Amends the Public Health Service Act, the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code to provide for the prompt payment of claims.
Amends the Public Health Service Act to address the issue of the nursing shortage through the Nursing Workforce Development Student Loan Repayment program, the establishment of a National Nurse Corps Scholarship program, and other grant and scholarship programs to train and retain nurses.
Establishes an alternative dispute resolution system for medical malpractice cases which preempts other State and Federal law, excluding vaccine-related claims.
Mandates mediation before trial.
Requires certifications and affidavits by participating parties and attorneys that certain consultations and investigations have taken place and that their case is reasonable and meritorious. Imposes sanctions, including payment of attorney's fees and costs, for submitting false allegations.
Directs the Secretary of Health and Human Services to appoint an Advisory Commission on Medical Malpractice. Limits the rate of increase in medical malpractice insurance rates to a specified maximum until after the Commission's report.
Addresses other medical malpractice insurance issues, including withdrawal from the market, guaranteed coverage and renewability, and disclosure.
Requires the Secretary to establish an interactive, secure Internet site to provide medical malpractice insurance quotes.
Amends the Internal Revenue Code to add deductions for premiums for medical liability insurance for: (1) high risk specialties; and (2) practices serving medically underserved communities.
Amends the Liability Risk Retention Act of 1986 to mandate equal treatment between traditional insurers and risk retention groups.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1158 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 1158
To modify the antitrust exemption applicable to the business of medical
malpractice insurance, to address current issues for health care
providers, to reform medical malpractice litigation by making available
alternative dispute resolution methods, requiring plaintiffs to submit
affidavits of merit before proceeding, and enabling judgments to be
satisfied through periodic payments, to reform the medical malpractice
insurance market, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 6, 2003
Mr. Sandlin introduced the following bill; which was referred to the
Committee on the Judiciary, and in addition to the Committees on Energy
and Commerce, Ways and Means, and Education and the Workforce, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To modify the antitrust exemption applicable to the business of medical
malpractice insurance, to address current issues for health care
providers, to reform medical malpractice litigation by making available
alternative dispute resolution methods, requiring plaintiffs to submit
affidavits of merit before proceeding, and enabling judgments to be
satisfied through periodic payments, to reform the medical malpractice
insurance market, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medical Liability
Insurance Crisis Response Act of 2003''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--ANTITRUST MATTERS: AMENDMENTS TO THE MCCARRAN-FERGUSON ACT
Sec. 101. Short title.
Sec. 102. Rules of construction.
Sec. 103. Amendments.
Sec. 104. Study and report.
Sec. 105. Effective date.
TITLE II--ADDRESSING CURRENT ISSUES FOR HEALTH CARE PROVIDERS
Sec. 201. Prompt payment of claims.
Sec. 202. Eliminating nurse shortages.
``Part H--National Nurse Service Corps Scholarship Program
``Sec. 851. National Nurse Service Corps Scholarship Program.
``Part I--Initiatives to Recruit Nurses and Combat the Nursing Shortage
``Sec. 855. Nurse recruitment grant program.
``Part J--Initiatives to Strengthen the Nurse Workforce
``Sec. 857. Grants for career ladder programs.
``Sec. 858. Grants for nurse training in long-term care for the
elderly.
``Sec. 859. Grants for internship and residency programs.
``Sec. 860. Developing retention strategies and best practices
in nursing staff management.
``Sec. 861. Stipend and scholarship program.
TITLE III--MEDICAL MALPRACTICE LIABILITY REFORM
Sec. 301. Definitions.
Sec. 302. Federal tort reform.
Sec. 303. Alternative dispute resolution methods.
Sec. 304. Preventing frivolous malpractice suits.
Sec. 305. Requirement for affidavit of merit.
TITLE IV--MEDICAL MALPRACTICE INSURANCE REFORMS
Sec. 401. Advisory Commission on Medical Malpractice.
Sec. 402. Limitation on rate of increase in medical malpractice
insurance rates.
Sec. 403. Withdrawal from medical malpractice insurance market.
Sec. 404. Guaranteed renewability of coverage.
Sec. 405. Guaranteed coverage for certain health care providers.
Sec. 406. Medical malpractice insurance disclosure.
Sec. 407. Medical malpractice insurance price comparison.
TITLE V--TAX-RELATED PROVISIONS
Sec. 501. Deduction for premiums for medical liability insurance for
high risk specialties.
Sec. 502. Deduction for premiums for medical liability insurance for
practices serving medically underserved
communities.
TITLE VI--ADDITIONAL PROVISIONS
Sec. 601. State consideration of additional and alternative methods.
Sec. 602. Mandating equal treatment between traditional insurers and
risk retention groups, including medical
malpractice risk retention groups.
TITLE I--ANTITRUST MATTERS: AMENDMENTS TO THE McCARRAN-FERGUSON ACT
SEC. 101. SHORT TITLE.
This title may be cited as the ``Medical Malpractice Insurance
Competitive Pricing Act of 2003''.
SEC. 102. RULES OF CONSTRUCTION.
The amendments made by this title preserve--
(1) the provisions relating to State taxing and regulatory
authority in section 2 of the Act of March 9, 1945 (59 Stat.
34; 15 U.S.C. 1012), commonly known as the McCarran-Ferguson
Act;
(2) the availability, to persons engaged in the business of
medical malpractice insurance, of the defense of State action
in the same manner and to the same extent as such defense is
available to other persons;
(3) the availability, to persons engaged in the business of
medical malpractice insurance, of any antitrust immunity or
defense that may be applicable under law other than the
McCarran-Ferguson Act;
(4) the legal standards applicable under the McCarran-
Ferguson Act, as in effect before such Act is amended by this
title, to all conduct described in the safe harbors found in
subparagraphs (B) and (C) of section 2(b)(1) of the McCarran-
Ferguson Act, as amended by this title; and
(5) the provisions relating to boycott, coercion, or
intimidation in section 3(b) of the McCarran-Ferguson Act.
SEC. 103. AMENDMENTS.
Section 2 of the Act of March 9, 1945 (59 Stat. 34; 15 U.S.C.
1012), commonly known as the McCarran-Ferguson Act, is amended--
(1) in subsection (b) by striking ``: Provided,'' and all
that follows through ``law.'' and inserting the following:
``except as follows:
``(1)(A) The antitrust laws shall be applicable to the
business of medical malpractice insurance except as provided in
subparagraphs (B) and (C).
``(B) The antitrust laws shall not be applicable to conduct
that consists of making an agreement or engaging in joint
conduct--
``(i)(I) to collect, compile, classify, or
disseminate historical data;
``(II) to develop procedures to collect, compile,
classify, or disseminate historical data; or
``(III) to verify that historical data is accurate
and complete;
``(ii) to determine, using standard actuarial
techniques, or disseminate, a loss development factor
or developed losses;
``(iii) to develop or disseminate a standard
medical malpractice insurance policy form (including a
standard addendum to a medical malpractice insurance
policy form and standard terminology in such a policy
form) if such agreement or joint conduct does not
include an agreement to adhere to such standard form,
or to require adherence to such standard form, except
that the fact that 2 or more persons engaged in the
business of medical malpractice insurance use such
standard form--
``(I) shall not be sufficient in itself to
support a finding that an agreement to adhere,
or to require adherence, to such standard form
exists; and
``(II) may be used only for the purpose of
supplementing or explaining direct evidence of
the existence of an agreement to adhere, or to
require adherence, to such standard form;
``(iv) to develop or disseminate, for use in
providing medical malpractice insurance in a State, a
manual that is filed, before dissemination, with the
State entity that regulates the business of medical
malpractice insurance under State law, if such manual
includes only--
``(I) information and conduct described in
clauses (i), (ii), and (iii), including
relativity factors;
``(II) during the transition period, a
trend factor or information to which a trend
factor has been applied, to the extent
permitted under subparagraph (C); and
``(III) explanations and instructions for
using the manual (or any of the information
contained in the manual), if such agreement or
joint conduct does not include an agreement
among competitors to adhere, or to require
adherence, to any of such explanations or
instructions;
``(v) to provide medical malpractice insurance
pursuant to a public necessity market mechanism; or
``(vi) to administer a public necessity market
mechanism in a State, pursuant to the authorization of
and under the supervision of such State, if all persons
who provide medical malpractice insurance in such State
pursuant to such mechanism, and all persons seeking to
obtain medical malpractice insurance through such
mechanism, have a reasonable opportunity to appeal
determinations affecting them to a governmental entity;
to the extent that such conduct is regulated by State law.
``(C) During the transition period, the antitrust laws
shall not be applicable to conduct that consists of making an
agreement or engaging in joint conduct to determine or
disseminate a trend factor, to the extent that such conduct is
regulated by State law.
``(2) Subsequent to the transition period, the independent
purchase of a trend factor by a person engaged in the business
of medical malpractice insurance from a person not engaged in
providing such insurance (and not affiliated with a person
engaged in providing such insurance) shall be presumed not to
violate the antitrust laws.
``(3) The Federal Trade Commission Act shall be applicable
to the business of medical malpractice insurance to the extent
that such business is not regulated by State law, except that,
with respect to enforcement of the antitrust laws, section 5 of
such Act shall be applicable to the business of medical
malpractice insurance to the same extent as the other antitrust
laws.'', and
(2) by adding at the end the following:
``(c) For purposes of subsection (b)--
``(1) the term `antitrust laws' has the meaning given it in
subsection (a) of the first section of the Clayton Act (15
U.S.C. 12), except that such term includes section 5 of the
Federal Trade Commission Act (15 U.S.C. 45) as such section 5
applies to conduct that constitutes a violation of the Sherman
Act or the Clayton Act;
``(2) the term `developed losses' means aggregate paid
losses and aggregate reserves held for received claims, as
adjusted by a loss development factor;
``(3) the term `historical data' means information
respecting--
``(A) losses paid by, claims received by, reserves
for such claims set aside by, or units of exposure to
loss in medical malpractice insurance policies sold by
any person engaged in the business of medical
malpractice insurance; or
``(B) medical malpractice insurance premiums
received by any person engaged in the business of
medical malpractice insurance, if such information is
not disseminated in a form from which information
respecting premiums received by any separately
identifiable person engaged in the business of medical
malpractice insurance may be derived;
``(4) the term `medical malpractice insurance policy' means
a contract under which medical malpractice insurance is sold to
an insured;
``(5) the term `loss' means an amount paid or to be paid by
a person engaged in the business of medical malpractice
insurance to (or for the benefit of) a claimant to satisfy a
claim on a medical malpractice insurance policy, and includes
any attorney, investigatory, or litigation expenses that are
separately incurred, identified, and allocated by such person
with respect to that particular claim;
``(6) the term `loss development factor' means an
adjustment to be made to the aggregate of losses incurred
during a prior period of time that have been paid or for which
claims have been received and reserves are being held, in order
to estimate the aggregate of the losses incurred during such
period that will ultimately be paid;
``(7) the term `medical malpractice insurance' means
insurance against loss caused by the action or inaction of any
health care provider;
``(8) the term `public necessity market mechanism' means a
plan established by State law or by the State entity that
regulates the business of medical malpractice insurance under
State law--
``(A) for providing a type of medical malpractice
insurance in a State;
``(B) in which the persons providing such type of
medical malpractice insurance pursuant to such
mechanism represent a substantial number of the persons
engaged in the business of providing such type of
insurance in such State and are either required by
State law, or formally requested or ordered by such
State entity, to participate;
``(C) the purpose of which is to make such type of
insurance available to persons who would not otherwise
be able to obtain such type of insurance at affordable
cost; and
``(D) in which the rate for such type of insurance
is subject to the approval or disapproval of such
State;
``(9) the term `relativity factor' means a ratio comparing
one classification of historical data to another such
classification, or comparing developed losses in one such
classification to developed losses in another such
classification;
``(10) the term `transition period' means the 2-year period
beginning on the effective date of the Insurance Competitive
Pricing Act of 2003; and
``(11) the term `trend factor' means an adjustment to be
made to developed losses in order to account for any change
that is anticipated to affect losses.''.
SEC. 104. STUDY AND REPORT.
(a) Study.--During the 5-year period beginning on the effective
date of this title, the Attorney General shall conduct a study to
determine the effect of this title, and the amendments made by this
title, on the business of medical malpractice insurance.
(b) Report.--Not later than 1 year after the expiration of the 5-
year period referred to in subsection (a), the Attorney General shall
submit, to the Speaker of the House of Representatives and the
President pro tempore of the Senate, a report summarizing the results
of the study required by subsection (a).
SEC. 105. EFFECTIVE DATE.
This title shall take effect 1 year after the date of the enactment
of this Act.
TITLE II--ADDRESSING CURRENT ISSUES FOR HEALTH CARE PROVIDERS
SEC. 201. PROMPT PAYMENT OF CLAIMS.
(a) Group Health Plans.--
(1) Public health service act amendments.--(A) Subpart 2 of
part A of title XXVII of the Public Health Service Act is
amended by adding at the end the following new section:
``SEC. 2707. PROMPT PAYMENT OF CLAIMS.
``(a) In General.--A group health plan, and a health insurance
issuer offering health insurance coverage in connection with a group
health plan, shall provide for prompt payment of claims submitted for
health care services or supplies furnished to a participant,
beneficiary, or enrollee with respect to benefits covered by the plan
or issuer, in a manner that is no less protective than the provisions
referred to in subsection (b).
``(b) Provisions.--The provisions referred to in this subsection
are the provisions of section 1842(c)(2) of the Social Security Act (42
U.S.C. 1395u(c)(2)), as modified as follows:
``(1) Alternative interest rate.--Instead of applying the
interest rate calculated under section 3902(a) of title 31,
United States Code, the interest rate shall be 1 percent of the
payment amount due plus, in the case of payments not made
within 25 days of the due date, an additional 1 percent
interest due for every month the payment is past due.
``(2) Coverage of 100 percent of claims.--The reference in
such section 1842(c)(2) to `not less than 95 percent of all
claims submitted under this part' shall be deemed to be a
reference to `100 percent of all claims submitted under the
plan or coverage involved'.
``(c) Permitting Additional Penalties.--State Insurance
Commissioners may establish and impose monetary penalties or other
penalties for failure by a group health plan, and a health insurance
issuer offering health insurance coverage in connection with a group
health plan, to comply with the provisions referred to in subsection
(b).''.
(2) ERISA amendments.--(A) Subpart B of part 7 of subtitle
B of title I of the Employee Retirement Income Security Act of
1974 is amended by adding at the end the following new section:
``SEC. 714. PROMPT PAYMENT OF CLAIMS.
``(a) In General.--A group health plan, and a health insurance
issuer offering health insurance coverage in connection with a group
health plan, shall provide for prompt payment of claims submitted for
health care services or supplies furnished to a participant or
beneficiary with respect to benefits covered by the plan or issuer, in
a manner that is no less protective than the provisions referred to in
subsection (b).
``(b) Provisions.--The provisions referred to in this subsection
are the provisions of section 1842(c)(2) of the Social Security Act (42
U.S.C. 1395u(c)(2)), as modified as follows:
``(1) Alternative interest rate.--Instead of applying the
interest rate calculated under section 3902(a) of title 31,
United States Code, the interest rate shall be 1 percent of the
payment amount due plus, in the case of payments not made
within 25 days of the due date, an additional 1 percent
interest due for every month the payment is past due.
``(2) Coverage of 100 percent of claims.--The reference in
such section 1842(c)(2) to `not less than 95 percent of all
claims submitted under this part' shall be deemed to be a
reference to `100 percent of all claims submitted under the
plan or coverage involved'.
``(c) Permitting Additional Penalties.--State Insurance
Commissioners may establish and impose monetary penalties or other
penalties for failure by a group health plan, and a health insurance
issuer offering health insurance coverage in connection with a group
health plan, to comply with the provisions referred to in subsection
(b).''.
(D) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 713 the
following new item:
``Sec. 714. Prompt payment of claims.''.
(3) Internal revenue code amendments.--
(A) In general.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 is amended--
(i) in the table of sections, by inserting
after the item relating to section 9812 the
following new item:
``Sec. 9813. Prompt payment of claims.'';
and
(ii) by inserting after section 9812 the
following:
``SEC. 9813. PROMPT PAYMENT OF CLAIMS.
``A group health plan shall provide for prompt payment of claims
submitted for health care services or supplies furnished to a
participant or beneficiary with respect to benefits covered by the
plan, in a manner that is no less protective than the provisions
referred to in subsection (b).
``(b) Provisions.--The provisions referred to in this subsection
are the provisions of section 1842(c)(2) of the Social Security Act (42
U.S.C. 1395u(c)(2)), as modified as follows:
``(1) Alternative interest rate.--Instead of applying the
interest rate calculated under section 3902(a) of title 31,
United States Code, the interest rate shall be 1 percent of the
payment amount due plus, in the case of payments not made
within 25 days of the due date, an additional 1 percent
interest due for every month the payment is past due.
``(2) Coverage of 100 percent of claims.--The reference in
such section 1842(c)(2) to `not less than 95 percent of all
claims submitted under this part' shall be deemed to be a
reference to `100 percent of all claims submitted under the
plan involved'.
``(c) Permitting Additional Penalties.--State Insurance
Commissioners may establish and impose monetary penalties or other
penalties for failure by a group health plan to comply with the
provisions referred to in subsection (b).''.
(b) Individual Health Insurance.--(1) Part B of title XXVII of the
Public Health Service Act is amended by inserting after section 2752
the following new section:
``SEC. 2753. PROMPT PAYMENT OF CLAIMS.
``The provisions of section 2707 shall apply to health insurance
coverage offered by a health insurance issuer in the individual market
in the same manner as they apply to health insurance coverage offered
by a health insurance issuer in connection with a group health plan in
the small or large group market.''.
(c) Protection of States' Rights.--Any issue relating to prompt
payment for health care services or supplies that is not governed by
any provision of law as amended by this section shall be governed by
otherwise applicable State or Federal law. This section (and the
provisions amended by this section) does not preempt or supercede any
law that imposes shorter time frames for payment, greater penalties for
non-payment, and, in general, provides greater assurances that group
health plans and health insurance issuers provide for prompt payment of
claims submitted for health care services or supplies furnished to a
participant, beneficiary, or enrollee with respect to benefits covered
by the plan or issuer.
(d) Effective Dates.--
(1) Group health plans and group health insurance
coverage.--The amendments made by subsection (a) apply with
respect to group health plans for plan years beginning on or
after January 1, 2003.
(2) Individual health insurance coverage.--The amendment
made by subsection (b) apply with respect to health insurance
coverage offered, sold, issued, renewed, in effect, or operated
in the individual market on or after such date.
SEC. 202. ELIMINATING NURSE SHORTAGES.
Title VIII of the Public Health Service Act (42 U.S.C. 296 et seq.)
is amended--
(1) in section 846(a)(3), by inserting ``in a nursing home,
in a hospice, in a home health agency, in a nurse-managed
health center, in a public health department,'' after ``in a
public hospital,'';
(2) in section 801, by adding at the end the following:
``(9) Health care facility.--The term `health care
facility' means an Indian Health service health center, a
Native Hawaiian health center, a hospital, a migrant health
center, a community health center, a Federally qualified health
center, a nurse-managed health center, a rural health clinic, a
nursing home, a home health care agency, a hospice, a public
health clinic, a long-term care facility, a skilled nursing
facility, or any other public, nonprofit, or private facility
designated by the Secretary.''; and
(3) by adding at the end the following:
``PART H--NATIONAL NURSE SERVICE CORPS SCHOLARSHIP PROGRAM
``SEC. 851. NATIONAL NURSE SERVICE CORPS SCHOLARSHIP PROGRAM.
``(a) Program Authorized.--The Secretary shall establish a National
Nurse Service Corps Scholarship program (referred to in this section as
the `program') that provides scholarships to individuals seeking
nursing education in exchange for service by such individuals in
critical nursing shortage areas or facilities.
``(b) Preference.--In awarding scholarships under this section, the
Secretary shall give preference to applicants with the greatest
financial need, applicants who agree to serve in health care facilities
experiencing nursing shortages in medically underserved areas,
applicants currently working in a health care facility who agree to
serve the period of obligated service at such facility, minority nurse
applicants, and applicants with an interest in a practice area of
nursing that has unmet needs.
``(c) Requirements.--To be eligible to participate in the program,
an individual must--
``(1) be accepted for enrollment, or be enrolled, in an
accredited school of nursing, on a full- or part-time basis, to
take courses leading to a collegiate or associate degree in
nursing, or a diploma in nursing;
``(2) submit an application to participate in the program;
and
``(3) enter into an agreement with the Secretary, at the
time of submittal of such application, to--
``(A) accept the conditions of the scholarship and
remain enrolled in a school of nursing;
``(B) maintain an acceptable level of academic
standing;
``(C) maintain enrollment in a course of study
until the individual completes the course of study; and
``(D) serve as a nurse for a period of not less
than 2 years in a critical nursing shortage area or
facility, or the individual may complete such required
period of service on a part-time basis subject to--
``(i) an agreement entered into by the
facility and the individual which is approved
by the Secretary; and
``(ii) the individual agrees in writing
that the period of obligated service will be
extended so that the aggregate amount of less
than full-time service performed will equal the
amount of service that would be performed
through full-time service.
``(d) Rule of Construction.--In selecting individuals to
participate in the program, the Secretary shall give preference to
individuals serving at public or nonprofit private facilities, unless
only a private facility is present in the geographic area that the
Secretary determines is experiencing a nursing shortage. While giving
priority to individuals who propose to provide service in public or
nonprofit private facilities, the Secretary must not disregard the
needs of areas that individuals seek to provide services in which no
public or nonprofit private facility is operating, including rural
areas.
``(e) Applications.--
``(1) In general.--The application forms for the programs
shall include--
``(A) a fair summary of the rights and liabilities
of an individual whose application is approved by the
Secretary; and
``(B) information respecting meeting a service
obligation and such other information as may be
necessary for the individual to understand the program.
``(2) Accessibility.--The application form and all other
information furnished by the Secretary shall be written so that
it may be understood by the average individual applying to
participate in the program. The Secretary shall make such
application forms, and other information available to
individuals desiring to participate in the program, on a date
sufficiently early to ensure that such individuals have
adequate time to carefully review and evaluate such forms and
information.
``(3) Distribution.--The Secretary shall distribute to
junior and senior high schools, community colleges,
universities, and schools of nursing materials providing
information on the program and shall encourage the schools to
disseminate the materials to students of the schools.
``(f) Scholarship.--
``(1) In general.--A scholarship provided to a student for
a school year under a written contract under the program shall
consist of--
``(A) payment to, or (in accordance with paragraph
(2)) on behalf of the student of--
``(i) the tuition of the student in such
school year; and
``(ii) all other reasonable educational
expenses and support services, including fees,
books, and laboratory expenses incurred by the
student in such school year; and
``(B) payment to the student of a stipend of $400
per month (adjusted in accordance with paragraph (3))
for each month that the student is enrolled.
``(2) Contracts.--
``(A) With a school of nursing.--The Secretary may
contract with a school of nursing, in which a
participant in the program is enrolled, for the payment
to the school of nursing of the amounts of tuition and
other reasonable educational expenses described in
paragraph (1)(A).
``(B) With an individual.--The Secretary shall
prepare a written contract for the program that shall
be provided to any individual who is enrolled or
accepted for enrollment at a school of nursing and who
desires to participate in the program at the time that
an application is provided to such individual. The
contract described in this paragraph shall contain a
provision that any financial obligation of the United
States arising out of a contract entered into under
this section and any obligation of the individual
which is conditioned thereon, is contingent upon funds being
appropriated for scholarships under this section.
``(3) Monthly stipend.--The amount of the monthly stipend
for each month that a student is enrolled, specified in
paragraph (1)(B) and as previously adjusted (if at all) in
accordance with this paragraph, shall be increased by the
Secretary as the Secretary determines to be reasonable.
``(g) Breach of Agreement.--In the case of an individual who enters
into an agreement under this section to provide service as a nurse in
consideration for receiving a scholarship, such individual is liable to
the Federal Government in accordance with sections 338E and 338F as
amended in the future. If the individual begins providing less than
full-time service but fails to begin or complete the period of
obligated service, the methods stated in section 338E(c) for
determining the damages for breach of the individual's written contract
will be used after converting periods of obligated service or of
service performed into their full-time equivalence.
``(h) Fund Regarding Use of Amounts Recovered for Contract
Breach.--There is established in the Treasury of the United States a
fund to be known as the National Nurse Service Corps Replacement Fund.
Such fund shall be governed under section 338F.
``(i) Service Information.--The Secretary shall provide to an
individual who has participated in the program and is nearing the
conclusion of his or her service obligation, information regarding
other opportunities for nursing in critical nursing shortage areas or
facilities.
``(j) Report.--Not later than 18 months after the first loan cycle,
and annually thereafter, the Secretary shall prepare and submit to
Congress a report describing the program, including statements
regarding--
``(1) the number of enrollees, scholarships, and grant
recipients by year of study;
``(2) the number of graduates;
``(3) the amount of scholarship payments made for each of
tuition, stipends, and other expenses;
``(4) which educational institution the scholar attended;
``(5) the number and placement location of the scholars;
``(6) the default rate and actions required;
``(7) the amount of outstanding default funds;
``(8) to the extent that it can be determined, the reason
for the default;
``(9) the demographics of the individuals participating in
the scholarship program; and
``(10) recommendations for future modifications of the
scholarship program.
``(k) Definitions.--In this section:
``(1) Community health center.--The term `community health
center' has the meaning given such term in section 330(a).
``(2) Critical nursing shortage area or facility.--
``(A) In general.--The term `critical nursing
shortage area or facility' means--
``(i) an urban or rural area that the
Secretary determines is experiencing a nursing
shortage;
``(ii) a population that the Secretary
determines has such a shortage; or
``(iii) a health care facility or other
public, nonprofit, or private facility that the
Secretary determines has a shortage.
``(B) Factors to consider.--In making a
determination regarding a critical nursing shortage
area or facility, the Secretary shall use the criteria
in section 846 for not more than 12 months, and after
such period--
``(i) the ratio of available nurses to the
number of individuals in the area or population
group;
``(ii) the demonstrated need of a health
care facility or other public, nonprofit, or
private facility in the area; or
``(iii) the presence of innovative
retention strategies utilized by eligible
facilities.
``(3) Rural health clinic.--The term `rural health clinic'
has the meaning given such term in section 1861(aa)(2) of the
Social Security Act.
``(l) Authorization of Appropriations.--For the purpose of payments
under agreements entered into under subsection (a), there are
authorized to be appropriated $40,000,000 for fiscal year 2003 and such
sums as may be necessary for fiscal years 2004 through 2007.
``PART I--INITIATIVES TO RECRUIT NURSES AND COMBAT THE NURSING SHORTAGE
``SEC. 855. NURSE RECRUITMENT GRANT PROGRAM.
``(a) Program Authorized.--The Secretary shall award grants to
eligible entities to increase nursing education opportunities.
``(b) Eligible Entity.--In this section, the term `eligible entity'
means a school of nursing, or a health care facility, or a partnership
of such school and facility.
``(c) Use of Funds.--An eligible entity that receives a grant under
subsection (a) shall use funds received from such grant to--
``(1) support outreach programs at primary, junior, and
secondary schools that inform guidance counselors and students
of education opportunities regarding nursing;
``(2) carry out special projects to increase nursing
education opportunities for individuals who are from
disadvantaged backgrounds (including economically disadvantaged
backgrounds and racial and ethnic minorities underrepresented
among registered nurses) by providing student scholarships or
stipends, pre-entry preparation, or retention activities;
``(3) support education programs for nursing students who
require assistance with math, science, English, and medical
terminology;
``(4) meet the costs of dependent care and transportation
for individuals who are taking part in a nursing education
program at any level; or
``(5) support community-based partnerships seeking to
recruit nurses in rural communities and medically underserved
urban communities, and other communities experiencing a nursing
shortage.
``(d) Application.--An eligible entity desiring a grant under
subsection (a) shall submit an application to the Secretary at such
time, in such manner, and containing such information as the Secretary
may reasonably require.
``(e) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $10,000,000 for fiscal year 2003
and such sums as may be necessary for fiscal years 2004 through 2007.
``PART J--INITIATIVES TO STRENGTHEN THE NURSE WORKFORCE
``SEC. 857. GRANTS FOR CAREER LADDER PROGRAMS.
``(a) Program Authorized.--The Secretary shall award grants to
eligible entities to assist individuals and develop programs to assist
individuals in obtaining education and training required to enter the
nursing profession and advance within such profession.
``(b) Definition.--The term `eligible entity' means a school of
nursing or a health care facility, or a partnership of such school and
facility.
``(c) Use of Funds.--An eligible entity that receives a grant under
subsection (a) shall use such funds received through such grant to--
``(1) establish student scholarships or stipends for nurse
professionals, licensed practical nurses, certified nurse
assistants, and home health aides who enroll in entry level
nursing programs, advanced practice nursing degree programs,
RN/Master nursing degree programs, doctoral nursing programs,
nurse administrator programs, and training programs focused on
specific technology use or disease management;
``(2) provide career counseling to individuals seeking to
advance within the nursing profession;
``(3) provide employees of the facility advanced training
and education at the school of nursing or health care facility;
``(4) establish or expand nursing practice arrangements in
noninstitutional settings to demonstrate methods to improve
access to primary health care in medically underserved
communities; and
``(5) develop programs, including distance learning
programs in coordination with the Office for the Advancement of
Telehealth, to facilitate educational advancement for
individuals with existing degrees or health care training.
``(d) Application.--An eligible entity seeking a grant under
subsection (a) shall submit an application to the Secretary at such
time, in such a manner, and containing such information as the
Secretary may reasonably require.
``(e) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $20,000,000 for fiscal year 2003
and such sums as may be necessary for fiscal years 2004 through 2007.
``SEC. 858. GRANTS FOR NURSE TRAINING IN LONG-TERM CARE FOR THE
ELDERLY.
``(a) Program Authorized.--The Secretary shall award grants to
eligible entities to develop and incorporate gerontology curriculum and
competencies and to encourage individuals to enter the nursing
profession with a focus on providing long-term care for the elderly.
``(b) Eligible Entity.--The term `eligible entity' means a--
``(1) school of nursing;
``(2) health care facility; or
``(3) partnership of paragraphs (1) and (2).
``(c) Use of Funds.--An eligible entity that receives a grant under
subsection (a) shall use funds under such grant to--
``(1) provide training to individuals who will provide
long-term care for the elderly;
``(2) develop stand alone courses in gerontological nursing
to support concentrations, minors, and majors in the
discipline;
``(3) train faculty members in gerontological nursing; or
``(4) provide continuing education in gerontological
nursing.
``(d) Application.--An eligible entity desiring a grant under
subsection (a) shall submit an application to the Secretary at such
time, in such manner, and containing such information as the Secretary
may reasonably require.
``(e) Definitions.--For the purposes of this section, the term
`health care facility' means a hospital, nursing home, home health care
agency, hospice, skilled nursing facility, long-term care facility, or
any other facility designated by the Secretary.
``(f) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $12,000,000 for fiscal year 2003
and such sums as may be necessary for fiscal years 2004 through 2007.
``SEC. 859. GRANTS FOR INTERNSHIP AND RESIDENCY PROGRAMS.
``(a) Program Authorized.--The Secretary shall award grants to an
eligible entity to develop internship and residency programs that
encourage mentoring and the development of specialties.
``(b) Definition.--The term `eligible entity' means a partnership
of a school of nursing and health care facility.
``(c) Use of Funds.--An eligible entity that receives a grant under
subsection (a) shall use such funds received through such grant to--
``(1) develop internship and residency programs and
curriculum and training programs for graduates of a nursing
program;
``(2) provide support for faculty and mentors; and
``(3) provide support for nurses participating in
internship and residency programs on both a full-time and part-
time basis.
``(d) Application.--An eligible entity seeking a grant under
subsection (a) shall submit an application to the Secretary at such
time, in such a manner, and containing such information as the
Secretary may reasonably require.
``(e) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $10,000,000 for fiscal year 2003
and such sums as may be necessary for fiscal years 2004 through 2007.
``SEC. 860. DEVELOPING RETENTION STRATEGIES AND BEST PRACTICES IN
NURSING STAFF MANAGEMENT.
``(a) Program Authorized.--The Secretary shall award grants to
eligible entities to carry out and evaluate demonstrations of models
and best practices in nursing care and develop innovative strategies or
approaches for retention of professional nurses.
``(b) Definitions.--In this section:
``(1) Eligible entity.--The term `eligible entity' means--
``(A) a partnership or coalition containing a
health care facility and a school of nursing;
``(B) a partnership or coalition containing a
health care facility and another organization with
expertise in outcome and cost-effectiveness
measurement; or
``(C) containing a health care facility
demonstrating proficiency in outcomes and cost-
effectiveness measurement, and receipt of accreditation
by an accepted organization shall constitute evidence
of such proficiency.
``(2) Nurse leadership.--The term `nurse leadership'
includes nurse executives, nurse administrators, and nurse
managers.
``(3) Professional nurse.--The term `professional nurse'
means a registered nurse who holds a valid and unrestricted
license to practice nursing in a State.
``(c) Distribution of Grants.--Grants awarded under this section
shall be distributed among a variety of geographic regions and among a
range of different types and sizes of health care facilities.
``(d) Duration of Grants.--Grants awarded under this section shall
be awarded for a period not greater than 2 years (and may be renewable
only once).
``(e) Allocation.--The Secretary shall determine the amount of a
grant awarded under this section to the nursing services of the health
care facility based on the number of staffed beds as follows, and if
the Secretary deems appropriate these amounts may be adjusted:
``(1) A maximum of $200,000 for a facility with less than
100 staffed beds.
``(2) A maximum of $400,000 for a facility with less than
400 staffed beds.
``(3) A maximum of $600,000 for a facility with 400 or more
staffed beds.
``(f) Priority Criteria.--The Secretary shall give priority in
awarding grants under this section to health care facilities that have
not previously received a grant under this section, and in the case of
a grant renewal, the Secretary shall give priority to grant recipients
who have demonstrated outcome improvements or have been designated as a
magnet hospital by the American Nurses Credentialing Center.
``(g) Use of Funds.--An eligible entity that receives a grant under
subsection (a) shall use such grant funds to do one or more of the
following:
``(1) Improve the quality of the health care facility work
environment, including improving communication and
collaboration among health care professionals.
``(2) Initiate or maintain aggressive nurse retention
programs, including other initiatives as deemed appropriate by
the nurse retention committee at the health care facility.
``(3) Reduce workplace injuries.
``(4) Reduce rates of nursing sensitive patient outcomes.
``(5) Provide high quality evaluations of the cost-
effectiveness and patient-outcomes of best practices, to assist
health care facility decision-makers in determining appropriate
nurse retention strategies.
``(6) Promote continuing nursing education and career
development.
``(h) Application.--
``(1) In general.--An eligible entity desiring a grant
under subsection (a) shall submit an application to the
Secretary at such time, and in such manner, and containing such
information as the Secretary may reasonably require.
``(2) Contents.--The application submitted under paragraph
(1) shall include a description of--
``(A) the project or projects proposed to be
carried out with grant funds;
``(B) the means by which to evaluate the project
with respect to its cost-effectiveness and outcomes as
they relate to staff turnover, workplace injuries, and
patient care outcomes that are sensitive to nursing
care; and
``(C) the system of patient outcomes measurement,
which shall be described by the nurse leadership and
professional nurses of the health care facility and
shall be sensitive to nursing care and shall evaluate
the specific needs of the patients served by the health
care facility and the educational needs of the nursing
staff at such facility to meet the needs of the
patients, and the health care facility must allocate
sufficient funds to carry out the system;
``(D) the health care facility's organizational and
clinical decision-making processes that incorporate the
input of the nursing staff, including the development
of a nurse retention committee, the inclusion of nurse
executive participation in senior level management of
the health care facility, and a nurse residency
training program for new graduate nurses entering the
workforce on a full-time basis, or nurses returning to
work at a health care facility on a full-time basis
after an absence of not less than 3 years without
working in the nursing field.
``(i) Authorization of Appropriations.--There is to be authorized
to be appropriated to carry out this section $10,000,000 for fiscal
year 2003 and such sums as may be necessary for fiscal years 2004
through 2007.
``SEC. 861. STIPEND AND SCHOLARSHIP PROGRAM.
``(a) Program Authorized.--
``(1) In general.--The Secretary shall establish a
scholarship and stipend program to encourage individuals to
seek a masters degree or a doctoral degree at a school of
nursing.
``(2) Limitation.--Assistance provided under paragraph (1)
for a part-time masters degree program shall be provided for
not more than 6 years and for a part-time doctoral degree
program not more than 7 years.
``(b) Eligibility.--To be eligible to receive a scholarship or
stipend under this section, an individual shall--
``(1) submit an application to the Secretary at such time,
in such manner, and containing such information as the
Secretary may reasonably require;
``(2) be accepted for enrollment, or be enrolled, in an
accredited school of nursing, on a full- or part-time basis to
take courses leading to a masters degree or doctoral degree;
``(3) enter into an agreement with the Secretary, at the
time of submittal of such application, to--
``(A) accept the conditions of the scholarship and
remain enrolled in a school of nursing;
``(B) maintain an acceptable level of academic
standing; and
``(C) maintain enrollment in a course of study
until the individual completes the course of study; and
``(4) teach at an accredited school of nursing for 1 year
for each year of assistance with a course load determined by
the school of nursing where the teaching will take place, and
the individual may complete such required period of service on
a part-time basis subject to--
``(A) an agreement entered into by the facility and
the individual which is approved by the Secretary; and
``(B) the individual agrees in writing that the
period of obligated service will be extended so that
the aggregate amount of less than full-time service
will equal the amount of service that would be
performed through full-time service.
``(c) Application.--The Secretary shall disseminate application
forms to individuals and in such forms, include--
``(1) a summary of the rights and liabilities of an
individual whose application is approved by the Secretary; and
``(2) information respecting meeting the service obligation
described in subsection (b)(4).
``(d) Scholarship.--
``(1) In general.--A scholarship provided to a student for
a school year under a written contract under the program shall
consist of--
``(A) payment to, or (in accordance with paragraph
(2)) on behalf of the student of--
``(i) the tuition of the student in such
school year; and
``(ii) all other reasonable educational
expenses and support services, including fees,
books, and laboratory expenses incurred by the
student in such school year; and
``(B) payment to the student of a stipend of $400
per month (adjusted in accordance with paragraph (3))
for each month that the student is enrolled.
``(2) Contracts.--
``(A) With a school of nursing.--The Secretary may
contract with a school of nursing, in which a
participant in the program is enrolled, for the payment
to the school of nursing of the amounts of tuition and
other reasonable educational expenses described in
paragraph (1)(A).
``(B) With an individual.--The Secretary shall
prepare a written contract for the program that shall
be provided to any individual who is enrolled or
accepted for enrollment at a school of nursing and who
desires to participate in the program at the time that
an application is provided to such individual. The
contract described in this paragraph shall contain a
provision that any financial obligation of the United
States arising out of a contract entered into under
this section and any obligation of the individual which
is conditioned thereon, is contingent upon funds being
appropriated for scholarships under this section.
``(3) Monthly stipend.--The amount of the monthly stipend
for each month that a student is enrolled, specified in
paragraph (1)(B) and as previously adjusted (if at all) in
accordance with this paragraph, shall be increased by the
Secretary as the Secretary determines to be reasonable.
``(e) Breach of Agreement.--In the case of an individual who enters
into an agreement under this section to provide service as a nurse in
consideration for receiving a scholarship, such individual is liable to
the Federal Government in accordance with sections 338E and 338F as
amended in the future. If the individual begins providing less than
full-time service but fails to begin or complete the period of
obligated service, the methods stated in section 338E(c) for
determining the damages for breech of the individual's written contract
will be used after converting periods of obligated service or of
service performed into their full-time equivalence.
``(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $10,000,000 for fiscal year 2003
and such sums as may be necessary for fiscal years 2004 through
2007.''.
TITLE III--MEDICAL MALPRACTICE LIABILITY REFORM
SEC. 301. DEFINITIONS.
In this title, the following definitions apply:
(1) Alternative dispute resolution system.--The term
``alternative dispute resolution system'' means a system that
provides for the resolution of medical malpractice claims in a
manner other than through medical malpractice liability
actions.
(2) Claimant.--The term ``claimant'' means any person who
alleges a medical malpractice claim, and any person on whose
behalf such a claim is alleged, including the decedent in the
case of an action brought through or on behalf of an estate.
(3) Future damages.--The term ``future damages'' means
damages for economic or noneconomic loss incurred after the
time of judgment.
(4) Health care professional.--The term ``health care
professional'' means any individual who provides health care
services in a State and who is required by the laws or
regulations of the State to be licensed or certified by the
State to provide such services in the State.
(5) Health care provider.--The term ``health care
provider'' means any organization or institution that is
engaged in the delivery of health care services in a State and
that is required by the laws or regulations of the State to be
licensed or certified by the State to engage in the delivery of
such services in the State.
(6) Injury.--The term ``injury'' means any illness,
disease, or other harm that is the subject of a medical
malpractice liability action or a medical malpractice claim.
(7) Mandatory.--The term ``mandatory'' means required to be
used by the parties to attempt to resolve a medical malpractice
claim notwithstanding any other provision of an agreement,
State law, or Federal law.
(8) Mediation.--The term ``mediation'' means a settlement
process coordinated by a neutral third party and without the
ultimate rendering of a formal opinion as to factual or legal
findings.
(9) Medical malpractice claim.--The term ``medical
malpractice claim'' means a claim against a health care
provider, a health care professional, or a blood or tissue bank
licensed or registered by the Food and Drug Administration in
which a claimant alleges that injury was caused by the
provision of (or the failure to provide) health care services,
except that such term does not include--
(A) any claim based on an allegation of an
intentional tort; or
(B) any claim based on an allegation that a product
is defective or unreasonably dangerous.
(10) Medical malpractice liability action.--The term
``medical malpractice liability action'' means a civil action
brought in a State or Federal court against a health care
provider, a health care professional, or a blood or tissue bank
licensed or registered by the Food and Drug Administration in
which the plaintiff alleges a medical malpractice claim.
SEC. 302. FEDERAL TORT REFORM.
(a) In General.--Except as provided in section 303, this title
shall apply with respect to any medical malpractice liability action
brought in any State or Federal court, except that this title shall not
apply to a claim or action for damages arising from a vaccine-related
injury or death to the extent that title XXI of the Public Health
Service Act applies to the claim or action.
(b) Preemption.--The provisions of this title shall preempt any
State law to the extent such law relates to a type of tort reform
included under this title and is inconsistent with such provisions.
(c) Effect on Sovereign Immunity and Choice of Law or Venue.--
Nothing in this title shall be construed to--
(1) waive or affect any defense of sovereign immunity
asserted by any State under any provision of law;
(2) waive or affect any defense of sovereign immunity
asserted by the United States;
(3) affect the applicability of any provision of the
Foreign Sovereign Immunities Act of 1976;
(4) preempt State choice-of-law rules with respect to
claims brought by a foreign nation or a citizen of a foreign
nation; or
(5) affect the right of any court to transfer venue or to
apply the law of a foreign nation or to dismiss a claim of a
foreign nation or of a citizen of a foreign nation on the
ground of inconvenient forum.
(d) Federal Court Jurisdiction Not Established on Federal Question
Grounds.--Nothing in this title shall be construed to establish any
jurisdiction in the district courts of the United States over medical
malpractice liability actions on the basis of section 1331 or 1337 of
title 28, United States Code.
SEC. 303. ALTERNATIVE DISPUTE RESOLUTION METHODS.
(a) Mandatory Mediation.--In any medical malpractice liability
action, before such action comes to trial, mediation shall be required.
Such mediation shall be conducted by one or more mediators who are
selected by agreement of the parties or, if the parties do not agree,
who are qualified under applicable State law and selected by the court.
(b) Requirements.--Mediation under subsection (a) shall be made
available by a State subject to the following requirements:
(1) Participation in such mediation shall be in lieu of any
alternative dispute resolution method required by any other law
or by any contractual arrangement made by or on behalf of the
parties before the commencement of the action.
(2) Each State shall disclose to residents of the State the
availability and procedures for resolution of consumer
grievances regarding the provision of (or failure to provide)
health care services, including such mediation.
(3) Each State shall provide that such mediation may begin
before or after, at the option of the claimant, the
commencement of a medical malpractice liability action.
(4) The Attorney General, in consultation with the
Secretary of Health and Human Services, shall, by regulation,
develop requirements with respect to such mediation to ensure
that it is carried out in a manner that--
(A) is affordable for the parties involved;
(B) encourages timely resolution of claims;
(C) encourages the consistent and fair resolution
of claims; and
(D) provides for reasonably convenient access to
dispute resolution.
(c) Further Redress and Admissibility.--Any party dissatisfied with
a determination reached with respect to a medical malpractice claim as
a result of an alternative dispute resolution method applied under this
section shall not be bound by such determination. The results of any
alternative dispute resolution method applied under this section, and
all statements, offers, and communications made during the application
of such method, shall be inadmissible for purposes of adjudicating the
claim.
SEC. 304. PREVENTING FRIVOLOUS MALPRACTICE SUITS.
(a) Certification.--The signatures of attorneys or parties
constitute a certificate by them that they have read the pleading that
to the best of their knowledge, information, and belief formed after
reasonable inquiry the medical malpractice claim is not groundless and
brought in bad faith or groundless and groundless and brought for the
purpose of harassment. Attorneys or parties who shall bring a
fictitious suit as an experiment to get an opinion of the court, or who
shall file any fictitious pleading in a cause for such a purpose, or
shall make statements in a pleading which they know to be groundless
and false, for the purpose of securing a delay of the trial of the
cause, shall be held guilty of contempt. If a pleading is signed in
violation of this subsection, the court, upon motion or upon its own
initiative, after notice and hearing, shall impose an appropriate
sanction, such as striking the pleadings, dismissing the suit, and
requiring payment of costs, attorneys fees, and sanctions (if
appropriate) plus interest, upon the person who signed it, a
represented party, or both.
(b) Process; Rules.--Courts shall presume that pleadings are filed
in good faith. No sanctions under this section may be imposed except
for good cause, the particulars of which must be stated in the sanction
order. The term ``groundless'' means, for purposes of this section,
having no basis in law or fact and not warranted by good faith argument
for the extension, modification, or reversal of existing law. A general
denial does not constitute a violation of this subsection (a). The
amount requested in damages, if any, does not constitute a violation of
subsection (a).
SEC. 305. REQUIREMENT FOR AFFIDAVIT OF MERIT.
(a) Requiring Submission With Complaint.--No medical malpractice
liability action may be brought by any individual unless, at the time
the individual brings the action (except as provided in subsection
(b)(1)), the individual (or the individual's attorney) submits an
affidavit declaring that--
(1) the individual (or the individual's attorney) has
consulted and reviewed the facts of the action with a qualified
specialist;
(2) the individual (or the individual's attorney) has
obtained a written report by a qualified specialist that
clearly identifies the individual and that includes the
specialist's statement of belief that, based on a review of the
available medical record and other relevant material, there is
a reasonable and meritorious cause for the filing of the action
against the defendant; and
(3) on the basis of the qualified specialist's review and
consultation, that the individual (or the individual's
attorney) has concluded that there is a reasonable and
meritorious cause for the filing of the action.
(b) Extension in Certain Instances.--
(1) In general.--Subject to paragraph (2), subsection (a)
shall not apply with respect to an individual who brings a
medical malpractice liability action without submitting an
affidavit described in such subsection if--
(A) the individual is unable to obtain the
affidavit before the expiration of the applicable
statute of limitations;
(B) as of the time the individual brings the
action, the individual has been unable to obtain
adequate medical records or other information necessary
to prepare the affidavit; or
(C) other good cause exists for failing to submit
the affidavit.
(2) Deadline for submission where extension applies.--In
the case of an individual who brings an action for which
paragraph (1) applies, the action shall be dismissed unless the
individual (or the individual's attorney) submits the affidavit
described in subsection (a) not later than--
(A) in the case of an action for which subparagraph
(A) of paragraph (1) applies, 90 days after bringing
the action;
(B) in the case of an action for which subparagraph
(B) of paragraph (1) applies, 90 days after obtaining
the information described in such subparagraph; or
(C) in the case of an action for which subparagraph
(C) of paragraph (1) applies, 90 days after the good
cause involved ceases to exist.
(c) Qualified Specialist Defined.--In subsection (a), a ``qualified
specialist'' means, with respect to a medical malpractice liability
action, a health care professional who is reasonably believed by the
individual bringing the action (or the individual's attorney)--
(1) to be knowledgeable in the relevant issues involved in
the action,
(2) to practice (or to have practiced) or to teach (or to
have taught) in the same area of health care or medicine that
is at issue in the action, and
(3) in the case of an action against a physician, to be
board certified in a specialty relating to that area of
medicine.
(d) Sanctions for Submitting False Allegations.--Upon the motion of
any party or its own initiative, the court in a medical malpractice
liability action may impose a sanction on a party or the party's
attorney (or both), including a requirement that the party reimburse
the other party to the action for costs and a reasonable attorney's
fee, if an affidavit described in subsection (a) is submitted without
reasonable cause and is found to be untrue.
(e) Confidentiality of Specialist.--Upon a showing of good cause by
a defendant, the court may ascertain the identity of a specialist
referred to in subsection (a) while preserving confidentiality.
TITLE IV--MEDICAL MALPRACTICE INSURANCE REFORMS
SEC. 401. ADVISORY COMMISSION ON MEDICAL MALPRACTICE.
(a) Appointment.--
(1) In general.--Not later than 90 days after the date of
the enactment of this Act, the Secretary of Health and Human
Services, in consultation with the Congress, shall appoint an
Advisory Commission on Medical Malpractice (in this section
referred to as the ``Commission'').
(2) Composition.--The Commission shall consist of 11
members, appointed without regard to the civil service laws.
Seven members shall be representatives of health care
professional organizations, 2 of whom shall be self-employed
physicians (allopathic or osteopathic). The remaining members
shall have expertise in health care quality or economics, but 2
shall have expertise in insurance and at least 1 shall be a
representative of patients.
(3) Terms; quorum.--The members of the Commission shall
serve until submission of the report pursuant to subsection
(d), at which time the Commission shall terminate. A vacancy
arising in the Commission shall be filled in the same manner as
the original appointment is made. A majority of members shall
constitute a quorum, and action shall be taken only by a
majority vote of those present and voting.
(b) Duties.--The Commission shall examine the causes of the medical
malpractice crisis. As part of such examination, the Commission shall
study and examine the following issues:
(1) The financial statements and information submitted to
regulators by insurance companies that offer medical
malpractice insurance, as well as any other information
maintained by regulators that may be relevant to this issue.
(2) How reductions in the investment income of insurers may
be adversely affecting the financial outlook of these
companies, thus increasing physician premiums to compensate for
any declines.
(3) The underwriting history of medical malpractice
insurance to determine whether premiums have historically
experienced similar increases and also determine whether
current market conditions are in some way unique.
(4) The competitiveness of markets, particularly in those
areas experiencing the sharpest premium increases. For example,
has the lack of competition in the medical malpractice
insurance market adversely affected physician premiums?
(5) How malpractice settlements and judgments compare to
premiums earned for medical malpractice lines of insurance. In
particular, how incurred but not yet reported holdings have
affected the reserve practices of medical malpractice insurers.
(6) The effect of current laws (at both the Federal and
State levels) on medical malpractice insurance rates.
(7) The underlying causes of changes in medical malpractice
insurance premiums.
(c) Staffing; Compensation.--
(1) Staffing.--The Secretary of Health and Human Services
shall furnish to the Commission an executive secretary and such
secretarial, clerical, and other services as may be necessary
to conduct its business, and may call upon other agencies of
the Government for statistical data, reports, and other
information which will assist the Commission in the performance
of its duties.
(2) Compensation.--Members of the Commission, while serving
on business of the Commission (inclusive of travel time), shall
be entitled to receive the daily equivalent of the annual rate
of basic maximum rate of pay payable from time to time under
section 5376 of title 5, United States Code, for each day and,
while so serving away from their homes or regular places of
business, may be allowed travel expenses, including per diem in
lieu of subsistence, in the same manner as provided in section
5703 of title 5, United States Code, for individuals in the
Government employed intermittently.
(d) Report.--Not later than one year after the date the Commission
is appointed, the Commission shall submit to Congress a report that
provides specific legislative changes that would address the problems
the Commission found, including a proposal for the reduction of medical
malpractice insurance rates.
(e) Response to Report.--The appropriate committees of the House of
Representatives and the Senate shall hold hearings on the Commission's
report and consider legislation to address these problems.
SEC. 402. LIMITATION ON RATE OF INCREASE IN MEDICAL MALPRACTICE
INSURANCE RATES.
(a) Declaration of Interstate Commerce.--Congress finds that
medical malpractice insurance coverage affects interstate commerce.
(b) Limitation on Rate of Increase.--Notwithstanding any other
provision of law, effective on the date of the enactment of this Act,
the rates charged for medical malpractice insurance coverage during the
period beginning on the day after the date of the enactment of this Act
and ending on the date that is 6 months after the date the Commission
files its report under section 401(d) shall not exceed the rates in
effect for such coverage as of January 1, 2002 (or, in the case of
coverage not offered as of such date, such comparable rate as is
approved by the Secretary of Health and Human Services) by more on an
annual than the annual rate of increase in the consumer price index for
all urban consumers plus 2 percentage points.
(c) Exception.--Any entity which can demonstrate to the Secretary
of Health and Human Services that under the terms of subsection (b) it
would be unable to earn a fair rate of return shall be exempt from the
limitation in rates under such subsection.
SEC. 403. WITHDRAWAL FROM MEDICAL MALPRACTICE INSURANCE MARKET.
(a) Limitation.--Any entity that discontinues writing medical
malpractice insurance coverage in a State shall also discontinue the
writing of any other line of insurance in such State.
(b) Orderly Withdrawal.--If an entity discontinues writing medical
malpractice insurance coverage in a State, it shall file with the
insurance commissioner of that State a plan of orderly withdrawal,
pursuant to which the insurer shall make such arrangements as are
necessary to ensure that any person insured by the entity shall
continue to be insured until the end of the term of the policy held by
such person.
(c) Sunset.--Subsections (a) and (b) shall only apply during the 3-
year period beginning on the date of the enactment of this Act.
SEC. 404. GUARANTEED RENEWABILITY OF COVERAGE.
(a) In General.--Subject to subsection (b), all medical malpractice
insurance coverage shall be guaranteed renewable. Rates for such
coverage shall increase by no more than the rate of increase in the
health care component of the consumer price index for all urban
consumers.
(b) Exceptions.--
(1) Rate freeze.--Subsection (a) shall not affect or
supersede the application of section 402.
(2) Limitation.--An entity is not required to renew medical
malpractice insurance coverage in the case of fraud, excessive
claims on which indemnity has been paid, or nonpayment of
premiums by the insured health care provider.
SEC. 405. GUARANTEED COVERAGE FOR CERTAIN HEALTH CARE PROVIDERS.
Any entity that is licensed to offer medical malpractice insurance
coverage shall offer medical malpractice insurance coverage to any
health care provider that has zero medical malpractice claims (as
defined in section 301(10)) on which indemnity has been paid during the
previous 3 years.
SEC. 406. MEDICAL MALPRACTICE INSURANCE DISCLOSURE.
(a) In General.--Annually on or before March 1, every insurer
writing medical malpractice insurance coverage to a health care
provider shall file with the Secretary of Health and Human Services a
copy of the Annual Statement it files with the Department of Insurance
in the State in which it is domiciled. Every such insurer shall also
file the following information with the Secretary:
(1) Information on closed claims.--
(A) The number of new claims reported during the
preceding year, and the total amounts reserved for such
claims and for allocated loss adjustment expenses in
connection with such claims.
(B) The number of claims closed during the
preceding year, and the amount paid on such claims,
broken out as follows:
(i) The number of claims closed each year
with payment, and the amount paid on such
claims and on allocated loss adjustment
expenses in connection with such claims.
(ii) The number of claims closed each year
without payment, and the amount of allocated
loss adjustment expenses in connection with
such claims.
(2) Information regarding verdicts, payment, and severity
of injury in connection with verdicts.--For each verdict
rendered against the insurer for more than $100,000, the amount
of the verdict, the amount paid to the plaintiff, and the
category of injury suffered by the plaintiff, categorized as
follows:
(A) Temporary injury.--
(i) Emotional distress.
(ii) lacerations, contusions, minor scars,
and rash not resulting in permanent scarring or
disfigurement.
(iii) Non-life-threatening infections.
(iv) Falls not resulting in fractures.
(v) Medication errors.
(B) Permanent injury.--
(i) Major injury, including loss of one or
more fingers, organs, limbs, deafness, loss of
sight, loss of fertility, permanent scarring or
disfigurement, and brain damage.
(ii) Catastrophic injury requiring life-
long care or having a fatal prognosis.
(C) Death.--Death.
(3) Information on rate changes.--Each rate change
implemented during the preceding five-year period, by state and
by medical specialty.
(4) Information on premiums and losses by medical
specialty.--
(A) Written premiums and paid losses for the
preceding year, and earned premiums and incurred losses
for the preceding year, broken out by medical
specialty.
(B) Number of providers insured in each medical
specialty.
(5) Information on premiums and losses by experience of the
insured.--
(A) Written premiums and paid losses for the
preceding year, and earned premiums and incurred losses
for the preceding year, broken out as follows:
(i) All insureds with no incidents within
the preceding five-year period.
(ii) All insureds with one incident within
the preceding five-year period.
(iii) All insureds with two incidents
within the preceding five-year period.
(iv) All insureds with three or more
incidents within the preceding five-year
period.
(B) Number of providers insured--
(i) with no incidents within the preceding
five-year period;
(ii) with one incident within the preceding
five-year period;
(iii) with two incidents within the
preceding five-year period; or
(iv) with three or more incidents within
the preceding five-year period.
(6) Information on the performance of the investments of
the insurer.--The value of the investments held in the
investment portfolio of the insurer as of December 31 of the
preceding calendar year, and the rate of return earned on such
investments, broken down by category of investment, as follows:
(A) United States government bonds.
(B) Bonds exempt from tax by the United States.
(C) Other bonds (unaffiliated).
(D) bonds of affiliates.
(E) Preferred stocks (unaffiliated),
(F) Preferred stocks of affiliates.
(G) Common stock (unaffiliated).
(H) Common stock of affiliates.
(I) Mortgage loans.
(J) Real estate.
(K) Any additional categories of investments
specified by the Secretary.
(b) Annual Report.--The Secretary shall submit to Congress by July
1 of each year a report on the performance of the medical malpractice
insurance market during the preceding year. Such report shall be based
on the information submitted pursuant to this section.
(c) Rules.--The Secretary shall promulgate rules to carry out the
purposes of this section.
(d) Insurer Defined.--For purposes of this section, the term
``insurer'' includes every insurance company authorized to transact
insurance business in any State, every risk retention group, every
insurance company issuing insurance to or through a purchasing group,
and any other person providing insurance coverage.
SEC. 407. MEDICAL MALPRACTICE INSURANCE PRICE COMPARISON.
(a) Internet Site.--Not later than July 1, 2003, and after
consultation with the medical malpractice insurance industry, the
Secretary of Health and Human Services shall establish an interactive,
secure internet site (in this section referred to as the ``internet
site'') which shall enable any health care provider licensed in the
United States to obtain a quote from each medical malpractice insurer
licensed to write the type of coverage sought by the provider.
(b) Online Forms.--
(1) In general.--The internet site shall enable health care
providers to complete an online form that shall capture a
comprehensive set of information sufficient to generate a quote
for each insurer. The Secretary shall develop transmission
software components which allow such information to be
formatted for delivery to each medical malpractice insurer
based on the requirements of the computer system of the
insurer.
(2) Protection of confidentiality of information
disclosed.--All information provided by a health care provider
for purposes of generating a quote through the internet site
shall be used only for that purpose and shall not be used in
connection with the National Physician's Data Bank or for any
other purposes, including in connection with any legal action.
(c) Integration of Rating Criteria.--The Secretary shall integrate
the rating criteria of each insurer into its online form after
consultation with each insurer. The Secretary shall integrate such
criteria using one of the following methods:
(1) Developing a customized interface with the insurer's
own rating engine.
(2) Accessing a third-party rating engine of the insurer's
choice.
(3) Loading the carrier's rating information into a rating
engine operated by the Secretary.
(4) Any other method agreed on between the Secretary and
the insurer.
(d) Presentation of Quotes.--After a health care provider has
answered all the questions appearing on the online form, such provider
will be presented with quotes from each medical malpractice insurer
licensed to write the coverage requested by the provider.
(e) Accuracy of Quotes.--Quotes provided at the internet site shall
at all times be accurate. Whenever any insurer changes its rates, such
rate changes shall be implemented at the internet site by the
Secretary, in consultation with the insurer, as soon as practicable,
but in no event later than 10 days after such changes take effect.
During any period during which an insurer has changed its rates but the
Secretary has not yet implemented such changed rates on the internet
site, quotes for that insurer shall not be obtainable at the internet
site.
(f) User-Friendly Features.--The Secretary shall design the
internet site to incorporate user-friendly formats and self-help
guidance materials, and shall develop a user-friendly internet user-
interface.
(g) Contact Information.--The internet site shall also provide
contact information, including address and telephone number, for each
medical malpractice insurer for which a provider obtains a quote at the
site.
(h) Report.--Not later than December 31, 2004, the Secretary shall
submit a report to the Congress on the development, implementation and
effects of the internet site. Such report shall be based on--
(1) the Secretary's consultation with health care
providers, medical malpractice insurers, State insurance
commissioners, and other interested parties; and
(2) the Secretary's analysis of other information available
to the Secretary.
The report shall describe the Secretary's views concerning the extent
to which this section has contributed to increasing the availability of
medical malpractice insurance coverage, and the effect this section has
had on the cost of medical malpractice insurance coverage.
TITLE V--TAX-RELATED PROVISIONS
SEC. 501. DEDUCTION FOR PREMIUMS FOR MEDICAL LIABILITY INSURANCE FOR
HIGH RISK SPECIALTIES.
(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to itemized deductions for
individuals and corporations) is amended by adding at the end the
following new section:
``SEC. 199. DEDUCTION FOR PREMIUMS FOR MEDICAL LIABILITY INSURANCE FOR
HIGH RISK SPECIALTIES.
``(a) In General.--In the case of a physician whose medical
practice is in a high risk specialty, there shall be allowed as a
deduction from gross income for the taxable year an amount equal to 125
percent of the aggregate premiums paid for medical liability insurance
with respect to such specialty for such taxable year.
``(b) High Risk Specialty.--
``(1) In general.--For purposes of this section, a
specialty is a high risk specialty for a taxable year if, for
the calendar year in which the taxable year begins, the average
premiums for medical liability insurance with respect to such
specialty are equal to or greater than 67 percent of the
average premiums for medical liability insurance for all
specialties for such calendar year, based on a weighted average
of the number of physicians practicing in each specialty.
``(2) Specialties taken into account.--For purposes of
paragraph (1), the Secretary, in consultation with the
Secretary of Health and Human Services and appropriate
professional organizations, shall determine the specialties to
be taken into account for purposes of paragraph (1) and shall
consider those specialities for which a payment may be made
under section 1886(h) of the Social Security Act. In making
such determination, the Secretary shall provide for an
appropriate treatment of subspecialties.
``(3) Publication of specialities.--The Secretary shall
publish the high risk specialities for a calendar year before
the beginning of the calendar year.
``(c) Physician.--The term `physician' has the meaning given such
term by section 1861(r)(1) of the Social Security Act.
``(d) Special Rules.--For purposes of this section--
``(1) Medical practice spanning more than 1 specialty.--In
the case of a medical practice a portion of which is in a high
risk specialty, the portion of the premiums paid for medical
liability insurance that may be taken into account under
subsection (a) shall be determined under regulations prescribed
by the Secretary.
``(2) Group practice, etc.--Under regulations prescribed by
the Secretary, the deduction allowed by this section shall be
allowed in case of a group practice or health care facility
which is a C corporation in the manner prescribed by the
Secretary.
``(3) Denial of double benefit.--No deduction shall be
allowed under any other provision of this chapter for any
amount for which a deduction is allowed under this section.''.
(b) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of such Code is amended by adding at the end
the following new item:
``Sec. 199. Deduction for premiums for
medical liability insurance for
high risk specialties.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.
SEC. 502. DEDUCTION FOR PREMIUMS FOR MEDICAL LIABILITY INSURANCE FOR
PRACTICES SERVING MEDICALLY UNDERSERVED COMMUNITIES.
(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to itemized deductions for
individuals and corporations) is amended by adding at the end the
following new section:
``SEC. 200. DEDUCTION FOR PREMIUMS FOR MEDICAL LIABILITY INSURANCE FOR
PRACTICES SERVING MEDICALLY UNDERSERVED COMMUNITIES.
``(a) In General.--In the case of a physician whose medical
practice serves medically underserved communities, there shall be
allowed as a deduction from gross income for the taxable year an amount
equal to 125 percent of the aggregate premiums paid for medical
liability insurance with respect to such practice for such taxable
year.
``(b) Medically Underserved Community.--For purposes of this
section, the term `medically underserved community' means a medically
underserved community (as defined by section 799B of the Public Health
Service Act) that has been designated under one of the categories
specified in such section for a calendar year in which the taxable year
of the physician begins.
``(c) Physician.--The term `physician' has the meaning given such
term by section 1861(r)(1) of the Social Security Act.
``(d) Special Rules.--For purposes of this section--
``(1) Medical practice spanning more than 1 community.--In
the case of a medical practice a portion of which serves a
medically underserved community, the portion of the premiums
paid for medical liability insurance that may be taken into
account under subsection (a) shall be determined under
regulations prescribed by the Secretary.
``(2) Group practice, etc.--Under regulations prescribed by
the Secretary, the deduction allowed by this section shall be
allowed in case of a group practice or health care facility
which is a C corporation in the manner prescribed by the
Secretary.
``(3) Denial of double benefit.--No deduction shall be
allowed under any other provision of this chapter for any
amount for which a deduction is allowed under this section.
``(4) Election.--A physician may elect whether to take a
deduction under this section or under section 199.''.
(b) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of such Code is amended by adding at the end
the following new item:
``Sec. 200. Deduction for premiums for
medical liability insurance for
practices serving medically
underserved communities.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.
TITLE VI--ADDITIONAL PROVISIONS
SEC. 601. STATE CONSIDERATION OF ADDITIONAL AND ALTERNATIVE METHODS.
It is the sense of Congress that the States, as primary regulators
of the insurance industry, should consider the following additional and
alternative methods for dealing with the rates and availability of
medical malpractice insurance:
(1) Using claims history as a rating factor in establishing
premiums and requiring each medical malpractice insurer to
offer its lowest rate to all doctors in a State meeting its
eligibility criteria for such rate.
(2) Limiting the percentage of an insurer's assets that can
be invested in stocks or other high-risk investments and
preventing insurers from seeking to recoup losses on their
investments by raising rates.
(3) Requiring prior approval by the state insurance
regulators of any medical malpractice insurance rates and
allowing health care providers to intervene in proceedings
regarding rate changes.
(4) Establishing new medical malpractice insurance
entities, using loans authorized by States, similar to the
model (enacted in Missouri) that established a new workers
compensation insurer.
(5) Setting up a fund to address birth-related neurological
injury compensation.
SEC. 602. MANDATING EQUAL TREATMENT BETWEEN TRADITIONAL INSURERS AND
RISK RETENTION GROUPS, INCLUDING MEDICAL MALPRACTICE RISK
RETENTION GROUPS.
(a) Risk Retention Groups.--Section 3 of the Liability Risk
Retention Act of 1986 (15 U.S.C. 3902) is amended--
(1) in subsection (a)(1), in the matter before subparagraph
(A), by inserting ``or have a disparate impact on,'' after
``directly or indirectly''; and
(2) in subsection (c), by inserting ``or has a disparate
impact on'' after ``which discriminates against''.
(b) Purchasing Groups.--Section 4 of such Act (15 U.S.C. 3903) is
amended--
(1) in subsection (a)--
(A) by striking ``or'' at the end of paragraph (7);
(B) by redesignating paragraph (8) as paragraph
(9); and
(C) by inserting after paragraph (7) the following
new paragraph:
``(8) have a disparate impact on a purchasing group; or'';
and
(2) in subsection (c), by inserting ``or has a disparate
impact on'' after ``which discriminates against''.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E406)
Referred to the Committee on the Judiciary, and in addition to the Committees on Energy and Commerce, Ways and Means, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on the Judiciary, and in addition to the Committees on Energy and Commerce, Ways and Means, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on the Judiciary, and in addition to the Committees on Energy and Commerce, Ways and Means, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on the Judiciary, and in addition to the Committees on Energy and Commerce, Ways and Means, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on the Judiciary, and in addition to the Committees on Energy and Commerce, Ways and Means, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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Referred to the Subcommittee on Health, for a period to be subsequently determined by the Chairman.
Referred to the Subcommittee on Employer-Employee Relations.