TITLE X--COMMITTEE ON WAYS AND MEANS--MEDICARE
Subtitle I--Medical Liability Reform
"Medicare Amendments Act of 1997"
CHAPTER 1--GENERAL PROVISIONS
- SEC. 10801. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS.
- (a) Applicability.--This subtitle shall apply with respect to any health care liability action brought in any State or Federal court, except that this subtitle shall not apply to--
- (1) an action for damages arising from a vaccine-related injury or death to the extent that title XXI of the Public Health Service Act applies to the action, or
- (2) an action under the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.).
- (b) Preemption.--This subtitle shall preempt any State law to the extent such law is inconsistent with the limitations contained in this subtitle. This subtitle shall not preempt any State law that provides for defenses or places limitations on a person's liability in addition to those contained in this subtitle or otherwise imposes greater restrictions than those provided in this subtitle.
- (c) Effect on Sovereign Immunity and Choice of Law or Venue.--Nothing in subsection (b) shall be construed to--
- (1) waive or affect any defense of sovereign immunity asserted by any State under any provision of law;
- (2) waive or affect any defense of sovereign immunity asserted by the United States;
- (3) affect the applicability of any provision of the Foreign Sovereign Immunities Act of 1976;
- (4) preempt State choice-of-law rules with respect to claims brought by a foreign nation or a citizen of a foreign nation; or
- (5) affect the right of any court to transfer venue or to apply the law of a foreign nation or to dismiss a claim of a foreign nation or of a citizen of a foreign nation on the ground of inconvenient forum.
- (d) Amount in Controversy.--In an action to which this subtitle applies and which is brought under section 1332 of title 28, United States Code, the amount of noneconomic damages or punitive damages, and attorneys' fees or costs, shall not be included in determining whether the matter in controversy exceeds the sum or value of $50,000.
- (e) Federal Court Jurisdiction Not Established on Federal Question Grounds.--Nothing in this subtitle shall be construed to establish any jurisdiction in the district courts of the United States over health care liability actions on the basis of section 1331 or 1337 of title 28, United States Code.
- SEC. 10802. DEFINITIONS.
As used in this subtitle:
- (1) Actual damages.--The term "actual damages" means damages awarded to pay for economic loss.
- (2) Alternative dispute resolution system; adr.--The term "alternative dispute resolution system" or "ADR" means a system established under Federal or State law that provides for the resolution of health care liability claims in a manner other than through health care liability actions.
- (3) Claimant.--The term "claimant" means any person who brings a health care liability action and any person on whose behalf such an action is brought. If such action is brought through or on behalf of an estate, the term includes the claimant's decedent. If such action is brought through or on behalf of a minor or incompetent, the term includes the claimant's legal guardian.
- (4) Clear and convincing evidence.--The term "clear and convincing evidence" is that measure 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. Such measure or degree of proof is more than that required under preponderance of the evidence but less than that required for proof beyond a reasonable doubt.
- (5) Collateral source payments.--The term "collateral source payments" means any amount paid or reasonably likely to be paid in the future to or on behalf of a claimant, or any service, product, or other benefit provided or reasonably likely to be provided in the future to or on behalf of a claimant, as a result of an injury or wrongful death, pursuant to--
- (A) any State or Federal health, sickness, income-disability, accident or workers' compensation Act;
- (B) any health, sickness, income-disability, or accident insurance that provides health benefits 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.
- (6) Drug.--The term "drug" has the meaning given such term in section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(g)(1)).
- (7) Economic loss.--The term "economic loss" means any pecuniary loss resulting from injury (including the loss of earnings or other benefits related to employment, medical expense loss, replacement services loss, loss due to death, burial costs, and loss of business or employment opportunities), to the extent recovery for such loss is allowed under applicable State law.
- (8) Harm.--The term "harm" means any legally cognizable wrong or injury for which punitive damages may be imposed.
- (9) Health benefit plan.--The term "health benefit plan" means--
- (A) a hospital or medical expense incurred policy or certificate,
- (B) a hospital or medical service plan contract,
- (C) a health maintenance subscriber contract, or
- (D) a MedicarePlus product (offered under part C of title XVIII of the Social Security Act),
that provides benefits with respect to health care services.
- (10) Health care liability action.--
The term "health care liability action" means a civil action brought in a State or Federal court against a health care provider, an entity which is obligated to provide or pay for health benefits under any health benefit plan (including any person or entity acting under a contract or arrangement to provide or administer any health benefit), or the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product, in which the claimant alleges a claim (including third party claims, cross claims, counter claims, or distribution claims) based upon the provision of (or the failure to provide or pay for) health care services or the use of a medical product, regardless of the theory of liability on which the claim is based or the number of plaintiffs, defendants, or causes of action.
- (11) Health care liability claim.--The term "health care liability claim" means a claim in which the claimant alleges that injury was caused by the provision of (or the failure to provide) health care services.
- (12) Health care provider.--The term "health care provider" means any person that is engaged in the delivery of health care services in a State and that is required by the laws or regulations of the State to be licensed or certified by the State to engage in the delivery of such services in the State.
- (13) Health care service.--The term "health care service" means any service for which payment may be made under a health benefit plan including services related to the delivery or administration of such service.
- (14) Medical device.--The term "medical device" has the meaning given such term in section 201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h)).
- (15) Noneconomic damages.--The term "noneconomic damages" means damages paid to an individual for pain and suffering, inconvenience, emotional distress, mental anguish, loss of consortium, injury to reputation, humiliation, and other nonpecuniary losses.
- (16) Person.--The term "person" means any individual, corporation, company, association, firm, partnership, society, joint stock company, or any other entity, including any governmental entity.
- (17) Product seller.--
- (A) In general.--Subject to subparagraph (B), the term "product seller" means a person who, in the course of a business conducted for that purpose--
- (i) sells, distributes, rents, leases, prepares, blends, packages, labels, or is otherwise involved in placing, a product in the stream of commerce, or
- (ii) installs, repairs, or maintains the harm-causing aspect of a product.
- (B) Exclusion.--Such term does not include--
- (i) a seller or lessor of real property;
- (ii) a provider of professional services in any case in which the sale or use of a product is incidental to the transaction and the essence of the transaction is the furnishing of judgment, skill, or services; or
- (iii) any person who--
- (I) acts in only a financial capacity with respect to the sale of a product; or
- (II) leases a product under a lease arrangement in which the selection, possession, maintenance, and operation of the product are controlled by a person other than the lessor.
- (18) Punitive damages.--The term "punitive damages" means damages awarded against any person not to compensate for actual injury suffered, but to punish or deter such person or others from engaging in similar behavior in the future.
- (19) State.--The term "State" means each of the several States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, and any other territory or possession of the United States.
- SEC. 10803. EFFECTIVE DATE.
This subtitle will apply to any health care liability action brought in a Federal or State court and to any health care liability claim subject to an alternative dispute resolution system, that is initiated on or after the date of enactment of this subtitle, except that any health care liability claim or action arising from an injury occurring prior to the date of enactment of this subtitle shall be governed by the applicable statute of limitations provisions in effect at the time the injury occurred.
CHAPTER 2--UNIFORM STANDARDS FOR HEALTH CARE LIABILITY ACTIONS
- SEC. 10811. STATUTE OF LIMITATIONS.
A health care liability action may not be brought after the expiration of the 2-year period that begins on the date on which the alleged injury that is the subject of the action was discovered or should reasonably have been discovered, but in no case after the expiration of the 5-year period that begins on the date the alleged injury occurred.
- SEC. 10812. CALCULATION AND PAYMENT OF DAMAGES.
- (a) Treatment of Noneconomic Damages.--
- (1) Limitation on noneconomic damages.--The total amount of noneconomic damages that may be awarded to a claimant for losses resulting from the injury which is the subject of a health care liability action may not exceed $250,000, regardless of the number of parties against whom the action is brought or the number of actions brought with respect to the injury.
- (2) Joint and several liability.--In any health care liability action brought in State or Federal court, a defendant shall be liable only for the amount of noneconomic damages attributable to such defendant in direct proportion to such defendant's share of fault or responsibility for the claimant's actual damages, as determined by the trier of fact. In all such cases, the liability of a defendant for noneconomic damages shall be several and not joint.
- (b) Treatment of Punitive Damages.--
- (1) General rule.--Punitive damages may, to the extent permitted by applicable State law, be awarded in any health care liability action for harm in any Federal or State court against a defendant if the claimant establishes by clear and convincing evidence that the harm suffered was the result of conduct--
- (A) specifically intended to cause harm, or
- (B) conduct manifesting a conscious, flagrant indifference to the rights or safety of others.
- (2) Proportional awards.--The amount of punitive damages that may be awarded in any health care liability action subject to this subtitle shall not exceed 3 times the amount of damages awarded to the claimant for economic loss, or $250,000, whichever is greater. This paragraph shall be applied by the court and shall not be disclosed to the jury.
- (3) Applicability.--This subsection shall apply to any health care liability action brought in any Federal or State court on any theory where punitive damages are sought. This subsection does not create a cause of action for punitive damages. This subsection does not preempt or supersede any State or Federal law to the extent that such law would further limit the award of punitive damages.
- (4) Bifurcation.--At the request of any party, the trier of fact shall consider in a separate proceeding whether punitive damages are to be awarded and the amount of such award. If a separate proceeding is requested, evidence relevant only to the claim of punitive damages, as determined by applicable State law, shall be inadmissible in any proceeding to determine whether actual damages are to be awarded.
- (5) Drugs and devices.--
- (A) In general.--
- (i) Punitive damages shall not be awarded against a manufacturer or product seller of a drug or medical device which caused the claimant's harm where--
- (I) such drug or device was subject to premarket approval by the Food and Drug Administration with respect to the safety of the formulation or performance of the aspect of such drug or device which caused the claimant's harm, or the adequacy of the packaging or labeling of such drug or device which caused the harm, and such drug, device, packaging, or labeling was approved by the Food and Drug Administration; or
- (II) the drug is generally recognized as safe and effective pursuant to conditions established by the Food and Drug Administration and applicable regulations, including packaging and labeling regulations.
- (ii) Clause (i) shall not apply in any case in which the defendant, before or after premarket approval of a drug or device--
- (I) intentionally and wrongfully withheld from or misrepresented to the Food and Drug Administration information concerning such drug or device required to be submitted under the Federal 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 relevant to the harm suffered by the claimant, or
- (II) made an illegal payment to an official or employee of the Food and Drug Administration for the purpose of securing or maintaining approval of such drug or device.
- (B) Packaging.--In a health care liability action 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 regulations of the Secretary of Health and Human Services (including labeling regulations related to such packaging), the manufacturer or product seller of the drug shall not be held liable for punitive damages unless such packaging or labeling is found by the court by clear and convincing evidence to be substantially out of compliance with such regulations.
- (c) Periodic Payments for Future Losses.--
- (1) General rule.--In any health care liability action in which the damages awarded for future economic and noneconomic loss exceeds $50,000, a person shall not be required to pay such damages in a single, lump-sum payment, but shall be permitted to make such payments periodically based on when the damages are found likely to occur, as such payments are determined by the court.
- (2) Finality of judgment.--The judgment of the court awarding periodic payments under this subsection may not, in the absence of fraud, be reopened at any time to contest, amend, or modify the schedule or amount of the payments.
- (3) Lump-sum settlements.--This subsection shall not be construed to preclude a settlement providing for a single, lump-sum payment.
- (d) Treatment of Collateral Source Payments.--
- (1) Introduction into evidence.--In any health care liability action, any defendant may introduce evidence of collateral source payments. If any defendant elects to introduce such evidence, the claimant may introduce evidence of any amount paid or contributed or reasonably likely to be paid or contributed in the future by or on behalf of the claimant to secure the right to such collateral source payments.
- (2) No subrogation.--No provider of collateral source payments shall recover any amount against the claimant or receive any lien or credit against the claimant's recovery or be equitably or legally subrogated the right of the claimant in a health care liability action.
- (3) Application to settlements.--This subsection shall apply to an action that is settled as well as an action that is resolved by a fact finder.
- SEC. 10813. ALTERNATIVE DISPUTE RESOLUTION.
- Any ADR used to resolve a health care liability action or claim shall contain provisions relating to statute of limitations, non-economic damages, joint and several liability, punitive damages, collateral source rule, and periodic payments which are identical to the provisions relating to such matters in this subtitle.