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Get Your Claim Paid: Delay Tactics and the Right to Sue

Some health insurance companies withhold payment of an entire claim when they're disputing only part of it.

As a patient, should you have the right to sue if your insurance company makes a damaging error?

Several consumer groups claim that they have found new evidence to boost their case that patients need more protections. The evidence is an Aetna training video that implies the company gives more attention to cases in which patients already have the right to sue.

"We released this to fuel the HMO debate and to tell Congress it's absolutely outrageous that they would adjourn without dealing with this," said Jamie Court of Consumers for Quality Care, which has lobbied for the "patients' bill of rights."

Consumer groups long have said that insurance companies will be less likely to deny legitimate claims if they fear a big lawsuit.

On one side are many Democrats, consumer advocates and trial lawyers, who want to give injured people new rights in court. On the other side are most Republicans, and business and insurance companies, who say more law-suits will drive up the cost of insurance.

Under current law, courts have said the federal law does not allow lawsuits for damages. So if, for example, an HMO denies a lung X-ray, and it turns out the patient had undetected lung cancer, the patient can sue to recover the cost of the X-ray but cannot win money for the damage caused by delay.

In the Aetna video, company attorneys are training case managers in how to handle claims. The topic is long-term disability claims, not health insurance, but the company says its policies do not differ.

Throughout the video, Aetna attorneys discuss the differences between ERISA and non-ERISA cases -- those where the company faces federal rules that prohibit lawsuits, and those governed by state laws that allow suits.

At one point, company attorney Jeffrey Blumenthal is explaining the importance of having accurate information in determining whether to deny a claim when a wrong decision could lead to a big judgment.

"We have an obligation, certainly in a non-ERISA setting, under state law, to conduct what's called a reasonable investigation," he says. "We could be subject to... bad faith damages, to punitive damages, to a whole range of extra-contractual liability that could be many, many millions of dollars."

"The lawyers are implicitly and explicitly saying patients with different types of liability exposures should be treated differently," said consumer advocates.

Aetna spokesman Fred Laberge said the company does put more time and money into cases not governed by the federal law -- that is, "non-ERISA cases" -- but only as part of the legal review that follows an initial decision whether to pay a claim. All cases get adequate attention from company officials who determine, on the merits, whether to pay for a certain insurance claim, Laberge said. And he said the differences do not affect whether a claim will be paid.

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