Being denied health insurance coverage is often more than just an inconvenience. When you are denied health insurance coverage, it could mean being forced to pay for an expensive and necessary procedure or being left with a medical bill after you already underwent treatment. Conversely, it may mean that you do not seek the medical care you need, which could mean a disease or condition progresses.
If you were denied health insurance coverage, you may be entitled to hold your insurance company liable for any resulting damages. A dedicated lawyer could explain your rights under California insurance laws and help you pursue compensation and damages for health insurance claims denials in Los Angeles.
Commonality of Health Insurance Claims Denials
A study released by Change Healthcare reports that every year, nine percent of insurance claims are denied. While this may seem like a small amount, this amounts to $262 billion dollars worth of medical expenses.
Insurance companies are frequently required by California Insurance Statutes, as well as the California Fair Claims Settlement Practice Regulations, to handle insurance claims fairly. In fact, insurance companies may have a duty to deal with insurance claims “fairly and in good faith,” as established in Gruenberg v. Aetna Insurance Co. (1973). However, insurance claims are frequently still denied for a variety of reasons, leaving individuals and health providers saddled with thousands of dollars of medical expenses.
Reasons Why Insurance Claims Could Be Denied
Health insurance companies are not in the business of helping people maintain their health—they are in the business of making money. Therefore, an insurance company will typically take advantage of every opportunity to deny a claim. Insurance companies commonly deny claims for any one of the following reasons:
- Claiming a lack of medical necessity
- Registration or medical coding errors
- Missing or invalid information in a claim
- Pre-certifications and authorizations that prohibit coverage
- Requesting medical documentation
- Claiming a service is not a covered benefit under the contract
- Reaching a maximum amount of coverage
- Lack of continued eligibility
- Change in job
Material Misrepresentation
Insurance companies often use the term “material misrepresentation” when they feel a person has misrepresented information on an initial or renewal insurance application. Examples of a material misrepresentation may include failing to report or underreporting tobacco use, alcohol consumption, or a known medical condition.
However, under the California Insurance Code §334, a material misrepresentation typically has to be a misrepresentation that is significant enough to have led the insurer to refuse the applicant’s policy originally. As a result, material misrepresentation often does not qualify as valid grounds for a claim denial, despite the insurance company’s argument to the contrary.
Patient Rights After a Claim Denial
Insurance policies are similar to standard contracts and are generally governed under traditional contract principles. Therefore, insurance companies generally must abide by an implied covenant of good faith and fair dealing, which in essence means they should not unreasonably deny a claim.
However, health insurance claims are unreasonably denied on a daily basis. If an insurance claim is unreasonably denied, the person facing that denial may be entitled to recover economic damages such as medical bills, as well as compensation for emotional distress, reasonable attorney’s fees, and for any other loss caused by an insurance company’s unreasonable conduct. An experienced lawyer could help an individual recover damages for health insurance claims in Los Angeles.
Contact an Attorney About Damages for Health Insurance Claims in Los Angeles
Insurance companies commonly dislike paying for health insurance claims if they can avoid it, and they know that many people would feel intimidated by a denial and therefore not challenge it. However, insurance companies may still be bound by the policies they write, which could contain guarantees of coverage under a variety of circumstances. If you were wrongly denied health insurance coverage, contact a health insurance lawyer who could help you pursue damages for health insurance claims denials in Los Angeles. Call today to get started on your case.
