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112th Congress                                             Rept. 112-39
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

======================================================================



 
HELP EFFICIENT, ACCESSIBLE, LOW-COST, TIMELY HEALTHCARE (HEALTH) ACT OF 
                                  2011

                                _______
                                

  May 23, 2011.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

         Mr. Upton, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                         [To accompany H.R. 5]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 5) to improve patient access to health care 
services and provide improved medical care by reducing the 
excessive burden the liability system places on the health care 
delivery system, having considered the same, report favorably 
thereon with amendments and recommend that the bill as amended 
do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     6
Committee Consideration..........................................     7
Committee Votes..................................................     7
Statement of General Performance Goals and Objectives............    18
New Budget Authority, Entitlement Authority, and Tax Expenditures    18
Earmark..........................................................    18
Committee Cost Estimate..........................................    18
Congressional Budget Office Estimate.............................    18
Federal Mandates Statement.......................................    25
Advisory Committee Statement.....................................    25
Applicability to Legislative Branch..............................    25
Section-by-Section Analysis of the Legislation...................    25
Changes in Existing Law Made by the Bill, as Reported............    29
Dissenting Views.................................................    30

    The amendments (stated in terms of the page and line 
numbers of the introduced bill) are as follows:
    Page 14, line 21, strike ``or''.
    Page 15, line 2, strike the period at the end and insert 
``; or''.
    Page 15, insert after line 2 the following:

                  (C) the defendant caused the medical product 
                which caused the claimant's harm to be 
                misbranded or adulterated (as such terms are 
                used in chapter V of the Federal Food, Drug, 
                and Cosmetic Act (21 U.S.C. 351 et seq.)).

                          PURPOSE AND SUMMARY

    H.R. 5 seeks to improve patient access to quality health 
care while reducing the overall cost of health in America.

                  BACKGROUND AND NEED FOR LEGISLATION

Introduction

    The nation's medical liability system imperils patient 
access and imposes tremendous costs on our nation. It has 
forced doctors out of practicing in certain specialties; it has 
caused trauma centers to close; it has forced pregnant women to 
drive hours to find an obstetrician. This badly broken system 
also imposes tremendous financial burdens: Americans spend over 
$200 billion every year in unnecessary ``health care'' 
costs;\1\ the Congressional Budget Office has reported to the 
Committee that comprehensive medical liability reform will save 
American taxpayers $62 billion over 10 years.\2\
---------------------------------------------------------------------------
    \2\The Congressional Budget Office document is available at the 
following link: http://www.cbo.gov/ftpdocs/1200xx/doc12085/03-10-
ReducingTheDeficit.pdf.
---------------------------------------------------------------------------
    President Obama has repeatedly cited the importance of 
medical tort reform, but nothing meaningful in this area was 
included in his signature Patient Protection and Affordable 
Care Act (PPACA), enacted on March 23, 2010.
    In sharp contrast, states like California and Texas, as 
well as others, have already enacted comprehensive medical 
liability reforms. As discussed below, enacting these reforms 
nationally will decrease the costs of defensive medicine, 
reduce medical liability fears that inhibit quality of care 
improvement, end years of Washington inaction on this recurring 
crisis, and, as shown by the states, increase patient access to 
quality care while reducing costs, including liability 
premiums.

The Costs of Defensive Medicine

    Doctors are sued at an alarming rate (by the age of 55, 61% 
of doctors have been sued)\3\ and forced to practice defensive 
medicine. In fact, a 2005 survey published in the Journal of 
the American Medical Association revealed that 93% of doctors 
said they have practiced defensive medicine and 92% said they 
made referrals to specialists and/or ordered tests or 
procedures in part to insulate themselves from medical 
liability.\4\
---------------------------------------------------------------------------
    \3\AMA's ``Medical Liability: By late career, 61% of doctors have 
been sued'': http://www.ama-assn.org/amednews/2010/08/16/pr120816.htm.
    \4\David M. Studdert, Michelle M. Mello, William N. Sage, Catherine 
M. DesRoches, Jordan Peugh, Kinga Zapert, Troyen A. Brennan, Defensive 
Medicine: Among High-Risk Specialist Physicians in a Volatile 
Malpractice Environment, 293 J. AM. MED. ASS'N 2609 (2005).
---------------------------------------------------------------------------
    Part of defensive medicine is called assurance behavior 
where a monetary value assigned. This occurs when a doctor 
orders a test or procedure where at least some of the 
motivation is to avoid being second-guessed in retrospect and 
possibly named in a medical liability suit. This is not fraud. 
Medicine is not an exact science. No doctor can tell whether 
the patient in front of them is the one who may have the rare 
clinical condition that may have been detected with an 
additional test. Faced with the possibility of a professionally 
devastating malpractice suit, many physicians will order the 
extra test. Sixty percent of malpractice cases are dropped or 
dismissed and never go to court, but it costs a doctor an 
average of $18,000 to defend against a lawsuit. Doctors are 
found not negligent in 90% of the cases that do go to trial, 
but each of these cases costs an average of $100,000 to 
defend.\5\
---------------------------------------------------------------------------
    \5\See note 5.
---------------------------------------------------------------------------
    Defensive medicine is not done to increase income. If an 
internist orders a CAT scan, the radiologist gets paid, not the 
internist.
    Medical malpractice premiums written in 2009 totaled 
approximately $10.8 billion.\6\ Indirect costs, particularly 
increased use of tests and procedures by providers to protect 
against future lawsuits (``defensive medicine''), have been 
estimated to be much higher than direct premiums.
---------------------------------------------------------------------------
    \6\NAIC, ``Countrywide Summary of Medical Malpractice Insurance, 
Calendar Years 1991-2009,'' provided to CRS on December 16, 2010.
---------------------------------------------------------------------------
    The Pacific Institute puts the cost of defensive medicine 
at some $200 billion and estimates that these additional 
liability-based medical care costs add at least 3.4 million 
Americans to the rolls of the uninsured.\7\ Nearly half of all 
medical malpractice claims do not involve injury or medical 
error. Less than 15 cents of every litigation-related dollar 
goes to those injured from medical negligence. Likewise, the 
Manhattan Institute concluded that about ten cents of every 
dollar paid for health care services goes to cover malpractice 
premiums, defensive medicine, and other costs associated with 
excessive litigation.
---------------------------------------------------------------------------
    \7\Lawrence I. McQuillan, Hovannes Ahramyan and Anthony P. Archie, 
Jackpot Justice: The True Cost of America's Tort System, Pacific 
Research Institute (Mar. 2007).
---------------------------------------------------------------------------

Medical Liability Fears Inhibit Quality of Care Improvements

    Fear of medical liability makes it more difficult to 
improve systems by making doctors reluctant to discuss and 
study errors and ``near misses'' or participate in morbidity 
and mortality conferences if the findings are ``discoverable'' 
in a malpractice claim.
    Another common myth claims that it is a small group of bad 
doctors who are responsible for most malpractice cases and the 
current medical tort system is needed or they will be free to 
repeatedly harm patients through their negligence. According to 
a 2007 analysis of National Practitioner Data Bank (NPDB) files 
by Public Citizen, ``The vast majority of doctors--82 percent--
have never had a medical malpractice payment since the NPDB was 
created in 1990. Just 5.9 percent of doctors were responsible 
for 57.8 percent of all malpractice payments since 1991, 
according to data from September 1990 through 2005. Just 2.3 
percent of doctors, having three or more malpractice payments, 
were responsible for 32.8 percent of all payments. Only 1.1 
percent of doctors, having four or more malpractice payments, 
were responsible for 20.2 percent of all payments.''\8\
---------------------------------------------------------------------------
    \8\Public Citizen, Congress Watch, The Great Medical Malpractice 
Hoax: NPDB Data Continue to Show Medical Liability System Produces 
Rational Outcomes, (January 2007). http://www.citizen.org/publications/
publicationredirect.cfm?ID=.
---------------------------------------------------------------------------
    However, Public Citizen's own report highlights the 
problem. According to the AMA Physician Practice Information 
Survey, 75.4% of cardiothoracic surgeons, 68.3% of general 
surgeons, 79.1% of neurosurgeons, 70.3% of orthopedic surgeons 
and 69.6% of OB/GYNs have been sued.\9\ The numbers don't add 
up. Either there are a lot of frivolous lawsuits or almost all 
doctors are really bad doctors. The truth is that most claims 
are meritless and do not result in a payment, yet most doctors 
have to defend themselves from these unnecessary claims at a 
substantial cost to themselves and the nation's health care 
system.
---------------------------------------------------------------------------
    \9\AMA 2007-2008 Physician Practice Information survey.
---------------------------------------------------------------------------
    The medical liability tort system does not improve quality. 
A number of studies have failed to show that the current system 
of medical liability deters medical errors or promotes patient 
safety.\10\ This has been most extensively studied in the 
specialty of obstetrics where the fear of medical liability has 
not been shown to result in fewer complications or cesarean 
sections.\11\ There is evidence, however, that fears of medical 
liability deter doctors from treating high risk patients, 
performing high risk procedures, entering high risk specialties 
and practicing in states without liability reform.
---------------------------------------------------------------------------
    \10\Mello MM, Brennan TA. Deterrence of medical errors: theory and 
evidence for malpractice reform. Texas Law Review. 2002; 80:1595-638.
    \11\A. Russell Localio, JD, MPH, MS; Ann G. Lawthers, ScD; Joan M. 
Bengtson, MD; Liesi E. Hebert, ScD; Susan L. Weaver; Troyen A. Brennan, 
MD, JD; J. Richard Landis, PhD, Relationship Between Malpractice Claims 
and Cesarean Delivery, JAMA. 1993;269(3):366-373.
---------------------------------------------------------------------------
    H.R. 5 will make it easier to promote efforts at improving 
patient safety and quality of care by allowing doctors and 
hospitals to examine the causes of medical errors and make 
systemic improvements without the fear of litigation that 
exists in states without liability reform.

A Recurring Crisis, Yet Washington Has Failed To Act

    Medical malpractice reform has surfaced as a national issue 
repeatedly over recent decades during periods of ``crisis''. A 
2004 survey found that three out of four emergency rooms had to 
divert ambulances because of a shortage of specialists due to 
medical liability issues.\12\ The evidence from states like 
California that medical liability reform works has been 
available for over three decades. Unnecessary costs and 
defensive medicine exact a negative effect on the federal 
health care programs of Medicare and Medicaid.\13\
---------------------------------------------------------------------------
    \12\Hospital Emergency Department Administration Survey, ``Federal 
Medical Liability Reform,'' 2004, the Schumacher Group, Alliance of 
Specialty Medicine, July 2005.
    \13\Under Medicare, the federal government pays a percentage of 
doctors' liability premiums through the practice expense component of 
the physician fee schedule. The federal government also incurs costs 
because of defensive medicine.
---------------------------------------------------------------------------
    President Obama has repeatedly expressed his support for 
meaningful medical liability reform. In a 2009 speech before 
the American Medical Association, the President acknowledged 
that defensive medicine leads to more tests and needless costs 
because doctors must protect themselves from frivolous 
lawsuits.\14\ Again, during a speech to a Joint Session of 
Congress in September 2009, President Obama said ``I don't 
believe malpractice reform is a silver bullet, but I've talked 
to enough doctors to know that defensive medicine may be 
contributing to unnecessary costs.''\15\ In his most recent 
State of the Union address, President Obama again included 
medical liability reform as part of his agenda.\16\
---------------------------------------------------------------------------
    \14\The text of the June 2009 speech can be found here: http://
www.whitehouse.gov/the-press-office/remarks-president-annual-
conference-american-medical-association.
    \15\The text of this address can be found here: http://
www.whitehouse.gov/the-press-office/remarks-president-a-joint-session-
congress-health-care.
    \16\In his January 25, 2011, State of the Union address, President 
Obama specifically called for ``medical malpractice reform to rein in 
frivolous lawsuits.'' On January 27, Republicans on the Committee wrote 
directly to the President seeking his leadership in crafting such 
legislation. There has been no response from the Administration.
---------------------------------------------------------------------------
    A common question from the American people is why there 
were no meaningful medical liability reform provisions in the 
health reform law. An October 2009 survey conducted by the 
Health Coalition on Liability and Access found that 69% of 
Americans wanted medical liability reform included in health 
care reform legislation.\17\ One of the most truthful answers 
came from Governor Howard Dean when he commented as follows on 
the House bill (H.R. 3200):
---------------------------------------------------------------------------
    \17\112th Congress Committee on the Judiciary Report on the ``Help 
Efficient, Accessible, Low-Cost, Timely Healthcare Act of 2011.''

        This is the answer from a doctor and a politician: 
        ``Here's why tort reform is not in the bill. When you 
        go to pass a really enormous bill like that, the more 
        stuff you put in it, the more enemies you make, right? 
        And the reason that tort reform is not in the bill is 
        because the people who wrote it did not want to take on 
        the trial lawyers in addition to everyone else they 
        were taking on. And that is the plain and simple 
        truth.''\18\
---------------------------------------------------------------------------
    \18\http://washingtonexaminer.com/blogs/beltway-confidential/2009/
08/dean-says-obamacare-authors-dont-want-challenge-trial-lawyers.
---------------------------------------------------------------------------

As Shown by the States, Comprehensive Reform Will Increase Patient 
        Access to Quality Care While Reducing Costs

    States that adopted caps saw tremendous benefits. Patients 
who are harmed are still compensated 100% for economic losses 
(anything to which a receipt can be attached), suffered as the 
result of a health care injury. California's landmark 
legislation, the Medical Injury Compensation Reform Act of 1975 
(MICRA) signed into law by Governor Jerry Brown (D), helped to 
stabilize the California medical liability insurance market. 
From 1976 through 2009, California's medical liability 
insurance premiums increased by 261% compared to a total 
increase of 945% for the other 49 states.\19\
---------------------------------------------------------------------------
    \19\The American Medical Association's written testimony for 
January 20, 2011, House Judiciary Committee hearing: http://www.ama-
assn.org/ama1/pub/upload/mm/399/ama-statement-medical-liability-reform-
2011.pdf.
---------------------------------------------------------------------------
    Additionally, Texas adopted comprehensive medical 
malpractice reform, including caps on non-economic damages, in 
2003, and these reforms have yielded remarkable outcomes, 
including an increase in new physicians, additional 
obstetricians, and reduced medical liability premiums. From 
2003 through 2009, the Texas Medical Board saw an increase of 
roughly 60% in their new physician licensure applications.\20\ 
While other states were losing obstetricians, Texas actually 
gained obstetricians. The number of obstetricians in Texas 
increased by 218 between 2002 and 2009 to a total of 2,444.\21\ 
Finally, all major physician liability carriers in Texas have 
reduced their rates resulting in nearly all Texas physicians 
having their premiums lowered by at least 30% and some by well 
over 40% since 2004.\22\
---------------------------------------------------------------------------
    \20\Texas Medical Association's ``Proposition 12 Produces Healthy 
Benefits'': http://www.texmed.org/Template.aspx?id=5238.
    \21\The chart detailing obstetricians in Texas can be found here: 
http://www.tapa.info/Downloads/Improving_Access/2010_Charts/
06_TAPA_Obstetricians.pdf.
    \22\Texas Medical Association ``Professional Liability Insurance 
Reform'': http://www.texmed.org/Template.aspx?id=780.
---------------------------------------------------------------------------
    Caps on non-economic damages do not deny injured patients 
the ability to have their cases heard. States that have enacted 
caps have not seen a significant reduction in the number of 
claims, only in the number of unpredictable and unreasonably 
large awards for pain and suffering.\23\ States that have not 
enacted reform continue to allow a few patients and their 
attorneys unlimited awards while everyone else is burdened with 
limited health care and rising costs.
---------------------------------------------------------------------------
    \23\In July 2007, a Los Angeles County Court awarded a plaintiff 
over $96 million in damages while abiding by MICRA's $250,000 cap on 
non-economic damages. www.micra.org.
---------------------------------------------------------------------------
    Twenty-eight states have enacted meaningful medical 
liability reform that includes, among other provisions, a cap 
on non-economic damages, while twenty-two states continue to 
operate within the national health care system without 
meaningful liability reform.\24\ In states with caps on non-
economic damages, liability premiums are 17% lower than they 
are in states without such caps.\25\
---------------------------------------------------------------------------
    \24\AANS/CNS PowerPoint Presentation ``The State of Medical 
Liability Reform: Successes and Challenges for the Future'', February 
19, 2010.
    \25\``The Medical Malpractice Crisis': Trends and the Impact of 
State Tort Reforms,'' Kenneth E. Thorpe, (January 21, 2004) at 20-30.
---------------------------------------------------------------------------
    In those states that have enacted meaningful reform, 
malpractice premiums are affordable, defensive medicine costs 
are lower and patients have greater access to care when and 
where they need it. For example, two thorough studies that used 
national data on Medicare populations concluded that states 
with medical litigation reforms saw an average reduction of 
4.3% in hospital costs for patients in managed care 
programs.\26\ This is not the case in states that have refused 
to enact meaningful reform.
---------------------------------------------------------------------------
    \26\Daniel P. Kessler and Mark B. McClellan, ``Medical Liability, 
Managed Care, and Defensive Medicine,'' National Bureau of Economic 
Research (NBER) Working Paper 7537 (February 2000) at 16.
---------------------------------------------------------------------------
    In states without liability reform, the system does not 
serve anyone except trial lawyers. Injured patients are not 
compensated in a timely or equitable way. They are forced to 
wade through several years of litigation and receive, on 
average, only 46 cents of every dollar awarded while the 
remaining 54 cents goes to their lawyers and other 
administrative fees.\27\
---------------------------------------------------------------------------
    \27\NEJM ``Claims, Errors, and Compensation Payments in Medical 
Malpractice Litigation.'': http://www.nejm.org/doi/full/10.1056/
NEJMsa054479.
---------------------------------------------------------------------------
    State reforms show that comprehensive medical liability 
reform, like H.R. 5, will improve patients' access to quality 
care while reducing the overall cost of health care in America.

                                HEARINGS

    On April 6, 2011, the Subcommittee on Health held a hearing 
entitled, ``The Cost of the Medical Liability System and 
Proposals for Reform, including H.R. 5, the Help Efficient, 
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011.'' 
At the hearing, the Subcommittee examined the nation's medical 
liability system and approaches for reform. The Subcommittee 
received testimony from: Lisa M. Hollier, MD, MPH, Fellow, 
American College of Obstetricians and Gynecologists; Allen B. 
Kachalia, MD, JD, Harvard Medical School; Troy M. Tippett, MD, 
Past President, American Association of Neurological Surgeons; 
Joanne Doroshow, Executive Director, The Center for Justice and 
Democracy; and, Brian Wolfman, JD, Visiting Professor, 
Georgetown University Law Center.

                        COMMITTEE CONSIDERATION

    On May 10-11, 2011, the Full Committee met in open markup 
session and favorably ordered H.R. 5 reported to the House, as 
amended, by a roll call vote, a quorum being present. The 
Committee received only a time-limited, additional referral on 
this legislation.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
following are the recorded votes taken on amendments offered to 
the measure, including the names of those Members voting for 
and against. A motion by Mr. Upton to order H.R. 5 reported to 
the House, as amended, was agreed to by a roll call vote.


         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    The goal of H.R. 5 is to improve patient access to quality 
health care by reducing the excessive burdens the medical 
liability system places on the health care delivery system.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
5, the Help Efficient, Accessible, Low-Cost, Timely Healthcare 
(HEALTH) Act of 2011, would result in no new or increased 
budget authority, entitlement authority, or tax expenditures or 
revenues.

                                EARMARK

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI, 
the Committee finds that H.R. 5 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974.
                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 23, 2011.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5, the Help 
Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act 
of 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Tom Bradley.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 5--Help Efficient, Accessible, Low-cost, Timely Healthcare 
        (HEALTH) Act of 2011

    Summary: H.R. 5 would impose limits on medical malpractice 
litigation in state and federal courts by capping awards and 
attorney fees, modifying the statute of limitations and the 
``collateral source'' rule, and eliminating joint and several 
liability.
    CBO expects that those changes would, on balance, lower 
costs for health care both directly and indirectly: directly, 
by lowering premiums for medical liability insurance; and 
indirectly, by reducing the use of health care services 
prescribed by providers when faced with less pressure from 
potential malpractice suits. Those reductions in costs would, 
in turn, lead to lower spending in federal health programs and 
to lower private health insurance premiums.
    Because employers would pay less for health insurance for 
employees, more of their employees' compensation would be in 
the form of taxable wages and other fringe benefits. As 
discussed below, the bill also would increase revenues because 
it would result in lower subsidies for health insurance. In 
total, CBO and the staff of the Joint Committee on Taxation 
(JCT) estimate that enacting H.R. 5 would increase federal 
revenues by almost $10 billion over the 2012-2021 period.
    Enacting H.R. 5 would reduce federal direct spending for 
Medicare, Medicaid, the government's share of premiums for 
annuitants under the Federal Employees Health Benefits (FEHB) 
program, and other federal health benefits programs. CBO 
estimates that direct spending would decline by about $48 
billion over the 2012-2021 period.
    Because enacting the legislation would affect direct 
spending and revenue, pay-as-you-go procedures apply. In total, 
CBO estimates that enacting H.R. 5 would reduce deficits by 
almost $14 billion over the 2011-2016 period and by about $57 
billion over the 2012-2021 period.
    Federal spending for active workers participating in the 
FEHB program is included in the appropriations for federal 
agencies, and is therefore discretionary. H.R. 5 would also 
affect discretionary spending for health care services paid by 
the Departments of Defense (DoD) and Veterans Affairs (VA). CBO 
estimates that implementing H.R. 5 would reduce discretionary 
spending by about $2 billion over the 2012-2021 period, 
assuming appropriations actions consistent with the 
legislation.
    H.R. 5 contains an intergovernmental mandate as defined in 
the Unfunded Mandates Reform Act (UMRA) because it would 
preempt state laws that provide less protection for health care 
providers and organizations from liability, loss, or damages 
(other than caps on awards for damages). CBO estimates the cost 
of complying with the mandate would be small and would fall 
well below the threshold established in UMRA for 
intergovernmental mandates ($71 million in 2011, adjusted 
annually for inflation).
    H.R. 5 contains several mandates on the private sector, 
including caps on damages and on attorney fees, a more 
restrictive statute of limitations, and the fair share rule. 
The cost of those mandates would exceed the threshold 
established in UMRA for private-sector mandates ($142 million 
in 2011, adjusted annually for inflation) in four of the first 
five years in which the mandates were effective, rising to $1.4 
billion per year in 2016, and totaling $3.3 billion over the 
2012-2016 period.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5 is shown in the following table. The 
costs of this legislation fall with multiple budget functions, 
primarily 550 (health) and 570 (Medicare).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 By fiscal year, in billions of dollars--
                                                 -------------------------------------------------------------------------------------------------------
                                                   2012    2013    2014    2015    2016    2017    2018    2019    2020     2021    2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   CHANGES IN REVENUES

Estimated Revenues:
    On-budget...................................       *     0.1     0.3     0.6     0.8     0.9     1.0     1.0     1.1       1.2        1.8        7.0
    Off-budget..................................       *       *     0.1     0.2     0.3     0.3     0.3     0.4     0.4       0.4        0.7        2.5
                                                 -------------------------------------------------------------------------------------------------------
        Total...................................       *     0.1     0.4     0.8     1.1     1.2     1.3     1.4     1.5       1.6        2.5        9.6

                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority......................    -0.1    -0.5    -1.8    -3.6    -5.3    -6.2    -6.7    -7.3    -7.9      -8.4      -11.3      -47.8
Estimated Outlays...............................    -0.1    -0.5    -1.8    -3.6    -5.3    -6.2    -6.7    -7.3    -7.9      -8.4      -11.3      -47.8

                                NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN REVENUES AND DIRECT SPENDING

Impact on the Deficit:
    On-budget...................................    -0.1    -0.6    -2.1    -4.2    -6.1    -7.1    -7.7    -8.3    -9.0      -9.6      -13.1      -54.8
    Off-budget..................................       *       *    -0.1    -0.2    -0.3    -0.3    -0.3    -0.4    -0.4      -0.4       -0.7       -2.5
                                                 -------------------------------------------------------------------------------------------------------
        Total...................................    -0.1    -0.6    -2.2    -4.4    -6.4    -7.4    -8.0    -8.7    -9.4     -10.0      -13.8      -57.4

                                                      CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...................       0       *    -0.1    -0.1    -0.2    -0.2    -0.2    -0.3    -0.3      -0.3       -0.4       -1.6
Estimated Outlays...............................       0       *    -0.1    -0.1    -0.2    -0.2    -0.2    -0.3    -0.3      -0.3       -0.4       -1.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Components may not add to totals because of rounding.
* = increase in revenues, reduction in spending, or reduction in deficits of less than $50 million.

    Basis of estimate: H.R. 5 would establish:
     A three-year statute of limitations for medical 
malpractice claims, with certain exceptions, from the date of 
discovery of an injury;
     A cap of $250,000 on awards for noneconomic 
damages;
     A cap on awards for punitive damages that would be 
the larger of $250,000 or twice the economic damages, and 
restrictions on when punitive damages may be awarded;
     Replacement of joint-and-several liability with a 
fair-share rule, under which a defendant in a lawsuit would be 
liable only for the percentage of the final award that was 
equal to his or her share of responsibility for the injury;
     Sliding-scale limits on the contingency fees that 
lawyers can charge;
     A safe harbor from punitive damages for products 
that meet applicable FDA safety requirements; and
     Permission to introduce evidence of income from 
collateral sources (such as life insurance payouts and health 
insurance) at trial.
    Over the 2012-2021 period, CBO and the staff of the Joint 
Committee on Taxation estimate that enacting H.R. 5 would 
reduce direct spending by about $48 billion and increase 
federal revenues by almost $10 billion. The combined effect of 
those changes in direct spending and revenues would reduce 
federal deficits by $57 billion over that period, with changes 
in off-budget revenues accounting for about $3 billion of that 
reduction in deficits. (Because those estimates assume 
enactment of H.R. 5 near the end of fiscal year 2011, no 
budgetary effects are expected in that year.)
    In addition, CBO estimates that implementing H.R. 5 would 
reduce discretionary spending for the FEHB program, DoD, and VA 
by about $2 billion over the 2012-2021 period.

Effects on National Spending for Health Care

    CBO reviewed recent research on the effects of proposals to 
limit costs related to medical malpractice (``tort reform''), 
and estimates that enacting H.R. 5 would reduce national health 
spending by about 0.5 percent.\1\ That figure comprises a 
direct reduction in spending for medical liability premiums and 
an additional indirect reduction from slightly less utilization 
of health care services. CBO's estimate takes into account the 
fact that, because many States have already implemented some 
elements of H.R. 5, a significant fraction of the potential 
cost savings has already been realized. Moreover, the estimate 
assumes that the reduction of about 0.5 percent would be 
realized over a period of four years, as providers gradually 
change their practice patterns.
---------------------------------------------------------------------------
    \1\See Congressional Budget Office, letter to the Honorable Orrin 
G. Hatch regarding CBO's Analysis of the Effects of Proposals to Limit 
Costs Related to Medical Malpractice, (October 9, 2009). http://
www.cbo.gov/ftpdocs/106xx/doc10641/10-09-Tort_Reform.pdf.
---------------------------------------------------------------------------

Revenues

    CBO estimates that private health spending would be reduced 
by about 0.5 percent. Much of private-sector health care is 
paid for through employment-based insurance that represents 
nontaxable compensation. In addition, beginning in 2014, 
refundable tax credits will be available to certain individuals 
and families to subsidize health insurance purchased through 
new health insurance exchanges. (The portion of those tax 
credits that exceed taxpayers' liabilities are classified as 
outlays, while the portions that reduce taxpayers' liabilities 
are recorded as reductions in revenues.)
    Lower costs for health care arising from enactment of H.R. 
5 would lead to an increase in taxable compensation and a 
reduction in subsidies for health insurance purchased through 
an exchange. Those changes would increase federal tax revenues 
by an estimated $9.6 billion over the 2012-2021 period, 
according to estimates by JCT. Social Security payroll taxes, 
which are off-budget, account for $2.5 billion of that increase 
in federal revenues.

Direct Spending

    CBO estimates that enacting H.R. 5 would reduce direct 
spending for Medicare, Medicaid, the Children's Health 
Insurance Program, the Federal Employees Health Benefits 
program, the Defense Department's TRICARE for Life program, and 
subsidies for enrollees in health insurance exchanges by 
roughly $48 billion over the 2012-2021 period.
    For programs other than Parts A and B of Medicare, the 
estimate assumes that federal spending for acute care services 
would be reduced by about 0.5 percent, in line with the 
estimated reductions in the private sector.
    CBO estimates that the reduction in federal spending for 
services covered under Parts A and B of Medicare would be 
larger--about 0.7 percent--than in the other programs or in 
national health spending in general. That estimate is based on 
empirical evidence showing that the impact of tort reform on 
the utilization of health care services is greater for Medicare 
than for the rest of the health care system.\2\
---------------------------------------------------------------------------
    \2\One possible explanation for that disparity is that the bulk of 
Medicare's spending is on a fee-for-service basis, whereas most private 
health care spending occurs through plans that manage care to some 
degree. Such plans limit the use of services that have marginal or no 
benefit to patients (some of which might otherwise be provided as 
``defensive'' medicine), thus leaving less potential for savings from 
the reduction of utilization in those plans than in fee-for-service 
systems.
---------------------------------------------------------------------------

Spending Subject to Appropriation

    CBO estimates that implementing H.R. 5 would reduce federal 
spending for health insurance for federal employees covered 
through the FEHB program by about 0.5 percent--in line with the 
estimated reductions in the private sector--and would reduce 
spending for health insurance and health care services paid for 
by the Departments of Defense and Veterans Affairs by lesser 
amounts. CBO expects that the impact on those agencies would be 
proportionally smaller than the impact on overall health 
spending because medical malpractice costs are already lower 
than average for entities covered by the Federal Tort Claims 
Act. In CBO's estimation, the cost of health insurance and 
health care services funded through appropriation acts would be 
reduced by $1.6 billion over the 2012-2021 period.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table. Only on-budget changes to outlays or revenues 
are subject to pay-as-you-go procedures.

                               CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 5, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ENERGY AND COMMERCE ON MAY 11, 2011
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             By fiscal year, in millions of dollars--
                                                                --------------------------------------------------------------------------------------------------------------------------------
                                                                  2011    2012      2013      2014      2015      2016      2017      2018      2019      2020      2021    2011-2016  2011-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      NET INCREASE OR DECREASE (-) IN THE ON-BUDGET DEFICIT

Statutory Pay-As-You-Go Impact.................................      0      -108      -593    -2,112    -4,186    -6,131    -7,105    -7,672    -8,331    -9,002    -9,574    -13,129    -54,814
Memorandum:
    Direct spending............................................      0      -100      -500    -1,800    -3,600    -5,300    -6,200    -6,700    -7,300    -7,900    -8,400    -11,300    -47,800
    Revenues...................................................      0         8        93       312       586       831       905       972     1,031     1,102     1,174      1,829      7,014
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on State, local, and tribal governments:

Intergovernmental Mandates

    The bill contains an intergovernmental mandate because it 
would preempt state laws that would prevent the application of 
any provision of the bill; however, it would not preempt any 
State law that provides greater protections for health care 
providers and organizations from liability, loss, or damages. 
While the preemption would limit the application of State and 
local laws, CBO estimates that it would not impose significant 
costs and would fall well below the threshold established in 
the Unfunded Mandates Reform Act for intergovernmental mandates 
($71 million in 2011, adjusted annually for inflation).

Other Impacts

    A decline in health care spending is expected to result in 
a decrease in rates for health insurance premiums. State, 
local, and tribal governments, as employers, would save money 
as a result of lower health insurance premiums precipitated by 
the bill. State, local, and tribal governments that collect 
income taxes also would realize increased tax revenues as a 
result of increases in workers' taxable income. State spending 
in Medicaid would decrease by over $4 billion over the 2012-
2016 period, with additional savings in the subsequent years.
    Estimated impact on the private sector: H.R. 5 contains 
several mandates on the private sector, because it would limit 
the amount of compensatory damages that a plaintiff can 
receive.
    Compensatory damages are paid to compensate a claimant for 
loss, injury, or harm suffered by a defendant's breach of duty. 
Laws that directly limit the right of plaintiffs to be 
compensated for losses that they incurred as a result of a 
defendant's wrongful acts impose a mandate.
    Applying this standard, the cap on non-economic damages, 
the statute of limitations, and the fair-share rule included in 
H.R. 5 would be considered mandates on the private sector, as 
defined by UMRA, because they would limit the ability of some 
claimants to recover the entire amount of compensatory damages 
that could be collected under current law. In addition, the cap 
on attorney fees is a mandate because it limits the fees that 
attorneys might otherwise be able to collect from their 
clients. The cost of those mandates would exceed the threshold 
established in UMRA for private-sector mandates ($142 million 
in 2011, adjusted annually for inflation) in four of the first 
five years in which the mandates were effective, rising to $1.4 
billion per year in 2016, and totaling $3.3 billion over the 
2012-2016 period.
    Previous CBO estimate: On March 10, 2011, CBO transmitted a 
cost estimate for the HEALTH Act as ordered reported by the 
House Committee on the Judiciary on February 16, 2011. The 
version of H.R. 5 approved by the Committee on Energy and 
Commerce would permit the introduction of evidence of income 
from collateral sources at trial. The version approved by the 
Committee on the Judiciary did not contain that provision. 
Differences in the CBO cost estimates primarily reflect that 
difference in the bills.
    Estimate prepared by: Federal Costs: Tom Bradley, Stuart 
Hagen, and Kirstin Nelson; Impact on State, Local, and Tribal 
Governments: Lisa Ramirez-Branum; Impact on the Private Sector: 
Stuart Hagen.
    Estimate approved by: Holly Harvey, Deputy Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Authority Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    Section 1 establishes the short title of the bill as the 
``Help Efficient, Accessible, Low Cost, Timely Healthcare 
(HEALTH) Act of 2011.''

Section 2. Findings and purpose

    Section 2 states the findings and purpose of the bill.

Section 3. Encouraging speedy resolution of claims

    Section 3 states that a health care lawsuit shall be 
commenced 3 years after the date of manifestation of injury or 
1 year after the claimant discovers, or through the use of 
reasonable diligence should have discovered, the injury, 
whichever occurs first. In no event shall the time for 
commencement of a health care lawsuit exceed 3 years after the 
manifestation of injury unless tolled for any of the following: 
(1) upon proof of fraud; (2) intentional concealment; or (3) 
the presence of a foreign body, which has no therapeutic or 
diagnostic purpose or effect, in the person of the injured 
person. There is an exception for alleged injuries sustained by 
a minor before the age of 6, in which case a health care 
lawsuit may be commenced by or on behalf of the minor until the 
later of 3 years from the date of manifestation of injury, or 
the date on which the minor attains the age of 8. This time 
period is tolled for minors for any period during which a 
parent or guardian and a health care provider or health care 
organization have committed fraud or collusion in the failure 
to bring an action on behalf of the injured minor. The 
Committee does not intend the term injury to include business 
injuries. The manifestation of injury occurs when the damaging 
effect becomes known. The discovery of injury occurs when the 
damaging effect becomes known and the claimant suspects it was 
caused by wrongdoing.

Section 4. Compensating patient injury

    Section 4 sets forth new guidelines regarding patients' 
ability to recover for certain types of damages. Subsection 
4(a) provides that in any health care lawsuit, nothing in this 
Act shall limit a claimant's recovery for the full amount of 
available economic damages, notwithstanding the limitation in 
subsection (b). Under subsection 4(b), there can be no more 
than $250,000 in non-economic damages with respect to the same 
injury.
    The cap in this section can apply separately to each party 
with a direct personal injury. For example, if there is a 
single class-action lawsuit where a drug manufacturer sold 
drugs that were taken by several individuals and those 
individuals suffered adverse events, each of those individuals 
could receive up to $250,000 in non-economic damages. 
Similarly, if a pregnant mother and her baby sustain physical 
injuries during an operation and a health care provider is 
found liable, then the mother and the baby could each recover 
damages up to the cap permitted in subsection 4(b).
    Subsection 4(c) makes clear that courts should apply the 
$250,000 cap for non-economic damages without calculations that 
include discounting to present value. Whether a given award 
below the cap involves discounting, however, remains a function 
of separate state and Federal law. Juries will not be informed 
about the maximum award for non-economic damages.
    Subsection 4(d) provides that each party shall be liable 
for the amount of damages allocated to such party. This 
allocation shall be determined in direct proportion to such 
party's percentage of responsibility for the damages. The 
Committee notes that this subsection does not override 
principles of vicarious liability. Furthermore, the ``fair 
share'' rule only applies when a judgment of liability is 
rendered.

Section 5. Maximizing patient recovery

    Section 5 requires that courts supervise the arrangements 
for payment of damages to protect against conflicts of 
interests. This section also establishes a sliding fee schedule 
for the payment of attorneys' contingency fees. Payments are 
allocated as follows: 40 percent of the first $50,000 recovered 
by the claimant; 33\1/3\ percent of the next $50,000 recovered 
by the claimant; 25 percent of the next $500,000 recovered by 
the claimant; and 15 percent of any amount by which the 
recovery by the claimant(s) is in excess of $600,000.
    The requirements for court supervision in the first 
paragraph do not apply outside of judicial proceedings. Thus, 
disputes settled prior to filing a lawsuit would not 
necessitate court supervision. The sliding fee schedule, by 
contrast, applies in all cases.

Section 6. Additional health benefits

    Section 6 ensures that, in any health care lawsuit 
involving injury or wrongful death, a party may introduce 
evidence of collateral source benefits received, or reasonably 
likely to be received, from other parties. This section also 
restricts a provider of collateral source benefits from 
subrogating a claimant's recovery or obtaining any lien or 
credit against the claimant's damage award.

Section 7. Punitive damages

    Section 7 specifies guidelines for awarding punitive 
damages. Under this section, punitive damages may be awarded, 
if otherwise permitted by applicable state or Federal law, 
against any person in a health care lawsuit. The amount of 
punitive damages awarded may be as high as two times the amount 
of economic damages awarded or $250,000, whichever amount is 
greater.
    This section does not permit juries to be informed of the 
formula for calculating punitive damages. Moreover, punitive 
damages may only be awarded if it is first proven by clear and 
convincing evidence that a defendant acted with malicious 
intent to injure the claimant, or that such person deliberately 
failed to avoid unnecessary injury that such person knew the 
claimant was substantially certain to suffer. This section 
states that no demand for punitive damages shall be included in 
a health care lawsuit as initially filed. Further, punitive 
damages in healthcare lawsuits may not be awarded if 
compensatory damages are not awarded.
    Paragraph 7(c)(1) shields manufacturers and distributors of 
medical products from punitive damages in certain instances. 
The provision is intended to shield those companies that are 
fully compliant with all Federal Food, Drug, and Cosmetic Act 
(FFDCA) laws and regulations (in the case of biological medical 
products, full compliance with the FFDCA and section 351 of the 
Public Health Service Act (PHSA) is required)). The FFDCA 
ensures the safety and effectiveness of drugs, devices, and 
biological products, all of which are covered by this section. 
Unless a claimant can demonstrate by clear and convincing 
evidence a lack of compliance with any FFDCA or PHSA section 
351 law or regulation, then a manufacturer, distributor or 
supplier is shielded from punitive damages. All other damages, 
if proven, are still available to the claimant.
    Under paragraph 7(c)(1), if a claimant can prove by clear 
and convincing evidence that a manufacturer, distributor or 
supplier has not complied with the FFDCA or section 351 of the 
PHSA, the claimant must then further prove that the harm 
attributed to the medical product resulted from the proven 
compliance failure. A technical violation of the Act that is 
wholly unrelated to the harm will not remove the shield 
provided for in this section. Rather, punitive damages will 
only be available to claimants who prove both a violation of 
the Act or regulations, and then draw the nexus between failed 
compliance and harm.
    Paragraph 7(c)(1) applies to medical products, as defined 
in section 9. Included in this definition are nonprescription, 
over-the-counter (OTC) drugs. Some OTC drugs are marketed after 
approval of a new drug application (NDA) or abbreviated new 
drug application (ANDA). Some OTC drugs are also marketed 
pursuant to monographs or tentative final monographs 
promulgated by the Agency. While a final monograph is a 
regulation, a tentative final monograph represents the Agency's 
current position on the requirements for safe and effective 
labeling, formulation and marketing of the OTC drug product. In 
some instances, tentative final monographs have been in 
existence for decades, yet have never been finalized. Companies 
follow these so-called ``tentative'' monographs and deliver 
safe and effective drug products. The Committee believes that 
the mere fact that the FDA has not taken the last step to 
finalize monographs in existence for decades should not 
preclude a manufacturer, distributor or supplier of such 
products from claiming the protections afforded by section 
7(c).
    Subsection 7(c) does not create an affirmative obligation 
on the part of the FDA to demonstrate compliance or 
noncompliance for the purposes of private litigation. The 
section also revokes the shield for persons: (1) who knowingly 
misrepresent information to the FDA or withhold information 
from the FDA; or (2) who bribe government officials for the 
purpose of obtaining approval of medical products. At the 
markup, the Committee adopted an amendment by Mr. Dingell that 
provides another exception to this shield. Under the amendment, 
a defendant could be liable for punitive damages if the 
defendant caused the medical product, which caused the 
claimant's harm, to be misbranded or adulterated. The Committee 
notes that term ``misbranding'' includes mislabeling and the 
term ``adulterated'' includes storing medical products at the 
incorrect temperature. The Committee also notes that a court or 
trier of fact may make the determination as to whether a 
product is misbranded or adulterated. There need not be an FDA 
determination.
    Paragraph 7(c)(2) prohibits a health care provider who 
prescribes, or who dispenses pursuant to a prescription, a 
medical product that is approved by the FDA from being named as 
a party in a product liability lawsuit. Nothing in the 
paragraph prevents a court from consolidating cases involving 
health care providers and cases involving products liability 
claims.

Section 8. Authorization of payment of future damages to claimants in 
        health care lawsuits

    Section 8 requires the court, at the request of any party, 
to order that the award of future damages equaling or exceeding 
$50,000 be paid by periodic payments.

Section 9. Definitions

    Section 9 defines many of the terms included in the 
legislation. The term ``health care lawsuit'' does not include 
a claim or action which is based on criminal liability; which 
seeks civil fines or penalties paid to Federal, State or local 
government; which is grounded in antitrust; or in which the 
dispute is over the price of health care goods or services. The 
latter exclusion addresses cases concerning price-fixing or 
over charging, not cases involving personal injury. Finally, 
the Committee intends the term ``health care goods and 
services'' to include those involving ``the assessment or care 
of the health of human beings.'' Such terms include the 
monitoring, supervision, and provision of direct assistance to 
claimants.

Section 10. Effect on other laws

    Section 10 states that this legislation does not apply to 
civil actions brought for a vaccine-related injury or death 
which is covered under provisions of the Public Health Service 
Act. It also states that nothing in the Act should affect any 
defense available to a defendant in a health care lawsuit or 
action under any other provision of federal law.

Section 11. State flexibility and protection of state's rights

    Section 11 specifies many of the rules governing the 
relationship between the HEALTH Act and state and Federal laws. 
Specifically, subsection 11(a) provides that provisions 
governing health care lawsuits outlined in the legislation 
preempt state law to the extent that state law prevents the 
application of these provisions. The legislation also 
supersedes the Federal Tort Claims Act (FTCA) to the extent 
that the FTCA provides for a greater amount of damages or 
contingent fees, a longer period in which a health care lawsuit 
may be commenced, or a reduced application of periodic payments 
of future damages. The FTCA is also superseded if it prohibits 
the introduction of evidence regarding collateral source 
benefits, or mandates or permits subrogation or a lien on 
collateral source benefits.
    Under subsection 11(b), if an issue is not addressed by a 
provision of law established by this legislation, it shall be 
governed by otherwise applicable state or Federal law. The 
subsection further states that the Act does not preempt or 
supersede any law that imposes greater procedural or 
substantive protections for health care providers and health 
care organizations from liability, loss, or damages.
    Subsection 11(c) states that this legislation does not 
preempt any state law (enacted before, on, or after the date of 
enactment of H.R. 5) that specifies a particular amount of 
compensatory or punitive damages (or the total amount of 
damages) that may be awarded in a health care lawsuit. The 
subsection also provides that the Act does not preempt any 
defense available to a party in a health care lawsuit under any 
other provision of state or Federal law.
    Finally, the Committee notes the interrelationship of a 
number of provisions of H.R. 5. H.R. 5 does not create a cause 
of action or provide for a remedy or recovery that is not 
available or permitted under other provisions of applicable 
law. Moreover, any protections, defenses, or restrictions that 
are legally enforceable or available under contracts would 
still apply. Before applying the provisions of H.R. 5, courts 
should first review the law applicable to the appropriate claim 
or cause of action without reference to H.R. 5. Courts should 
then apply the limitations of H.R. 5 where appropriate.

Section 12. Applicability; effective date

    Section 12 states that the provisions of the legislation 
apply to any health care lawsuit brought in Federal or state 
court, or subject to alternative dispute resolutions system, 
that is initiated on or after the date of the enactment of the 
Act, except that any health care lawsuit arising from an injury 
occurring prior to the date of the enactment of the Act is 
governed by the applicable statute of limitations provision in 
effect at the time the injury occurred.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                            DISSENTING VIEWS

    We, the undersigned members of the Committee on Energy and 
Commerce, oppose the passage of H.R. 5, the Help Efficient, 
Accessible Low-cost Timely Healthcare (HEALTH) Act of 2011, a 
bill to reform the nation's medical malpractice liability 
system. Accordingly, we submit the following comments to 
express our concerns about this profoundly flawed and deeply 
divisive legislation.

                              Introduction

    H.R. 5, the Help Efficient, Accessible, Low-cost, Timely 
Healthcare (HEALTH) Act of 2011,\1\ should not and will not 
become law. And for good reason. It is one-sided. It will not 
``fix'' the problems it purports to address. And in one-fell 
swoop, it completely up-ends literally centuries of state law. 
Pure and simple--and contrary to the argument put forth by the 
bill's leading sponsor, H.R. 5 is not ``meaningful [medical 
malpractice] reform.\2\
---------------------------------------------------------------------------
    \1\Hereinafter cited as the HEALTH Act.
    \2\Rep. Phil Gingrey, The HEALTH Act: A Real Reform Option (online 
at: http://gingrey.house.gov/News/DocumentSingle.aspx?DocumentID-240791 
(accessed on May 19, 2011).
---------------------------------------------------------------------------
    This is not to suggest that medical malpractic not a 
problem in this country. It is. On this point members on all 
sides of the issue agree.\3\ But it is also complex and 
complicated and therefore, deserving of a very thoughtful and 
measured response. H.R. 5 is anything but that.
---------------------------------------------------------------------------
    \3\See, e.g., remarks of Rep. Frank Pallone (p. 12); Rep. Joe Pitts 
(p. 18); and Rep. Michael Burgess (p. 29) during the full Committee 
markup of H.R. 5 (House Committee on Energy and Commerce, Markup on 
H.R. 5, HEALTH Act of 2011, 112th Cong. (May 10, 2011) (transcript of 
the proceeding) and Ranking Member Henry Waxman (House Committee on 
Energy and Commerce, Markup on H.R. 5, HEALTH Act of 2011, 112th Cong., 
p. 21 (May 11, 2011) (transcript of the proceeding).
---------------------------------------------------------------------------
    Congresses of the past share this belief. Indeed, since the 
107th Congress, legislation identical or similar to H.R. 5 has 
repeatedly failed to reach the president's desk.\4\ Most 
recently, the text of H.R. 5 was rejected in the form of the 
motion to recomit\5\ offered by the Republicans at the 
conclusion of the House debate on the Affordable Care Act 
(ACA).\6\ Its failure to become law under Democratic or 
Republican congresses and presidents alike is itself a verdict 
on its merits and efficacy.
---------------------------------------------------------------------------
    \4\House Committee on the Judiciary, HEALTH Act of 2011, Dissenting 
Views, 112th Cong., p. 88 (Mar. 17, 2011) (H. Rept. No. 112-39, Part 
1).
    \5\Common Sense Health Care Reform and Affordability Act, H. Amdt. 
510, 111th Cong. (2009) (offered by Minority Leader John Boehner as a 
substitute amendment to H.R. 3963, the Affordable Health Care for 
America Act).
    \6\The ACA is comprised of two public laws, P.L. 111-148 and P.L. 
111-152.
---------------------------------------------------------------------------
    We do not believe the case has been made for this House, 
for this Congress or for this President to follow a different 
course of action. While the current state-based system for 
dealing with medical malpractice is far from perfect, in our 
view, it is the framework through which appropriate 
modifications and improvements should be developed and 
implemented. A ``one-size-fits-all'' approach--the very vision 
of H.R. 5--not only tears this system down; it also imposes 
upon the states, a new, unified, and untested legal structure 
with little regard for the potential consequences.
    There are many particulars in the bill and the arguments of 
its advocates to which we object. The views expressed here 
focus only on those specifics that received extensive attention 
during the Committee's consideration of the legislation:
     the mis-representation of the California law upon 
which H.R. 5 is supposedly based;
     the bill's wholesale preemption of state medical 
malpractice law;
     its broad and expansive scope that goes beyond 
traditional medical malpractice; and
     its unparalleled protections for manufacturers of 
drugs and medical devices approved by the Food and Drug 
Administration (FDA).
    As such, and in recognition of both the thorough and 
thoughtful analysis of all aspects of the legislation by the 
Committee on the Judiciary minority members and our shared 
jurisdiction over H.R. 5, we incorporate by reference herein 
the dissenting views included in the report filed by the 
Corrittee on the Judiciary on H.R. 5 by members of that 
Committee who oppose the bill.\7\ We concur in those views and 
stand with these colleagues in wholly rejecting this 
legislation.
---------------------------------------------------------------------------
    \7\House Committee on the Judiciary, HEALTH Act of 2011, Dissenting 
Views, 112th Cong., pp. 88-120 (Mar. 17, 2011) (H. Rept. No. 112-39, 
Part 1).
---------------------------------------------------------------------------

                        Background and Overview

    A medical malpractice claim is an allegation of harm or 
injury caused by a health care provider. A medical malpractice 
lawsuit is a civil (i.e., non-criminal) action in which an 
individual making such an allegation seeks damages against 
those health care providers the individual believes is legally 
responsible or liable for the harm or injury that has occurred. 
Medical malpractice liability arises when a health care 
provider engages in negligence or an intentional wrongdoing.\8\ 
``The general difference between an action based in negligence 
and one based in intentional tort [wrongdoing] is that a 
`medical procedure poorly performed might constitute 
negligence, while a medical proced correctly performed that was 
not consented to might constitute an intentional tort.'''\9\
---------------------------------------------------------------------------
    \8\See Garner, BA (editor-in-chief), Black's Law Dictionary (9th 
ed. 2009), (``malpractice: medical malpractice'') (available online at: 
http://www.westlaw.com); and Keeton, WP, Dobbs, DB, Keeton, RE, and 
Owen, DG, Prosser and Keeton on Torts (5th ed. 2004), pp. 185-187 (West 
Group, Hornbook Series).
    \9\Congressional Research Service, Medical Malpractice Liability 
Reform: Legal Issues and 50-State Surveys on Tort Reform Proposals, 
Rept. No. R411661, P. 2 (Mar. 28, 2011).
---------------------------------------------------------------------------
    Traditionally, the principals of medical malpractice 
liability and the procedures for the conduct of medical 
malpractice lawsuits have been governed by state law.\10\ In 
fact, it has always been that way.
---------------------------------------------------------------------------
    \10\Id. at Summary.
---------------------------------------------------------------------------
    Periodically, however, Congress has engaged in a debate 
about various aspects of medical malpractice, generally in 
response to sharply rising medical malpractice insurance 
premiums for physicians as well as reports of activities 
strongly associated with such increases--the difficulty of 
doctors in some specialties obtaining any malpractice coverage 
at all and the decision of many physicians to leave the 
practice of medicine altogether because the insurance they 
could secure was too expensive.\11\ Reform the system and 
premium charges will subsequently fall, resulting in good 
things for doctors, for their patients, and for the nation's 
health care bill--so the argument has gone. This flawed logic 
apparently failed to sway past Congresses, which chose not to 
act upon it.
---------------------------------------------------------------------------
    \11\Congressional Research Service, Medical Malpractice: Background 
and Legislation in the 112th Congress, Rept. No. R41693, p. 1 (Apr. 26, 
2011).
---------------------------------------------------------------------------
    Sponsors of the HEALTH Act have put forth the same 
defective reasoning, stating that H.R. 5 ``will . . . bring 
down the cost of medical malpractice insurance which will 
reduce the overall cost of health care in this country,''\12\ 
and making lower malpractice insurance premiums one of the 
driving forces behind the legislation.\13\ Yet, data indicate 
that today, the overall medical liability insurance market is 
not in crisis.\14\ They also show it is the direct regulation 
of insurance companies--and not a cap on non-economic damages 
(one of the core elements of H.R. 5)--that is responsible for 
the reductions in insurance premiums that have been seen.\15\
---------------------------------------------------------------------------
    \12\Remarks of Rep. Phil Gingrey, House Committee on Energy and 
Commerce, Markup on H.R. 5, HEALTH Act of 2011, 112th Cong., p. 151 
(May 11, 2011) (transcript of the proceeding).
    \13\HEALTH Act, Section (2)(b)(2).
    \14\Congressional Research Service, Medical Malpractice: Background 
and Legislation in the 112th Congress, Rept. No. R41693, p. 1 (Apr. 26, 
2011); Testimony of Joanne Doroshow, Executive Director, Center for 
Justice & Democracy, House Committee on Energy and Commerce, Hearing on 
the Cost of the Medical Liability System Proposals for Reform, 
Including H.R. 5, HEALTH Act of 2011, 112th Cong., p. 25 (Apr. 6, 2011) 
(transcript of the proceeding).
    \15\This is precisely what happened in the state of California. 
After the state's cap on non-economic damages for medical malpractice 
cases was enacted in 1975 as part of MICRA, malpractice premium rates 
rose by some 450%. They only dropped in 1988 when state Proposition 103 
was passed, setting up a state regulatory process for insurance rates. 
(Testimony of Joanne Doroshow, Executive Director, Center for Justice & 
Democracy, House Committee on Energy and Commerce, Hearing on the Cost 
of the Medical Liability System Proposals for Reform, Including H.R. 5, 
HEALTH Act of 2011, 112th Cong., p. 51 (Apr. 6, 2011) (transcript of 
the proceeding)).
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    Nor is there compelling evidence that the HEALTH Act will 
achieve the other major goals articulated by its 
advocates\16\--to eliminate the practice of so-called defensive 
medicine;\17\ to ``put the focus back on patients'';\18\ and to 
significantly reduce health care costs.\19\
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    \16\HEALTH Act, Section (2)(b).
    \17\Congressional Research Service, Medical Malpractice: Background 
and Legislation in the 112th Congress, Rept. No. R41693, pp. 4-5; 7 
(Apr. 26, 2011); Testimony of Allen B. Kachalia, MD, JD, Medical 
Director, Brigham and Women's Hospital (p. 34) and Joanne Doroshow, 
Executive Director, Center for Justice & Democracy (p. 70), House 
Committee on Energy and Commerce, Hearing on the Cost of the Medical 
Liability System Proposals for Reform, Including H.R. 5, HEALTH Act of 
2011, 112th Cong., (Apr. 6, 2011) (transcript of the proceeding).
    \18\Rep. Phil Gingrey, The HEALTH Act: A Real Reform Option (online 
at: http://gingrey.house.gov/News/DocumentSingle.aspx?DocumentID=240791 
(assessed on May 19, 2011). See Testimony of Allen B. Kachalia, MD, JD, 
Medical Director, Brigham and Women's Hospital, House Committee on 
Energy and Commerce, Hearing on the Cost of the Medical Liability 
System Proposals for Reform, Including H.R. 5, HEALTH Act of 2011, 
112th Cong., p. 34 (Apr. 6, 2011) (transcript of the proceeding). See 
also the 2009 letter to Senator Orrin Hatch from the Congressional 
Budget Office (CBO) on the effects of medical malpractice reform in 
which CBO stated that ``. . . imposing limits on [the right to sue for 
damages that result from negligent health care] might be expected to 
have a negative impact on health outcomes.'' (Letter from Douglas W. 
Elmendorf, Director, Congressional Budget Office to Senator Orrin G. 
Hatch, p. 5 (Oct. 9, 2009) (online at: http:cbo.gov/ftpdocs/106xx/
doc10641/10-09-Tort_Reform.pdf)
    \19\Congressional Research Service, Medical Malpractice: Background 
and Legislation in the 112th Congress, Rept. No. R41693, pp. 4-5 (Apr. 
26, 2011).
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    Despite the poor prognosis for success of the approach 
taken by H.R. 5, and as previously acknowledged, we believe 
medical malpractice is a very real and significant concern that 
requires appropriate attention. Malpractice insurance premiums 
remain high in some parts of the country.\20\ And the justice 
system does not always work as it should. Many legitimate 
malpractice cases are never filed and when they are, in some 
instances, severely injured individuals do not receive just 
compensation; in others, damages appear to be excessive.\21\ 
These issues can and should be addressed in the proper forum.
---------------------------------------------------------------------------
    \20\See e.g., Testimony of Troy M. Tippetts, MD, Past President, 
American Association of Neurological Surgeons, House Committee on 
Energy and Commerce, Hearing on the Cost of the Medical Liability 
System Proposals for Reform, Including H.R. 5, HEALTH Act of 2011, 
112th Cong., p. 115-116 (Apr. 6, 2011) (transcript of the proceeeding); 
and comments of Rep. Tim Murphy during the full Committee markup of 
H.R. 5 (Remarks of Rep. Tim Murphy, House Committee on Energy and 
Commerce, Markup on H.R. 5, HEALTH Act of 2011, 112th Cong., p. 43 (May 
11, 2011) (transcript of the proceeding)).
    \21\Testimony of Allen B. Kachalia, MD, JD, Medical Director of 
Quality and Safety, Brigham and Women's Hospital, House Committee on 
Energy and Commerce, Hearing on the Cost of the Medical Liability 
System Proposals for Reform, Including H.R. 5, HEALTH Act of 2011, 
112th Cong., p. 32 (Apr. 6, 2011) (transcript of the proceeding).
---------------------------------------------------------------------------
    But beyond all this lies the root problem of medical 
malpractice--medical errors. As summarized succinctly by 
Congressional Research Service experts, ``medical errors can 
lead to injury, and injury is the medical basis on which a 
malpractice claim is made.''\22\ Such mistakes appear to be at 
an all-time high. For example, a recent study from the leading 
journal Health Affairs indicates that the number of confirmed 
serious, adverse events occurring in hospitalized patients is 
at least ten times higher than previously reported, with such 
events taking place in one-third of hospital admissions.\23\
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    \22\Congressional Research Service, Medical Malpractice: Background 
and Legislation in the 112th Congress, Rept. No. R41693, p. 6 (Apr. 26, 
2011).
    \23\Classen DC, Resar R, Griffin F, Federico F, Frankel T, Kimmel 
N, Whittington JC, Frankel A, Seger A and James BC, `Global Trigger 
Tool' Shows That Adverse Events in Hospitals May Be Ten Times Greater 
Than Previously Measured, Health Affairs, 30, No. 4 (2011):581-589.
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    H.R. 5 makes no attempt to address this fundamental issue. 
Shockingly, other than improving the exchange of information, 
reducing medical errors and improving patient care is not even 
listed among the purposes of the legislation.\24\ Moreover, 
proponents of the HEALTH Act specifically rejected an amendment 
to the bill offered at the full Committee markup that would 
have included the achievement of these goals in that section of 
the bill.\25\ This makes no sense given that experts on all 
sides of the malpractice issue agree: We must address medical 
mismanagement as part of any fundamental reform of our health 
care system.\26\
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    \24\HEALTH Act, Section 2(b).
    \25\House Committee on Energy and Commerce, Markup on H.R. 5, 
HEALTH Act of 2011, 112th Cong., pp. 201-207; 229-237 (amendment 
offered by Rep. Ed Towns) (May 11, 2011) (transcript of the 
proceeding).
    \26\``Reform should address how well the malpractice system 
improves the quality of care that we provide. After all, this is one of 
the system's main goals.'' (Testimony of Allen B. Kachalia, MD, JD, 
Medical Director of Quality and Safety, Brigham and Women's Hospital, 
House Committee on Energy and Commerce, Hearing on the Cost of the 
Medical Liability System Proposals for Reform, Including H.R. 5, HEALTH 
Act of 2011, 112th Cong., p. 33 (Apr. 6, 2011) (transcript of the 
proceeding)).
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    The Affordable Care Act takes on this challenge. It 
includes several provisions designed to improve patient safety 
and reduce unnecessary medical errors.\27\ The Administration 
has already begun to use these authorities to address patient 
safety in a significant fashion.\28\ When fully implemented and 
evaluated, theses types of measures are expected to have a 
positive impact on the medical malpractice situation as it 
exists today.
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    \27\See, e.g., ACA Section 2702 (Medicaid payment adjustment for 
Health care-acquired conditions); Section 3001 (hospital value-based 
purchasing program); Section 3008 (Medicare payment adjustment for 
conditions acquierd in hospitals; Section 3011 (national strategy to 
improve health care quality); Section 3012 (interagency working group 
on health care quality); Section 3013 (quality measure development); 
Section 3014 (quality measurement); Section 3015 (quality data 
collection, public reporting); Section 3021 (Center for Medicare and 
Medicaid Innovation); Section 3025 (hospital readmissions reduction 
program); Section 3026 (community-based care transitions program); 
Section 3501 (health care delivery system research; quality improvement 
technical assistance); Section 3503 (medication management services in 
treatment of chronic disease); and Section 3508 (demonstration program 
to integrate quality improvement and patient safety training into 
clinical eduction of health professionals).
    \28\For a description of these initiatives, see HHS, Partnership 
for Patients: Better Care, Lower Costs (Apr. 12, 2011) (online at: 
http://www.healthcare.gov/news/factsheets/partnership04122011a.html).
---------------------------------------------------------------------------
    In the meantime and in recognition of the immediate desire 
to address a number of medical malpractice concerns, the ACA 
also provides $50 million for demonstration projects to allow 
states to develop, implement and evaluate alternatives to 
current malpractice litigation practices and procedures.\29\ 
The Department of Health and Human Services (HHS) is now in 
process of awarding those grants. In addition, the President's 
budget proposal for FY 2012 calls for $100 million in state 
medical malpractice demonstration projects (followed by $50 
million for each of FY 2013 through FY 2015) to be administered 
by the Department of Justice in consultation with HHS.\30\ This 
demonstration project approach to malpractice reform has also 
been endorsed by a recent study on behalf of the Medicare 
Payment Advisory Commission (MedPAC).\31\
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    \29\ACA, Section 10607.
    \30\Office of Management and Budget, Exc. Office of the President, 
Budget of the United States Government, Fiscal Year 2012, p. 191 
(online at: http://www.whitehouse.gov/omb/budget/Overview/).
    \31\Mello MM, Kachalia A, Evaluation of Options for Medical 
Malpractice System Reform, MedPAC, No. 10-2 (Apr. 2010).
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    We believe these efforts, combined with those designed to 
improve patient outcomes, form the basis for real and truly 
meaningful medical malpractice reform that can have a 
substantial impact on health care costs. They should be given 
every opportunity to proceed and succeed. As currently 
structured, H.R. 5 cannot produce same results. In our view, 
then, once again, the legislation should be turned back and 
aside.

                          H.R. 5 Is Not MICRA

    Since its introduction, proponents of the HEALTH Act have 
suggested that it is modeled on the Medical Injury Compensation 
Reform Act (MICRA),\32\ medical malpractice legislation that 
was enacted in California in 1975.\33\ At best, this is an 
unintentional misreading of the California law; at worse, it is 
an attempt to mislead members into believing that a vote for 
H.R. 5 is a vote for MICRA. As the plain language of H.R. 5 
makes clear, this is simply not true.
---------------------------------------------------------------------------
    \32\MICRA is codified at different sections within the California 
Code. See Cal. Business and Professions Code, Section 6146; Cal. Civil 
Code, Sections 3333.1 and 3333.2; and Cal. Code of Civil Procedure, 
Section 667.7.
    \33\See e.g., Internal Memorandum from Committee Staff to Members 
of the House Committee on Energy and Commerce, Full Committee Markup on 
May 10-11, 2011, p. 5., in which Committee staff state: ``H.R. 5 
mirrors the provisions of MICRA . . .'' and comments of Rep. Joe Pitts 
during the full Committee markup of H.R. 5. (Remarks of Rep. Joe Pitts, 
House Committee on Energy and Commerce, Markup on H.R. 5, HEALTH Act of 
2011, 112th Cong., pp. 18-19 (May 10, 2011) (transcript of the 
proceeding).
---------------------------------------------------------------------------
    The differences between MICRA and H.R. 5 on a number of key 
issues are stark and important:
     MICRA applies only to cases involving a doctor, a 
nurse, or a hospital (and similar health care providers).
    The Health Act is breathtaking in its scope. Its 
provisions--including caps on non-economic and punitive 
damages--cover all ``healthcare lawsuits,'' providing 
protections not only for physicians and hospitals, but also for 
nursing homes, insurance companies, health maintenance 
organizations, medical device manufacturers, and pharmaceutical 
companies.\34\ This approach goes far beyond what is typically 
contemplated as a medical malpractice case.
---------------------------------------------------------------------------
    \34\HEALTH Act, Section 9(9).
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     MICRA applies only to cases of professional 
negligence and not other causes of action.
    H.R. 5 takes in all ``health care liability actions . . . 
regardless of the theory of liability'' on which a lawsuit is 
based.\35\ This includes cases of intentional wrongdoing--cases 
in which a patient does not consent to a medical or health care 
service--as well as negligence.
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    \35\HEALTH Act, Section 9(8).
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     MICRA does not include any limitations on claims 
brought against pharmaceutical and medical device companies.
    Except in rare instances, the HEALTH Act provides complete 
immunity from punitive damages to manufacturers of drugs and 
devices that have been approved by the FDA or that are 
generally recognized as being safe and effective in accordance 
with FDA standards.\36\ Such blanket immunity is virtually 
unprecedented.\37\
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    \36\HEALTH Act, Section 7(c).
    \37\Generally speaking, punitive damages cannot be assessed against 
vaccine manufacturers under the National Vaccine Injury Compensation 
Program (established in Title 21 of the Public Health Service Act) in 
those vaccine injury cases in which an injured person rejects 
compensation and elects to file a lawsuit in court. However, as 
discussed in these views on the issue of states' rights, we believe the 
Compensation Program is a unique and special initiative, completely 
distinguishable from the HEALTH Act.
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     MICRA does not cap punitive damages or require 
special action before punitive damages can be awarded.
    H.R. 5 includes a cap on punitive damages--$250,000 or 
twice the amount of non-economic damages, whichever is 
greater.\38\ Moreover, H.R. 5 establishes special procedures 
and conditions that must be met before punitive damages can be 
sought in a lawsuit,\39\ making it far more difficult for such 
damages to be awarded.
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    \38\HEALTH Act, Section 7(b)(2).
    \39\HEALTH Act, Section 7(a).
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     MICRA restricts its limitations on attorney 
contingency fees only to cases brought against health care 
providers.
    The HEALTH Act imposes limits on contingency fees for 
attorneys involved in a much broader spectrum cases, including 
those in which a claim is brought against a pharmaceutical or 
medical device manufacturer.\40\ Such limits, in effect, create 
hurdles for an injured party to obtain the best possible legal 
representation.
---------------------------------------------------------------------------
    \40\HEALTH Act, Section 5.
---------------------------------------------------------------------------
    These dramatic differences between the two pieces of 
legislation--along with others--illustrate just how misguided 
and deceptive it is to assert that H.R. 5 is a MICRA look-
alike. Moreover, these distinctions highlight the extreme 
nature of H.R. 5. Indeed, the HEALTH Act not only goes far 
beyond what is covered and considered by MICRA; it is, in fact, 
a constellation of reforms that when taken together in a single 
package, constitutes a radical transformation of the nation's 
tort system and not simply medical malpractice reform. Such 
transformation is neither necessary nor warranted and certainly 
is not what MICRA stands for.

                 H.R. 5 Is an Assault on States' Rights

    At its core, H.R. 5 is a wholesale refutation of the 
federalist approach to medical malpractice liability under 
which states have traditionally developed their own law and 
established their own rules to govern these kinds of cases.\41\ 
Every state is affected by the legislation and, despite 
suggestions to the contrary, no state will be able to keep its 
current malpractice law intact.\42\
---------------------------------------------------------------------------
    \41\States have traditionally set their own rules and procedures 
for dealing with other health-related matters, e.g., licensure of 
medical professionals and the regulation of health insurance.
    \42\``I have heard or been briefed that Section 11 [state 
flexibility] of H.R. 5 does protect the states' rights, but if you read 
it, it is extremely restrictive, and most states that have medical 
liability or medical malpractice reform laws will have this federal law 
supersede it. Read Section 11. It is a one size fits all.'' (Remarks of 
Rep. Lee Terry, House Committee on Energy and Commerce, Markup on H.R. 
5, HEALTH Act of 2011, 112th Cong., p. 26 (May 10, 2011) (transcript of 
the proceeding)).
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    Such action is troubling on many fronts. Of greatest 
concern perhaps--beyond the bill's direct and unjustified 
attack on states' rights--is the magnitude of what is 
contemplated under the legislation.
    In one form or another, all 50 states have addressed the 
issue of medical malpractice liability and no two states have 
come out in exactly the same place. Instead, each has developed 
a process and set of procedures for medical malpractice cases 
that best meet the needs of its citizens and own legal system. 
Thus, for example, some states have enacted caps on damages in 
malpractice cases; other states have laws or even 
constitutional provisions that specifically prohibit them. The 
same can be said for many of the other reforms included in the 
HEALTH Act such as those related to joint and several 
liability, statutes of limitations, attorney contingency fees, 
and periodic payments for awards.\43\
---------------------------------------------------------------------------
    \43\Congressional Research Service, Medical Malpractice Liability 
Reform: Legal Issues and 50-State Surveys on Tort Reform Proposals. 
Rept. No. R41661 (Mar. 29, 2011).
---------------------------------------------------------------------------
    No state, however, has attempted to capture every action 
against ``a health care provider, a health care organization, 
or the manufacturer, distributor, supplier, marketer, promoter, 
or seller of a medical product, regardless of the theory of 
liability on which the claim is based''\44\ under the umbrella 
of a single medical malpractice reform initiative. No state, 
then--not a single one--has in place the ``new world'' 
malpractice order set out in H.R. 5.
---------------------------------------------------------------------------
    \44\HEALTH Act, Section 9(7).
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    The sweep of H.R. 5 is simply stunning. In short, advocates 
of the HEALTH Act would have the federal government strike down 
the medical malpractice law of all 50 states\45\ and replace it 
with their own, uniform, first-of-a-kind version of what that 
law should be. It comes as no surprise, then, that the bi-
partisan National Conference of State Legislatures strongly 
opposes the legislation and concludes that ``federal 
malpractice legislation is unnecessary.''\46\
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    \45\The HEALTH Act allows for only two exceptions under which state 
law would not be preempted: (a) state law that provides greater 
procedural or substantive protections for health care providers and 
organizations than those found in H.R. 5 (HEALTH Act, Section 
11(b)(2)); and (b) state law that specifies an exact dollar figure for 
a cap on either non-economic or punitive damages; such figures would 
remain untouched, regardless of their amount (HEALTH Act, Section 
11(c)). The former demonstrates the one-sided approach of the HEALTH 
Act--state laws that protect health care providers and organizations 
are preserved while state laws that protect patients and consumers are 
tossed out.
    \46\Letter from Assemblyman William Home (NV) and Rep. Jerry Madden 
(TX), National Conference of State Legislatures, to Rep. Joe Pitts and 
Rep. Frank Pallone (Apr. 4, 2011) (online at: http://
www.ncsl.orgdefault.aspx?tabid=22497).
---------------------------------------------------------------------------
    The inconsistency of this vision cannot go unmentioned. By 
and large, proponents of H.R. 5 are the very same members who 
have staunchly spoken out in favor of states rights--at times 
even with respect to medical malpractice law.\47\ Yet, in this 
instance, they have squarely turned their backs on this 
principle. This reincarnation is stunning as well.\48\
---------------------------------------------------------------------------
    \47\See, e.g., the debate over the amendment offered by Rep. Tammy 
Baldwin during the full Committee mark up of H.R. 5. The text of that 
amendment reads: ``Nothing in this Act shall be construed to modify or 
preempt any substantive or procedural state law governing medical 
malpractice or medical liability cases or to impair state authority 
regarding legal standards or procedures used in medical malpractice or 
medical product liability cases.'' This language is identical to that 
found in Section 2(c) of H.R. 816, Provider Shield Act of 2011, 
introduced by Rep. Phil Gingrey, the primary sponsor of H.R. 5, in 
February 2011. Yet Rep. Gingrey, along with two other co-sponsors of 
H.R. 816, Reps. Tim Murphy and Michael Burgess--as well as all other 
proponents of the HEALTH Act--voted against the Baldwin amendment. 
(House Committee on Energy and Commerce, Markup on H.R. 5, HEALTH Act 
of 2011, 112th Cong., pp. 6-65 (amendment offered by Rep. Tammy 
Baldwin) (May 11, 2011) (transcript of the proceeding)). All of these 
members went on to reject a narrower amendment to carve out and 
preserve only state constitutional provisions that address medical 
malpractice liability. (House Committee on Energy and Commerce, Markup 
on H.R. 5, HEALTH Act of 2011, 112th Cong., pp. 66-88 (amendment 
offered by Rep. John Barrow) (May 11, 2011) (transcript of the 
proceeding)). During the markup, Rep. Lee Terry emphasized how support 
for H.R. 5 is inconsistent with support for states rights: ``It seems 
ironic to me that as someone who passionately opposed the 
nationalization of our health care based on the fact that this was 
extreme federalism and usurps states' rights that now, because it is 
politically expedient for us on this side of the aisle, that we are now 
engaging in that same philosophical conduct.'' (Remarks of Rep. Lee 
Terry, House Committee on Energy and Commerce, Markup on H.R. 5, HEALTH 
Act of 2011, 112th Cong., p. 26 (May 10, 2011) (transcript of the 
proceeding)). Rep. Terry's point is underscored in an op-ed piece 
against H.R. 5, penned by Professor Randy Barnett of Georgetown 
University Law Center at the very time this Committee report is being 
filed. Professor Barnett is a well-known and ardent opponent of the ACA 
who has twice this year testified against the law before Congress, co-
authored the National Federation of Independent Business's amicus brief 
on the constitutionality of the Act for the 11th Circuit Court of 
Appeals, and has appeared with Republicans to promote its repeal. In 
his op-ed piece, Professor Barnett states:
---------------------------------------------------------------------------
      But tort law--the body of rules by which persons seek 
      damages for injuries to their person and property--has 
      always been regulated by the states, not the federal 
      government. Tort law is at the heart of what is called the 
      `police power' of states . . . Indeed, if Congress can now 
      regulate tort law, which has always been at the core of 
      state powers, then Congress, and not the states, has a 
      general police power. . . . While I strongly support 
      reforming our malpractice laws to protect honest doctors 
      from false claims and out-of-control state juries, this 
      reform must come at the state level, as it has in recent 
      years. Constitutional law professors have long cynically 
      ridiculed a `fair-weather federalism' that is abandoned 
      whenever it is inconvenient to someone's policy 
      preferences. If House Republicans ignore their pledge to 
      America to assess the Constitution themselves, and invade 
      the powers `reserved for the states' affirmed by the Tenth 
      Amendment, they will prove my colleagues right.
---------------------------------------------------------------------------
    Barnett, R. Tort Reform and the GOP's Fair-Weather Federalism, 
Washington Examiner (May 21, 2011). It is also noteworthy that during 
Committee consideration of H.R. 5, one proponent of the bill pointed to 
the efforts of Mississippi Governor Haley Barbour in enacting a 
``comprehensive tort reform law that has significantly reshaped our 
[Mississippi] medical liability system'' as a model Congress should 
``emulate.'' (Remarks of Rep. Gregg Harper, House Committee on Energy 
and Commerce, Markup on H.R. 5, HEALTH Act of 2011, 112th Cong., p. 47 
(May 10, 2011) (transcript of the proceeding)). Yet Governor Barbour is 
on record before the Committee in opposing federal legislation that 
would preempt state medical malpractice law. (Committee on Energy and 
Commerce, Hearing on the Consequences of Obamacare: Impact on Medicaid 
and State Health Care Reform, 112th Cong., p. 111 (Mar. 1, 2011) 
(transcript of the proceeding)).
    \48\We are compelled to comment as well on the inconsistency 
concerning the assertions of H.R. 5 advocates regarding the bill's 
constitutional authority. They cite Article I, Section 8, Clause 3 of 
the Constitution as the basis for the bill, stating that ``health-care 
related lawsuits are activities that affect interstate commerce'' and 
argue that such lawsuits contribute to the high costs of health care. 
(Statement of Rep. Phil Gingrey, Congressional Record, H434 (Jan. 24, 
2011)). Yet, for the past two years, supporters of the HEALTH Act have 
argued precisely the opposite with respect to the ACA--that its 
provisions violate the Constitution's Commerce Clause even though, they 
too, are designed to address the high costs of health care.
---------------------------------------------------------------------------
    HEALTH Act proponents cite two statutes in support of their 
federalist approach to medical malpractice reform\49\--the 
Federal Torts Claim Act (FTCA)\50\ and the National Childhood 
Vaccine Injury Act\51\--as examples of congressional 
intervention in medical malpractice liability. We submit at 
neither law is on point.
---------------------------------------------------------------------------
    \49\See, e.g., the comments of Rep. Brian Bilbray (pp. 23-24); Rep. 
Phil Gingrey (p. 25); and Rep. Bill Cassidy (pp. 31-32) on this point 
during the full Committee markup. (House Committee on Energy and 
Commerce, Markup on H.R. 5, HEALTH Act of 2011, 112th Cong., (May 11, 
2011) (transcript of the proceeding)).
    \50\United States Code, Title 28, Chapter 171.
    \51\Public Health Service Act, Title 21, Subtitle 2.
---------------------------------------------------------------------------
    Enacted in 1946, the FTCA was established to provide a 
mechanism through which the federal government could be sued 
and held liable for damages in civil or tort actions. (Until 
then, under our traditional common law borrowed from the 
British, the government enjoyed sovereign immunity, meaning 
that it could never be held liable for claims, regardless of 
its degree of culpability.) The FTCA partially waives the 
government's sovereign immunity by authorizing civil suits 
(with some exceptions) to be brought against the United States 
and making federal employees acting within the scope of their 
employment immune from liability--that is, it makes the United 
States liable for torts of its employees to the extent private 
employers are liable under state law for the torts of their 
employees.
    In contrast to the HEALTH Act, the FTCA does not create 
federal tort law; it simply makes the federal government 
subject to state tort law. The law of the state in which the 
misconduct occurs governs both the substantive and procedural 
aspects of FTCA cases.
    Congress can, however, place limitations on its waiver of 
sovereign immunity. It has, for example, not waived sovereign 
immunity for punitive damages so no individual can collect such 
damages from the federal government. Under the FTCA 
specifically, Congress has capped attorney fees and requires 
that individuals seeking redress against the federal government 
first file an administrative claim with the appropriate federal 
agency before bringing a lawsuit in federal court. But once 
that lawsuit is initiated, state law will fully apply, 
including state law regarding the award of non-economic 
damages.\52\ Under H.R. 5, a completely different set of 
rules--those established under the legislation--would be used 
instead.\53\
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    \52\The following example illustrates how the FTCA interacts with 
state law. A doctor employed by a federally-qualified health center in 
Delaware commits medical malpractice on one of the center's patients. 
Since the doctor is a federal employee, the patient cannot sue either 
the health center or the doctor directly, but can file a claim against 
the federal government under the procedures set forth in the FTCA. 
Under those procedures, the patient must first file an administrative 
claim with HHS. If the patient is not satisfied with the determination 
made by HHS, she may then file a medical malpractice cause of action 
against the government in the U.S. District Court of Delaware. That 
action will be based on Delaware state law which does not cap non-
economic damages.
    \53\See HEALTH Act, Section 9(8), which defines ``health care 
liability action'' to include malpractice cases brought in federal as 
well as state court. Moreover, the HEALTH Act specifically supersedes 
provisions of the FTCA related to damages, attorney contingency fees, 
statutes of limitations, and periodic payments of awards. (HEALTH Act, 
Section 11(a).)
---------------------------------------------------------------------------
    The National Childhood Vaccine Injury Act does not work 
either as a justification for H.R. 5. Created in 1986, this 
statute established a new ``no-fault'' system to compensate 
individuals who have been injured by vaccines routinely 
administered to children. Unlike H.R. 5, the scope of this law 
is quite narrow and targeted. It was enacted to address two 
very specific and overriding concerns with which the federal 
government has a direct interest: ``(a) the inadequacy--from 
both the perspective of vaccine-injured persons as well as 
vaccine manufacturers--of the [then current] approach to 
compensating those who have been damaged by a vaccine; and (b) 
the instability and unpredictability of the childhood vaccine 
market.\54\ As discussed in our Introduction to these 
dissenting views, we do not believe supporters of H.R. 5 have 
made the same kind of compelling argument to rationalize direct 
federal intervention into the issue of medical malpractice 
liability. Nor do we believe that the legislation is designed 
to adequately address that problem.
---------------------------------------------------------------------------
    \54\House Committee on Energy and Commerce, National Childhood 
Vaccine Injury Act of 1986, 99th Cong., p. 7 (Sept. 26, 1986) (H. Rept. 
99-908, Part 1).
---------------------------------------------------------------------------
    But beyond their differences in purpose and scope is the 
primary substantive distinction between H.R. 5 and the vaccine 
compensation law. Under the National Childhood Vaccine Injury 
Act, injured patients who meet the relevant and relatively 
generous eligibility criteria are awarded compensation from a 
fund supported by a federal tax on specified vaccines. Those 
who are dissatisfied with their awards may take their claim to 
court.
    It is true that such claims are litigated under special 
rules and limitations that, like the HEALTH Act, affect state 
tort law. But those rules and limitations must be understood in 
the context of the larger National Childhood Vaccine Injury 
Program which, as previously noted, makes federally supported 
compensation--including economic and non-economic damages--
available to injured persons. H.R. 5 does not, of course, 
include a compensation component; it merely changes the rules 
under which compensation can be awarded, making it far more 
difficult for justice to be best served. The difference between 
the two pieces of legislation in this regard could not be more 
profound.
    In sum, H.R. 5 is unprecedented in its approach to, and in 
its reach and impact on, state medical malpractice liability 
law--for no justified end. And there is no relevant federal 
statute which legitimately serves as its prototype. In our 
view, then, this legislation--on these grounds alone--should be 
rejected.

              H.R. 5 Reaches Too Far and Protects Too Many

    As described in our Background and Overview to these 
dissenting views, medical malpractice typically refers to 
negligent wrongdoing by health professionals, resulting in harm 
to a patient. As we also discussed, H.R. 5 goes well beyond 
this understanding to include all health care liability actions 
involving ``a health care provider, a health care organization, 
or the manufacturer, distributor, supplier, marketer, promoter, 
or selIers of a medical product, regardless of the theory of 
liability on which the claim is based.''\55\ Such a broad, 
expansive and sweeping perspective of medical malpractice is 
not to be found in the law books of any of the 50 states. H.R. 
5 simply goes too far.
---------------------------------------------------------------------------
    \55\HEALTH Act, Section 9(7).
---------------------------------------------------------------------------
    Three areas that H.R. 5 touches directly received 
considerable attention during the Committee's deliberations 
over the HEALTH Act:
     the HEALTH Act's inclusion of intentional torts;
     its protections for nursing homes; and
     the inclusion of lawsuits involving FDA-approved 
drugs and medical devices.
    Here we address the first two issues; the last is discussed 
separately in the section, H.R. 5 Is An Unwarranted Windfall 
for Pharmaceutical and Medical Companies.

                           INTENTIONAL HARMS

    In the context of medical malpractice, an intentional tort 
or wrongdoing occurs when a patient does not consent to a 
procedure or service--even if it is performed or provided 
correctly. In such cases, the health care provider is 
``generally alleged to have intentionally acted in a fashion 
that ultimately caused harm to the patient.''\56\ Intentional 
torts include claims such as assault, sexual assault and rape, 
battery, false imprisonment (unlawfully holding someone against 
their will), invasion of privacy, conversion (theft), 
misrepresentation, and fraud.\57\
---------------------------------------------------------------------------
    \56\Congressional Research Service, Medical Malpractice Liability 
Reform: Legal Issues and 50-State Surveys on Tort Reform Proposals, 
Rept. No. R41661, p. 2 (Mar. 28, 2011).
    \57\See Gamer, BA (editor-in-chief), Black's Law Dictionary) (9th 
ed. 2009) (``battery: tort''); (``tort: intentional tort'') (available 
online at: http://www.westlaw.com); and Keeton, WP, Dobbs, DB, Keeton, 
RE, and Owen, DG, Prosser and Keeton on Torts (5th ed. 2004), pp. 33-54 
(West Group, Hornbook Series).
---------------------------------------------------------------------------
    Except in those instances in which a claim is based upon 
criminal liability,\58\ the HEALTH Act affords its liability 
protections to those who have committed these and similar kinds 
of acts, including conduct that results in egregious injury or 
even death to patients. Nothing in the Committee's 
deliberations over H.R. 5--not a shred of testimony presented 
at the Health Subcommittee hearing or any point of debate made 
during the full Committee markup--documents or justifies this 
position. This is yet another example of how extreme H.R. 5 is 
in its approach to medical malpractice reform.
---------------------------------------------------------------------------
    \58\HEALTH Act, Section 9(7).
---------------------------------------------------------------------------
    Consider these real world examples:
     Dr. Ben D. Ramaley, a Connecticut obstetrician/
gynecologist, substituted his own sperm for that of a patient's 
husband during an artificial insemination procedure. The couple 
went on to have a set of twins, only to learn after their birth 
and a subsequent paternity test that the treating physician 
(and not the husband) was the biological father. The state's 
Department of Public Health fined the doctor $10,000 for 
``using the wrong man's sperm'' in the procedure, but allowed 
him to keep an unrestricted license to practice medicine. The 
couple's medical malpractice lawsuit against the physician was 
settled, but there is no record of Dr. Ramaley's ever facing 
criminal charges.\59\
---------------------------------------------------------------------------
    \59\Greenwich Times, Doctor Uses Wrong Man's Sperm to Produce Twins 
(Nov. 12, 2009) (online at: http://www.ctpost.com/default/article/
Doctor-uses-wrong-man-s-sperm-to-produce-twins-215345.php).
---------------------------------------------------------------------------
     Dr. Kermit Gosnell, a Pennsylvania physician, 
performed late term abortions on minority and low-income 
women--many of whom were pregnant for the first time--without 
informing the mothers he was doing so. He falsified ultrasounds 
used to determine the duration of the pregnancy and taught his 
staff to hold the probe in such a way that the fetuses looked 
smaller. Few, if any, of the women who were sedated during the 
procedure knew that their babies had been delivered alive. And 
because they were misled about the length of their pregnancies, 
none of them was given the opportunity to make an informed 
choice about what to do about their pregnancy. Dr. Gosnell is 
now facing criminal charges, but has not yet been found guilty 
of any crime. At least 46 lawsuits have been filed against him 
in the past.\60\
---------------------------------------------------------------------------
    \60\MSNBC, `House of Horrors' Alleged at Abortion Clinic (Jan. 19, 
2011) (online at: http:www.msnbc.msn.com/id41154527/ns/us_news-
crime_and_courts/t/house-horrors-alleged-abortion-clinic/); ABC News, 
Alleged Victim Calls Philadelphia Abortion Doc Kermit Gosnell a 
`Monster' (Jan. 25, 2011) (online at: http://abcnews.go.com/US/alleged-
victim-calls-philadelphia-abortion-doctor-kermit-gosnell/
storsyid=12731387).
---------------------------------------------------------------------------
     Mildred Taylor, who suffered from Alzheimer's 
disease, but was otherwise healthy, was a resident at the 
Prestige Assisted Living facility in Marysville, California. On 
June 24, 2004, the wheelchair-bound, 98-year old was falsely 
imprisoned when she was left outside overnight by facility 
staff. No one made any attempt to find her, even though staff 
knew she was not in her room. No one called Ms. Taylor's family 
and no one contacted the police to report her missing. She was 
not found until the next morning when her body temperature had 
dropped to 93 degrees and her right leg had become severely 
swollen. Ms. Taylor remained bed-ridden and debilitated until 
her death less than one month later. The California Department 
of Social Services cited Prestige for violating Ms. Taylor's 
rights, but did not even fine the company.\61\
---------------------------------------------------------------------------
    \61\Appeal Democrat, Suit Filed in Death of Patient (June 9, 2005) 
(online at: http://www.appeal-democrat.com/news/prestige-15049-taylor-
lawsuit.html).
---------------------------------------------------------------------------
    In each of these cases, a ``health good or service''--as 
that term is defined in H.R. 5\62\--was provided, arguably 
bringing them within the purview of H.R. 5. In the instance of 
Mildred Taylor, we think our position is made even stronger by 
the comments found in the majority views of this Committee 
report that the term ``health care goods and services'' is 
intended to include those ``involving the assessment or care of 
the health of human beings'' as well as the ``monitoring, 
supervision, and provision of direct assistance to claimants.''
---------------------------------------------------------------------------
    \62\HEALTH Act, Section 9(12).
---------------------------------------------------------------------------
    Supporters of the HEALTH Act point to the bill's exclusion 
of actions constituting criminal liability as the basis for 
arguing that examples such as these and those discussed during 
the full Committee markup\63\ would fall outside the reach of 
H.R. 5. But intentional tort is not the same as criminal 
liability. In criminal cases, individuals must be selected for 
prosecution, tried in a court of law, and successfully 
convicted using a standard of proof that is appropriately 
high--proof beyond a reasonable doubt. In contrast, many 
incidents of intentional tort--even if they meet the elements 
of a crime--are never reported, let alone prosecuted.\64\ 
Indeed, Dr. Ramaley does not appear to ever have faced criminal 
charges; Dr. Gosnell has not yet been convicted of anything. 
And it is unclear how an entity such as a nursing home could be 
charged with a crime in a case like Mildred Taylor's. We submit 
that under H.R. 5, these health care providers could escape 
significant civil liability as well.\65\
---------------------------------------------------------------------------
    \63\House Committee on Energy and Commerce, Markup on H.R. 5, 
HEALTH Act of 2011, 112th Cong., pp. 103-106 (May 11, 2011) (transcript 
of the proceeding).
    \64\This is especially true with regard to sexual assaults. See 
U.S. Department of Justice, Bureau of Justice Statistics, Rape and 
Sexual Assault: Reporting to the Police and Medical Attention, 1992-
2000 (Aug. 2002) (online at: http://bjs.ojp.usdoj.gov/content/pub/pdf/
rsarp00.pdf).
    \65\This argument made by H.R. 5 advocates is undercut further by 
the very language of the bill which lists among the factors to be 
considered in determining punitive damages ``any criminal penalties 
imposed on [a party] as a result of the conduct complained of. . . .'' 
(HEALTH Act, Section 7(b)(E)). If criminal acts are outside the scope 
of H.R. 5, how can such acts be taken into account in determining 
punitive damages under the legislation?
---------------------------------------------------------------------------
    Advocates of H.R. 5 also maintain that even in the absence 
of criminal activity, cases like these are not protected under 
the bill because they are extreme and non-therapeutic in nature 
and thus do not meet the definition of a health care good or 
service.\66\ We struggle to find text in the legislation that 
supports this argument. At the very least, the language is 
ambiguous on the point. Regardless, there is no bright line 
here. Consider, for example, the situation in which a 
psychiatrist has consensual sex with a patient because he 
believes--and convinces the patient--that this is the best way 
to ``treat'' her emotional problems. Do the protections of H.W. 
5 apply in any subsequent malpractice lawsuit brought by the 
patient? Again, based upon the text of the legislation, we 
believe the answer is unclear at best.
---------------------------------------------------------------------------
    \66\House Committee on Energy and commerce, Markup of HR. 5, HEALTH 
Act of 2011, 112th Cong., pp. 196-199 (May 11, 2011) (transcript of the 
proceeding).
---------------------------------------------------------------------------
    Supporters of the HEALTH Act argue further that the 
availability of punitive damages in cases in which ``malicious 
intent to injure''\67\ occur should address any concerns we 
have about the inclusion of intentional torts in this 
legislation because, in their view, such actions are de facto, 
ones of this character.\68\ We are not comforted at all by this 
assertion; indeed, we believe it is Orwellian.
---------------------------------------------------------------------------
    \67\HEALTH Act, Section 7(a).
    \68\House Committee on Energy and Commerce, Markup on H.R. 5, 
HEALTH Act of 2011, 112th Cong., pp. 193-194 (May 11, 2011) (transcript 
of the proceeding).
---------------------------------------------------------------------------
    The purpose of H.R. 5's provisions on punitive damages is 
to limit them or cut them out altogether. Although ``malicious 
intent to injure'' is one ground upon which an injured person 
may seek punitive damages, the punitive damages procedural 
hurdles\69\ and monetary limits in the bill--$250,000 or two 
times the amount of economic damages awarded\70\--still apply. 
Moreover, this argument ignores other features of the 
legislation that may adversely affect an individual who has 
experienced an intentional tort and seeks compensation for the 
wrong that has occurred.\71\ In sum, we believe it is 
unconscionable for the federal government to place these kinds 
of restrictions on anyone--such as those individuals described 
in the cases above--who has been injured as a result of an 
intentional tort.
---------------------------------------------------------------------------
    \69\HEALTH Act Section 7(a).
    \70\HEALTH Act Section 7(b)(2).
    \71\Such an example is the elimination of the legal standard of 
joint and several liability which allows injured persons to sue all 
responsible parties and recover from each one in proportion to the 
degree of fault, or to sue any one party and recover the entire amount 
of damages. (HEALTH Act Section 4(d)).
---------------------------------------------------------------------------
    We find these provisions of the bill particularly 
troublesome because during the debate over the issue of 
intentional torts, there appeared to be consensus among the 
members who participated that these activities are not the 
stuff of traditional medical malpractice cases. And so it was 
especially disappointing that an amendment to clarify and 
resolve the matter was not adopted. Under that amendment, 
intentional torts would be removed from the scope of the 
bill.\72\ Much to our amazement and consternation, the 
amendment was resoundly defeated, keeping intact liability 
protections for actions that--regardless of one's position on 
medical malpractice reform--never should have been a part of 
the HEALTH Act in the first place.
---------------------------------------------------------------------------
    \72\House Committee on Energy and Commerce, Markup on H.R. 5, 
HEALTH Act of 2011, 112th Cong., pp. 190-200; 222-229 (amendment 
offered by Ranking Member Henry Waxman) (May 11, 2011) (transcript of 
the proceeding).
---------------------------------------------------------------------------

              NURSING HOMES AND OTHER HEALTH CARE ENTITIES

    H.R. 5 covers lawsuits brought against not only providers 
such as physicians or hospitals--the typical medical 
malpractice situation--but also cases involving ``health care 
organizations,'' including nursing homes, health maintenance 
organizations (HMOs), and health insurance companies.\73\ As 
such, these entities are entitled to the liability protections 
afforded under the bill, including the caps on non-economic and 
punitive damages.
---------------------------------------------------------------------------
    \73\HEALTH Act, Sections 9(7) and 9(10).
---------------------------------------------------------------------------
    We have found no credible evidence to support the inclusion 
of these entities within the range of the HEALTH Act. Nursing 
homes, HMOs, and insurance companies were not even discussed 
during the Health Subcommittee hearing on the legislation. And 
the debate in the full Committee markup did nothing to persuade 
us to see the need to include these organizations within the 
realm of ``medical malpractice reform.''
    In fact, our concern over H.R. 5's inclusion of these 
businesses has only grown. This is especially true with respect 
to nursing homes which continue to be the subject of countless 
cases of negligence and even intentional wrongdoing. According 
to a Government Accountability Office (GAO) report on this 
topic, the proportion of nursing homes with serious quality 
problems remains unacceptably high, despite a decline in the 
incidence of such reported problems. Actual harm or more 
serious deficiencies were cited for 20% or some 3500 nursing 
homes during an 18-month period.\74\ A more recent GAO report 
concludes that serious care problems in nursing homes continue 
to be of concern.\75\ These findings were reinforced by the 
several examples provided during the debate over this issue in 
the full Committee markup.\76\
---------------------------------------------------------------------------
    \74\GAO, Nursing Home Quality: Prevalence of Serious Problems, 
While Declining, Reinforces Importance of Enhanced Oversight, pp. 3-4, 
GAO-03-561 (July 2003).
    \75\GAO, High-Risk Series: An Update, p. 159, GAO-11-278 (Feb. 
2011).
    \76\House Committee on Energy and Commerce, Markup on H.R. 5, 
HEALTH Act of 2011, 112th Cong., pp. 103-105 (May 11, 2011) (transcript 
of the proceeding).
---------------------------------------------------------------------------
    Supporters of the legislation contend that liability 
protections are necessary for nursing homes to decrease their 
liability costs and increase access to liability insurance 
coverage.\77\ But a recent study conducted by the same firm 
whose work was cited in support of this argument suggests that 
these issues have been largely resolved. In fact, according to 
this study, the average annual loss (i.e., expenses related to 
liability insurance claims) per nursing home bed decreased from 
$1,710 in 2001 to $1,270 in 2009.\78\ And an article in 
Insurance Journal on the study concluded that ``liability 
insurance pricing and availability for long term care providers 
are good and getting better'' and attributed this trend to a 
new-found emphasis on quality of care.\79\
---------------------------------------------------------------------------
    \77\See, e.g., the comments of Rep. Pete Olson on this point. 
(Remarks of Rep. Pete Olson, House Committee on Energy and Commerce, 
Markup of H.R. 5, HEALTH Act on 2011, 112th Cong., pp. 106-108; 110-113 
(May 11, 2011) (transcript of the proceeding)).
    \78\Aon Risk Solutions, 2010 Long Term Care General Liability and 
Professional Liability Actuarial Analysis (Aug. 2010) (online at: 
http://img.en25.com/Web/AON/LTC%20Benchmark%20Study_2010_FINAL.pdf).
    \79\Insurance Journal, Growth, Stability and Changes in Store for 
Long Term Care Market (Nov. 14, 2010) (online at: http://
www.insurancejournal.com/magazines/mag-features/2010/11/14/160493.htm).
---------------------------------------------------------------------------
    With regard to the impact of tort reform on these promising 
results, study documents observe that ``while long term care 
liability costs are stable across much of the nation, Arkansas, 
Tennessee and West Virginia are experiencing high expenses--
known as loss costs--related to insurance claims.''\80\ In the 
context of the HEALTH Act, it is worth noting that two of these 
states--Arkansas and West Virginia--have both enacted some form 
of tort reform;\81\ yet, according to this study, the insurance 
market in these states remains turbulent. This suggests that 
such reform is not the cure-all advocates of H.R. 5 would have 
us believe.
---------------------------------------------------------------------------
    \80\Aon Risk Solutions, Highest Long Term Care Liability Costs in 
Arkansas, Tennessee and West Virginia: Aon Study Costs Across the Rest 
of the Nation Remain Stable (Aug. 5, 2010) (online at: http://
ir.aon.com/phoenix.zhtml?c=105697&p;=irol-
newsArticle&ID;=1457169&highlight;=).
    \81\Insurance Journal, Growth, Stability and Changes in Store or 
Long Term Care Market (Nov. 14, 2010) (online at: http://
www.insurancejournal.com/magazines/mag-features/2010/11/14/
160493.htm)).
---------------------------------------------------------------------------
    Thus we remain unconvinced that nursing homes (or any other 
health care organization)\82\ should receive the unprecedented 
protections provided to them under the HEALTH Act. In this 
respect, too, the legislation is unnecessarily and 
inappropriately broad in its scope and therefore, should be 
rejected.
---------------------------------------------------------------------------
    \82\Physician groups now supporting H.R. 5 have in the past argued 
fervently in favor of ensuring that HMOs are held fully accountable for 
injuries that occur to their patients. (See, e.g., the position of the 
American Medical Association on this issue. (American Medical News, 
Both Sides Ready for HMO Liability Fight (Feb. 2004) (on line at: 
http://www.ama-assn.org/amednews/2004/02/16/gvsb0216.htm)).
---------------------------------------------------------------------------

H.R. 5 Is an Unwarranted Windfall for Pharmaceutical and Medical Device 
                               Companies

    H.R. 5 sweeps so-called ``medical products,'' or FDA-
approved drugs, biologics, and devices into its overly broad 
span. Lawsuits involving drugs and medical devices are not the 
kind of cases that are traditionally considered medical 
malpractice cases, which are ostensibly the subject of the 
legislation. A typical ``medical malpractice'' lawsuit is one 
filed by an injured patient against his or her treating 
physician. In contrast, cases involving medical products are 
filed by patients who are injured--and often killed--by 
defective drugs and medical devices against large, extremely 
well-resourced pharmaceutical or medical device companies.\83\
---------------------------------------------------------------------------
    \83\Testimony of Brian Wolfman, JD, Visiting Professor of Law, 
Georgetown University Law Center, House Committee on Energy and 
Commerce, Subcommittee on Health, Hearing on The Cost of Medical 
Liability System Proposals for Reform. Including H.R. 5, HEALTH Act 
2011, 112th Cong., p. 5 (Apr. 6, 2011).
---------------------------------------------------------------------------
    The primary rationales advanced by supporters of H.R. 5 for 
the legislation\84\ simply do not apply to lawsuits relating to 
FDA-approved drugs and medical devices. For instance, 
proponents of the HEALTH Act argue that it is necessary to 
curtail the practice of defensive medicine.\85\ They claim the 
legislation will bring down the cost of medical malpractice 
insurance\86\ and also fix doctor shortages caused by liability 
exposure.\87\
---------------------------------------------------------------------------
    \84\As discussed in the Background and Overview section of these 
dissenting views, we do not believe H.R. 5 will achieve any of the 
primary goals set forth by its supporters.
    \85\See e.g., the comments of Rep. Joe Pitts during the full 
Committee markup of H.R. 5. (Remarks of Rep. Joe Pitts, House Committee 
on Energy and Commerce, Markup on H.R. 5, HEALTH Act of 2011, 112th 
Cong., p. 18 (May 9, 2011) (transcript of the proceeding)).
    \86\See e.g., the comments of Rep. Phil Gingrey during the full 
Committee markup of H.R. 5. (Remarks of Rep. Phil Gingrey, House 
Committee on Energy and Commerce, Markup on H.R. 5, HEALTH Act of 2011, 
112th Cong., p. 151 (May 10, 2011) (transcript of the proceeding)).
    \87\See e.g., comments of Rep. Tim Murphy during the Health 
Subcommittee hearing on H.R. 5. (House Committee on Energy and 
Commerce, Subcommittee on Health, Hearing on The Cost of Medical 
Liability System Proposals for Reform, Including H.R. 5, HEALTH Act 
2011, 112th Cong., pp. 101; 104 (Apr. 6, 2011) (transcript of the 
proceeding)).
---------------------------------------------------------------------------
    Absolutely no justification has been asserted during the 
Committee's deliberations on the legislation for H.R. 5's 
inclusion of medical products. To the contrary, there was much 
debate about the danger and inappropriateness of covering drugs 
and devices, particularly during the testimony of Professor 
Brian Wolfman at the Health Subcommittee's hearing on the 
bill.\88\
---------------------------------------------------------------------------
    \88\House Committee on Energy and Commerce, Subcommittee on Health, 
Hearing on The Cost of Medical Liability System Proposals for Reform, 
Including H.R. 5, HEALTH Act 2011, 112th Cong., pp. 51-52; 104-107; 
117-121 (Apr. 6, 2011) (transcript of the proceeding).
---------------------------------------------------------------------------
    In our view, the HEALTH Act will have an especially 
devastating impact on patients injured by defective or 
inadequately labeled drugs and devices. For instance, in 
addition to failing to fully compensate victims of dangerous 
drugs and devices for their non-economic damages, H.R. 5's 
$250,000 cap on non-economic damages would make it very 
difficult for these individuals to retain competent counsel who 
would be willing to take on the typical large, and well endowed 
pharmaceutical or medical device company.\89\ Most individuals 
who are injured by these products cannot begin to pay for the 
out-of-pocket expenses necessary to finance a potentially 
massive lawsuit against a drug or device manufacturer.\90\ 
Instead, they rely upon a contingency system in which an 
attorney is willing to represent them in exchange for a certain 
percentage of any final recovery in the case.\91\ Particularly 
in cases that are complex and difficult or include very well-
financed defendants, a limit of $250,000 in non-economic 
damages would be insufficient to enable most attorneys to 
afford the protracted litigation process such cases 
involve.\92\
---------------------------------------------------------------------------
    \89\Testimony of Brian Wolfman, JD, Visiting Professor of Law, 
Georgetown University Law Center, House Committee on Energy and 
Commerce, Subcommittee on Health, Hearing on The Cost of Medical 
Liability System Proposals for Reform, Including H.R. 5, HEALTH Act 
2011, 112th Cong., p. 5 (Apr. 6, 2011).
    \90\Id.
    \91\Id.
    \92\Id.
---------------------------------------------------------------------------
    In his testimony at the Health Subcommittee hearing on H.R. 
5, Professor Wolfman provided a disturbing illustration of this 
concern.\93\ He described a conversation he had with the 
attorney who represented Diana Levine, the injured party 
(plaintiff) in the recent U.S. Supreme Court case, Wyeth v. 
Levine.\94\ Ms. Levine brought a lawsuit against Wyeth, one of 
the country's largest pharmaceutical companies, having lost her 
arm by amputation after receiving an inadequately labeled Wyeth 
drug.\95\ After years of litigation, Ms. Levine's case was 
eventually heard by the Supreme Court, which affirmed that 
persons injured by an inadequately labeled FDA-approved drug 
can sue the manufacturer of that product.\96\
---------------------------------------------------------------------------
    \93\Id. at 12.
    \94\Wyeth v. Levine, 129 S.Ct. 1178 (2009).
    \95\Id.
    \96\Id.
---------------------------------------------------------------------------
    Subsequent to the Court's decision, Professor Wolfman spoke 
with Ms. Levine's lawyer. Professor Wolfman asked the attorney 
if he would have taken the Levin case if there had been a 
$250,000 limit on non-economic damages; after a long pause, the 
attorney hesitantly responded ``no.''\97\ Unquestionably, then, 
had the provisions of H.R. 5 been in place during the 
litigation, Ms. Levine might well have lost out in securing the 
stellar and long-term representation she was able to obtain 
under current law. Thus, as the Levine case clearly 
demonstrates, the adverse effects of the kinds of caps found in 
the HEALTH Act go beyond simply imposing an artificial dollar 
amount on damages.
---------------------------------------------------------------------------
    \97\Testimony of Brian Wolfman, JD, Visiting Professor of Law, 
Georgetown University Law Center, House Committee on Energy and 
Commerce, Subcommittee on Health, Hearing on the Cost of Medical 
Liability System Proposals for Reform, Including H.R. 5 HEALTH Act 
2011, 112th Cong., p. 12 (Apr. 6, 2011).
---------------------------------------------------------------------------
    The limits H.R. 5 puts on attorney contingency fees would 
only exacerbate this problem. With draconian caps on the amount 
that an attorney could collect through his or her contingency 
contracts in place, most plaintiffs' attorneys would 
financially unable to take on complex product liability cases 
involving drugs and devices.\98\ Mr. Wolfman's testimony about 
his conversation with the attorney in the Levine case 
underscores this point as well.
---------------------------------------------------------------------------
    \98\Id. at 19.
---------------------------------------------------------------------------
    H.R. 5 would also abolish punitive damages in cases 
pertaining to FDA-approved drugs and devices, except in the 
most limited circumstances.\99\ Specifically, H.R. 5 would 
prohibit punitive damages in cases in which a drug or device 
either received FDA approval or is ``generally recognized among 
qualified experts as safe and effective.''\100\
---------------------------------------------------------------------------
    \99\Under Section 7(c)(4) of the HEALTH Act, punitive damages may 
be awarded in such cases only when a person: (a) before or after 
premarket approval, clearance, or licensure of the medical product at 
issue, knowingly misrepresented to or withheld from the FDA information 
that is required to be submitted under the Federal Food, Drug, and 
Cosmetic Act or section 351 of the Public Health Service Act 
(regulation of biological products) that is material and is causally 
related to the harm which the injured party allegedly suffered; or (b) 
made an illegal payment to an official of the FDA for the purpose of 
either securing or maintaining approval, clearance, or licensure of 
such medical product.
    \100\H.R. 5, Section 7(c).
---------------------------------------------------------------------------
    Because much information is gained about the safety and 
effectiveness of drugs and devices after they are on the market 
and in use by a broad population of people, it is misguided to 
tie the availability of punitive damages to these products' 
initial FDA approval. Indeed, most product liability lawsuits 
regarding drug safety relate information that was not presented 
to the FDA at the time of the drug's approval.\101\ But under 
the HEALTH Act, even a manufacturer that fails to exercise due 
diligence and investigate reports of a safety problem could be 
immunized from punitive damages.
---------------------------------------------------------------------------
    \101\Testimony of Brian Wolfman, JD, Visiting Professor of Law, 
Georgetown University Law Center, House Committee on Energy and 
Commerce, Subcommittee on Health, Hearing on The Cost of Medical 
Liability System Proposals for Reform, Including H.R. 5, HEALTH Act 
2011, 112th Cong., p. 20 (Apr. 6, 2011).
---------------------------------------------------------------------------
    Although an amendment was adopted during the full Committee 
markup of the bill that would permit an award of punitive 
damages in cases in which the defendant caused the drug or 
device to be misbranded or adulterated,\102\ H.R. 5 would still 
have the effect of severely restricting the availability of 
punitive damages in lawsuits involving medical products.
---------------------------------------------------------------------------
    \102\House Committee on Energy and Commerce, Markup of H.R. 5. 
HEALTH Act of 2011, 112th Cong., pp. 162-164 (amendment offered by Rep. 
John Dingell) (May 11, 2011) (transcript of the proceeding).
---------------------------------------------------------------------------
    Punitive damages have a unique and specific function: They 
serve to punish exceptionally outrageous, deliberate or harmful 
misconduct, and to deter both the wrongdoer and others from 
engaging in similar misconduct in the future.\103\ By severely 
limiting punitive damages in drug and device cases, H.R. 5 
places all of us in danger because in effect, it removes the 
most potent and effective means of deterring bad actors. There 
is simply no justification for this drastic action.
---------------------------------------------------------------------------
    \103\Testimony of Joanne Doroshow, Executive Director, Center for 
Justice & Democracy, House Committee on Energy and Commerce, 
Subcommittee on Health, Hearing on The Cost of Medical Liability System 
Proposals for Reform, Including H.R. 5, HEALTH Act 2011, 112th Cong., 
p. 32 (Apr. 6, 2011).
---------------------------------------------------------------------------
    This is especially true in light of FDA's recognition of 
the valuable role state-based litigation plays in complementing 
the agency's regulation of drugs and medical devices.\104\ FDA 
is on record in finding that drug and device lawsuits help to 
uncover post-market safety risks that are unknown to the agency 
at the time of approval. Indeed, as a former FDA chief counsel 
has stated: ``FDA regulation of a device cannot anticipate and 
protect against all safety risks to individual consumers. Even 
the most thorough regulation of a product such as an important 
medical device may fail to identify potential problems 
presented by the product. Regulation cannot protect against all 
possible injuries that might result over time.''\105\
---------------------------------------------------------------------------
    \104\Kessler, D and Vladeck D, A Critical Examination of the FDA's 
Efforts to Preempt Failure-to-Warn Claims, Georgetown Law Journal, 
96:461, 463 (Jan. 2008) (online at http://www.georgetownlawjounalorg/
issues/pdf/96-2/Kessler&Vladeck.PDF;).
    \105\Porter, MJ, The Lohr Decision: FDA Perspective and Position, 
Food & Drug Law Journal, 52:7, 11 (Jan. 1997).
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    Drug and medical device manufacturers will always be better 
positioned and better equipped than the FDA to know the safety 
profile of their products, since they develop and manufacture 
the products, typically receive safety reports about the 
products first, and are required to alert the FDA to any 
product-related risks they uncover. FDA, on the other hand, is 
responsible for overseeing the safety of hundreds of thousands 
of drugs and medical devices. The U.S. Supreme Court recently 
recognized this reality in Wyeth v. Levine, in which it found: 
``The FDA has limited resources to monitor the 11,000 drugs on 
the market, and manufacturers have superior access information 
about their drugs, especially in the post-marketing phase as 
new risks emerge.''\106\
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    \106\Wyeth v. Levine, 129 S. Ct. 1187 (2009).
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    Simply put: H.R. 5 would weaken the tort system's 
critically important layer of consumer protection at the very 
time when FDA's ability to assure the safety of our drugs and 
medical devices is in great peril. The Republican FY 2012 
budget resolution calls for a return to FY 2008 funding levels 
for discretionary funding across all government agencies.\107\ 
For FDA, this translates into a funding cut of over $600 
million--almost 20% of the agency's entire budget. Reductions 
of this magnitude will only exacerbate FDA's inherent 
difficulty both in monitoring the post-market safety of the 
tens of thousands of FDA-approved products on the market and in 
sending timely safety information to physicians and patients.
---------------------------------------------------------------------------
    \107\H. Con. Res. 34 (adopted by the House of Representatives on 
Apr. 15, 2011).
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    For these reasons and more, it is irresponsible--even 
dangerous--to sweep drug and medical device cases within the 
scope of the HEALTH Act. In our view, such lawsuits should 
continue to stand on their own--subject to the substantive and 
procedural law that now governs them--so as to help ensure that 
these products remain as safe as possible while at the same 
time, providing the opportunity for adequate compensation for 
those individuals who have been harmed.

                               Conclusion

    Our colleagues on the Committee on the Judiciary who have 
also filed dissenting views on the HEALTH Act have summed up 
our own views quite well:

          Collectively, the `reforms' proposed by H.R. 5 would 
        limit a patient's ability to recover compensation for 
        damages caused by medical negligence, defective 
        products, and irresponsible insurance practices. In 
        addition to raising core issues of fairness, H.R. 5 
        preempts the law in all 50 states, with little regard 
        for the consequences. The legislation was designed more 
        than 20 years ago to resolve an insurance `crisis', but 
        all available evidence shows that the insurance market 
        is not in crisis today. H.R. 5 does not make insurance 
        more available, does not cut spending to any 
        appreciable degree, and does not address issues of 
        access to justice or patient safety. Because H.R. 5 
        solves few problems facing Americans and exacerbates 
        many real ones, we believe the Congress should reject 
        this bill.\108\
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    \108\House Committee on the Judiciary, HEALTH Act of 2011, 
Dissenting Views, 112th Cong., p. 118 (Mar. 17, 2011) (H. Rept. No. 
112-39, Part 1.)

    We concur in this assessment of the HEALTH Act and join 
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with these colleagues in opposing H.R. 5.

                                   Henry A. Waxman.
                                   Mike Doyle.
                                   Donna M. Christensen.
                                   Charles A. Gonzalez.
                                   Anthony Weiner.
                                   Lois Capps.
                                   Jan Schakowsky.
                                   Jay Inslee.
                                   Tammy Baldwin.
                                   Anna G. Eshoo.
                                   Frank Pallone, Jr.
                                   G. K. Butterfield.
                                   Doris O. Matsui.
                                   Edward J. Markey.
                                   Edolphus Towns.
                                   Bobby L. Rush.
                                   John D. Dingell.
                                   Diana DeGette.
                                   Gene Green.