Can You Sue When a Health Insurance Claim is Denied?

If a healthcare insurer has denied or delayed valid claims, or refused to pay for critical treatment, lab tests, services, specialist consultations, or a prescription drug, which resulted in serious long-term complications or death, you and your family can consider taking legal action.

Many health insurance companies have been targets in claim denial lawsuits for violating the terms of their own insurance policies. It has been a point of contention for many years, and now victims and plaintiffs have found success in filing complaints against unscrupulous health insurance outfits that regularly deny or underpay claims.

What Rights Do Health Insurance Policyholders Have?

There are consumer protection laws designed to protect consumers, and give them the right to take legal action when insurers act in bad faith. Bad faith claims refer specifically to instances when a healthcare insurance company deliberately denies, delays or underpays valid claims made by policyholders.

Unfortunately, it has become so common for insurers to violate healthcare policies that many consumers and plaintiffs are forced to hire an attorney and sue their healthcare insurers for damages that include all out-of-pocket medical costs, pain and suffering, emotional distress, and, in some cases, wrongful death.

Victims of health insurance claim denial and insurance bad faith can contact our consumer protection lawyers for a free consultation and case review. We can assess your claims, review your policy contract, and determine exactly what you can expect in a healthcare claim denial settlement.

Why Are Healthcare Claims Denied So Often?

Health insurance claim denial rates vary widely and depend on the health insurance company and the type of healthcare plan (PPO, HMO, Managed Care, Medicare, Medicare Advantage, Medicaid). The type of healthcare service requested also affects the rate of claim denial.

Some statistics suggest that up to 15 percent of all claims submitted to insurers in the U.S. are initially denied, with higher claim denial rates for more expensive treatments. Importantly, more than half of the claims that are initially denied are eventually covered when a policyholder appeals a denial. Many Americans say they have cancelled or delayed follow-up healthcare services because they did not have coverage and did not have the money to pay out of pocket.

According to commonwealthfund.org, 45 percent of insured adults have received a medical bill or been charged a co-payment that they believed was covered under their health insurance plan. Insurers will often find dubious reasons to deny coverage for expensive medications, treatments and diagnostic tests that your medical team has requested.

Every case is unique, and we will need to review your medical records and policy with industry experts to conclude whether or not a healthcare provider has acted in bad faith. Healthcare claims are denied every day for the following reasons:

• Errors in paperwork, or omissions of necessary policy information. Both hospital staff and policyholders may be responsible for the errors.
• Delays and claim denials are often the result of a healthcare provider questioning whether a certain procedure, test, or prescription drug is necessary. Insurers often question physicians themselves about their professional decisions.
• Delays can be the result of a healthcare provider recommending a less expensive option before it pays for the requested service, medication or treatment. Such delays can delay critical medical care.
• A provider holds up a procedure or care when they think your policy or health plan doesn’t cover the requested service.
• If you use an out-of-network provider, an insurer may not cover any of the medical bills.
• Pre-authorization for a procedure or diagnostic testing may be required, even when a clinic deems it an emergency.

What Should You Do if Your Health Insurance Claim is Denied?

To build a case, we need to understand why a claim was delayed or denied outright. If you have had a health insurance claim denied which resulted in a delay in diagnosing a serious illness or injury, you may want to consider hiring an attorney and taking legal action. To begin the process, you should compile all documentation related to your communication with your healthcare providers.

You may want to begin with the claim appeal process, which involves a written request to your insurer to reconsider a claim approval. We can assist you in resubmitting an original claim, along with the appeal paperwork and any other supporting documentation. Generally, policyholders have four to six months from the day they learn their claim was denied to file an appeal.

Can I Sue a Health Insurance Company?

It is important to note that if you have a group plan offered by an employer, federal law governs the insurance, and ERISA requires that you go through certain appeal steps before challenging with a lawsuit.

Health insurers and providers of health plans have obligations to their policyholders and must cover claims listed in a particular policy. Otherwise, a plaintiff can file a bad faith lawsuit. We think all health insurance companies should pay claims in a prompt manner to minimize serious health risks to patients. You can consider filing a lawsuit for the following bad faith health insurance behavior:

• Claim Denials
• Claim Delays
• Delayed Reimbursement
• Not Investigating Claims
• Misrepresenting Health Policy Terms

Some claims are prematurely denied due to treatment that is received out of network or treatment that providers call “experimental.” Some providers even use third-party companies to review and make determinations on valid claims, which can further delay coverage with an added step of approval. These third-party companies can have requirements that allow them to deny the claims, unbeknownst to policyholders.

Claim denials often come in the form of an Explanation of Benefits (EOB) which will have a description of what was not covered. A health insurance attorney can help you navigate through this frustrating and complex system of delays, denials and appeals.

Our lawyers cannot magically make your medical bills disappear, but we can assist you, and we can pressure your insurance company to pay for what we believe they owe. Plaintiffs who file a bad faith lawsuit against a health provider can recover damages for pain and suffering, emotional distress, physical injury, and lost wages.