Fighting Insurance Companies When They Deny Your Medical Treatment

Use these links to jump to different sections:

• Filing an Internal Appeal
• Document Everything
• The External Review Option
• Filing Suit for a Health Insurance Denial
• The Squeaky Wheel in a Health Insurance Claim

“Most of us try to do good research before they go to a doctor. You find someone qualified, and the doctor says, ‘OK, I’ve sent you to all these tests and looked at all these scans. This is the plan of action. This is what we have to do to solve your problem.’ Then you breathe a sigh of relief. ‘Yes, I’m finally going to feel better!’ And the insurance company gets back to you saying, ‘This isn’t necessary.’ “It’s infuriating,” says Lisa S. Kantor, an employee benefits attorney at Kantor & Kantor in Northridge. “People think the doctor is in charge of treatment decisions, but really the insurance companies really call the shots,” says William Shernoff, an insurance bad faith litigator at Shernoff Bidart Echeverria in Beverly Hills and Claremont. “For example, we had a pretty serious case where a lady got cancer and the doctor prescribed a PET scan, which is designed to tell if the cancer is spreading. It was denied, and because of it the cancer did spread and my client nearly lost her life. That’s one example; we see these all the time.” Frustration with medical necessity disputes is unfortunately commonplace—especially in the mental health arena, Kantor adds. “People are sick, need a treatment, a psychiatrist recommends staying for 30 days, and the insurance says, ‘No, we think seven days is enough. You should be better by then.’ Insurance companies should not be dictating treatment.” The unfortunate reality is that they do. But if and when that occurs, thankfully you have legal recourse.

Filing an Internal Appeal

You have 180 days from the notice of denial to appeal to your health insurance company under the Employee Retirement Income Security Act. This is required, Kantor notes, and it’s worth trying to receive a positive result without filing a lawsuit. “Depending on the type of denial and what the issue is, we sometimes advise people to do it themselves,” she adds. “We try to help them through it because it’s obviously cheaper for them.” In Kantor’s experience, appeals work roughly a quarter of the time. If, as a result, you end up paying for a treatment out of pocket, it never hurts to submit a post-service claim seeking compensation. Kantor says that has worked surprisingly often. “And I don’t know why—if it goes to a different department, if the surgical report shows they needed it. Many of my clients have gotten paid that way.” Regardless of your circumstances, Kantor and Shernoff recommend going back to your health professional and asking them to help repute the insurance’s company’s claim that the treatment is not necessary. “In medical necessity cases, it’s always important that the treating doctor who was overruled by the insurance company is willing to be on your side and testify that the treatment was absolutely necessary,” Shernoff says.

Document Everything

Documentation is key, Kantor suggests. Keep everything your healthcare provider and insurance company sends you, as well as your correspondence with them. “Don’t talk over the phone unless you’re planning to send a letter confirming what you said. If you can send it certified mail or with some kind of tracking, that is best,” Kantor adds. She sometimes even submits a video of her client discussing how important their treatment is to them. Even if it doesn’t convince your insurance company, it may help with a judge or jury.

The External Review Option

The state also offers an external review process (or external appeal) through the Department of Insurance and Department of Managed Health Care, which hire a company to evaluate your case. “If they decide the insurance company was wrong, the insurance company has to pay for it,” Shernoff says.

Filing Suit for a Health Insurance Denial

If all that fails, or time is of the essence, it may be time to file a lawsuit. “Ultimately, it’s good to come to one of us and explain what happened,” Shernoff says. “We can take it from there.”

Shernoff’s own California Supreme Court case, Sarchett v. Blue Shield, is often cited to defend the decisions of treating doctors over that of the insurance company. In addition to case law, juries and press coverage also help.

“These are really strong lawsuits because juries understand,” he says. “Number one, the medical condition could worsen. Number two, if the treatment was done and not covered, there’s a big whopping medical bill. There’s emotional distress, consequential damages, and juries get outraged when they see someone who needs medical treatment but didn’t get it because a company wanted to make a profit. So the chance of punitive damages is also high.”

Also high is the likelihood of a settlement before trial. “They realize these cases are often explosive with juries and the press, so they pay a lot of money and insist on confidentiality.”

The Squeaky Wheel in a Health Insurance Claim

“Insurance companies may tell you over and over again, ‘We don’t cover this, we don’t cover that,’ but I have heard people who just keep at it—be it social media, publicity, the news media—and somehow they get what they need. Insurance companies don’t like publicity. So being the squeaky wheel can get things done,” Kantor says.

“Keep complaining; keep putting claims in; keep at it. Sometimes I think it’s designed to make you give up, but don’t give up.”

For more information on this area of law, see our overviews of health care law and insurance coverage.