Seeking Legal Action Against your Health Insurer for Denying Coverage
Maintaining a health insurance policy does provide a degree of comfort to many policyholders. While the policy itself cannot prevent against health problems, the comfort is knowing that, in most cases, any health problems will not cause financial ruin for the policyholder. However, issues arise when an insurance company denies coverage for a specific and necessary medical event or prescription medication. In many cases, it is known why a denial was issued – the policy does not provide coverage for that specific event. However, in some cases, it is not as clear, and, in the most extreme cases, retaining the services of an attorney versed in interpreting contracts and holding a party responsible for their obligations may be necessary to obtaining coverage and reimbursement. Recently, the Supreme Judicial Court gave the green light for a family to continue litigation against a Walgreens pharmacy for its failure to obtain a physician’s pre-authorization of insurance coverage for epilepsy medication, and when the young woman was unable to get this medication, she died from a fatal seizure. Although this ruling allows the family to continue litigation against a pharmacy, it nevertheless illustrates how insurance companies can cause harm to a policyholder, as the pre-authorization requirement was a requirement of the insurance company, which acts, in effect, as a denial of coverage. A discussion of instances in which a policyholder may want to consider filing suit against an insurance company, will follow below.
Legally speaking, claims against insurance companies who deny coverage are matters of contract law, and must be brought within three years of the occurrence. The legal theory typically presented is that the insurance company acted in bad faith when it denied the claim. Insurance companies owe a duty of good faith and fair dealing to their policyholders, sometimes referred to as the “covenant of good faith and fair dealing.” If an insurance company violates that covenant, the policyholder may attempt to force the insurance company to act contrary to the violation – that is, to force the insurance company to act in good faith.
Types of Denials
Whether to cover a specific medical event typically turns on whether the treatment is considered medically necessary. That is, a determination must be made as to whether the treatment will be necessary to save the policyholder’s life, or whether it is necessary to alleviate the condition. Further, it is actually the insurance company that makes this determination, as opposed to a policyholder’s physician. If the determination is that a treatment is medically necessary, under most insurance policies, the insurance company must cover the treatment. On the other hand, if the insurance company sees a treatment as optional, as opposed to life-saving or condition-alleviating, they can deny the claim. Nevertheless, the insurance company must act in good faith in their actions. Most bad faith denials fall within the following categories:
- The result of data-entry mistakes, such as incorrect coding, which should be caught and corrected;
- Treatment that the insurance company considers to be experimental, but does not provide support; and
- Use of a third party to make the determination, who either may not have reviewed the file, nor have a background sufficient to determine the medical necessity of a proposed treatment.
Seek Legal Advice
If you or a loved one have been denied coverage by your insurance company for treatment for a medical condition, and you believe their denial to be in error, contact the attorneys at Leontire & Associates, P.C. as soon as possible. We have experience and expertise in various aspects of contract law, including the complexities of insurance policies. Armed with this experience, we can review your claim. If we believe it to be viable, we will work with you to develop a strategy to ensure your insurance company is acting according to the terms of the policy. Contact our Boston office today.