is not in effect for the year, 
        under the alternative Federal system established under section 
        6(b).
            (2) Federal diversity actions.--A covered health care 
        malpractice action may not be brought in a Federal court under 
        section 1332 of title 28, United States Code, during a calendar 
        year unless the covered health care malpractice claim that is 
        the subject of the action has been initially resolved under the 
        alternative dispute resolution system described in paragraph 
        (1) that applied in the State whose law applies in such action.
    (b) Initial Resolution of Claims Under ADR.--For purposes of 
subsection (a), an action is ``initially resolved'' under an 
alternative dispute resolution system if--
            (1) the ADR reaches a decision on whether the defendant is 
        liable to the plaintiff for damages; and
            (2) if the ADR determines that the defendant is liable, the 
        ADR reaches a decision regarding the amount of damages assessed 
        against the defendant.
    (c) Procedures for Filing Actions.--
            (1) Notice of intent to contest decision.--
                    (A) In general.--Not later than 60 days after a 
                decision is issued with respect to a covered health 
                care malpractice claim under an alternative dispute 
                resolution system, each party affected by the decision 
                shall submit a sealed statement to a court of competent 
                jurisdiction, selected by the arbitrator, indicating 
                whether the party intends to contest the decision.
                    (B) Sealed statements.--Each sealed statement 
                submitted to a court under subparagraph (A) shall 
                remain sealed until the earlier of--
                            (i) the date on which all affected parties 
                        have submitted such statement; or
                            (ii) the submission deadline described in 
                        subparagraph (A).
            (2) Requirements for filing action.--A covered health care 
        malpractice action may not be brought by a party unless--
                    (A) such party files the action in a court of 
                competent jurisdiction not later than 90 days after the 
                decision resolving the covered health care malpractice 
                claim that is the subject of the action is issued under 
                the applicable alternative dispute resolution system; 
                and
                    (B) any party has filed the notice of intent 
                required by paragraph (1).
            (3) Court of competent jurisdiction.--For purposes of this 
        subsection, the term ``court of competent jurisdiction'' 
        means--
                    (A) with respect to actions filed in a State court, 
                the appropriate State trial court; and
                    (B) with respect to actions filed in a Federal 
                court, the appropriate United States district court.
    (d) Legal Effect of Uncontested ADR Decision.--A decision reached 
under an alternative dispute resolution system that is not contested 
under subsection (c) shall, for purposes of enforcement by a court of 
competent jurisdiction, have the same status in the court as the 
verdict of a covered health care malpractice action adjudicated in a 
State or Federal trial court.
    (e) Standard of Judicial Review.--The standard of judicial review 
of a claim filed under subsection (c) shall be de novo.
    (f) Award of Costs and Attorneys' Fees After Initial ADR 
Resolution.--
            (1) In general.--In the case of a covered health care 
        malpractice action brought in any State or Federal court after 
        ADR, if the final judgment or order issued (exclusive of costs, 
        expenses, and attorneys' fees incurred after judgment or trial) 
        in the action is not more favorable to a party contesting the 
        ADR decision than the ADR decision, the opposing party may file 
        with the court, not later than 10 days after the final judgment 
        or order is issued, a petition for payment of costs and 
        expenses, including attorneys' fees, incurred with respect to 
        the claim or claims after the date of the ADR decision.
            (2) Award of costs and expenses.--If the court finds, under 
        a petition filed under paragraph (1), with respect to a claim 
        or claims, that the judgment or order finally obtained is not 
        more favorable to the party contesting the ADR decision with 
        respect to the claim or claims than the ADR decision, the court 
        shall order the contesting party to pay the costs and expenses 
        of the opposing party, including attorneys' fees, incurred with 
        respect to the claim or claims after the date of the ADR 
        decision, unless the court finds that requiring the payment of 
        such costs and expenses would be manifestly unjust.
            (3) Limitation.--Attorneys' fees awarded under this 
        subsection shall be in an amount reasonably attributable to the 
        claim or claims involved, calculated on the basis of an hourly 
        rate of the attorney, which may not exceed that which the court 
        considers acceptable in the community in which the attorney 
        practices law, taking into account the attorney's 
        qualifications and experience and the complexity of the case. 
        Attorneys' fees under this subsection may not exceed--
                    (A) the actual cost incurred by the party for 
                attorneys' fees payable to an attorney for services in 
                connection with the claim or claims; or
                    (B) if no such cost was incurred by the party due 
                to a contingency fee agreement, a reasonable cost that 
                would have been incurred by the party for noncontingent 
                attorneys' fees payable to an attorney for services in 
                connection with the claim or claims.
    (g) Applicability.--The requirements of this section shall apply 
only to each covered health care malpractice claim arising out of an 
event (or events) occurring on or after the date that is 270 days after 
the date of enactment of this Act.

SEC. 5. BASIC REQUIREMENTS FOR STATE ALTERNATIVE DISPUTE RESOLUTION 
              SYSTEMS.

    The alternative dispute resolution system of a State meets the 
requirements of this section if the system--
            (1) applies to all covered health care malpractice claims 
        under the jurisdiction of the courts of such State;
            (2) requires that a written opinion resolving the dispute 
        be issued not later than 180 days after the date on which each 
        party against whom the claim is filed has received notice of 
        the claim (other than in exceptional cases for which a longer 
        period is required for the issuance of such an opinion), and 
        that the opinion contain--
                    (A) findings of fact relating to the dispute; and
                    (B) a description of the costs incurred in 
                resolving the dispute under the system (including any 
                fees paid to the individuals hearing and resolving the 
                claim), together with an appropriate assessment of the 
                costs against any of the parties;
            (3) requires individuals who hear and resolve claims under 
        the system to meet such qualifications as the State may require 
        (in accordance with regulations of the Attorney General);
            (4) is approved by the State or by local governments in the 
        State;
            (5) with respect to a State system that consists of 
        multiple dispute resolution procedures--
                    (A) permits the parties to a dispute to select the 
                procedure to be used for the resolution of the dispute 
                under the system; and
                    (B) if the parties do not agree on the procedure to 
                be used for the resolution of the dispute, assigns a 
                particular procedure to the parties;
            (6) provides for the transmittal to the State agency 
        responsible for monitoring or disciplining health care 
        professionals and health care providers of any findings made 
        under the system that such a professional or provider committed 
        malpractice, unless, during the 90-day period beginning on the 
        date the system resolves the claim against the professional or 
        provider, the professional or provider brings an action 
        contesting the decision made under the system; and
            (7) provides for the regular transmittal to the 
        Administrator of the Agency for Healthcare Research and Quality 
        of information on disputes resolved under the system, in a 
        manner that assures that the identity of the parties to a 
        dispute shall not be revealed.

SEC. 6. CERTIFICATION OF STATE SYSTEMS; APPLICABILITY OF ALTERNATIVE 
              FEDERAL SYSTEM.

    (a) Certification.--
            (1) In general.--Not later than 270 days after the date of 
        enactment of this Act and periodically thereafter, the Attorney 
        General, in consultation with the Secretary, shall determine 
        whether the alternative dispute resolution systems of each 
        State meet the requirements of this Act.
            (2) Basis for certification.--The Attorney General shall 
        certify the alternative dispute resolution system of a State 
        under this subsection for a calendar year if the Attorney 
        General determines under paragraph (1) that such system meets 
        the requirements of section 5.
    (b) Applicability of Alternative Federal System.--
            (1) Establishment and applicability.--Not later than 270 
        days after the date of enactment of this Act, the Attorney 
        General, in consultation with the Secretary, shall establish by 
        rulemaking an alternative Federal ADR system for the resolution 
        of covered health care malpractice claims during a calendar 
        year, to be used for a calendar year in States that do not have 
        an alternative dispute resolution system that is certified 
        under subsection (a) for such year.
            (2) Requirements for system.--Under the alternative Federal 
        ADR system established under paragraph (1)--
                    (A) paragraphs (1), (2), (6), and (7) of section 5 
                shall apply to claims brought under such system;
                    (B) the claims brought under such system shall be 
                heard and resolved by medical and legal experts 
                appointed as arbitrators by the Attorney General, in 
                consultation with the Secretary; and
                    (C) with respect to a State in which such system is 
                in effect, the Attorney General may (at the request of 
                such State) modify the system to take into account the 
                existence of dispute resolution procedures in the State 
                that affect the resolution of health care malpractice 
                claims.
            (3) Treatment of states with alternative system in 
        effect.--If the alternative Federal ADR system established 
        under this subsection is applied with respect to a State for a 
        calendar year such State shall reimburse the United States, at 
        such time and in such manner as the Secretary may require, for 
        the costs incurred by the United States during such year as a 
        result of the application of the system with respect to the 
        State.

SEC. 7. GAO STUDY OF PRIVATE LITIGATION INSURANCE.

    The Comptroller General of the United States shall--
            (1) undertake a study of the effectiveness of private 
        litigation insurance markets, such as those in the United 
        Kingdom and Germany, in providing affordable access to courts, 
        evaluating the merit of prospective claims, and ensuring that 
        prevailing parties in ``loser pays'' systems are reimbursed for 
        attorneys' fees; and
            (2) not later than 270 days after the date of enactment of 
        this Act, submit to Congress a report describing the results of 
        such study.

Summary: Fair Resolution of Medical Liability Disputes Act of 2009 - Prohibits a medical malpractice action from being filed in a state court or a federal court under diversity of citizenship jurisdiction unless: (1) the claim that is the subject of the action has been initially resolved under an alternative dispute resolution (ADR) system; and (2) an affected party notifies the appropriate court of the intent to contest the decision and files the action within 90 days after such decision is issued.

Provides: (1) for the payment of an opposing party's court costs and attorneys' fees by the contesting party in the case of a malpractice action brought in court after ADR if the final judgment issued in the action is not more favorable to the contesting party than the ADR decision; and (2) that an uncontested ADR decision shall have the status of a verdict in a court adjudicated action.

 Sets forth basic requirements for state ADR systems, including a requirement that they transmit to the state agency responsible for monitoring or disciplining health care providers any findings that a provider committed malpractice. Directs the Attorney General to: (1) certify state ADR systems that meet the requirements of this Act; and (2) establish an alternative federal ADR system for any state that does not establish its own system.

 Directs the Comptroller General to study the effectiveness of private litigation insurance markets in providing affordable access to courts, evaluating the merit of prospective claims, and ensuring that prevailing parties in "loser pays" systems are reimbursed for attorney's fees.