When an insurance company decides it doesn't want to pay a claim, it is required by law in most states to give a legitimate reason. If it doesn't give a reasonable explanation or doesn't have a legitimate reason, the insurance company can be liable for bad faith.
One way insurance companies try to boost profits and get around these requirements is to claim that certain treatments are "not medically necessary." An extreme example aired yesterday on The Today Show:
Here are some of the facts from the show:
- A man and his sister had the same health insurance company, United Healthcare
- The man and his sister had same life-threatening disease, cystic fibrosis, and the same mutation of that disease
- The man and his sister had the same doctor
- The doctor for the man and his sister wrote an identical letter to United Healthcare asking it to pay for a new, life-saving medication for cystic fibrosis, which costs $25,000/month
United Healthcare approved the claim for the sister, but denied the claim for the brother as "not medically necessary." For over a year, the man's health declined, while his sister's improved. As The Today Show prepared to air a segment on the man's fight for life against United Healthcare, the show's producers called to ask for a comment by United Healthcare. The response? A complete change in position, so they wouldn't look quite as bad on national television.
Kevin and Katie Dwyer's case shows just how arbitrary insurance companies can be. But most folks aren't going to receive help from The Today Show to make their own insurance company do the right thing. In a country where we are required by law to buy car and health insurance or suffer severe economic penalties, it is unfair that insurance companies get away so often with such arbitrary conduct.
Here at the Chaney Law Firm, we see "not medically necessary" claim denials all the time. It is a method insurance companies use to boost profits, often at the expense of their own policyholders. As one example, one car insurance company denied payments for computerized radiographic mensuration analysis (CRMA) services by a medical doctor in Texarkana based upon reports by two chiropractors in Washington State and Georgia. The medical doctor objected to the Washington and Georgia chiropractic boards and the insurance company, but the insurance company wouldn't change its position. That case is ongoing.
This example reflects a common practice; in many instances, the insurance company will attach a boilerplate report from a medical reviewer who lives many states away and who does not know the standards of practice here at home. Another example is when insurance companies hire the same experts here in Arkansas repeatedly because they always issue the same boilerplate reports in favor of the insurance company. You can read more about these so-called "medical reviewers" and their predictable opinions on our professional defense witnesses page.
If you've been told by an insurance company that a treatment is not medically necessary, you have rights. You can appeal the insurance company's decision, take your case to the Insurance Commissioner for help, or hire an attorney to help you with the process. We provide free consultations and would be happy to see if we can help.