Medicare and Medicaid Third Party Liability Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare and Medicaid Third Party 
Liability Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) illnesses and diseases that result from the use of 
        tobacco products cost Federal Government health care programs 
        billions of dollars, including at least $16,000,000,000 in the 
        medicare program and $3,000,000,000 in the medicaid program for 
        inpatient hospital services in fiscal year 1994;
            (2) over the next 20 years, such illnesses and diseases 
        will cost the medicare trust funds at least $800,000,000,000;
            (3) in April 1994, the trustees of the medicare trust funds 
        concluded that such funds may be insolvent in 7 years, with 
        $128,000,000,000 of expenditures due to such illnesses and 
        diseases;
            (4) recent discoveries, including documents, patents and 
        patent applications, and testimony, have shown that--
                    (A) the tobacco industry has known for years that 
                the nicotine in cigarettes is addictive,
                    (B) the industry has attempted both to conceal this 
                information from the public and the Government and to 
                manipulate the amount of nicotine in cigarettes, and
                    (C) it is possible to manufacture cigarettes which 
                are far less dangerous to consumers;
            (5) more than 36 percent of medicare recipients are former 
        smokers and 20 percent are current smokers;
            (6) approximately 43 percent of medicaid recipients smoke, 
        compared to 26 percent of the general public;
            (7) the medicare population is much more at risk of 
        contacting illnesses and diseases that result from the use of 
        tobacco products than younger smokers, because such population 
        has smoked longer;
            (8) legal scholars and courts are increasingly agreeing 
        that it is appropriate to use statistical evidence to prove 
        causation; and
            (9) in view of the large number of Americans killed, 
        disabled, or otherwise injured each year as a result of smoking 
        cigarettes, the addictiveness of the nicotine in cigarettes, 
        and the absence of any significant benefits to society from 
        smoking, cigarettes are an unreasonably dangerous product and 
        cigarette manufacturers are engaged in abnormally dangerous 
        activities.
    (b) Purpose.--The purpose of this Act is to allow the American 
taxpayers to recoup billions of dollars in Federal Government health 
care funds spent on tobacco related illnesses and diseases.

SEC. 3. CLASS ACTION TO RECOVER COSTS TO FEDERAL GOVERNMENT HEALTH CARE 
              PROGRAMS OF TOBACCO RELATED ILLNESSES AND DISEASES.

    (a) In General.--(1) With respect to payments made under any 
applicable Federal Government health care program to or on behalf of 
more than one recipient with a disease, illness, condition, or 
complication caused, in whole or in part, by the use of tobacco 
products, the Attorney General of the United States may seek recovery 
for such payments from third parties (or any successors to such third 
parties) that manufacture tobacco products. The Attorney General (after 
consultation with the appropriate Secretaries who administer such 
programs) may bring an action in the name of the United States in 
United States district court to recover such payments made to or on 
behalf of all such recipients in one proceeding.
    (2) Any action to enforce the rights of the Attorney General under 
this section with respect to any payment described in paragraph (1) 
shall be commenced within 5 years of such payment.
    (3) For purposes of paragraph (1), the term ``applicable Federal 
Government health care program'' includes--
            (A) the medicare program under title XVIII of the Social 
        Security Act;
            (B) the medicaid program under title XIX of such Act;
            (C) the veterans health care program under title 38, United 
        States Code; and
            (D) any other similar Federal health care program.
    (b) Notice Under the Class Action.--(1) In any action brought under 
this section, no notice to recipients described in subsection (a)(1) is 
required, and such recipients shall have no right to become a party to 
such action. Such action is independent of any rights or causes of 
action of such recipients.
    (2) In any such action in which the number of recipients described 
in subsection (a)(1) is so large as to cause it to be impracticable to 
join or identify each claim, the Attorney General shall not be required 
to so identify the individual recipients for which payment has been 
made, but rather can proceed to seek recovery based upon payments made 
to or on behalf of an entire class of recipients.
    (c) Rules of Evidence.--In any action brought under this section, 
the Federal Rules of Evidence shall be construed, regarding the 
introduction and probative value of evidence on the issues of causation 
and damages, in order to effectuate the purposes of this Act to the 
greatest extent possible. The issues of causation and damages in any 
such action may be proven by use of statistical analysis or 
epidemiological evidence, or both.
    (d) Share of Liability.--In any action brought under this section 
in which a third party is liable due to its manufacture, sale, or 
distribution of a tobacco product, the Attorney General shall be 
allowed to proceed under a market share theory, if the products 
involved are substantially interchangeable and substantially similar 
factual or legal issues would be involved in seeking recovery against 
each liable third party individually. In the alternative, the Attorney 
General shall be allowed to proceed under a theory of concerted action 
or enterprise liability, or both, if warranted by the facts presented 
to the court.
    (e) Distribution of Recovery.--Amounts recovered under any action 
brought under this section shall be paid to the United States and 
disposed of as follows:
            (1) In the case of amounts recovered arising out of a claim 
        under title XIX of the Social Security Act, there shall be paid 
        to each State agency an amount bearing the same proportion to 
        the total amount recovered as the State's share of the amount 
        paid by the State agency for such claim bears to the total 
        amount paid for such claim.
            (2) Such portion of the amounts recovered as is determined 
        to have been paid out of the trust funds under sections 1817 
        and 1841 of the Social Security Act shall be repaid to such 
        trust funds.
            (3) The remainder of the amounts recovered shall be 
        deposited as miscellaneous receipts of the Treasury of the 
        United States.

Summary: Medicare and Medicaid Third Party Liability Act - Authorizes the Attorney General to seek a class action recovery from tobacco product manufacturers of any payments made under the Medicare, Medicaid, veterans' health care, or any other similar Federal health care program to or on behalf of more than one recipient with a disease, illness, condition, or complication caused, in whole or in part, by the use of tobacco products.