42 U.S.C. § 280g–15 — State demonstration programs to evaluate alternatives to current medical tort litigation

(a) In general: The Secretary may award demonstration grants to States to develop, run, and evaluate alternatives to current tort litigation for resolving disputes over injuries a patient blames on a health care provider or organization. The Secretary must fund a diverse mix of alternatives. (b) Duration: Grants may run for up to 5 years. (c) Conditions for demonstration grants: (1) Each State must develop an alternative that (A) resolves disputes over provider-caused injuries, and (B) cuts health care errors by encouraging patient-safety data from resolved disputes to be collected and studied by organizations working to improve patient safety and care quality. (2) The State must show how its alternative (A) makes the liability system more reliable through prompt, fair dispute resolution; (B) resolves disputes efficiently; (C) encourages disclosure of health care errors; (D) improves patient safety by detecting, analyzing, and reducing errors and adverse events; (E) improves access to liability insurance; (F) fully informs patients about how the alternative differs from regular tort litigation; (G) lets patients opt out or withdraw at any time and still pursue other options, including litigation; (H) wouldn't conflict with State law in a way that blocks the alternative; and (I) wouldn't limit or curtail a patient's existing legal rights, access to the State's legal system, or ability to file a malpractice claim. (3) The State must identify the sources and methods for paying compensation -- public, private, or a combination -- and, as practical, build in financial incentives for activities that improve patient safety. (4)(A) The State must set a scope of jurisdiction for the alternative (such as statewide, a region, a practice area, or a group of providers) wide enough to properly evaluate it, but not based on who pays for care or on the patient population. (B) The State must show how patients will be told they fall within that scope and how they can opt out or withdraw at any time, without limit. (5) In awarding grants, the Secretary must prefer States that (A) built their alternative through real consultation with patient advocates, providers, plaintiff and defense attorneys, malpractice insurers, and patient-safety experts; (B) propose alternatives likely to improve patient safety; and (C) propose alternatives likely to improve access to liability insurance. (d) Application: (1) Each State must apply to the Secretary as required. (2)(A) In reviewing applications, the Secretary must consult a review panel of experts appointed by the Comptroller General. (B) The Comptroller General must solicit public nominations and appoint 9 to 13 highly qualified members, making sure patient advocates, health care providers and organizations, patient- and provider-side attorneys, malpractice insurers, State officials, and patient-safety experts are all fairly represented. (C) The Comptroller General must name a panel chairperson. (D) The Secretary must give the panel the information, staff, and administrative help it reasonably needs. (E) The panel may request information directly from any federal department or agency, which must generally provide it. (e) Reports: (1) Each grantee State must submit an annual report to the Secretary evaluating how effective its funded activities were, covering at least their impact on patient safety and on the availability and price of medical liability insurance. (2) The Secretary must submit to Congress an annual compendium of those State reports, plus an analysis of how the funded activities affected care quality, the number and nature of medical errors, medical resource use, dispute-resolution time, and liability-insurance availability and price. (f) Technical assistance: (1) The Secretary must give technical assistance to States applying for or holding grants. (2) That assistance must include (A) guidance on non-economic damages -- including weighing individual facts and circumstances -- on identifying avoidable injuries, and on disclosing errors and adverse events to patients; and (B) working with States to develop shared definitions, formats, and data-collection infrastructure for reporting, to help combine and analyze data within and across States. (3) States not receiving grants may also use those shared definitions, formats, and infrastructure. (g) Evaluation: (1) The Secretary, with the review panel, must contract with a research organization for an overall evaluation of the grants' effectiveness and an annual report to Congress, starting no later than 18 months after the first grant-funded program begins. (2) The evaluation must include (A) an analysis of the grants' effects using the measures in paragraph (3); (B) for each State, how well its alternative met the elements in subsection (c)(2); (C) a comparison of the effectiveness of different States' alternatives; (D) a comparison of grantee States with similar States that didn't get grants; and (E) a comparison, using those measures, of grantee States with States that, before March 23, 2010, had capped non-economic damages or required a merit opinion before a claim could proceed. (3) The evaluations must analyze and compare (A) the nature and number of injury disputes; (B) the nature and number of claims where tort litigation was pursued despite an available alternative; (C) how disputes and claims were resolved, including time and cost to all sides; (D) the medical liability environment; (E) health care quality; (F) patient safety, meaning detecting, analyzing, and reducing errors and adverse events; (G) patient and provider satisfaction with the alternative and the liability environment; and (H) the effect on medical service use, adjusted for risk. (4) The Secretary must reserve 5 percent of each year's funds appropriated under subsection (k) to pay for this evaluation. (h) MedPAC and MACPAC reports: (1) The Medicare Payment Advisory Commission must independently review how these alternatives affect the Medicare program and its beneficiaries. (2) The Medicaid and CHIP Payment and Access Commission must independently review how they affect the Medicaid and CHIP programs and their beneficiaries. (3) By December 31, 2016, both Commissions must each submit a report to Congress with their findings and recommendations, including how the alternatives affected the efficiency and effectiveness of the respective programs. (i) Option to provide for initial planning grants: Of the funds appropriated under subsection (k), the Secretary may use up to $500,000 per State for planning grants, to help States develop demonstration project applications that meet subsection (c). States whose current law wouldn't block adopting an alternative get preference. (j) Definitions: "Health care services" means services -- given by a provider or someone working under a provider's supervision -- for (A) diagnosing, preventing, or treating any human disease or impairment, or (B) assessing human health. "Health care organization" means any individual or entity obligated to provide, pay for, or administer health benefits under a health plan. "Health care provider" means any individual or entity (A) licensed, registered, or certified under federal or State law to provide health care services, or (B) required to be so licensed, registered, or certified but exempted by other law. (k) Authorization of appropriations: Congress may spend $50,000,000 total over the 5 fiscal years starting with 2011. (l) Current State efforts to establish alternative to tort litigation: Nothing in this section limits any State's prior, current, or future efforts to build its own alternative to tort litigation. (m) Rule of construction: Nothing in this section limits a State's authority over, or responsibility for, its own justice system.