National Partnership: Liability Provisions of Goss/Coburn/Shadegg/Thomas/Greenwood Substitute Are Riddled With Loopholes

Liability Provisions of
Goss/Coburn/Shadegg/Thomas/Greenwood Substitute
Are Riddled With Loopholes

Bipartisan Bill (H.R. 2990)

Before filing suit

File Lawsuit

Trial/
Judgment

Patient recovers damages

Complete internal and external review except when injury or death has already occurred.

Patient wins if patient can prove his/her case in court.¹

No federally set limit on compensatory or punitive damages. Punitive damages cannot be recovered if plan complies with external review.

Goss/Coburn/Shadegg/Thomas/Greenwood Substitute
Before filing suit: Complete internal and external review in all cases, even when injury or death has already occurred.	è	File Lawsuit² The substitute only allows injured patients to sue to recover damages if: 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."
		è	è	è
		Case automatically dismissed if: another external review - obtained by the plan - concludes that the patient isn’t injured or the plan’s 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 the plan.³ 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 costs.	Evidence/Trial 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 damages.⁴	Evidence/Trial 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 evidence).)
If ALL the previous hurdles are overcome, patient wins, and:
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 circumstances 1. Punitive damages are available only when the lawsuit is based upon the plan’s 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 proceeding. 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