The move follows criticism of the FDA that it does not monitor drug safety sufficiently and legislation to limit awards in medical malpractice lawsuits.
The bill signed Friday would not prohibit patients or patients families from accessing their own medical records or taking other steps to take legal action against health providers.
The bill received support from disparate sectors of the health care community, including groups representing both health plans and physicians.
Doctors want to provide safer care, they said, but they fear being punished for reporting medical errors that they commit or witness.
This bill addresses those fears, and makes reporting completely voluntary. Patient and provider confidentiality would be assured.
In addition, employers and accrediting agencies are prohibited from taking actions against participants who report or gather data.
The Department of Health and Human Services is required to set up a way to analyze the effects of new medical practices and to facilitate the exchange of the patient-safety organizations designated to collect information.
Though these provisions have been criticized as underfunded, most health policy experts relish the opportunity to collect more data.
That information could help identify which events precede errors, in an effort to reduce them.
The goal is not just to learn from mistakes but to teach other health care providers to avoid repeating them.