Heath insurance is a legal contract that binds both parties. If your insurer underpays or won’t pay at all, you have enforceable rights. Here’s how to handle the handlers.
This article will discuss the three options you have for challenging a health insurance claim. First, however, the article discusses several tips you can use throughout the process to make sure your claim, your claim dispute, and any further action is as strong as possible.
Before pursuing your dispute, even before filing your claim, make sure you consider the following:
Documentation: your claim will be denied and your dispute, appeal, and legal action fail unless you can document your case and your insurer’s actions/inactions. You should keep everything. If you contact the insurance company, you should “memorialize” the conversation in a letter that you send to the company. If you aren’t getting any response to your telephone calls or letters, you should document that fact in a letter. When you send a letter, you should send it certified mail return receipt requested or other method where delivery and receipt can be proven.
Prepare: make sure you understand your claim and its value. Don’t agree with your insurers representative about anything unless you know the elements of your claim inside and out. If you have questions about charges, contact your medical provider and have them explain them. If you have to, contact your insurer and ask them to explain the charges and your coverage. Don’t commit to anything. Unless you know for a fact the answer to the question they will try to get you to agree to, say you are unsure. Don’t commit yourself until you know exactly what you are committing to.
Remember, most insurance providers are in the business to make money. They do this by paying out less in claims than they receive in premiums. These days, insurance companies are making record profits and paying out at record lows. They have strategies for settling claims for less than they are worth. Your best defense is your preparation.
Care: everything you send and say to your insurance company will be documented as well. Your telephone conversations will be recorded. The representative will type notes that will be saved. All correspondence will be thoroughly documented. Don’t say or write anything you don’t want to see come up again. You should always act reasonably. Don’t underestimate or exaggerate your claim. Don’t threaten. The more patience and level-headedness you can muster, the more likely you will be able to resolve your claim. If it does not resolve, let your attorney make threats for you when the time is right.
Time: insurance companies drag their feet. However, you have legal rights that will expire. Your clock to exercise those rights started ticking either when you were injured, when you first contacted your insurance company, and when they first deny your claim. Don’t let them drag out your case so that you miss an opportunity or so that you have to make a decision at the last minute. The best way you can do this is to know the time limits (called “Statutes of Limitations”) and to keep on top of things. Don’t let there be a gap of activity on your claim or dispute. Follow up. Remember, the squeaky wheel gets the grease.
Now that you know the tips, here’s how to put them into practice. There are three avenues to pursue a rejected claim or unacceptable settlement offer.
The first is an appeal directly to your insurance provider. This is a necessary step that you must take in order to take your case further. You will need to read your policy carefully in order to determine your appeal rights. You may also find that information on the company’s website. Or, you can get it by calling the company and requesting the guidelines be sent to you.
Since your policy is a contract, you will be bound to its terms just as your provider will. Thus, if your policy only allows a certain period of time in which to submit a dispute, you must do so within that time frame. The same is true with any other procedural requirements, such as what documentation you must provide, what form your dispute is presented in, and how/who the dispute is filed and heard.
Similarly, your provider will be required to follow the guidelines for their own dispute resolution process. If you feel that your dispute is not being handled fairly, document that fact in writing.
If you are not satisfied with the outcome of the internal dispute, then you will have to take it to the next step. You have two options: file a complaint with your state’s insurance department or commission (see below for a tip on how to find their website) or contact a lawyer specializing in insurance litigation.
Most states have an agency that regulates insurance providers and enforces the state’s insurance laws. An easy way to locate your state’s agency is to go to a search engine such as google and type “insurance commission” or “insurance department” and [your state name] into the search window. Once you find your state’s site, find the “complaint” link and follow the directions.
If you are not satisfied after filing a complaint with your state insurance agency, or decide to skip that option, you will need to contact an attorney that specializes in insurance law. In addition to any recovery you may seek under your policy, many states have “bad faith” laws that increase the damages you can get for an insurance providers “bad faith” handling or denial of your insurance claim. For example, in Ohio, an insurance provider is subject to punitive damages, if it can be shown that your claim was undervalued or denied in bad faith.
Litigation, however, is expensive and time-consuming. Unless your case involves a large claim or is an egregious case of bad faith, you should think hard about whether you can afford the time and money to pursue a lawsuit. I counsel my clients to look at the situation logically, setting, to the extent possible, the deep emotions involved that can affect judgment. You shouldn’t end up paying me more than your are going to get from your provider. That won’t make anybody happy (except me, of course). I discourage litigation if the attorney is the only one who is going to benefit in the end. Still, I can honestly say that many times an insurance company will finally be motivated to settle only after they receive a demand letter from an attorney. So, one strategy you can use is to hire your attorney just to send the first letter. You can always jump in with both feet later.
To find out more about the rights your individual state provides, check out the Georgetown University’s Health Policy Institute. They provide state by state information and their webpage is located at:
Note: I am attorney licensed to practice in the State of Ohio. The laws of your state may be different. This article presents a summary and should not be used as a substitute for legal advice. If you have any questions about your rights, you should consult with an attorney.
You may find my article on how to get free legal advice helpful. It’s geared towards low-income individuals, but it has tips that everyone can use. It is located at: