Orlando Harmon
Health insurance coverage is meant to provide people with the security of knowing that they can seek necessary treatment in the event of an emergency without accumulating large medical bills. However, insurance companies sometimes deny payment for medical treatment, leaving patients with unexpected bills and a feeling of being let down. In the case of medication, insurance companies may deny coverage for a particular drug, leaving patients wondering if they can sue to get the medication they need. While suing an insurance company is possible, it is a complex, time-consuming, and expensive process, and the outcome is not guaranteed. Before taking legal action, it is advisable to understand your legal rights, carefully review your insurance contract, and seek the help of an experienced insurance attorney.
| Characteristics | Values |
|---|---|
| Denial of medication coverage | Denial based on determination that injuries resulted from "illegal activity" or that treatment is not "medically necessary" |
| Reasons for denial | Lack of coverage, treatment received out of network, or treatment considered experimental |
| Appeal process | Internal appeal to the insurance company, external appeal to a third-party review |
| Legal action | Possible to sue for breach of contract, bad faith tort, or under unfair trade practices laws; varies by state |
| Considerations | Consult an attorney, review insurance policy and denial letter, gather documentation and evidence |
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What You'll Learn
Appealing the decision
If your health insurance company denies coverage for your medication, you have the right to appeal the decision. The first step is to understand why you received the denial. This explanation is usually provided in a document called an Explanation of Benefits (EOB) from your insurer. Some of the simplest denials are the result of mistakes such as incorrect coding or typos and can be easily reversed if caught in time.
The appeals process typically begins with an internal appeal, which involves a written request to your insurer explaining why you believe your claim should be approved. You may also submit a letter from your doctor explaining why the treatment is necessary for your health, along with any supporting medical literature. You will then resubmit your original claim, along with the appeal paperwork and any supporting documentation. If the insurance company is swayed by your doctor’s letter or your explanation, your claim will be approved. Otherwise, the insurer will once again deny your claim. During an internal appeal, you typically have a set amount of time, such as six months, from the day you learn your claim was denied to file the appeal.
If your internal appeal is denied, you can proceed to file an external appeal, where you request an independent third party to review your claim. This could involve an independent reviewer with the insurance company and a doctor with the same specialty as your doctor assessing your appeal to determine if they will approve or deny coverage. It is important to note that each state and insurance company offering coverage must provide access to an independent external review process.
While appealing an insurance denial can be daunting, it is worth noting that more than 50% of appeals of denials for coverage or reimbursement are ultimately successful. This percentage may be even higher if you have an employer-funded or self-insured plan. Therefore, it is important to understand your insurance coverage and the specific appeals process outlined in your plan.
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Bad faith insurance practices
Bad faith insurance refers to an insurer's attempt to renege on its obligations to its clients. This can manifest in several ways, such as refusing to pay a policyholder's legitimate claim or failing to investigate and process a claim within a reasonable period. Here are some common bad faith health insurance practices:
Unjust Denial of Valid Claims
Health insurers may deny claims without a reasonable basis or without conducting a thorough investigation. This can include denying claims by asserting that a treatment is not medically necessary without consulting appropriate medical professionals.
Misrepresentation of Policy Terms
Insurance companies can act in bad faith by misrepresenting the language of an insurance contract to the policyholder to avoid paying a claim. They misinterpret policy terms to refuse to cover treatments explicitly covered under the policy.
Pre-existing Conditions
Insurers may deny a claim by incorrectly labelling a condition as pre-existing, which is not covered under the policy.
Lack of Transparency
Bad faith can occur when insurance companies fail to disclose policy limitations and exclusions to policyholders before they purchase a policy. Policyholders may not be fully aware of what is and isn't covered, leading to unexpected claim denials.
Delay Tactics
Insurers may engage in bad faith by intentionally delaying the processing or payment of claims to avoid their financial responsibilities. They might request unnecessary documentation, fail to respond to inquiries or submissions in a timely manner, or drag out the investigation process without a valid reason.
Underpayment
Underpayment occurs when an insurer pays less than the amount required to cover the policyholder's legitimate medical expenses. This can be done through improper discounting or applying unjustified reductions to the claim amount.
If you believe your health insurance claim has been unfairly denied or that your insurer is acting in bad faith, it is essential to seek legal advice. An experienced attorney can help you understand your rights and navigate the complexities of bad faith claims to ensure you receive the coverage and benefits owed to you.
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Breach of contract
An insurance policy is a type of contract, and every state allows for a breach of contract action. If your insurance claim has been denied, you can sue your insurance company for breach of contract if you can prove the following:
- You had a valid insurance policy.
- You fulfilled your obligations under the policy.
- The insurer failed to fulfill its commitments.
- You suffered damages as a result.
For example, if your insurance company fails to investigate a claim properly or it denies a legitimate claim, you can sue the insurance company for breach of contract. Under contract law, breach of contract occurs when an insurance company fails to honor its end of the bargain.
Some common reasons for denying a claim include:
- Lack of coverage: The insurance company may argue that your insurance policy doesn't cover your claim.
- Insufficient documentation: The insurance company may claim that you did not provide enough evidence to support your claim.
- Bad faith denial: The insurance company may offer many justifications for denying your claim, such as confusing policy jargon or claiming that you made a bad faith claim.
If your insurance claim has been denied, you can take the following steps to protect your rights:
- Review your policy: Carefully read your insurance policy to understand the coverage, exclusions, and obligations. This will help you determine whether the denial was warranted or if you have grounds for a dispute.
- Request a detailed explanation: Ask the insurance company for a detailed explanation of why your claim was denied, including specific policy provisions and any other reasons for the denial.
- Gather documentation: Collect all relevant documents, including your insurance policy, correspondence with the insurer, evidence supporting your claim, and other essential information.
- Appeal the denial: Most insurance companies have an internal appeals process. Submit a formal appeal, providing additional documentation and arguments to support your claim.
- Consult an attorney: If you believe the insurance company has breached its contract or acted in bad faith, you can consult an experienced attorney who specializes in insurance law to determine if you have a valid case and the best course of action.
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Personal injury claims
When it comes to personal injury claims, individuals are often entitled to compensation for harm suffered due to the reckless or irresponsible actions of another party. This can include coverage for medical bills, pain and suffering, and other damages. However, insurance companies sometimes deny these claims, which can be challenging for the claimant.
In the event of a denied personal injury claim, it is essential to carefully review the denial letter and the insurance policy. Exclusions or specific language in the fine print may explain the denial. If the denial appears ambiguous, erroneous, or misleading, writing a dispute letter or initiating an internal appeal is advisable. An internal appeal involves requesting the insurer to reconsider and providing additional supporting documentation, such as a letter from your doctor explaining the necessity of the treatment.
If the internal appeal is unsuccessful, you can proceed with an external appeal. This involves seeking an independent third party to review the claim and make a binding decision. It is important to act promptly, as there are typically time limits for filing appeals. Additionally, consulting with a personal injury lawyer is recommended to explore the possibility of filing a lawsuit, especially if the insurer remains unresponsive or continues to deny the claim.
In certain cases, insurance companies may be held liable for bad faith or breach of contract. Bad faith occurs when the insurer fails to treat their clients fairly and reasonably, resulting in potential liability for emotional distress, fraud, or punitive damages. On the other hand, breach of contract arises when the insurance company denies a claim contrary to the strictures in the policy. In such instances, scrutinizing the language used in the policy becomes crucial, and if a breach is established, the claimant may be awarded damages.
It is important to remember that the process of disputing a denied personal injury claim can be complex, and seeking legal assistance from a qualified attorney can be beneficial to protect your rights and interests.
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Hiring an attorney
If your insurance company has denied your request for medication, you may be able to sue them. However, there are several steps you should take before doing so.
Firstly, you should enlist your doctor to help reverse the denial. Your doctor can communicate with the insurance company regarding the necessity of your treatment. They can also provide a letter explaining why the treatment is necessary for your health, along with supporting medical literature. This often helps resolve insurance disputes involving denials.
If your insurance company still denies your request, you can file an internal appeal. This involves a written request to your insurer explaining why you believe your claim should be approved. You have six months from the day you learn your claim was denied to file an appeal.
If your internal appeal is denied, you can file an external appeal before a neutral third party. This involves asking an independent entity to look at all the facts and make a decision on your claim. You usually have four months from the date you learn your internal appeal was denied to file an external appeal.
If your external appeal is denied, you may want to consider hiring an attorney. A health insurance lawyer can help determine whether your insurer is acting in bad faith and whether their actions are legal. They can interpret and apply the terms of your health plan to the specific facts of your case and increase your chances of success. They can also initiate and litigate a lawsuit seeking payment of your claim.
When hiring a health insurance attorney, it is important to find someone who has experience with cases similar to yours. For example, if your health plan is provided by your employer, you will need an attorney with expertise in ERISA law. You should also be aware of how the attorney charges for their services. Some lawyers charge by the hour, while others charge by the case or take cases on a contingency basis.
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Frequently asked questions
You can request an internal appeal, which involves a written request to your insurer explaining why you believe your claim should be approved. You can also submit a letter from your doctor explaining why the treatment is necessary for your health, along with any supporting medical literature. If the internal appeal is denied, you can file an external appeal, where a neutral third party will review your claim and make a decision.
Yes, you can sue your insurance company for denying your claim, but it may be expensive and difficult to win the case. Before suing, you should consult an attorney with experience in insurance litigation, as insurance law can be complex. An attorney will be able to explain the types of damages you can pursue and your likelihood of success.
There are several reasons why insurance companies deny claims. Some common reasons include lack of coverage, treatment received out of network, or treatment that is considered experimental. Other reasons include incorrect coding or typos, which can often be easily reversed if caught in time.
