You have an insurance coverage to protect yourself from the unforeseen. And when you fall ill or get injured, you expect your medical bills to be paid. However, sometimes insurers will deny legitimate claims and refuse to pay for the procedure or treatment. Insurance carriers are in the business of making money and in order to maximize their revenues, they usually fail to pay on claims, keeping the money from going out the door. Medical expenses add up quickly and more problems come in when your insurance company denies your claim. This can result in emotional and financial stress, which can be devastating to you and your family.
Denial of insurance can also mean prolonging an illness or, in some instances, death. Insurance policies come with out-of-pocket portions and deductibles for the policyholder to pay. While this is clearly indicated in the agreement, what is not mentioned is the fact that the insurance company will come up with all sorts of reasons to refuse payment for many procedures and treatments, not all of which make sense or are legal. At Stop Insurance Denial Law Firm, we know the rules and are zealous advocates for our clients. We aggressively help clients get the coverage, treatment, procedure, and assistance they need. Our attorneys know how to challenge insurance claim denials using consumer protection and insurance laws. If you’ve been denied a claim, contact us today at 310-878-1771 to schedule a free consultation. Please do so promptly because the rules are complicated and confusing and there are many time deadlines that may apply.
Duties of Insurance Companies
The following are some of the most basic duties of an insurance company owed to the policyholder. The insurance company is held liable for the resulting damages if any of these is broken.
Duty of Good Faith and Fair Dealing
The courts have determined that the special relationship between a policyholder and insurance company generates a duty of good faith and fair dealing. Usually, it is considered that a policyholder is purchasing peace of mind. And for the insured to get this peace of mind, the insurance carrier should commit to doing what’s right to protect the insured. When an insurance provider fails to do the right thing, they may bedeemed to be acting in bad faith. This behavior prompts severe penalties for an insurance company, particularly the likelihood of punitive punishment for their actions.
Duty to Indemnify
Indemnity is usually confusing due to the manner in which it is written and stated in contracts. Nonetheless, the idea is simple and denotes the duty of one party to recompense for the loss incurred by another party. This means that if you are found liable to a third party for damages, your insurance carrier should pay for damages suffered up to the policy limits. Such a payment is referred to as indemnity.
Duty to Defend
When a third party brings a claim, the insurance company has a duty to defend. It is the responsibility of an insurance company to provide their policyholder with meaningful defense and take care of all the litigation expenses. This means hiring a competed attorney on behalf of the policyholder. The duty to defend is comprehensive and encompasses all covered claims based on the facts indicated in the claim. The courts have found that a meaningful defense is one that constitutes all claims and doesn’t give the insurance company a chance to deconstruct claims.
Duty to Quickly and Fairly Manage Claims
An insurance carrier also has the duty to promptly and fairly investigate the claim and provide the benefits such as paying legitimate claims. These duties are governed by the duty of good faith and fair dealing.
Duty to Disclose Conflicts
Numerous forms of conflicts can arise in an insurance case and it’s the duty of the insurance company to disclose them to the policyholder. Likewise, the defense attorney must consider the interests of both the insured and the insurance company when handling this matter. The defense attorney is required to disclose conflicts to both parties. Many conflicts will require the insured to have a separate attorney (paid for by the insurer). This is referred to as Cumis counsel.
In most cases, however, there exists a conflict involving the possibility of the defense attorney using policylimits as the upside risk to the insurer while risking hurting the policyholder. This means that the insured will be responsible for any amounts over the policy limits. The policyholder wants the lawyer to settle the claim within the policy’s limits. But a conflict may arise if the defense lawyer realizes that the chances of losing are very high, but then tries to minimize the settlement by threatening to take the case to trial. This is a tactic developed to scare the plaintiff’s attorney, and given that most law firms are small and lack the trial experience, they cannot afford to pursue costly and long lawsuits.
Also, a conflict may occur if the insurance company believes certain claims aren’t covered under the policy and goes ahead to issue a reservation of rights letter indicating that should the facts surface to that stop coverage, the insurer reserves its rights to deny such a claim. These are some of the conflicts that may lead to the defense lawyer coming up with a strategy that greatly hurts the policyholder, depending on the manner in which the claims in a case are handled and defended. Once an insurance company issues a reservation of rights letter, it means that it is recognizing a conflict and gives the choice to hire a separate lawyer.
Duty to Hire Cumis Counsel or Separate Attorney
When a conflict occurs and stands in the way of the policyholder from obtaining suitable legal defense, the insurer is required to hire and pay for a separate attorney to represent the insured. This attorney is referred to as Cumis counsel, a lawyer advocating for the rights of a defendant in a lawsuit where the claim is covered under the insurance policy, but there’s a conflict of interest between the insured and the insurance provider.
Having a separate attorney can result in better defense for the policyholder. Even though conflicts are quite frequent, their disclosure usually is not. It’s also not common for Cumis counsel to be hired. At Stop Insurance Denial Law Firm, we have litigated many cases where the insurer should have appointed Cumis counsel but didn’t. In such cases, insurance providers are held liable and have to pay for damages caused by the failure to appoint Cumis counsel.
What Are the Policyholder’s Rights When the Insurer Breaks its Duties?
If you incurdamages because your insurance carrier acted in bad faith or breached your insurance contract, you can take legal action and recover damages. The attorneys at Stop Insurance Denial Law Firms can help you.If you’ve suffered damages as a result of wrongful denial by your insurance company, get in touch with us today at 310-878-1771 or complete our online contact form for a complimentary initial consultation.
Importance of Retaining the Services of an Experienced Insurance Denials Attorney
When your insurer wrongfully delays, underpays or denies your insurance claim, it not only commits an injustice but may also have broken the law. Insurance providers have a duty to act in good faith and fairdealing, which may not be indicated in writing but exists by operation of law in all insurance contracts. For this reason, if an insurance provider breaks the agreement, the insured can sue the provider for bad faith plus a general breach of contract claim. If successful, the plaintiff may recover extra-contractual exposure, which involves damages beyond the insurance benefits such as attorney fees, emotional distress, and punitive damages.
Typically, the specific duties of an insurance company differ by type of claim and industry. An insurance provider to review and pay insurance claims as guided by their policies and procedures. This means that they must thoroughly investigate a claim, determine proper values, and make a prompt payout. Furthermore, they must adhere to applicable laws and regulations. An insurance carrier is considered to be acting in “bad faith” when they violate one or more of the requirements. At Stop Insurance Denial Law Firms, we work with policyholders across the nation, making sure that insurance companies pay for claims and arrange for services, treatments, and procedures that insured individuals need and deserve.
It’s important to remember that the goal of every insurance company is to make a profit and protect their bottom line. This is the main reason why they may refuse to provide coverage for certain treatments and people with certain conditions. It is also common for insurers to unlawfully deny coverage for medically necessary treatment. You cannot on your insurance carrier doing the right thing or acting in good faith. Most insurers don’t get serious about paying claims unless credibly threatened a policyholder with a highly experienced and effective attorney.
If wrongfully denied coverage, you may want to retain the services of a insurance denial attorney who could help you file a claim or an appeal if your claim has been denied. The attorneys at Stop Insurance Denial Law Firm understand the different circumstances of insurance denial and stand ready to fight for the rights of policyholders.
Common Reasons Given by Insurance Companies to Deny Legitimate Claims
Treatment Not Considered Medically Necessary
How do insurance carriers deny valid insurance claims? One way they do it is by harshly denying certain types of claims without even evaluating whether the claim is covered under the policy.For example, an insurance company may automatically deny a claim for laser removal citing it as cosmetic and medically unnecessary. It could be that the policyholder suffers from severe recurrent folliculitis, a painful skin condition in which hair follicles become inflamed and develop into benign cysts. Chronic folliculitis is less likely to clear with just antibiotics and the medically accepted treatment is laser hair removal. In such a case, the insurer may deny the claim wrongly assuming that it is purely cosmetic. This means that the insurer avoids learning the facts, hoping that the policyholder will drop the claim altogether.
Determining whether treatment is medically necessary for one individual is an evaluation that by and large doesn’t apply to other claimants. Denying an insurance claim because treatment is not considered necessary is a way for insurers to insulate themselves from potential liability. Insurance companies also deny treatment based on a claim that a treatment is investigational or experimental. It’s not uncommon insurers to deny coverage for an FDA-approved treatment, citing it as investigational or experimental. That is a wrongful action by the insurance carrier and they do this to save money, even if the patients’ treating physician has recommended the treatment as the most appropriate. Unfortunately, many patients faced with a denial will accept the decision and pay the bills themselves.
Another way that health insurance companies deny legitimate claims is by stating that the insured failed to disclose pre-existing conditions. Under the Patient Protection and Affordable Care Act, insurance carriers cannot deny treatment by citing pre-existing health conditions.
Even so, treatment may be denied if there was a pre-existing condition, the insured failed to reveal the existence of the condition, or the case involves fraud. The insurance company has a duty to investigate the information provided on the application. If the name of a physician who treated the policyholder is listed in the application form, the insurer is charged with a duty of knowledge and would have discovered the physician’s records and treatment.
Insurers may also deny coverage for certain treatments they consider to be out-of-network. Many Preferred Provider Organizations and almost all Exclusive Provider Organizations and Health Maintenance Organizations, insurance carriers deny treatment if it is not provided by an in-network healthcare provider. When an insurer cannot provide the necessary medical treatment within its networks, they have a legal duty to allow a member to go out-of-network for treatment.
It’s common for people with unusualor rare disease to opt for out-of-network medical treatment. However, this often costs insurance companies more money than they would if treatment was provided an in-network healthcare provider and this is why they usually resist allowing patients to go out-of-network. Before going out-of-network, an individual should first contact their insurance company and explain in writing why they must go out-of-network.
There are many other tactics that insurers employ to deny valid claims. For instance, they may deny a claim based on a simple technical issue such as your doctor mistakenly putting in the wrong diagnostics or procedure code. Insurance companies use auditing programs to lower the amount paid to hospitals and physicians. The auditing software work by finding technical errors in billing codes submitted for payment.
Also, insurance companies bank on the fact that the contracts are extremely complex, written in hieroglyphics that are difficult to interpret, with one inexplicable clause after another. They know that policyholders cannot understand if they read the agreement or do not even take the time to understand them, leaving them at a disadvantage when appealing a claim denial.
Bad Faith Cases
Purchasing insurance is usually referred to as “buying peace of mind” and insurers are expected to do what is right to protect the insured. An insurance carrier may be acting in bad faith if they fail to do what is right. Court cases involving insurance denials are often times document-intensive and long. In cases involving insurance bad faith, industry guidelines usually include the Utilization Review Accreditation Commission (URAC) and National Committee for Quality Assurance (NCQA). Expert testimony may also be needed to show how the denied medical treatment caused damage to the member or patient.
If you’re involved in a bad faith claims dispute with your insurer, call a compassionate lawyer who is well-versed in the circumstance of insurance denial as soon as possible. Certain deadline will apply based on the nature of your policy and the applicable statute of limitations. The attorneys at Stop Insurance Denial Law Firm can help you properly complete and file paperwork and hold your insurance company accountable. You can rest assured that your case is in good hands.
Finding An Insurance Denial Attorney Near Me
Insurance companies usually have an advantage from the word go. They’re the writers of your policy and also have the power to deny or delay your payment. What’s more, they have highly trained and skilled adjusters who work to ensure that money stays in their pockets. If you’re involved in a dispute with your insurance company, don’t give up. Retain the services of a seasoned insurance denial attorney.
Stop Insurance Denial Law Firm takes the side of people throughout the United States whose insurance claims were denied. Our clients are policyholders who counted on their insurance carriers to keep their promise, only to have the contract used against them. We represent individuals who have received treatment but are now burdened with huge medical bills because the insurance company didn’t pay. We represent individuals who cannot obtain the procedure or treatment they need because their insurer has refused to pre-approve the claim. We also represent individuals forced to pay out-of-pocket for a covered treatment or procedure because their insurer refused to pay. Whatever your situation, if your claim has been denied, we can help.