Merritt Personal Lines Manual: Health Insurance -- Common Claims Issues, Disputes and Resolutions Introduction

In the late 1990s and early 2000s, U.S. health care consumers made an average of more than 35,000 complaints each year to state insurance departments about managed care plans and other health care insurance companies, according to the National Association of Insurance Commissioners.

The most frequent complaints involved claim denials, disputed claims, slow payments by insurance companies and premium-related matters.

The volume of problems prompted the government and the national insurance association to step up their consumer help.

The late 1990s saw increasing insurance litigation fueled by more aggressive attempts by insurance companies to challenge or reject claims and a public backlash against the industry's shortcomings, especially with managed care plans.

"The first thing the individual needs to do is to know what type of health plan or coverage they have," says Carolyn Morris, director of the Consumer Services Bureau for the Pennsylvania Insurance Department. "It's important for consumers to have an idea of what's covered and what's not and to keep their member handbooks or employer handbooks."

Resolving disputes starts by contacting your insurance company, who must follow the dispute procedures outlined in your policy (another reason why it's so important to hang onto your insurance documents).

If the dispute is not resolved by the insurance company, you may appeal to the proper state or federal agency...the state Insurance Department; the state Department of Health for managed care plans; the federal Health Care Financing Agency for Medicare managed care plans; and the state Department of Public Welfare for Medicaid managed care plans.

Regardless of type of insurance, the Insurance Department handles complaints involving the way the policy was sold, return of premium and coordination of benefits.

"It's really important that the first thing they do...is find out if they have an internal grievance mechanism with that plan," Morris said.