How to Fight a Medical Necessity Bad Faith Claim With a Non-ERISA Policy

Sometimes it seems that health insurance companies care first and foremost about their bottom-line and are always on the lookout for any reason to deny a claim for coverage. One of the more common reasons for denial of a specific claim is “lack of medical necessity.” Continue reading to learn how to contest a bad faith insurance claim denial based on medical necessity for policies that are not governed by ERISA. If you have been wrongfully denied coverage by your health insurance provider, reach out to a seasoned Los Angeles health insurance denial attorney for assistance.

What Is ERISA?

ERISA is a federal law regulating certain employee benefit plans, including some employer-sponsored health insurance plans. Claim denials of ERISA plans must go through the insurer’s internal appeals process before a civil lawsuit can be filed. Such a lawsuit would be filed in federal court, and compensatory damages such as pain and suffering or emotional distress are not allowed. If your plan is not governed by ERISA, you can file your claim in California state court and recover pain and suffering damages as well as punitive damages in appropriate cases. If you purchased your policy privately or pay for it yourself, you likely have a non-ERISA policy.

What is Medical Necessity?

Health insurance policies do not cover every possible form of treatment. Insurance companies set specific limits on the types of procedures that are covered and under what circumstances. One typical requirement for a claim to be covered is for the requested treatment to be “medically necessary” to treat some injury or illness. An insurance provider, for instance, might claim that a procedure was cosmetic rather than medically necessary, or that there were cheaper and better alternatives available. Even if a treatment is medically sound, an insurance provider might deny pre-authorization or reimbursement for a procedure that the insurer decides was not necessary to treat the condition suffered by the policyholder.

Challenging a Medical Necessity Denial

Just because an insurance provider claims that a treatment was not medically necessary does not make it so. Sometimes providers deny blanket categories of treatments as medically unnecessary, even when they may be under given circumstances. For example, some insurers claim liposuction is always cosmetic and never medically necessary, even though it is a medically-approved treatment for debilitating conditions like lipedema. Insurers might also simply disagree with the course of treatment recommended by a medical professional, either by mistake or by deliberately misinterpreting the facts.

If your health insurance claim was denied based on lack of medical necessity, you have options to fight back. First, within 180 days of receiving your denial notice, you can file an internal appeal within the insurance company. With the help of a bad faith denial attorney, you can challenge the reasons for the denial and provide evidence to back up your claim. The insurance provider has a certain time limit within which they must consider the validity of your appeal. If you require pre-authorization immediately, you can seek an expedited appeal.

If the provider persists in denying your claim after appeal, you can continue to challenge their decision outside of the company. In California, if your denial was based on a lack of medical necessity, you could seek an independent medical review (IMR) through the California Department of Insurance (CDI). The CDI will appoint an impartial medical professional to review the merits of your claims.

Additionally, before or after you seek an IMR, you can file a lawsuit directly against the health insurance company. With help from your healthcare denial lawyer, you can prove that your claim was wrongfully denied. If you can demonstrate bad faith, moreover, such as showing that the provider deliberately ignored the evidence backing your claim or that they engaged in stalling or intimidation tactics, you might be entitled to additional damages on top of the coverage for the treatment you seek.

Get Help Contesting a California Bad Faith Insurance Denial

If your health insurance claim has been unreasonably denied or if you are dealing with other bad faith insurance issues in California, fight for the coverage you are owed with the help of the seasoned and effective Los Angeles insurance claim denial lawyers at Gianelli & Morris for a free consultation at 213-489-1600.