California warns state’s health insurers about denying legitimate claims

An insurance company is a business. Like any other business, the bottom line is making money. For insurers, the more claims that are denied - even if some of them are unreasonable denials - the more revenue is ultimately retained.

Given the inherent nature of the insurance business model, improperly denied claims will always crop up from time to time. Sometimes, however, the problem becomes so intense that regulators step in and issue formal sanctions. This was the case recently in California as the California Department of Managed Health Care warned several insurance companies that they were violating state law by failing to provide coverage to policy holders for medically necessary treatments.

Almost all of the claims inspected were denied wrongfully

The three insurers involved in the recent spate of unreasonable claim denials were Blue Shield, Health Net and Anthem Blue Cross. These companies had reportedly been designating speech and occupational therapy as treatments that were not medically necessary for policyholders.

A number of patients with an applicable health insurance or disability insurance policy whose claims had been denied sought relief. Of the denied claims sent for independent medical review, 97 percent were found to have been wrongly denied because speech therapy, occupational therapy or both were in fact medically necessary expenses that should have been covered by the applicable policies. Given the apparent scope of the problem, the state stepped in to formally reprimand the offending insurance companies.

All three insurers were ordered by the California Department of Managed Health Care to cease denying legitimate claims for medically necessary services. One of the insurers, Health Net, also received a $300,000 fine for repeated denials of medically valid claims.

Contact a California insurance attorney if your claim was wrongfully denied

Sometimes, when denials of legitimate claims are widespread across a certain category of insurance coverage like they were in this case, the state will step in to order insurers to provide policyholders with the benefits they are entitled to. Often, however, individual legal action is required in order to get payment from your insurer.

If you have been wrongfully denied coverage because your insurer has told you that treatment is "not medically necessary" - or for any other reason - get in touch with a California insurance attorney as soon as possible. Your attorney can ensure that insurers are held accountable to provide the benefits they promised would be there for you when they started accepting your premium payments. Contact a California insurance attorney today, and get the payments you need from your insurer.