Before filing suit:
Complete internal and external review in all cases, even when
injury or death has already occurred.
The substitute only allows injured patients to sue to recover
1. the external reviewer agrees with the patient that the plan
improperly denied care;
2. the basis of the suit is the plan's negligent failure to
follow the plan's own "requirements" or definitions regarding what
care is medically necessary or appropriate (or experimental), no
matter how inconsistent with best medical practice the plan's
definitions may be; and
3. the patient suffered "substantial harm." "Substantial harm" is
narrowly defined as "loss of life, loss or significant impairment of
limb or bodily function, significant disfigurement, or severe and
chronic physical pain."
dismissed if: another external review - obtained by the
plan - concludes that the patient isnít injured or the planís
conduct did not cause the injury. This means that a determination
normally made by a court would be made by a private entity hired by
Patient can avoid dismissal only by bringing forth "clear and
convincing" evidence. If patient tries to make such a showing but
fails, the patient must pay the plan's legal fees and
In the trial, patient must be careful not to submit any evidence
that is relevant only to whether punitive damages are appropriate,
no matter how difficult it would be to separate evidence relevant to
liability and damages generally from evidence relevant to punitive
Patient loses case if patient fails to prove by "clear and
convincing" evidence that initial external review (decided in favor
of plan) is incorrect. (Generally, patients need only prove their
own case by a majority of the evidence (a "preponderance" of the
If ALL the previous hurdles are overcome, patient
Recovers compensatory damages
Economic damages -- not capped.
Non-economic damages -- capped at lesser of 2 times the amount of
the economic loss or $500,000.
May be able to recover punitive damages in limited
1. Punitive damages are available only when the lawsuit is
based upon the planís negligent failure to meet the decisional time
frames specified in the bill, not when the dispute concerns the
wrongful (but timely) denial of care.
2. Punitive damages would be decided in a separate legal
3. As a matter of federal law, a heightened standard for recovery
is established: proof of "conscious, flagrant indifference to the
rights or safety of others." Common standards like reckless
indifference or malice would apparently not suffice.
4. Punitive damages are available only when the plan fails to
follow the initial external review.
5. Punitive damages are capped at the greater of 2 times the
amount awarded for economic loss or $250,000. Special lower caps for
defendants who are individuals or small businesses.5