To respond to a medicare funding warning.
1 Be it enacted by the Senate and House of Representatives of the United States of America
2 in Congress assembled,
3 SECTION 1. SHORT TITLE; REFERENCES; PURPOSE OF LEGISLATION.
4 (a) SHORT TITLE.鈳疶his Act may be cited as the "Medicare Funding Warning Response
5 Act of 2008".
6 (b) REFERENCES.鈳疘n this Act:
7 (1) Except where otherwise specifically provided, references in this Act shall be
8 considered to be made to the Social Security Act, or to a section or other provision
10 (2) The term "Secretary" shall be deemed a reference to the Secretary of Health
11 and Human Services.
12 (3) The terms "Medicare" and "Medicare program" mean the program under title
13 XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).
14 (4) The Medicare Prescription Drug, Improvement, and Modernization Act of
15 2003 (P.L. 108-173) shall be referred to as the "MMA".
16 (5) The term "excess general revenue medicare funding" has the meaning given
17 such term by section 801(c) of the MMA.
18 (6) The term "Trustees Report" means the annual report submitted under
19 subsection (b)(2) of sections 1817 and 1841 of the Social Security Act (42 U.S.C.
20 1395i(b)(2) and 1395t(b)(2), respectively).
21 (c) PURPOSE.鈳疘t is the purpose of this Act to respond to the medicare funding warning
1 currently in effect under section 801(a)(2) of the MMA.
2 TITLE I鈳疘NTRODUCING PRINCIPLES OF VALUE-BASED HEALTH CARE INTO
3 THE MEDICARE PROGRAM
4 SEC. 101. INTRODUCING PRINCIPLES OF VALUE-BASED HEALTH CARE
5 INTO THE MEDICARE PROGRAM.
6 (a) ELECTRONIC HEALTH RECORDS.鈥擳he Secretary shall develop and implement a
7 system for encouraging nationwide adoption and use of interoperable electronic health records
8 and to make available personal health records for Medicare beneficiaries.
9 (b) PRICING TRANSPARENCY.鈥擳he Secretary shall make publicly available information
10 on prices and payments under the Medicare program for treatments (including episodes of care),
11 items, and services to assist Medicare beneficiaries in making choices among providers, plans,
12 and treatment options.
13 (c) QUALITY TRANSPARENCY.鈥擳he Secretary shall make publicly available information
14 on the quality of care provided to Medicare beneficiaries to assist them in making choices among
15 providers, plans, and treatments. To ensure the continued development and evolution of quality
16 measures, the Secretary shall develop and implement a plan for ensuring that, by the year 2013,
17 quality measures are available and reported with respect to at least 50 percent of the care
18 provided under the Medicare program (determined according to the amount of payment made
19 under such program for items and services with respect to which such measures are available).
20 The Secretary shall report to the Committees on Ways and Means and Energy and Commerce in
21 the House of Representatives and the Committee on Finance in the Senate annually on the
22 progress of the goal specified in the preceding sentence.
23 (d) INCENTIVES FOR VALUE.鈳?
1 (1) INCENTIVES FOR PROVIDERS AND SUPPLIERS.鈳?
2 (A) IN GENERAL.鈳疶he Secretary shall design and implement a system for
3 use in the Medicare program under which a portion of the payments that would
4 otherwise be made under such program to some or all classes of individuals and
5 entities furnishing items or services to beneficiaries of such program would be
6 based on the quality and efficiency of their performance.
7 (B) IMPLEMENTATION.鈳疶he Secretary shall first implement such system
8 in settings where measures are well-accepted and already collected, including
9 hospitals, physicians' offices, home health agencies, skilled nursing facilities, and
10 renal dialysis facilities. The initial focus of such efforts shall be on quality, but
11 the Secretary shall add measures of efficiency as they are identified. The system
12 shall also include incentives for reducing unwarranted geographic variations in
13 quality and efficiency.
14 (C) SECRETARY'S AUTHORITY.鈳疶he Secretary may implement the system
15 described in this paragraph without regard to any provision of title XVIII of the
16 Social Security Act that would, in the absence of subparagraphs (A) and (B),
17 apply with respect to payment to an individual or entity furnishing items or
18 services for which payment may be made under the Medicare program.
19 (2) BENEFICIARY INCENTIVES.鈥?
20 (A) IN GENERAL.鈥擳he Secretary shall implement incentives for Medicare
21 beneficiaries to use more efficient providers and preventive services known to
22 reduce costs.
23 (B) ACCESS TO HEALTH SAVINGS ACCOUNTS.鈥擳he Secretary shall assure
1 a transition into the Medicare program for individuals who are not yet enrolled in
2 such program who own health savings accounts, and shall provide for the
3 availability of high deductible health plan options in the Medicare program.
4 (e) BROADLY TRANSFORMING THE PRIVATE HEALTH CARE MARKETPLACE.鈥擳he
5 Secretary shall use and release Medicare data for quality improvement, performance
6 measurement, public reporting, and treatment-related purposes. In implementing the preceding
7 sentence, the Secretary shall apply risk adjustment techniques where appropriate and shall
8 determine the circumstances under which it is appropriate to release such data.
9 (f) PROTECTING INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION.鈳疘n implementing
10 this title, the Secretary shall ensure that individually identifiable beneficiary health information is
11 protected (in accordance with the regulations adopted under section 264(c) of the Health
12 Insurance Portability and Accountability Act of 1996 and such other laws and regulations as may
14 (g) REGULATIONS.鈳疶he Secretary may implement a system described in this section by
15 regulation, but only if such regulation is issued after public notice and an opportunity for public
17 (h) DEFINITIONS.鈳疉s used in this section:
18 (1) The term "efficiency" means the delivery of health care in a manner that
19 reduces the costs of providing care for Medicare beneficiaries while maintaining or
20 improving the quality of such care.
21 (2) The term "information on quality of care" means such measures of鈳?
22 (A) the use of clinical processes and structures known to improve care,
23 (B) health outcomes, and
1 (C) patient perceptions of their care,
2 as the Secretary may select with preference given to those measures that have
3 been recognized through a consensus-based process.
4 (i) SAVINGS REQUIREMENT.鈳?
5 (1) IN GENERAL.鈳疶he Secretary may implement the provisions of subsections (a)
6 through (e) of section 101 and section 102 for a year only to the extent that the Secretary
7 determines (and the Chief Actuary of the Centers for Medicare & Medicaid Services
8 certifies) that鈳?
9 (A) the total amount of payment made under title XVIII of the Social
10 Security Act over the five and ten year periods that begin with January 1 of such
11 year as a result of the implementation of such subsections (a) through (e) and
12 section 102 is less than the amount that would have been made over such periods
13 if such implementation had not occurred; and
14 (B) the total amount of payment made under each of titles XIX and XXI of
15 such Act over such periods as a result of such implementation is no greater than
16 the amount that would have been made under each such title over such periods if
17 such implementation had not occurred.
18 (2) AVAILABILITY OF APPROPRIATIONS.鈳疶he Secretary shall carry out the
19 provisions of this section subject to the availability of appropriations and to the extent
20 permitted consistent with paragraph (1).
21 SEC. 102. RELEASE OF PHYSICIAN PERFORMANCE MEASUREMENTS.
22 Section 1848(k) (42 U.S.C. 1395w-4(k)) is amended by adding at the end the following
23 new paragraph:
1 "(9) RELEASE OF QUALITY MEASUREMENTS.鈥?
2 "(A) IN GENERAL.鈥擭otwithstanding section 552a of title 5, United States
3 Code, the Secretary may鈥?
4 "(i) release to the public physician-specific measurements of the
5 quality or efficiency of physician performance against a standard
6 (reflecting measurements that have been recognized through a consensus-
7 based process) that has been endorsed by the Secretary; and
8 "(ii) release, to an entity that will generate or calculate such
9 measurements, data that the entity may use to perform such task.
10 "(B) ENDORSEMENT OF STANDARDS.鈥擳he Secretary may make an
11 endorsement under subparagraph (A) by publication of a notice in the Federal
13 TITLE II鈥擱EDUCING THE EXCESSIVE BURDEN THE LIABILITY SYSTEM
14 PLACES ON THE HEALTH CARE DELIVERY SYSTEM
15 SEC. 201. SHORT TITLE.
16 This title may be cited as the "Help Efficient, Accessible, Low-cost, Timely Healthcare
17 (HEALTH) Act of 2008".
18 SEC. 202. FINDINGS AND PURPOSE.
19 (a) FINDINGS.鈳?
20 (1) EFFECT ON HEALTH CARE ACCESS AND COSTS.鈳疌ongress finds that our
21 current civil justice system is adversely affecting patient access to health care services,
22 better patient care, and cost-efficient health care, in that the health care liability system is
23 a costly and ineffective mechanism for resolving claims of health care liability and
1 compensating injured patients, and is a deterrent to the sharing of information among
2 health care professionals which impedes efforts to improve patient safety and quality of
4 (2) EFFECT ON INTERSTATE COMMERCE.鈳疌ongress finds that the health care and
5 insurance industries are industries affecting interstate commerce and the health care
6 liability litigation systems existing throughout the United States are activities that affect
7 interstate commerce by contributing to the high costs of health care and premiums for
8 health care liability insurance purchased by health care system providers.
9 (3) EFFECT ON FEDERAL SPENDING.鈳疌ongress finds that the health care liability
10 litigation systems existing throughout the United States have a significant effect on the
11 amount, distribution, and use of Federal funds because of鈳?
12 (A) the large number of individuals who receive health care benefits under
13 programs operated or financed by the Federal Government;
14 (B) the large number of individuals who benefit because of the exclusion
15 from Federal taxes of the amounts spent to provide them with health insurance
16 benefits; and
17 (C) the large number of health care providers who provide items or
18 services for which the Federal Government makes payments.
19 (b) PURPOSE.鈳疘t is the purpose of this title to implement reasonable, comprehensive, and
20 effective health care liability reforms designed to鈳?
21 (1) improve the availability of health care services in cases in which health care
22 liability actions have been shown to be a factor in the decreased availability of services;
23 (2) reduce the incidence of "defensive medicine" and lower the cost of health care
1 liability insurance, all of which contribute to the escalation of health care costs;
2 (3) ensure that persons with meritorious health care injury claims receive fair and
3 adequate compensation, including reasonable noneconomic damages;
4 (4) improve the fairness and cost-effectiveness of our current health care liability
5 system to resolve disputes over, and provide compensation for, health care liability by
6 reducing uncertainty in the amount of compensation provided to injured individuals; and
7 (5) provide an increased sharing of information in the health care system which
8 will reduce unintended injury and improve patient care.
9 SEC. 203. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.
10 The time for the commencement of a health care lawsuit shall be 3 years after the date of
11 manifestation of injury or 1 year after the claimant discovers, or through the use of reasonable
12 diligence should have discovered, the injury, whichever occurs first. In no event shall the time
13 for commencement of a health care lawsuit exceed 3 years after the date of manifestation of
14 injury unless tolled for any of the following鈳?
15 (1) upon proof of fraud;
16 (2) intentional concealment; or
17 (3) the presence of a foreign body, which has no therapeutic or diagnostic purpose
18 or effect, in the person of the injured person.
19 Actions by a minor shall be commenced within 3 years from the date of the alleged manifestation
20 of injury except that actions by a minor under the full age of 6 years shall be commenced within
21 3 years of manifestation of injury or prior to the minor's 8th birthday, whichever provides a
22 longer period. Such time limitation shall be tolled for minors for any period during which a
23 parent or guardian and a health care provider or health care organization have committed fraud
1 or collusion in the failure to bring an action on behalf of the injured minor.
2 SEC. 204. COMPENSATING PATIENT INJURY.
3 (a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL ECONOMIC LOSSES IN HEALTH CARE
4 LAWSUITS.鈳疘n any health care lawsuit, nothing in this title shall limit a claimant's recovery of
5 the full amount of the available economic damages, notwithstanding the limitation in subsection
7 (b) ADDITIONAL NONECONOMIC DAMAGES.鈳疘n any health care lawsuit, the amount of
8 noneconomic damages, if available, may be as much as $250,000, regardless of the number of
9 parties against whom the action is brought or the number of separate claims or actions brought
10 with respect to the same injury.
11 (c) NO DISCOUNT OF AWARD FOR NONECONOMIC DAMAGES.鈳疐or purposes of applying
12 the limitation in subsection (b), future noneconomic damages shall not be discounted to present
13 value. The jury shall not be informed about the maximum award for noneconomic damages. An
14 award for noneconomic damages in excess of $250,000 shall be reduced either before the entry
15 of judgment, or by amendment of the judgment after entry of judgment, and such reduction shall
16 be made before accounting for any other reduction in damages required by law. If separate
17 awards are rendered for past and future noneconomic damages and the combined awards exceed
18 $250,000, the future noneconomic damages shall be reduced first.
19 (d) FAIR SHARE RULE.鈳疘n any health care lawsuit, each party shall be liable for that
20 party's several share of any damages only and not for the share of any other person. Each party
21 shall be liable only for the amount of damages allocated to such party in direct proportion to such
22 party's percentage of responsibility. Whenever a judgment of liability is rendered as to any
23 party, a separate judgment shall be rendered against each such party for the amount allocated to
1 such party. For purposes of this section, the trier of fact shall determine the proportion of
2 responsibility of each party for the claimant's harm.
3 SEC. 205. MAXIMIZING PATIENT RECOVERY.
4 (a) COURT SUPERVISION OF SHARE OF DAMAGES ACTUALLY PAID TO CLAIMANTS.鈳疘n any
5 health care lawsuit, the court shall supervise the arrangements for payment of damages to protect
6 against conflicts of interest that may have the effect of reducing the amount of damages awarded
7 that are actually paid to claimants. In particular, in any health care lawsuit in which the attorney
8 for a party claims a financial stake in the outcome by virtue of a contingent fee, the court shall
9 have the power to restrict the payment of a claimant's damage recovery to such attorney, and to
10 redirect such damages to the claimant based upon the interests of justice and principles of equity.
11 In no event shall the total of all contingent fees for representing all claimants in a health care
12 lawsuit exceed the following limits:
13 (1) 40 percent of the first $50,000 recovered by the claimant(s).
14 (2) 33 1/3 percent of the next $50,000 recovered by the claimant(s).
15 (3) 25 percent of the next $500,000 recovered by the claimant(s).
16 (4) 15 percent of any amount by which the recovery by the claimant(s) is in
17 excess of $600,000.
18 (b) APPLICABILITY.鈳疶he limitations in this section shall apply whether the recovery is
19 by judgment, settlement, mediation, arbitration, or any other form of alternative dispute
20 resolution. In a health care lawsuit involving a minor or incompetent person, a court retains the
21 authority to authorize or approve a fee that is less than the maximum permitted under this
22 section. The requirement for court supervision in the first two sentences of subsection (a) applies
23 only in civil actions.
1 SEC. 206. ADDITIONAL HEALTH BENEFITS.
2 In any health care lawsuit involving injury or wrongful death, any party may introduce
3 evidence of collateral source benefits. If a party elects to introduce such evidence, any opposing
4 party may introduce evidence of any amount paid or contributed or reasonably likely to be paid
5 or contributed in the future by or on behalf of the opposing party to secure the right to such
6 collateral source benefits. No provider of collateral source benefits shall recover any amount
7 against the claimant or receive any lien or credit against the claimant's recovery or be equitably
8 or legally subrogated to the right of the claimant in a health care lawsuit involving injury or
9 wrongful death. This section shall apply to any health care lawsuit that is settled as well as a
10 health care lawsuit that is resolved by a fact finder. This section shall not apply to section
11 1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) of the Social
12 Security Act, or to section 8131 or section 8132 of title 5, United States Code. This section shall
13 not apply to section 1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42 U.S.C.
14 1396a(a)(25)) of the Social Security Act, or to section 8131 or section 8132 of title 5, United
15 States Code, or to a collateral source provider that is an employee benefit plan under section 3(3)
16 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(3)).
17 SEC. 207. PUNITIVE DAMAGES.
18 (a) IN GENERAL.鈳疨unitive damages may, if otherwise permitted by applicable State or
19 Federal law, be awarded against any person in a health care lawsuit only if it is proven by clear
20 and convincing evidence that such person acted with malicious intent to injure the claimant, or
21 that such person deliberately failed to avoid unnecessary injury that such person knew the
22 claimant was substantially certain to suffer. In any health care lawsuit where no judgment for
23 compensatory damages is rendered against such person, no punitive damages may be awarded
1 with respect to the claim in such lawsuit. No demand for punitive damages shall be included in a
2 health care lawsuit as initially filed. A court may allow a claimant to file an amended pleading
3 for punitive damages only upon a motion by the claimant and after a finding by the court, upon
4 review of supporting and opposing affidavits or after a hearing, after weighing the evidence, that
5 the claimant has established by a substantial probability that the claimant will prevail on the
6 claim for punitive damages. At the request of any party in a health care lawsuit, the trier of fact
7 shall consider in a separate proceeding鈳?
8 (1) whether punitive damages are to be awarded and the amount of such award;
10 (2) the amount of punitive damages following a determination of punitive
12 If a separate proceeding is requested, evidence relevant only to the claim for punitive damages,
13 as determined by applicable State law, shall be inadmissible in any proceeding to determine
14 whether compensatory damages are to be awarded.
15 (b) DETERMINING AMOUNT OF PUNITIVE DAMAGES.鈳?
16 (1) FACTORS CONSIDERED.鈳疘n determining the amount of punitive damages, if
17 awarded, in a health care lawsuit, the trier of fact shall consider only the following鈳?
18 (A) the severity of the harm caused by the conduct of such party;
19 (B) the duration of the conduct or any concealment of it by such party;
20 (C) the profitability of the conduct to such party;
21 (D) the number of products sold or medical procedures rendered for
22 compensation, as the case may be, by such party, of the kind causing the harm
23 complained of by the claimant;
1 (E) any criminal penalties imposed on such party, as a result of the
2 conduct complained of by the claimant; and
3 (F) the amount of any civil fines assessed against such party as a result of
4 the conduct complained of by the claimant.
5 (2) MAXIMUM AWARD.鈳疶he amount of punitive damages, if awarded, in a health
6 care lawsuit may be as much as $250,000 or as much as two times the amount of
7 economic damages awarded, whichever is greater. The jury shall not be informed of this
9 (c) NO PUNITIVE DAMAGES FOR PRODUCTS THAT COMPLY WITH FDA STANDARDS.鈳?
10 (1) IN GENERAL.鈳?
11 (A) No punitive damages may be awarded against the manufacturer or
12 distributor of a medical product, or a supplier of any component or raw material
13 of such medical product, based on a claim that such product caused the claimant's
14 harm where鈳?
15 (i)(I) such medical product was subject to premarket approval,
16 clearance, or licensure by the Food and Drug Administration with respect
17 to the safety of the formulation or performance of the aspect of such
18 medical product which caused the claimant's harm or the adequacy of the
19 packaging or labeling of such medical product; and
20 (II) such medical product was so approved, cleared, or licensed; or
21 (ii) such medical product is generally recognized among qualified
22 experts as safe and effective pursuant to conditions established by the
23 Food and Drug Administration and applicable Food and Drug
1 Administration regulations, including without limitation those related to
2 packaging and labeling, unless the Food and Drug Administration has
3 determined that such medical product was not manufactured or distributed
4 in substantial compliance with applicable Food and Drug Administration
5 statutes and regulations.
6 (B) RULE OF CONSTRUCTION.鈳疭ubparagraph (A) may not be construed as
7 establishing the obligation of the Food and Drug Administration to demonstrate
8 affirmatively that a manufacturer, distributor, or supplier referred to in such
9 subparagraph meets any of the conditions described in such subparagraph.
10 (2) LIABILITY OF HEALTH CARE PROVIDERS.鈳疉 health care provider who
11 prescribes, or who dispenses pursuant to a prescription, a medical product approved,
12 licensed, or cleared by the Food and Drug Administration shall not be named as a party to
13 a product liability lawsuit involving such product and shall not be liable to a claimant in a
14 class action lawsuit against the manufacturer, distributor, or seller of such product.
15 Nothing in this paragraph prevents a court from consolidating cases involving health care
16 providers and cases involving products liability claims against the manufacturer,
17 distributor, or product seller of such medical product.
18 (3) PACKAGING.鈳疘n a health care lawsuit for harm which is alleged to relate to
19 the adequacy of the packaging or labeling of a drug which is required to have tamper-
20 resistant packaging under regulations of the Secretary of Health and Human Services
21 (including labeling regulations related to such packaging), the manufacturer or product
22 seller of the drug shall not be held liable for punitive damages unless such packaging or
23 labeling is found by the trier of fact by clear and convincing evidence to be substantially
1 out of compliance with such regulations.
2 (4) EXCEPTION.鈳疨aragraph (1) shall not apply in any health care lawsuit in
4 (A) a person, before or after premarket approval, clearance, or licensure of
5 such medical product, knowingly misrepresented to or withheld from the Food
6 and Drug Administration information that is required to be submitted under the
7 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) or section 351 of
8 the Public Health Service Act (42 U.S.C. 262) that is material and is causally
9 related to the harm which the claimant allegedly suffered; or
10 (B) a person made an illegal payment to an official of the Food and Drug
11 Administration for the purpose of either securing or maintaining approval,
12 clearance, or licensure of such medical product.
13 SEC. 208. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO
14 CLAIMANTS IN HEALTH CARE LAWSUITS.
15 (a) IN GENERAL.鈳疘n any health care lawsuit, if an award of future damages, without
16 reduction to present value, equaling or exceeding $50,000 is made against a party with sufficient
17 insurance or other assets to fund a periodic payment of such a judgment, the court shall, at the
18 request of any party, enter a judgment ordering that the future damages be paid by periodic
19 payments. In any health care lawsuit, the court may be guided by the Uniform Periodic Payment
20 of Judgments Act promulgated by the National Conference of Commissioners on Uniform State
22 (b) APPLICABILITY.鈳疶his section applies to all actions which have not been first set for
23 trial or retrial before the effective date of this Act.
1 SEC. 209. DEFINITIONS.
2 In this title:
3 (1) ALTERNATIVE DISPUTE RESOLUTION SYSTEM; ADR.鈳疶he term "alternative
4 dispute resolution system" or "ADR" means a system that provides for the resolution of
5 health care lawsuits in a manner other than through a civil action brought in a State or
6 Federal court.
7 (2) CLAIMANT.鈳疶he term "claimant" means any person who brings a health care
8 lawsuit, including a person who asserts or claims a right to legal or equitable
9 contribution, indemnity or subrogation, arising out of a health care liability claim or
10 action, and any person on whose behalf such a claim is asserted or such an action is
11 brought, whether deceased, incompetent, or a minor.
12 (3) COLLATERAL SOURCE BENEFITS.鈳疶he term "collateral source benefits" means
13 any amount paid or reasonably likely to be paid in the future to or on behalf of the
14 claimant, or any service, product or other benefit provided or reasonably likely to be
15 provided in the future to or on behalf of the claimant, as a result of the injury or wrongful
16 death, pursuant to鈳?
17 (A) any State or Federal health, sickness, income-disability, accident, or
18 workers' compensation law (except the Federal Employees' Compensation Act (5
19 U.S.C. 8101 et seq.);
20 (B) any health, sickness, income-disability, or accident insurance that
21 provides health benefits or income-disability coverage;
22 (C) any contract or agreement of any group, organization, partnership, or
23 corporation to provide, pay for, or reimburse the cost of medical, hospital, dental,
1 or income disability benefits; and
2 (D) any other publicly or privately funded program.
3 (4) COMPENSATORY DAMAGES.鈳疶he term "compensatory damages" means
4 objectively verifiable monetary losses incurred as a result of the provision of, use of, or
5 payment for (or failure to provide, use, or pay for) health care services or medical
6 products, such as past and future medical expenses, loss of past and future earnings, cost
7 of obtaining domestic services, loss of employment, and loss of business or employment
8 opportunities, damages for physical and emotional pain, suffering, inconvenience,
9 physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of
10 society and companionship, loss of consortium (other than loss of domestic service),
11 hedonic damages, injury to reputation, and all other nonpecuniary losses of any kind or
12 nature. The term "compensatory damages" includes economic damages and
13 noneconomic damages, as such terms are defined in this section.
14 (5) CONTINGENT FEE.鈳疶he term "contingent fee" includes all compensation to
15 any person or persons which is payable only if a recovery is effected on behalf of one or
16 more claimants.
17 (6) ECONOMIC DAMAGES.鈳疶he term "economic damages" means objectively
18 verifiable monetary losses incurred as a result of the provision of, use of, or payment for
19 (or failure to provide, use, or pay for) health care services or medical products, such as
20 past and future medical expenses, loss of past and future earnings, cost of obtaining
21 domestic services, loss of employment, and loss of business or employment
23 (7) HEALTH CARE LAWSUIT.鈳疶he term "health care lawsuit" means any health
1 care liability claim concerning the provision of health care goods or services or any
2 medical product affecting interstate commerce, or any health care liability action
3 concerning the provision of health care goods or services or any medical product
4 affecting interstate commerce, brought in a State or Federal court or pursuant to an
5 alternative dispute resolution system, against a health care provider, a health care
6 organization, or the manufacturer, distributor, supplier, marketer, promoter, or seller of a
7 medical product, regardless of the theory of liability on which the claim is based, or the
8 number of claimants, plaintiffs, defendants, or other parties, or the number of claims or
9 causes of action, in which the claimant alleges a health care liability claim. Such term
10 does not include a claim brought by the United States Government or a relator under the
11 False Claims Act (31 U.S.C. 3729 et seq.) or a claim or action which is based on criminal
12 liability; which seeks civil fines or penalties paid to Federal, State, or local government;
13 or which is grounded in antitrust.
14 (8) HEALTH CARE LIABILITY ACTION.鈳疶he term "health care liability action"
15 means a civil action brought in a State or Federal Court or pursuant to an alternative
16 dispute resolution system, against a health care provider, a health care organization, or
17 the manufacturer, distributor, supplier, marketer, promoter, or seller of a medical product,
18 regardless of the theory of liability on which the claim is based, or the number of
19 plaintiffs, defendants, or other parties, or the number of causes of action, in which the
20 claimant alleges a health care liability claim.
21 (9) HEALTH CARE LIABILITY CLAIM.鈳疶he term "health care liability claim"
22 means a demand by any person, whether or not pursuant to ADR, against a health care
23 provider, health care organization, or the manufacturer, distributor, supplier, marketer,
1 promoter, or seller of a medical product, including, but not limited to, third-party claims,
2 cross-claims, counter-claims, or contribution claims, which are based upon the provision
3 of, use of, or payment for (or the failure to provide, use, or pay for) health care services
4 or medical products, regardless of the theory of liability on which the claim is based, or
5 the number of plaintiffs, defendants, or other parties, or the number of causes of action.
6 (10) HEALTH CARE ORGANIZATION.鈳疶he term "health care organization" means
7 any person or entity which is obligated to provide or pay for health benefits under any
8 health plan, including any person or entity acting under a contract or arrangement with a
9 health care organization to provide or administer any health benefit.
10 (11) HEALTH CARE PROVIDER.鈳疶he term "health care provider" means any
11 person or entity required by State or Federal laws or regulations to be licensed, registered,
12 or certified to provide health care services, and being either so licensed, registered, or
13 certified, or exempted from such requirement by other statute or regulation.
14 (12) HEALTH CARE GOODS OR SERVICES.鈳疶he term "health care goods or
15 services" means any goods or services provided by a health care organization, provider,
16 or by any individual working under the supervision of a health care provider, that relates
17 to the diagnosis, prevention, or treatment of any human disease or impairment, or the
18 assessment or care of the health of human beings.
19 (13) MALICIOUS INTENT TO INJURE.鈳疶he term "malicious intent to injure" means
20 intentionally causing or attempting to cause physical injury other than providing health
21 care goods or services.
22 (14) MEDICAL PRODUCT.鈳疶he term "medical product" means a drug, device, or
23 biological product intended for humans, and the terms "drug", "device", and "biological
1 product" have the meanings given such terms in sections 201(g)(1) and 201(h) of the
2 Federal Food, Drug and Cosmetic Act (21 U.S.C. 321) and section 351(a) of the Public
3 Health Service Act (42 U.S.C. 262(a)), respectively, including any component or raw
4 material used therein, but excluding health care services.
5 (15) NONECONOMIC DAMAGES.鈳疶he term "noneconomic damages" means
6 damages for physical and emotional pain, suffering, inconvenience, physical impairment,
7 mental anguish, disfigurement, loss of enjoyment of life, loss of society and
8 companionship, loss of consortium (other than loss of domestic service), hedonic
9 damages, injury to reputation, and all other nonpecuniary losses of any kind or nature.
10 (16) PUNITIVE DAMAGES.鈳疶he term "punitive damages" means damages
11 awarded, for the purpose of punishment or deterrence, and not solely for compensatory
12 purposes, against a health care provider, health care organization, or a manufacturer,
13 distributor, or supplier of a medical product. Punitive damages are neither economic nor
14 noneconomic damages.
15 (17) RECOVERY.鈳疶he term "recovery" means the net sum recovered after
16 deducting any disbursements or costs incurred in connection with prosecution or
17 settlement of the claim, including all costs paid or advanced by any person. Costs of
18 health care incurred by the plaintiff and the attorneys' office overhead costs or charges for
19 legal services are not deductible disbursements or costs for such purpose.
20 (18) STATE.鈳疶he term "State" means each of the several States, the District of
21 Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American
22 Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and any
23 other territory or possession of the United States, or any political subdivision thereof.
1 SEC. 210. EFFECT ON OTHER LAWS.
2 (a) VACCINE INJURY.鈳?
3 (1) To the extent that title XXI of the Public Health Service Act establishes a
4 Federal rule of law applicable to a civil action brought for a vaccine-related injury or
6 (A) this title does not affect the application of the rule of law to such an
7 action; and
8 (B) any rule of law prescribed by this title in conflict with a rule of law of
9 such title XXI shall not apply to such action.
10 (2) If there is an aspect of a civil action brought for a vaccine-related injury or death to
11 which a Federal rule of law under title XXI of the Public Health Service Act does not apply, then
12 this title or otherwise applicable law (as determined under this title) will apply to such aspect of
13 such action.
14 (b) OTHER FEDERAL LAW.鈳疎xcept as provided in this section, nothing in this title shall
15 be deemed to affect any defense available to a defendant in a health care lawsuit or action under
16 any other provision of Federal law.
17 SEC. 211. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.
18 (a) HEALTH CARE LAWSUITS.鈳疶he provisions governing health care lawsuits set forth in
19 this title preempt, subject to subsections (b) and (c), State law to the extent that State law
20 prevents the application of any provisions of law established by or under this title. The
21 provisions governing health care lawsuits set forth in this title supersede chapter 171 of title 28,
22 United States Code, to the extent that such chapter鈳?
23 (1) provides or allows for a greater amount of damages or contingent fees, or a
1 longer period in which a health care lawsuit may be commenced, than provided in this
3 (2) precludes or reduces the applicability or scope of periodic payment of future
4 damages as provided in this title; or
5 (3) through application of State law, conflicts with provisions of this title
6 concerning joint liability, collateral source benefits, subrogation, or liens.
7 (b) PROTECTION OF STATES' RIGHTS AND OTHER LAWS.鈳?
8 (1) Any issue that is not governed by any provision of law established by or under
9 this title (including State standards of negligence) shall be governed by otherwise
10 applicable State or Federal law.
11 (2) This title shall not preempt or supersede any State or Federal law that imposes
12 greater procedural or substantive protections for health care providers and health care
13 organizations from liability, loss, or damages than those provided by this title or create a
14 cause of action.
15 (c) STATE FLEXIBILITY.鈳疦o provision of this title shall be construed to preempt鈳?
16 (1) any State law (whether effective before, on, or after the date of the enactment
17 of this title) that specifies a particular monetary amount of compensatory or punitive
18 damages (or the total amount of damages) that may be awarded in a health care lawsuit,
19 regardless of whether such monetary amount is greater or lesser than is provided for
20 under this title, notwithstanding section 204(a); or
21 (2) any defense available to a party in a health care lawsuit under any other
22 provision of State or Federal law.
23 SEC. 212. APPLICABILITY; EFFECTIVE DATE.
1 This title shall apply to any health care lawsuit brought in a Federal or State court, or
2 subject to an alternative dispute resolution system, that is initiated on or after the date of the
3 enactment of this title, except that any health care lawsuit arising from an injury occurring prior
4 to the date of the enactment of this title shall be governed by the applicable statute of limitations
5 provisions in effect at the time the injury occurred.
6 TITLE III鈳疘NCREASING HIGH-INCOME BENEFICIARY AWARENESS AND
7 RESPONSIBILITY FOR HEALTH CARE COSTS
8 SEC. 301. INCOME-RELATED REDUCTION IN PART D PREMIUM SUBSIDY.
9 (a) INCOME-RELATED REDUCTION IN PART D PREMIUM SUBSIDY.鈳?
10 (1) IN GENERAL.鈳疭ection 1860D-13(a) (42 U.S.C. 1395w-113(a)) is amended by
11 adding at the end the following new paragraph:
12 "(7) REDUCTION IN PREMIUM SUBSIDY BASED ON INCOME.鈳?
13 "(A) IN GENERAL.鈳疘n the case of an individual whose modified adjusted
14 gross income exceeds the threshold amount applicable under subparagraph (B) for
15 the calendar year, the monthly amount of the premium subsidy applicable to the
16 premium under this section for a month after December 2008 shall be reduced
17 (and the monthly beneficiary premium shall be increased) by the monthly
18 adjustment amount specified in subparagraph (C).
19 "(B) THRESHOLD AMOUNT.鈳疐or purposes of this paragraph, the threshold
20 amount is鈳?
21 "(i) except as provided in clause (ii), $82,000, and
22 "(ii) in the case of a joint return, twice the amount applicable under
23 clause (i) for the calendar year.
1 "(C) MONTHLY ADJUSTMENT AMOUNT.鈳?
2 "(i) IN GENERAL.鈳疶he monthly adjustment amount specified in
3 this subparagraph for an individual for a month in a year is equal to the
4 product of鈳?
5 "(I) the quotient obtained by dividing鈳?
6 "(aa) the applicable percentage specified in the table
7 in clause (ii) for the individual for the calendar year
8 reduced by 25.5 percent; by
9 "(bb) 25.5 percent; and
10 "(II) the base beneficiary premium (as computed under
11 paragraph (2)).
12 "(ii) APPLICABLE PERCENTAGE.鈳?
13 "(I) IN GENERAL.鈥?
鈥樷?業f the modified adjusted gross income is: The applicable
More than $82,000 but not more than $102,000 ........................... 35 percent
More than $102,000 but not more than $153,000 ......................... 50 percent
More than $153,000 but not more than $205,000 ......................... 65 percent
More than $205,000 ....................................................................... 80 percent.
14 "(II) JOINT RETURNS.鈳疘n the case of a joint return, subclause (I)
15 shall be applied by substituting dollar amounts which are twice the dollar
16 amounts otherwise applicable under subclause (I) for the calendar year.
17 "(III) MARRIED INDIVIDUALS FILING SEPARATE RETURNS.鈳疘n the
18 case of an individual who鈳?
19 "(aa) is married as of the close of the taxable year (within
1 the meaning of section 7703 of the Internal Revenue Code of
2 1986) but does not file a joint return for such year, and
3 "(bb) does not live apart from such individual's spouse at
4 all times during the taxable year,
5 subclause (I) shall be applied by reducing each of the dollar amounts
6 otherwise applicable under such subclause for the calendar year by the
7 threshold amount for such year applicable to an unmarried individual.
8 "(D) DETERMINATION BY COMMISSIONER OF SOCIAL SECURITY.鈳疶he
9 Commissioner of Social Security shall have the authority to make initial and
10 reconsideration determinations necessary to carry out the income-related
11 reduction in premium subsidy under this paragraph.
12 "(E) MODIFIED ADJUSTED GROSS INCOME.鈳疐or purposes of this
13 paragraph, the term 'modified adjusted gross income' has the meaning given such
14 term in subparagraph (A) of section 1839(i)(4), determined for the taxable year
15 applicable under subparagraphs (B) and (C) of such section.
16 "(F) JOINT RETURN DEFINED.鈳疐or purposes of this paragraph, the term
17 'joint return' has the meaning given to such term by section 7701(a)(38) of the
18 Internal Revenue Code of 1986.
19 "(G) PROCEDURES TO ASSURE CORRECT INCOME-RELATED REDUCTION IN
20 PREMIUM SUBSIDY.鈳?
21 "(i) DISCLOSURE OF BASE BENEFICIARY PREMIUM.鈳疦ot later than
22 September 15 of each year beginning with 2008, the Secretary shall
23 disclose to the Commissioner of Social Security the amount of the base
1 beneficiary premium (as computed under paragraph (2)) for the purpose of
2 carrying out the income-related reduction in premium subsidy under this
3 paragraph with respect to the following year.
4 "(ii) ADDITIONAL DISCLOSURE.鈳疦ot later than October 15 of each
5 year beginning with 2008, the Secretary shall disclose to the
6 Commissioner of Social Security the following information for the
7 purpose of carrying out the income-related reduction in premium subsidy
8 under this paragraph with respect to the following year:
9 "(I) The monthly adjustment amount specified in
10 subparagraph (C).
11 "(II) Any other information the Commissioner of Social
12 Security determines necessary to carry out the income-related
13 reduction in premium subsidy under this paragraph.
14 "(H) RULE OF CONSTRUCTION.鈳疶he formula used to determine the
15 monthly adjustment amount specified under subparagraph (C) shall only be used
16 for the purpose of determining such monthly adjustment amount under such
18 (2) COLLECTION OF MONTHLY ADJUSTMENT AMOUNT.鈳疭ection 1860D-13(c) (42
19 U.S.C. 1395w-113(c)) is amended鈳?
20 (A) in paragraph (1), by striking "(2) and (3)" and inserting "(2), (3), and
21 (4)"; and
22 (B) by adding at the end the following new paragraph:
23 "(4) COLLECTION OF MONTHLY ADJUSTMENT AMOUNT.鈳?
1 "(A) IN GENERAL.鈳疦otwithstanding any provision of this subsection or
2 section 1854(d)(2), subject to subparagraph (B), the amount of the income-related
3 reduction in premium subsidy for an individual for a month (as determined under
4 subsection (a)(7)) shall be paid through withholding from benefit payments in the
5 manner provided under section 1840.
6 "(B) AGREEMENTS.鈳疘n the case where the monthly benefit payments of
7 an individual that are withheld under subparagraph (A) are insufficient to pay the
8 amount described in such subparagraph, the Commissioner of Social Security
9 shall enter into agreements with the Secretary, the Director of the Office of
10 Personnel Management, and the Railroad Retirement Board as necessary in order
11 to allow other agencies to collect the amount described in subparagraph (A) that
12 was not withheld under such subparagraph.".
13 (b) CONFORMING AMENDMENTS.鈳?
14 (1) MEDICARE.鈳疨art D of title XVIII (42 U.S.C. 1395w-101 et seq.) is
16 (A) in section 1860D-13(a)(1)鈳?
17 (i) by redesignating subparagraph (F) as subparagraph (G);
18 (ii) in subparagraph (G), as redesignated by subparagraph (A), by
19 striking "(D) and (E)" and inserting "(D), (E), and (F)"; and
20 (iii) by inserting after subparagraph (E) the following new
22 "(F) INCREASE BASED ON INCOME.鈳疶he monthly beneficiary premium
23 shall be increased pursuant to paragraph (7)."; and
1 (B) in section 1860D-15(a)(1)(B), by striking "paragraph (1)(B)" and
2 inserting "paragraphs (1)(B) and (1)(F)".
3 (2) INTERNAL REVENUE CODE.鈳疭ection 6103(l)(20) of the Internal Revenue
4 Code of 1986 (relating to disclosure of return information to carry out Medicare part B
5 premium subsidy adjustment) is amended鈳?
6 (A) in the heading, by striking "PART B PREMIUM SUBSIDY ADJUSTMENT"
7 and inserting "PARTS B AND D PREMIUM SUBSIDY ADJUSTMENTS";
8 (B) in subparagraph (A)鈳?
9 (i) in the matter preceding clause (i), by inserting "or 1860D-
10 13(a)(7)" after "1839(i)"; and
11 (ii) in clause (vii), by inserting after "subsection (i) of such
12 section" the following: "or under section 1860D-13(a)(7) of such Act";
14 (C) in subparagraph (B)鈳?
15 (i) by inserting "or such section 1860D-13(a)(7)" before the period
16 at the end;
17 (ii) as amended by clause (i), by adding at the end the following
18 new sentence: "Such return information may be disclosed to officers and
19 employees of the Departments of Health and Human Services and Justice,
20 to the extent necessary, and solely for their use, in any administrative or
21 judicial proceeding ensuing from an adjustment to any such premium.";
23 (D) by adding at the end the following new subparagraph:
1 "(C) TIMING OF DISCLOSURE.鈳疪eturn information shall be
2 disclosed to officers, employees, and contractors of the Social Security
3 Administration under subparagraph (A):
4 "(i) for taxpayers currently entitled to benefits under title II
5 of the Social Security Act, or as qualified railroad retirement
6 beneficiaries within the meaning of section 7(d) of the Railroad
7 Retirement Act of 1974, within 4 months preceding the month in
8 which the taxpayer first becomes entitled to benefits under part A
9 or is eligible to enroll in part B or part D of title XVIII of the
10 Social Security Act; and
11 "(ii) for taxpayers not currently receiving benefits under
12 title II of the Social Security Act, or as qualified railroad retirement
13 beneficiaries within the meaning of section 7(d) of the Railroad
14 Retirement Act of 1974, or who have participated in Medicare
15 qualified government employment as defined in section 210(p) of
16 the Social Security Act, after the taxpayer applies for a benefit
17 under part A or part B and is eligible to enroll in part D of title
18 XVIII of the Social Security Act.".
19 (c) IMPLEMENTATION.鈳疦otwithstanding any other provision of law, the Secretary, in
20 consultation with the Commissioner of Social Security may implement this section, and the
21 amendments made by this section, by program instruction or otherwise.