Bad Faith Insurance: How to Handle a Denied Healthcare Claim

Healthcare insurance is based on a contract. In exchange for the policyholder paying premiums, health insurance companies have a legal duty to provide coverage, uphold the terms of the policy and pay valid claims as provided in the policy.

However, insurance is also a business. This means that, in an effort to increase profits, many insurance companies may use bad faith insurance practices and deny valid claims or offer to pay far less than the claim is worth.

When this happens, policyholders have a right to hold their health insurance companies accountable.

Handling a Denied Insurance Claim

According to AARP, insurance providers deny some 200 million healthcare claims annually.  Some steps policyholders can take in order to facilitate a claim approval even after it has been denied include:

Verifying the reason your claim was denied:  Contact your insurance company and find out why your claim was denied as soon as you receive notice.  Some common reasons insurance companies initially deny claims are due to incomplete paperwork, lack of authorization or medical necessity, past filing time constraints, or co-pay/deductible amounts.  It is important to rule out these factors when ascertaining why your claim was denied.

Finding support of advocates:  Explain your case to a qualified resource to assist you in understanding the validity of your claim.  This could be your doctor or hospital social worker.  By finding an advocate who knows the ins-and-outs of the healthcare industry, you might be able to better convey the necessity of the claim.

Continue applying and re-applying: Many insurance companies use auditing software that are programmed to find errors in submitted claims and automatically deny the claim based on certain denial algorithms. Therefore, the more you resubmit your claim with supporting paperwork, the better chances you have in getting your claim through the system.

Saving electronic records:  It is essential to keep a digital paper trail of your interactions with the insurance company and involved parties such as your physician. This can be done via mail or email and can prove to be advantageous when submitting your claim through an automatic process.

Determining the price of the denied treatment: Be an informed policyholder and do your research. If it is difficult to ascertain the price of a particular treatment, there are a plethora of online resources that can provide you an accurate estimate of the denied claim cost. Doing this can help you better negotiate with your insurer.

What is Bad Faith Insurance?

Insurance companies are legally required to act in good faith and to use only fair claims practices. California law defines certain acts and conduct that can qualify as bad faith. They include the following:

• Unreasonable denial of policy benefits
• Misrepresenting facts or policy provisions to claimants
• Failing to respond or act promptly with respect to a claim
• Not having reasonable standards for the prompt investigation and processing of claims
• Failing to either approve or deny claims within a reasonable time period after the insured has submitted adequate proof of loss
• Failing to provide prompt justification for the denial of a claim

Bad Faith Insurance Lawsuits

Every year in California, insurance companies are the subject of bad faith lawsuits based on unfair denial of benefits, short-changing of benefits and illegal practices regarding the handling of policyholders’ claims.

Attorneys are investigating allegations that some California insurance companies are using bad faith insurance practices at the expense of the policyholder.

If you suspect that your health insurance company has engaged or continues to engage in bad faith practices that have caused you harm, an experienced bad faith insurance attorney can evaluate your situation and determine if you have legal recourse.

Join a Free California Bad Faith Insurance Lawsuit Investigation

A bad faith lawsuit investigation has been launched into allegations that some California insurance companies are refusing to pay valid medical claims or offering to pay far less than the claim is worth. Some of the companies being investigated for potential violations include:

• Aetna
• Anthem Blue Cross
• Blue Cross of California
• Blue Shield of California
• Cigna
• Health Net
• Kaiser
• Secured Horizons
• United Healthcare
• WellPoint
• Others

If you or a loved one were denied coverage for autism treatment, mental health treatment, plastic surgery skin removal after weight loss, proton therapy for cancer, or some other medically necessary treatment, you may have a legal claim.

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