When it comes to health insurance, there are a few terms that can give just about anyone hives. The first, of course, is "pre-existing condition." There may not be one resident of Florida who does not know someone who has fought a claim denial over a pre-existing condition.
Another term is "experimental treatment." Medications that are caught in the Food and Drug Administration's approval vortex can save lives, but they will cost the patients a pretty penny, because insurance will not cover them. Nor, of course, will insurers cover procedures that are not "medically necessary."
Two individuals and a medical association that represents 6,500 physicians have filed a lawsuit against a managed care health plan that challenges the insurer's definition of medical necessity. The plaintiffs are not in Florida, but the case could serve as a model in other areas of the country, because the health plan, Health Net Inc., has millions of members across the U.S.
The insurer would not pay for one patient's surgery. He had a rare type of prostate cancer, and the company denied the $30,000 claim because the surgery was not medically necessary. For the other plaintiff, the problem was ongoing treatment for debilitating back, neck and head pain. She had suffered from the crippling disorder for 10 years before she had any success with "occipital nerve stimulation." To keep the pain at bay, she requested a permanent device. The insurer said it was not medically necessary.
A representative of the medical association accuses the company of not paying for the treatments because they are expensive. It is a time-honored complaint from physicians about managed care that costs outweigh patient care. It doesn't help that the company is publicly traded.
The insurance company responded to the suit in a public statement. Medical opinions vary on the meaning of "medical necessity," the company said, and the insurer's decisions are based on guidelines from its primary regulators, the state's managed care and insurance departments.
This will be an interesting case to follow.
Source: Business Insurance, "L.A. doctors, patients sue Health Net for denying claims," Reuters, Sept. 13, 2012
Our firm works with clients to resolve insurance claim denials like the one discussed in this post. If you would like to learn more about our practice, please visit our Miami insurance coverage disputes page.