ProPublica Says Health Insurers Don’t Always Follow the Law After Denying a Claim

As an insurance law firm that regularly gets contacted by Californians who had an insurance claim denied and are frustrated with their inability to get the insurance company to listen to them, it comes as no surprise to us to hear that insurers don’t always follow the law when denying a claim or in their follow-up communication with policyholders. That said, even we were surprised to learn just how widespread this problem is. A recent report released by ProPublica, an organization that bills itself as “a nonprofit newsroom that investigates abuses of power,” listened to over 100 people with health insurance claim denials describe their experiences trying to wring information out of the insurers regarding how they made their decision to deny coverage. The accounts they heard were disheartening.

We discuss the ProPublica findings below, including why claims get denied and how insurers fail to comply with the law when policyholders request information. If you are a California insurance policyholder whose health insurance claim was unreasonably delayed or denied, and the insurance company isn’t giving you a satisfactory reason as required by law, contact Gianelli & Morris to speak with a team of experienced and dedicated California insurance bad faith lawyers.

Policyholders Need to Know the Why and How When a Claim Is Denied

Insurance customers who need a medical procedure that is recommended by their doctor are understandably upset and confused when the insurance company tells them they can’t have the treatment the doctor ordered. These days, many insurance companies resort to computer algorithms and bureaucrats to make coverage decisions based on the company’s profitability instead of the patient’s needs as the primary concern, which is arguably an unlawful bad faith practice. Even without acting in bad faith, insurers can still make errors by misapplying their policies or failing to follow their procedures correctly.

Patients have a legal right to know what information the insurer used to make its decision. Getting this information is crucial to determining if the insurer made a mistake or acted in bad faith. Did an insurance company employee communicate with a doctor or nurse, or with other company employees internally? Did they talk about the benefit of the requested treatment for the patient or about its cost and the savings to the company of denying the treatment?

It’s vital for policyholders to know what the insurer talked about and what they relied on to make their decision. Customers are entitled to documents, records, plan provisions, internal rules, guidelines and protocols, copies of emails, and transcripts of phone calls or recordings of the calls themselves – whatever the insurer talked about and relied on, the insured has a right to know.

Sometimes Insurance Companies Don’t Communicate Reasons as Required by Law

ProPublica reported last year on the experiences policyholders had trying to get important information from their insurers following a health insurance claim denial. After aggregating over 120 different patient experiences, ProPublica came up with the top three mistakes insurers were making:

1) Wrongfully requiring a subpoena before releasing records

Many patients were told they had to get a court order before the company would release their files to them. This is an incorrect interpretation of the law; nothing in the law requires a court order or permits the insurance company to require a subpoena before giving a customer access to their files. When pressed, companies chalk up this mistake to a lack of proper employee training, but one wonders where so many insurance company workers get this wrong idea from in the first place.

2) Misinterpreting a request for a claim file as an appeal

Over and over again, ProPublica reviewed reports of customers requesting their claim file and later getting back a response to the effect of, “We have received your request to appeal the denial.” Calling such a request an appeal forces the case into a drawn-out administrative process without giving the policyholders the information they asked for or giving them an opportunity to resolve the matter more quickly and less formally.

3) Missing the deadline to respond

Perhaps the most frequent insurance company violation concerns failing to respond to information requests in a timely manner. The federal ERISA law, which governs most employer-sponsored health plans, requires insurers to respond to a policyholder request for information within 30 days of receiving the request. Medicaid rules have the same requirement for Medicaid (Medi-Cal) plans such as Anthem Blue Cross, Health Net, Blue Shield Promise, or Molina Healthcare of California. California law is even stricter, requiring a response within 15 days for plans governed by state law, including privately purchased plans, public sector employee plans, and others.

Nevertheless, time and again insurers were found to “blow past” even the 30-day deadline. ProPublica received reports of policyholders waiting 50 days, 70 days, or longer to get a response. Some were even told in writing that they would get a response in 45 days, a clear violation of both California and federal law, regardless of which law is controlling. At best, insurance company employees are misunderstanding the nature of the request or they are unaware of the applicable legal deadline to provide requested information. Of course, this failure could also be seen as an intentional delay tactic and evidence of bad faith.

Are the Insurance Companies Shooting Straight?

The ProPublica report investigated five leading health insurance companies, including Anthem Blue Cross Blue Shield, Cigna, UnitedHealthcare, and Aetna. When caught out, the insurer would most often admit the error and send the records or other requested information. They would also tend to blame the error on the lack of or inadequate training of employees who give wrong answers to customers or miss statutory deadlines. While these excuses don’t make the insurers blameless, they do give the impression that the insurance company was not acting in bad faith, which could open them up to costly legal liability, including punitive damages.

Yet another mistake ProPublica uncovered was that these insurance companies don’t always let their insureds know they are entitled to these records and tell them how to get them. If they tell them at all, the language is often buried deep in a denial letter. What is their motive in failing to make this option more conspicuous, which would help customers understand the company’s decision-making process if they have nothing to hide?

Contact Gianelli & Morris for Help With Insurance Claim Denials in California

If you think your insurance company is not being straight with you, if they wrongfully denied your claim and are stonewalling your efforts to get answers, Gianelli & Morris can help. We represent policyholders throughout California who have been wronged by their insurers. Give us a call at 213-489-1600 for a free consultation. Let us help you get the healthcare coverage you paid for and hold the insurance company accountable for any harm they have caused in a wrongful denial or other bad faith conduct.