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Denial Of Health Insurance Coverage
Doctors Telling Patients To 'See A Lawyer'
Missouri Lawyers Weekly
By Stephanie S. Maniscalco
Missouri attorneys are receiving an increasing number of calls from people angry with their insurance companies or health maintenance organizations over denials of coverage, experts say.
Attorneys are even getting calls from health care providers fed up with struggling to get reimbursement.
"People don't know what to do to get their benefits," St. Louis attorney Debra Schuster said. And when they call "they are not looking for damages and they do not expect an economic windfall - they simply want the coverage they paid for."
She said the health insurance litigation practice was growing rapidly but acknowledged that such cases must be carefully screened and are often "an uphill battle."
"I think one of the best things that could happen is for the bar to develop a subsection because this is a pretty new field and attorneys could benefit from sharing strategy."
Kansas City attorney Gordon Myerson predicted that litigation against insurance companies will continue to increase "as long as insurance companies continue to look for ways not to pay.
"Things have definitely changed because I remember when a life insurance representative used to show up at the visitation with a check in hand. Now they wait and wait, often leaving no alternative but to pursue remedies in court," he said.
"Now the companies will spend equal to or greater than the amount of the policy to defend once they have latched onto something the adjuster thinks can be used to avoid paying," he said.
Myerson said he also has noticed that more doctors are sending patients to lawyers.
"One out of three people who come in tell me that a health care provider has been critical of their insurance company," he said. "I often hear that they have told the patient they don't want to get involved but then they say, 'you really should see a lawyer.'
"Doctors are overworked, and they are realizing that they spend too much time collecting from the insurance companies," Myerson said.
St. Louis attorney Herman Praszkier said, "People are frustrated and are not quite sure what to do and often if it is not a big amount, they just pay it. They don't follow the appeal procedure because they don't know about it."
Praszkier said doctors have sent patients to him when they needed surgery that was refused by the insurance company.
"First the company will say it is not covered, then they will say it is not medically necessary," he said. He noted that in one case an insurance company failed to pay for surgery for a man who had suffered trauma to his face in an accident.
"The insurance company didn't pay because the man didn't have pre-authorization," said Praszkier. "Of course the man was unconscious at the time, so now we are going to sue the insurance company - we have already sent a letter to which they did not respond.
"It is uncomfortable for a doctor to go after the patient for money, so they tell them to go to an attorney now," said Praszkier. "They are getting frustrated by the lack of reimbursement or lack of timely reimbursement and although they will turn patients in to collections, they are reluctant to sue."
Schuster said that the publicity surrounding the Patients' Bill of Rights is helping to educate people who have been denied coverage by health maintenance organizations.
"Right now there is really no threat to health plans - there are no real teeth in the law," she said.
"Although the Patients' Bill of Rights can circumvent the law to a degree, if the ERISA preemption is repealed, that could change the entire landscape," Schuster added.
"The popular press has helped because people have previously been under the impression that fighting an insurance company is like fighting city hall, and usually it is at a time in their lives when they do not have the emotional energy to take on such a fight," she said.
And Myerson said that Missouri's vexatious refusal to pay statute "does not have enough teeth to scare the insurance companies.
"The statute limits you to attorney's fees plus 10 percent and that is not much of a penalty," he said. "They do worry about punitive damages, however."
Kansas City attorney Derek Potts said that although recent large verdicts in California and Florida have spurred interest in litigation against health maintenance organizations, "ERISA preempts you from going after HMOs like other insurance companies.
"Verdicts have piqued attorneys' interest, but the majority of cases that could happen don't because of ERISA, which severely limits the ability to sue the HMOs," he said.
"Courts have been chipping away at the ERISA shield around the country, and the Missouri legislature passed laws in 1997 to try to do that also, but the law is still clear that most claims are preempted," Potts said.
He said he had seen HMOs frequently deny coverage of cancer treatments that the HMO says are not well established.
"These are cases where the treatment could have saved lives and the person dies shortly after, and then we are left with a wrongful death claim," he said.
Potts said another possible cause of action is fraud.
"People see commercials, get mailings and talk to agents who promise a wide range of benefits," he said. "They can sue for fraud and misrepresentation when the insurer doesn't deliver."
Breach of contract and the fact that gatekeepers are often not health care professionals are also good bases for lawsuits, he said.
"I think the Patients' Bill of Rights will change everything, and more and more lawyers will pursue this litigation as a practice niche," Potts predicted.
Schuster and Myerson both emphasized that attorneys should carefully comb through the certificate of insurance when screening health litigation cases.
"The devil is in the details, and if a certificate clearly excludes a procedure or service that the person is seeking, that is the threshold," Schuster said.
"However if the definition of medical necessity says that a doctor can determine medical necessity, we proceed," she said.
"The more difficult case is where the contract says the doctor in conjunction with the plan's medical directors can determine medical necessity, then the health care providers can weigh in with their doctors," Schuster said.
She said a second critical screening tool is the medical documentation. "Look for cases where the certificate of coverage has clear, clinically supported evidence that the doctor says something is medically necessary."
Myerson suggested that attorneys meet personally with the claimant to assess whether a jury would believe them rather than the insurance company. A personal meeting also may help the attorney uncover other claims that the client would not have thought to mention.
"A lot of these claims come in incidental to other litigation, such as when you are talking to a client who has suffered a tragedy in the family and you ask if there is any other insurance.
"They may say they have other insurance but that they will not pay, and then of course the attorney should make further inquiries," he said.
St. Louis attorney Praszkier said many people do not know what is covered in their policies let alone what the appeal process is. He agreed that the certificate of insurance, which spells out what is covered and what is not, is the place to start.
"I have deposed a corporate representative of an HMO before and he admitted that he did not know what everything in the policy means. The point is they are written by lawyers for lawyers," he said.
Praszkier noted that most policies require a written appeal and provide a hearing as a last resort.
"A lot of people don't know that they can have an attorney represent them at the hearing," he said. Praszkier said this has been effective in the past.
"I didn't discuss the merits of the case but simply talked to them about the policy," he said. "It can be effective to say, 'Here is what the policy says, honor what you wrote.'
"So get the policy, read it carefully but get ready to file the lawsuit," Praszkier said.
Praszkier also noted that attorneys should prepare a lien letter. "You need to put the insurance company on notice, because I have seen them try to pay the hospital directly to avoid paying us," he said.
"My preference is not to sue," said Schuster. "A lot of times what the insurer does is grant a one-time exception and although it is a victory for the client, it won't change the law.
"What we really need are precedent setting cases," Schuster said.
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