Blue Shield is one of the largest, most recognizable health insurers in America. If this organization provides your insurance coverage, then you’re one of the over 100 million Americans currently insured by companies operating under the Blue Cross Blue Shield Association (BCBSA) umbrella.
Thirty-six companies are currently licensed by BCBSA, with operations in every state of America. This comprehensive coverage easily makes Blue Shield an attractive choice for health coverage. Although this is good news, the company is constantly being accused of engaging in unethical practices against its policyholders.
An excellent example of such practices is insurance claims denial whereby the company dismisses claims on flimsy grounds. You too might be a victim of these denials. Before discussing the various options available, let’s try and understand the way Blue Shield operates.
A Brief History of Blue Shield
Blue Shield was officially founded in 1939 in the state of California. Initially catering to employees in the mining and lumber industries, the company grew relatively fast due to rising demand for health insurance. In the 1960s the federal government picked it as one of the companies that would administer Medicare.
The insurer would later merge with Blue Cross in 1982 to form the Blue Cross Blue Shield Association. As a member of BCBSA, your Blue Shield insurance provider is licensed by the association to operate in certain territories of the US. The company, however, remains free to work independently of both the association and other Blue Shield insurance providers.
This independence is evident in the way Blue Shield-affiliated companies are run. While some operate as non-profits, others are publicly traded organizations.
Some Health Insurance Plans Offered by Blue Shield
Deciding on a health plan can be an overwhelming experience for some. Although Blue Shield has various tailor-made health care plans, they all fall under some broad categories known as HMO and PPO.
A Health Maintenance Organization (HMO) plan requires you to have a primary care physician, a particular doctor or facility you’ll be visiting for all your medical needs. It’s restrictive because it limits your options. Under this plan, you cannot see another doctor unless referred by the physician who’s recognized by your insurer.
A Preferred Provider Organization (PPO) plan, on the other hand, gives you more freedom to choose a doctor. Such policies have a long list of medical providers that you can visit without the need to be referred. PPOs are generally more expensive than HMOs since they offer a wider variety of options.
With Blue Shield, you will be able to choose an HMO or PPO plan. Blue Shield also offers some HMO/PPO hybrids that further increase your health care plan options.
In addition to the two plans above, the company also administers the federal government funded Medicare program for senior citizens.
When Blue Shield Fails to Act in Good Faith
Medical procedures can be quite expensive. If you’ve been paying your premiums to Blue Shield only for them to deny your medical claim, then the company has gone against the concept of good faith that the insurer is expected to abide by.
Even though your health coverage contract with Blue Shield has you and the company as the two main entities, in reality, it has three major players:
- The beneficiary, also known as the policyholder.
- The medical service providers. These are the physicians or medical facilities your insurer allows you to visit whenever you need medical attention.
- The insurer. This is the company that reimburses your physician the cost incurred in treating you. In this case, the insurer is Blue Shield.
When Blue Shield denies your insurance claim, the fault could lie with any of the three parties above. As the beneficiary, you could have exhausted your policy limit. Your physician could also have used erroneous codes in describing your medical procedure. And the other case comes when the insurer refuses to pay a genuine claim.
Reasons Why Blue Shield Might Deny Your Claim
As one of the largest health coverage providers in the country, Blue Shield receives millions of requests every year. To increase profits, the company tries its best to minimize payouts. While sometimes the company is justified in rejecting claims, other times it does so purely to improve its bottom-line.
Some of the reasons Blue Shield might give for denying your claim include:
- You visited a physician that is not a member of Blue Shield’s approved network of medical service providers.
- There were errors in the way you filed your claim.
- Your doctor overstated the cost of a procedure administered to you.
- Your claim included some treatments that your doctor never performed.
- You missed some premium payments.
- The process performed is not covered by your particular health care plan.
- You did not disclose some pre-existing medical conditions.
- You’ve made duplicate claims.
Blue Shield has been known to refuse to pay claims through these dubious reasons or through other malicious acts. Such tricks include delaying your paperwork, repeatedly asking you to clarify some information with your doctor, offering you lower benefits than you’re supposed to receive, or paying for only part of the procedure you underwent.
If this happens, you have no choice but to pay for the medical treatment from your pocket. Other than being expensive, it is a stressful experience that creates unnecessary hassle and inconvenience.
It Is Not a New Problem
Over the years, many policyholders have taken Blue Shield to court. The insurer has been accused several times of being dishonest in its decision to deny various health insurance claims.
According to the American Bar Association, the year 2014 saw 165 managed care disputes lodged against Blue Cross Blue Shield (BCBS). The following year the number rose to 234, while 2016 saw BCBS plans attract 216 arguments. Majority of these cases were filed on behalf of policyholders.
More providers are also filing lawsuits against the company for denying their healthcare reimbursement claims which is an exciting development because most providers prefer to be in insurance companies’ good books. By taking the company to court, they risk being excluded from the list of the insurer’s approved medical providers.
What you need to understand about insurance denials is that sometimes it all boils down to interpretation. While you might need a procedure because your doctor thinks it’s necessary for your well being, your insurer might interpret the process as unnecessary or cosmetic.
Sometimes, an insurance company such as Blue Shield does this out of their profit-mindedness meant to maintain high profit margins.
Anti-trust Case against Blue Shield
BCBS is currently the defendant in a federal anti-trust lawsuit. The suit alleges that the association and its 36 members have been operating in a cartel-like manner, to the detriment of their policyholders. The companies are alleged to have agreed not to compete against one another by setting up exclusive territories.
This class action lawsuit brought on behalf of its over 100 million members has the potential to not only affect the operations of Blue Shield but of the entire insurance industry as well. If found guilty of engaging in anti-trust practices, BCBS could be forced to allow competition between its members.
Ultimately, this will be a win for you as a policyholder because more competition could potentially lead to lower premiums and better customer care services.
The Correct Course of Action on Insurance Denials
If Blue Shield ever denies your insurance claim, you have various dispute resolution mechanisms at your disposal. As a policyholder, both federal and state laws guarantee you some rights regarding your contract with the insurer, who is also obligated to take part in such processes.
The first thing you should do is to go through the notification of denial and see whether the problem can be rectified. For example, if your claim was denied due to erroneous coding on your medical provider’s part, you can ask your doctor to fix it then re-apply. The same is applicable if you omitted some information on the claim form.
If Blue Shield denies your claim because it disputes the type or cost of a medical procedure, you can ask your doctor to help you provide evidence proving its cost and legitimacy.
If you fix all obvious mistakes, but your claim still gets denied, you should move to the appeal stage. The law allows you to request for both internal and external appeals. Internal appeals rarely succeed because you’re re-applying to the same people who denied your claim in the first place.
An external appeal is more transparent because you’ll be presenting your case to an independent third party reviewer. Blue Shield will also be required by law to attend the review and give concrete reasons for denying your claim. If this external appeal also fails, you should initiate legal proceedings.
Four Reasons Why Appeals Rarely Work
Attempting to appeal an insurance company’s decision can be a hectic process. There are four main reasons why it’s almost always an exercise in futility:
- You are never invited to attend an internal appeal, so you can’t tell for sure whether your case was reviewed. The result is usually the insurer upholding their denial.
- The insurer displays some arrogance in the way they choose to interpret certain procedures. If Blue Shield decides that a treatment you underwent was not medically necessary, you’ll not have a decent chance of arguing your case.
- The internal appeals panel is convened by the insurance company. It would be naïve of you to think it would arrive at a decision that would hurt the company, even if that decision were morally upright.
- The insurer can afford to present its doctors, lawyers and other “experts” to validate its interpretation. These experts will contradict your doctor and poke holes into your arguments.
For the above reasons, the appeals process could turn out to be a monumental waste of time for you. You might go through it as a formality, but chances are you will end up receiving the same disappointing news.
Why Legal Action is Your Best Bet
If Blue Shield has denied your claim on more than one occasion, chances are it will still be rejected no matter how many times you re-apply and appeal. With a competent attorney by your side, your claim will be taken more seriously than before. You will no longer be subjected to flimsy excuses or unwarranted delays.
Lawyers are also conversant with the inner workings of the insurance industry. That means they’re more likely to understand the kind of loopholes Blue Shield might try to exploit when denying your claim. Their legal expertise makes them more likely to successfully argue against such loopholes.
Lawyers are also better suited to negotiate directly with Blue Shield on your behalf, instead of you doing it by yourself. Since they’ve probably gone through the process many times before, they can help in expediting it.
Finally, if your lawsuit against Blue Shield proceeds, your attorney is in a position to help you win a more significant award than the amount your claim would have given you. Some law firms don’t even require you to pay upfront fees; they instead receive a percentage of your winnings as attorney fees. This considerably reduces the burden of a lawsuit on you.
Successful Lawsuits against Blue Shield
In the past, if you won a lawsuit, your insurer would only pay out your benefits. The situation has changed in the recent past, with settlements getting larger. Some payouts amounting to millions of dollars have been awarded against insurers with the intention of discouraging them from acting in bad faith in future.
If your attorney receives a percentage of your award, they’re more likely to pursue larger settlements vigorously. This presents a win-win situation for you and your lawyer.
In 2011, Blue Shield of California agreed to pay $2 million to settle a class action lawsuit. The insurer had been accused of dropping policyholders after falling ill and needing expensive treatment. Other customers were also decreased by petty excuses regarding their health records.
A 2016 class action lawsuit also accused Blue Shield of failing to provide coverage to outpatients seeking treatment for mental health and substance abuse issues. Given that more than 25% of American adults have a form of a mental health condition; many policyholders were locked out of coverage. Blue Shield agreed to pay $7 million to settle that lawsuit.
In 2003 around 900,000 doctors sued the Blue Cross Blue Shield insurance group. They accused the insurer of reimbursing them unfairly for treating patients. BCBS was further charged with conspiring through its various companies to defraud doctors to the tune of millions of dollars annually.
These crimes violated the Racketeer Influenced and Corrupt Organization (RICO) Act of 1970. In 2007 BCBSA and its affiliated companies agreed to settle the lawsuit for $128 million.
These and many other huge settlements prove that it’s possible for you to hold Blue Shield accountable for unfair denial of coverage.
Advantages of Punitive Settlements to Policyholders
As a policyholder with Blue Shield, news of such huge awards against the company should keep you secure in the knowledge that the legal system is looking out for you. As stated before, insurers are always coming up with schemes designed to reduce the amounts paid in claims. Policyholders almost always end up paying the price when such unscrupulous projects are implemented.
One outcome of such punitive settlements is that Blue Shield is forced to start thinking about the well-being of its policyholders, rather than just its bottom line. The result is better service provision to you and the rest of its clients.
Another positive outcome is that you get access to higher quality medical attention from Blue Shield’s network of service providers. Since the insurer is keen to avoid another large settlement, it works harder to ensure its relationship with both policyholders and the doctors who treat them is good.
Punitive awards also discourage Blue Shield from colluding with other insurers to fix premium rates. The result is a more competitive insurance industry with generally affordable premiums.
Are there any Insurance Denial Attorneys Near Me?
If your claim has been wrongfully denied by Blue Shield and all pleas for amicable resolution have been ignored, you should go ahead and seek legal recourse. A health insurance lawyer who has years of experience with health denial cases can do a good job of fighting for your rights in court.
At Stop Insurance Denial Law Firm, we specialize in challenging unfair insurance claims denials by companies such as Blue Shield. Our impressive track record means you have higher chances of receiving a favorable ruling. If you want to know more about your legal options, don’t hesitate to call us on 310-878-1771 or fill out our online contact form with any questions or for a call back. Our services are available to all Blue Shield policyholders in the United States.