Text: H.R.3037 — 102nd Congress (1991-1992)All Information (Except Text)

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HR 3037 IH
102d CONGRESS
1st Session
 H. R. 3037
To improve the health care delivery system and ensure access to affordable
quality health care through reduced liability costs and improved quality of
care, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
July 25, 1991
Mr. ARCHER, Mr. MICHEL (both by request), Mr. GUNDERSON, Mr. GOSS, Mr. THOMAS
of California, Mr. GALLO, Mr. SUNDQUIST, Mr. GRANDY, Mr. SCHULZE, Mr. CRANE,
and Mr. PORTER) introduced the following bill; which was referred jointly
to the Committees on the Judiciary, Energy and Commerce, and Ways and Means
A BILL
To improve the health care delivery system and ensure access to affordable
quality health care through reduced liability costs and improved quality of
care, and for other purposes.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SHORT TITLE
  This Act may be cited as the `Health Care Liability Reform and Quality of
  Care Improvement Act of 1991'.
TITLE I--FINDINGS AND PURPOSE
  SEC. 101. FINDINGS- The Congress finds that:
  (a) The Federal Government is a direct provider of health care to many
  Americans, a source of payment for the health care of a much larger number
  of Americans through Medicare, Medicaid and other programs; and a promoter
  of quality assurance efforts. As a result, the Federal Government has a
  major interest in health care issues, including the availability, cost,
  and quality of health care.
  (b) The rising costs of malpractice insurance, litigation, and liability are
  contributing significantly to increases in the cost of health care. These
  and other health care liability problems have adversely affected health
  care consumers and created tensions among the medical and legal professions,
  the insurance industry and consumers.
  (c) The fear of medical malpractice liability has caused some health care
  providers to practice unnecessary defensive medicine, adding to health
  care costs.
  (d) This fear of liability and the increased costs adversely impact the
  ability of health care professionals to continue to practice in high risk
  specialty areas and certain geographic areas of the country.
  (e) Improving the effectiveness of activities to reduce the incidence of
  health care injuries would reduce the incidence of medical malpractice as
  well as medical liability.
  (f) Improving the effectiveness of the civil judicial system would not
  only deter frivolous actions which increase health care costs but would
  result in fair and expeditious compensation for meritorious claims of
  health care malpractice.
  (g) The Federal Government is designing a pilot project, using the Federal
  Employees Health Benefits Program, to promote alternative dispute resolution
  procedures on a voluntary basis.
  SEC. 102. PURPOSE- It is the purpose of this Act to:
  (a) Provide incentives to States to enact health care liability tort reforms
  and establish alternative dispute resolution mechanisms to achieve efficient,
  costs effective and expeditious disposition of health care disputes;
  (b) Provide incentives to States to adopt quality assurance reforms to
  reduce the incidence of malpractice; and
  (c) Incorporate these reforms on the Federal level through amendments to
  the Federal Tort Claims Act.
TITLE II--HEALTH CARE LIABILITY REFORMS
  SEC. 201. DEFINITIONS- For purposes of titles II and IV:
  (a) The term `economic damages' means losses for health care facility
  and medical expenses, lost wages and income, lost employment, burial
  expenses, and other pecuniary losses incurred by an individual as a result
  of negligence in the provision of health care services as recognized by
  State law;
  (b) The term `non-economic damages' means losses for physical and emotional
  pain, suffering, physical impairment, emotional distress, mental anguish,
  disfigurement, loss of enjoyment, and loss of companionship, services,
  consortium and other non-pecuniary losses incurred by an individual as a
  result of negligence in the provision of health care services as recognized
  by State law;
  (c) The term `health care provider' means any individual and any organization
  or institution that is engaged in the delivery of health care services,
  and is required by State or Federal law or regulation to be licensed or
  certified to engage in the delivery of such health care services;
  (d) The term `health care liability action' means a civil action or
  proceeding in any judicial tribunal brought pursuant to State law against a
  health care provider, alleging that injury was suffered by the plaintiff as
  the result of any act or omission by a health care provider without regard
  to the theory of liability asserted in the action. This term excludes
  civil penalty actions by any State or State agency or officer or by the
  United States or by any Federal agency or officer;
  (e) The term `injury' means an injury, illness, disease, or other harm
  suffered by an individual as a result of the provision of health care
  services by a health care provider;
  (f) The term `State' means any State of the United States, the District
  of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands,
  American Samoa, the Northern Mariana Islands, the Trust Territories of the
  Pacific Islands, and any other territory or possession of the United States;
  (g) The term `Secretary' means the Secretary of Health and Human Services;
  and
  (h) The term `person' means any individual, corporation, company,
  association, firm, partnership, society, joint stock company, or any other
  entity, including any governmental entity.
  SEC. 202. IN GENERAL- To be eligible to participate in the incentive program
  provided for in section 209, the States shall enact, adopt, or otherwise
  have in effect no later than three years from the date of enactment of this
  Act the health care liability reforms set forth in sections 203 through 208.
  SEC. 203. JOINT AND SEVERAL LIABILITY- (a) In any health care liability
  action, the liability of each defendant for non-economic damages shall
  be several only and shall not be joint. Each defendant shall be liable
  only for the amount of non-economic damages allocated to that defendant in
  direct proportion to that defendant's percentage of fault, and a separate
  judgment shall be rendered against that defendant for that amount.
  (b) Subsection (a) shall not apply with respect to those persons
  participating in joint conduct in a common scheme by two or more persons who
  consciously and deliberately agreed to jointly participate in such conduct
  with actual knowledge of the wrongfulness of the conduct resulting in a
  tortious act and where such acts proximately caused the injury complained
  of by the plaintiff and for which one or more of such persons is found
  liable for damages.
  SEC. 204. LIMITATION ON NON-ECONOMIC DAMAGES- (a) Non-economic damages
  may not be awarded in an amount in excess of $250,000 in any health care
  liability action. The Secretary, for good cause, may waive the requirement
  of this section in determining a State's compliance with this Act pursuant
  to section 209.
  (b) For purposes of this section, in addition to the parties within the
  purview of section 201(d), `any health care liability action' includes
  all actions (including multiple actions) for damages, and includes all
  plaintiffs and all defendants in such actions, which arise out of or were
  caused by the same personal injury or death, whether or not each defendant
  is a health care provider.
  (c) COST-OF-LIVING- The amount described in subsection (a) shall be adjusted
  every three years to reflect changes in the cost-of-living index utilized
  by the Secretary in determination of adjustment in Old Age, Survivors,
  and Disability Insurance benefits. The first such adjustment shall be made
  three years after the date of the enactment of this Act.
  SEC. 205. COLLATERAL SOURCE BENEFITS- (a) Except as provided in subsection
  (c), the total amount of damages received by a plaintiff shall be reduced,
  in accordance with subsection (b), by any other payment which has been
  made or which will be made to such plaintiff to compensate such plaintiff
  for an injury, including payments under--
  (1) Federal or State disability or sickness programs;
  (2) Federal, State, or private health insurance programs;
  (3) private disability insurance programs;
  (4) employer wage continuation programs; and
  (5) any other source of payment intended to compensate such plaintiff fo
  such injury.
  (b) The amount by which an award of damages to a plaintiff for an injury
  shall be reduced under subsection (a) shall be--
  (1) the total amount of any payments (other than such award) which have
  been made or which will be made to such plaintiff to compensate such
  plaintiff for such injury, less
  (2) the cost incurred by such plaintiff (or by the spouse, parent, or legal
  guardian of such plaintiff) to secure the payments described in clause (1).
  (c) Subsection (a) shall not apply to any payment which the individual
  is required by law to repay out of any damages recovered from a negligent
  health care provider.
  SEC. 206. PERIODIC PAYMENT OF JUDGMENTS- (a) In any health care liability
  action subject to this Act in which damages for future economic damages
  are awarded, no health care provider shall be required to pay for such
  future damages in a single, lump--sum payment but shall be permitted to
  make periodic payments based on when the damages are found by the court
  to be likely to occur or at the time such damages accrue.
  (b) The court may require such health care provider to purchase an annuity
  or fund a reversionary trust to make such periodic payments, if the court
  finds a reasonable basis for concluding that the health care provider may
  be unable to or will not make the periodic payments.
  (c) The judgment of the court awarding such periodic payments may not be
  reopened at any time to contest, amend, or modify the schedule or amount
  of the payments in the absence of fraud or any ground permitting relief
  to be granted after entry of a final judgment.
  (d) This subsection shall not be construed to preclude a settlement
  providing for a single, lump-sum payment.
  SEC. 207. ALTERNATE DISPUTE RESOLUTION MECHANISMS- (a) IN GENERAL- It is
  declared to be the policy of the United States to encourage--
  (1) the creation, adoption, and use of alternative dispute resolution
  mechanisms to achieve the efficient, cost effective and expeditious
  disposition of civil disputes; and
  (2) the modification of procedural and evidentiary rules to the extent
  feasible to accommodate such alternative dispute resolution techniques.
  (b)(1) To encourage the resolution of claims prior to litigation of a
  health care liability action, the State shall establish at least one
  alternative dispute resolution mechanism. The Secretary, for the purpose
  of determining compliance under section 209, shall deem a State to be in
  compliance with the requirements of this section if the State has in effect
  at least one mediation or pretrial screening panel alternative dispute
  resolution mechanism specified in regulations issued by the Secretary in
  consultation with the Attorney General, or if the State has in effect
  another alternative dispute resolution mechanism which the Secretary,
  in consultation with the Attorney General, finds to be equally effective
  in deterring frivolous actions and resulting in fair and expeditious
  compensation for meritorious claims. The Secretary, in consultation with the
  Administrative Conference of the United States and the Attorney General,
  shall promulgate regulations that specify the Secretary's criteria for
  evaluating the effectiveness of these mechanisms.
  (2) The time period during which a proceeding pursuant to this section
  is pending shall not be included or counted in determining whether any
  statute of limitations bars a health care liability action.
  SEC. 208. QUALITY ASSURANCE REFORM-
  (a) PROMOTE STATE COOPERATION WITH FEDERAL EFFECTIVENESS RESEARCH EFFORTS-
  The State, through the appropriate health authority, shall cooperate
  with Federal research efforts with respect to patient outcomes, clinical
  effectiveness and clinical practice guidelines.
  (b) IMPROVE THE PERFORMANCE OF STATE MEDICAL BOARDS- (1) The State, through
  the appropriate health authority, shall collect, analyze and supply the
  Secretary with information and data, as specified in regulations to be
  promulgated by the Secretary, on staffing, revenue, disciplinary actions,
  expenditures, case-loads of the State Medical Board, and use of continuing
  medical education programs in order to demonstrate that the State medical
  boards meet performance criteria established by the Secretary in regulations.
  (2) The State, through the appropriate health authority, shall impose a
  requirement on the State Medical Board to require a physician disciplined
  by the State Medical Board to take a certain number of continuing education
  courses as the board requires, with educational outcome measures required,
  in the subject areas in which the board determines that the physician's
  knowledge is deficient.
  (c) ALTERNATIVE PROGRAMS- The Secretary, for purposes of determining
  compliance under section 209 of the Act, shall deem a State in compliance
  with the requirements of this section if the State has in effect,
  instead of the programs described in subsection (b), a program to reduce
  the incidence of negligence which the Secretary finds to be at least as
  effective in reducing the incidence of negligence as compliance with the
  Secretary's standards promulgated under section 208(b). The Secretary shall
  promulgate regulations that specify the Secretary's criteria for evaluating
  the effectiveness of alternatives to section 208(b), including, for example:
  (1) Requirements for risk management systems to be carried out by
  institutions providing health care in the State;
  (2) Quality assurance systems, administered by the State or professional
  bodies, which review the quality of care rendered by the physicians of
  the State; or
  (3) State programs for the promulgation of standards of care in areas of
  medical practice in which the risk of negligence is greatest and assurance
  of satisfactory levels of compliance with such standards.
  SEC. 209. STATE IMPLEMENTATION OF HEALTH CARE LIABILITY REFORMS-
  (a) IMPLEMENTATION- The States shall have three years from the effective
  date of this Act in which to enact, adopt, or otherwise comply with the
  provisions as set forth in Sections 202 through 208 of this Act.
  (b) NOTIFICATION- (1) Notification by the State shall be submitted to the
  Secretary, with a Certification by the Chief Executive Officer of the State
  that, on the date the notification is submitted, the State has enacted,
  adopted, or otherwise has in effect the health care liability reforms set
  forth in this Act.
  (2) The notification shall be accompanied by documentation to support the
  certification required by this subsection, including copies of relevant
  State statutes, rules, procedures, regulations, judicial decisions, State
  constitutional provisions, and opinions of the State Attorney General.
  (3) The Notification shall contain such other information, be in such form,
  and be submitted in such manner, as the Secretary may require.
  (c) REVIEW OF NOTIFICATION- (1) Within ninety days after receiving
  a notification under subsection (b), the Secretary shall review the
  notification and determine whether the notification demonstrates that the
  State has enacted, adopted, or otherwise has in effect the health care
  liability reforms set forth in this Act.
  (2) If the Secretary determines that the notification makes such
  demonstration, the Secretary shall approve the notification, authorizing the
  State to participate in the incentive program provided for in subsection (f).
  (3) If, after reviewing a notification under this subsection, the Secretary
  determines that the notification does not make the demonstration required
  under such subsection, the Secretary shall, within fifteen days after making
  such determination, provide the State which submitted such notification with
  a written notice specifying such determination and containing recommendations
  for revisions which would cause the notification of the State to be approved.
  (4) Within thirty days after receiving a revised notification, the Secretary
  shall review the revised notification and determine whether the notification
  demonstrates that the State has enacted, adopted, or otherwise has in effect
  the health care liability reforms set forth in this Act. If the Secretary
  determines that the revised notification makes such a demonstration, the
  Secretary shall approve the revised notification, authorizing the State
  to participate in the incentive program provided for in subsection (f).
  (d) NON-COMPLIANCE- (1) If a State fails to submit to the Secretary a
  notification or revised notification pursuant to this section, the Secretary
  shall, within fifteen days after the time period under section (b)(1)
  expires, send the State written notice of determination of non-compliance.
  (2) If, during the time period determined by the Secretary under subsection
  (c), the Secretary determines that a revised notification does not
  demonstrate that the State has enacted, adopted, or otherwise implemented
  the health care liability reforms set forth in this Act, and that the
  State's revised notification is not approved, or if a determination of
  non-compliance is made pursuant to subsection (d)(1)(A), the Secretary
  shall, within fifteen days after making such determination, provide the
  State with written notice of non-compliance, including the determination
  of the Secretary and the reasons therefor.
  (3) If, during any time period after a notification is approved under
  subsection (c), the Secretary determines that the State does not have
  currently in effect the health care liability reforms upon which the
  notification was approved, the Secretary shall within thirty days of
  making such determination provide the State with written notice of such
  determination and withdraw the approval of the notification. Such notice
  shall specify--
  (A) the determination of the Secretary and the reasons therefor;
  (B) that the Secretary will require the State, within sixty days after
  receipt of such notice, to return all funds provided to the State under
  the incentive program provided for in this Act in subsection (f) of this
  section which have not been expended by the State at the time such notice is
  received unless the State takes such corrective action as may be necessary
  to ensure that the State has such health care liability reforms in effect
  in the State and presents a certification to this effect to the Secretary
  in accordance with subsection (b).
  (e) CONSULTATION WITH THE ATTORNEY GENERAL- In making determinations of
  compliance or non-compliance pursuant to this Act, the Secretary shall
  consult with the Attorney General with respect to any issues of tort law
  or policy.
  (f) INCENTIVE PROGRAM-DISTRIBUTION OF FUNDS- The Secretary shall establish
  an administrative process to:
  (1) withhold from each State 2 percent of the amount computed under section
  1396b(a)(7) of title 42, United States Code, and from each hospital 1
  percent of the total amounts computed under section 1395ww(d)(1) of title
  42, United States Code, for each fiscal year beginning after the initial
  three-year period after the enactment of this Act; and
  (2) distribute that part of the withheld funds comprising 2 percent of the
  amount computed under section 1396b(a)(7) of title 42, United States Code,
  on a proportional basis among States whose notifications have been approved
  by the Secretary pursuant to this section, and that part of the withheld
  funds comprising 1 percent of the total amounts computed under section
  1395ww(d)(1) of title 42, United States Code on a proportional basis among
  hospitals otherwise entitled to those funds in States whose notifications
  have been approved by the Secretary pursuant to this section: `Proportional
  basis' means (i) with respect to funds withheld from amounts payable under
  section 1396b(a)(7) of title 42, United States Code, in proportion to the
  average Medicaid payments made to a State for the last three preceding
  fiscal years for which data is available to such payments to all States
  whose notifications have been approved by the Secretary, and (ii) with
  respect to funds withheld from amounts computed under section 1395ww(d)(1)
  of title 42, United States Code, in proportion to the hospital's share of
  payments made under that section to all payments to hospitals operating
  in States whose notifications have been approved by the Secretary.
  (g) CONFORMING AMENDMENTS- (1) MEDICAID- Section 1396b(a)(7) of title 42,
  United States Code is amended by adding at the end thereof the following
  sentence: `Effective the first day of the first fiscal year beginning at
  least three years after the enactment of the Health Care Liability Reform
  and Quality of Care Improvement Act of 1991, a State shall only receive
  98 percent of the amount of the payment to which it would otherwise be
  entitled under this paragraph'.
  (2) MEDICARE- Section 1395ww(d)(1) of title 42, United States Code is amended
  by adding the following sentence at the end thereof: `Effective the first day
  of the first fiscal year beginning at least three years after the enactment
  of the Health Care Liability Reform and Quality of Care Improvement Act
  of 1991, a hospital shall only receive 99 percent of the amount of the
  payment to which it would otherwise be entitled under this paragraph'.
  SEC. 210. In the case of any experimental, pilot, or demonstration project,
  as defined by regulations promulgated by the Secretary in coordination with
  the Attorney General, which, in the judgment of the Secretary, is likely
  to assist in promoting the objectives of this Act, in a State or States,
  the Secretary may waive compliance with any of the requirements in this
  title to the extent and for the period the Secretary finds necessary to
  enable such State or States to carry out such project.
TITLE III--FEDERAL IMPLEMENTATION OF HEALTH CARE LIABILITY REFORMS
  SEC. 301. Limitations on Lability-
  (1) Section 2674 of title 28, United States Code, is amended by inserting
  `(a)' at the beginning of the section, and by adding at the end of the
  section the following new subsections:
  `(b)(1) Except as provided in paragraph (2) of this subsection, in any
  health care liability action the United States shall not be found jointly and
  severally liable for non-economic damages, but shall be liable, if at all,
  only for those non-economic damages directly attributable to its pro-rata
  share of fault or responsibility for the injury, and not for non-economic
  damages attributable to the pro-rata share of fault or responsibility of
  any other person (without regard to whether that person is a party to the
  action) for the injury, including any person bringing the action.
  `(2) This subsection shall not apply as between the United States and
  any person with which it is acting in concert where the concerted action
  proximately caused the injury for which either the United States or that
  person is found liable.
  `(3) For the purposes of this subsection, `concerted action' and `acting
  in concert' mean the conscious acting together in a common scheme of two or
  more persons who consciously and deliberately agreed to jointly participate
  in such conduct with actual knowledge of the wrongfulness of the conduct
  resulting in a tortious act and where such acts proximately caused the
  injury complained of by the plaintiff and for which one or more of such
  persons is found liable for damages.
  `(c)(1) Except as provided in paragraph (3), the total amount of damages
  received by an individual shall be reduced, in accordance with paragraph
  (2), by any other payment which has been made or which will be made to
  such individual to compensate such individual for an injury, including
  payments under--
  `(i) Federal or State disability or sickness programs;
  `(ii) Federal, State, or private health insurance programs;
  `(iii) private disability insurance programs;
  `(iv) employer wage continuation programs; and
  `(v) any other source of payment intended to compensate such individual
  for such injury.
  `(2) The amount by which an award of damages to an individual for an injury
  shall be reduced under paragraph (1) shall be--
  `(i) the total amount of any payments (other than such award) which have
  been made or which will be made to such individual to compensate such
  individual for such injury, less
  `(ii) the amount paid by such individual (or by the spouse, parent, or legal
  guardian of such individual) to secure the payments described in clause (i).
  `(3) Paragraph (1) shall not apply to any payment which the individual
  is required by law to repay out of any damages recovered from a negligent
  health care provider.
  `(d)(1) No damages, other than damages for economic loss, shall be awarded
  in excess of $250,000 in any health care liability action against the
  United States.
  `(2) For purposes of this section, in addition to the parties within the
  purview of section 201(d) of the Health Care Liability Reform and Quality of
  Care Improvement Act of 1991, any `health care liability action' includes
  all actions (including multiple actions) for damages, and includes all
  plaintiffs and all defendants in such actions, which arise out of or were
  caused by the same personal injury or death, whether or not each defendant
  is a health care provider.
  `(3) COST-OF-LIVING- The amount described in subsection (a) shall be adjusted
  every three years to reflect changes in the cost-of-living index. The first
  such adjustment shall be made three years after the date of the enactment
  of this Act. For purposes of this subsection, the `cost-of-living index'
  means the cost of living index utilized by the Secretary in determination
  of adjustment in Old Age, Survivors, and Disability Insurance benefits.'.
  SEC. 302. PERIODIC PAYMENTS OF JUDGMENTS- (1) Chapter 171 of title 28,
  United States Code, is amended by adding the following new section 2681:
`Sec. 2681. Periodic payments of judgments
  `In any health care liability action subject to this chapter in which the
  damages awarded for future economic loss exceed $100,000, the court shall,
  at the request of the United States, enter an order providing that damages
  for future economic loss be paid in whole or in part by periodic payments
  based on when the damages are found likely to occur rather than by a single
  lump-sum payment. The court shall make findings of fact as to the dollar
  amount, frequency and duration of the periodic payments. The United States
  at its discretion may pay the judgment periodically or purchase an annuity
  or fund a reversionary trust for the same purpose. The judgment of the court
  shall be final, and shall not be reopened at any time to contest, amend,
  or modify the schedule or amount of such payments in the absence of fraud or
  any ground permitting relief to be granted after entry of a final judgment.'.
  (2) The table of sections of chapter 171 of title 28, United States Code,
  is amended by adding at the end thereof the following new item:
`2681. Periodic payments of judgments.'
  SEC. 303. APPLICABILITY OF AMENDMENTS-
  (a) State alternative dispute resolution procedures shall not be applicable
  to the United States.
  (b) For the purposes of title III, the term `plaintiff' means any person
  who has allegedly suffered injury from professional services provided by a
  health care provider and who brings a health care liability action or who
  brings such an action on behalf of any person who has allegedly suffered
  injury from such professional services or who brings such an action because
  a person allegedly suffered injury from such services.
  (c) The amendments made by this title shall apply to all actions filed on
  or after, and all administrative claims pending on or presented on or after,
  the date of enactment of this Act.
TITLE IV--CONSTRUCTION OF PROVISIONS
  SEC. 401. IN GENERAL- Nothing in this Act shall be construed--
  (a) To waive or affect any defense of sovereign immunity asserted by any
  State under any law or by the United States;
  (b) To preempt State choice-of-law rules with respect to claims brought
  by a foreign nation or a citizen of a foreign nation;
  (c) To affect the right of any court to transfer venue, 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) To create or vest jurisdiction in the district courts of the United
  States over any health care liability action subject to this Act (which
  is not otherwise properly in Federal district court); or
  (e) To prevent the States from enacting, adopting, or otherwise having in
  effect more comprehensive or additional health care liability reforms than
  those set forth in this Act.
  SEC. 402. SEVERABILITY- If any provision of this Act or the amendments
  made by this Act or the application of the provision to any person or
  circumstance is held invalid, the remainder of this Act and such amendments
  and the application of the provision to any other person or circumstance
  shall not be affected by that invalidation.
  SEC. 403. EFFECTIVE DATE- This Act shall become effective on its date
  of enactment.