Health Insurance Bad Faith Attorney Los Angeles

Health insurance is absolutely essential to our peace of mind.  We rely on it implicitly.  When a health insurance company unreasonably denies a health claim, a person’s health, livelihood, and even life may be at stake.

At The Kristy Law Firm, we daily fight huge insurers like Kaiser Permanente, Blue Cross, and Blue Shield.  Our Los Angeles health insurance bad faith lawyes file lawsuits against such insurers to force them to live up to the promises in their health plans and policies.

We offer a free evaluation of your case.  We represent insurance policyholders on a contingency-fee basis, which means that our clients owe us nothing unless and until we recover money for them.  If you believe your health insurance claim was handled unfairly, call us today for a free evaluation of your case.  Or, fill out the contact form for a free evaluation. Thank you, we look forward to discussing your case with you.

Claims Denied as “Not Medically Necessary”

The Requirement of Medical Necessity

Health insurers sometimes deny coverage of a procedure or medication as “not medically necessary.”  The insurer will cite language in its policy (or “plan”), stating that the insurer need only pay for treatment that is medically necessary.  It can be extremely distressing to be told that your insurer refuses to pay for treatment after your physician has ordered it.  How can it not be “medically necessary” if your own physician believes it is?  This can be considered a bad faith insurance practice.

Utilization Management

HMOs decide whether to cover medical treatment using a system called “utilization management.”  This is the industry term for the process of deciding whether to cover – pay for – a proposed course of treatment.  Physicians, nurses, and other HMO staff review requests for proposed treatment and decide whether it is medically necessary.

Health insurers may decide that a proposed procedure is not “medically necessary” because other, less expensive procedures are just as good.  However, in denying a claim on the basis of medical necessity, they rarely recommend any particular alternative plan of treatment.

HMOs, even “not-for-profit” HMOs, are likely any other modern corporation: They seek to minimize costs.  Cost-cutting is part of their culture.  The premiums they collect from patients are relatively fixed, so the lower their expenses, the higher their profits.  Unfortunately, when a health insurance company cuts corners to save costs, human lives are profoundly affected.

Your Rights

Many clients have come to us in exasperation and even despair after fighting for coverage of necessary medical care.  Their physician – or, sometimes, team of physicians – have written letters to the health insurer, stating that the proposed treatment is medically necessary.  Still, the insurer refuses to cover the treatment.

We file suit against insurers who have unfairly denied health claims as not medically necessary.  We conduct a thorough investigation of the insurer’s process in denying the claim.  We advance the cost of retaining expert physicians who will testify about the necessity of the plaintiff’s treatment.  We hold the insurer responsible for the consequences of its wrongful denial.  These consequences take the form of monetary damages for the treatment foregone: wrongful death; past and future medical costs; and physical and mental suffering.

If you believe your health claim is being unfairly denied, seek legal advice immediately.

Post-Claims Underwriting

Definition

“Post-claims underwriting” is the practice of waiting until after a claim is made before declaring the insured ineligible for benefits because of a “material misrepresentation” in her insurance application.

Many people purchase health insurance and pay their premiums for more than a year, only to be denied coverage when they submit a claim.  Their insurer then tells them that a review of the insured’s application for insurance reveals that the insured was not truthful about an important question relating to his or her medical condition.  Consequently, the insurer has decided to rescind – i.e., cancel – the health insurance policy.

Current California Law

It is against the law for health insurers to cancel a policy through post-claims underwriting.  (Health & Safety Code section 1389.3; Insurance Code section 10384.)

Group health plans may not delay the underwriting process until a claim is made.  That is, they must “resolve all reasonable questions arising from written information submitted on or with an application before issuing the policy or certificate.”  (Insurance Code section 10384.)  In other words, group health plans must investigate the applicant’s medical history before issuing a policy.  Failure to do so amounts to impermissible post-claims underwriting. (Hailey v. California Physicians’ Service (2007) 158 Cal.App.4th 452, 466–67; Nazaretyan v. California Physicians’ Service (2010) 182 Cal.App.4th 1601, 1609.)

Insurers that offer health plans to individuals are subject to a more lenient standard.  Such insurers may cancel a policy where nothing in the application alerted the insurer that the insured’s responses were incomplete or inaccurate.  Under these circumstances, an insurer issuing an individual policy is not guilty of post-claims underwriting.  (Nieto v. Blue Shield of Calif. Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 70.

Conclusion

When applying for health insurance, answer all questions fully and completely.  If you do not understand a question on the application, ask the insurer’s representative to explain what information the question requires.  Document your understanding of the question in a letter to the insurer.  If you believe you are the victim of post-claims underwriting, seek legal advice immediately.

Health Insurance Fraud

Definition

Health insurance fraud means occurs when an insurer makes a promise about the insurance policy that it knows to be untrue.  Policyholders who rely on that promise become the victims of fraud when they make a claim and fail to receive the promised benefit.

Certain health insurers, including Midwest National Life Insurance Company and The MEGA Life and Health Insurance Company, specialize in health insurance policies for individuals.  They market to these individuals through non-profit groups such as The National Alliance for the Self-Employed and the Alliance for Affordable Services.

Individuals who have purchased health insurance from Mid-West and MEGA have found that their policies did not adequately protect them, as the sales representative had promised they would.  These individuals have reported the following behavior by the insurer:

  • The sales representative completes the application for the customer.  When the customer later made a claim, the insurance company alleged that the customer had misrepresented his medical condition in the policy, thus voiding coverage.  (This is called post-claims underwriting.)  The policyholder is charged with submitting false information, even though the sales representative had filled out the application for him.
  • The sales representative offers a range of policies, with varying premiums and coverage limits.  For example, policies with lower premiums have higher maximum amounts the policyholder would be responsible to pay if she were hospitalized.  Nonetheless, the sales representative states that even the cheapest policy would provide “adquate” coverage if the policyholder developed a serious illness like cancer.
  • When the policyholder later requires hospitalization for a serious illness, he finds that he is responsible for tens or even hundreds of thousands of dollars in medical bills.  The insurance he purchased does not begin to pay for the true cost of things like daily hospital stays and chemotherapy.

Be wary of solicitations like the ones above.  Ask for a specimen of the policy being offered, then read it and ask about anything you do not understand.  If a sales representative tells you that you will be adequately covered if you become seriously ill, ask for details.  How much do cancer treatments and hospitalization cost – and how much does the policy cover?  What would your out-of-pocket maximum be?

If you believe you may be the victim of insurance fraud, seek the legal advice of a health insurance bad faith attorney in Los Angeles immediately.