Merritt Personal Lines Manual: Filing a Complaint or Grievance
In most states, the company's review of your denial includes two steps -- an informal review followed by a formal review if you remain dissatisfied after the informal review.
If you appeal to a state or federal agency, include your name, address and daytime phone number with any complaint.
It might be good to use the Insurance Department complaint form. To obtain a copy of the form you can usually call the state Insurance Department's hotline number.
State your case briefly, giving a full explanation of the problem. Include the name of your insurance company, policy number and the name of agent or adjustor involved. You may want to supply any documentation you have to support your case, including phone notes (i.e. who you talked to and what was discussed).
Another tactic used by insurance companies (as discussed earlier) is the unjustifiable delay in payment of claims. Despite laws requiring insurance companies to pay unquestioned medical claims within 15 working days, some companies take up to six months or even longer to compensate patients.
"If hospitals delayed care the way insurance companies delayed payment, we would have a lot of dead patients on our hands," said a lobbyist for the Georgia Hospital Association.
Though several insurance companies acknowledge that recent mergers of companies may have caused some delays, the industry as a whole has a tendency to dismiss the problem, claiming that they are isolated incidents.
"On the whole, claims are paid in a fairly expeditious manner," said Richard Coorsh, a spokesman for the Health Insurance Association of America.
According to Coorsh, a 1996 survey of 53 members found that 90 percent of claims were paid within 14 days. However, a survey by the Georgia Hospital Association found that private insurance companies took an average 69 days to pay a "clean claim" -- that is, one requiring no additional information from the provider or patient.
The survey also reported a number of claims took anywhere from 40 to 169 days to get a clean claim paid. And, self-insured plans by large companies, which are exempt from the 15-day requirement, presented a particular problem.
In 1998, three Florida-based physician organizations -- a prominent 30-member ob-gyn group in Jacksonville, the 4,000-member Florida Physicians Association and the 16,000-member Florida Medical Association -- filed a class action lawsuit against Prudential Health Care Plan, Inc., accusing the company of systematically denying and delaying payment on large claims and losing others. The physicians want to stop the alleged practices and recover interest on the claims and damages that they say may exceed $10 million.
The organizations had internal documents that proved Prudential made a policy of automatically rejecting claims once the insured person submitted more than $1,000 in medical bills on the basis that the covered person had other insurance, even though the plan had no knowledge of such co-insurance. In fact, Prudential officials acknowledged that only 5 percent of its members had such dual coverage arrangements as those that exist when a husband and wife are covered by separate health plans, according to the physician organizations.
According to Donald Weidner, Florida Physicians Association's executive director and general counsel:
Florida law specifically requires that when there is a coordination of benefits issue that the insurance companies involved have to pay the provider 100 percent of the claims and then hassle out which company is supposed to pay what. If Prudential thinks there is other insurance, they certainly have the right to go to the patient or the doctor [and ask for the name of the other company]. But they certainly do not have the right to refuse to pay the physician in the meantime.
The groups also charged Prudential with knowingly losing claims that were filed electronically.
Prudential had little to say about the suit. In a four-paragraph statement, the company asserted it had an excellent track record on claims payments in the state, paying 92.3 percent of all claims within 30 days, 97.9 percent within 45 days and 98.9 percent within 60 days.
Prudential also defended its practice of requiring proof of dual coverage. "It is standard industry practice to coordinate the payment of benefits. When we have the information we process those claims routinely. When we don't have that information we request that information to make sure we are paying the claim properly and not duplicating payments," said Julie Chalpan, public relations manager for Prudential's southeast division.
