Who Decides What Is Medically Necessary?
One of the most common reasons health insurance providers give when denying a claim is that the requested procedure or treatment was not “medically necessary.” Cosmetic procedures or other elective treatments are typically excluded from coverage for this reason. In many cases, however, a treating physician will recommend a procedure or referral to a specialist for a serious health condition, but their recommended treatment will be denied by the patient’s insurance provider. When you are dealing with a health issue and your doctor recommends a specialist or a course of treatment, how can an insurance provider assert the treatment is not necessary? Who gets to decide what is “medically necessary?” Our zealous Los Angeles insurance denial and bad faith attorneys help clients fight back against wrongful denials based on bad-faith assertions that a claim is medically unnecessary.
Health Insurance Plans Hide Behind Medical Group Decisions
In many cases, policyholders are assigned to a specific medical group they must stay within in order to get coverage. The medical group contracts with the insurance company to provide services to insured parties in exchange for coverage. These contracts often require the medical group to make its own determinations about a patient’s treatment. The medical group is an entity separate from the actual practicing physicians within the group. In order to insulate themselves from unilaterally deciding whether a treatment is medically necessary, the insurance companies often rely on the decisions of the medical group. This system is flawed.
Regardless of what an individual doctor decides about a patient’s health and appropriate course of treatment, the medical group is given authority to decide whether a patient’s treatment is actually necessary. But the medical group is beholden to its relationship with the insurance company. Rather than leaving decisions regarding medical necessity up to the actual physicians treating the patient, some more distant entity with financial incentives tied to the insurance provider is making decisions about the health and wellbeing of the patient.
When a health insurance provider rejects a policyholder’s claim, they must do so for appropriate reasons. If the insurance company, by itself or with the blessing of a complicit medical group, claims a procedure is not medically necessary in contravention of the actual medical needs of the patient, the patient’s finances, health, and life are at stake. Decisions about medical necessity should be made solely based on the needs of the patient, not the financial incentives of a health insurance provider or complicit medical group.
Bad Faith Claims
When a health insurance provider rejects a claim in bad faith, policyholders have the right to sue. When a procedure or course of treatment has been recommended by a treating physician, a health insurance provider should not be able to unilaterally claim a lack of medical necessity in contravention of the medical evidence. The fact that an intermediary medical group made their determination for them should not insulate the insurance provider from liability.
Insurance providers that reject claims in bad faith may be liable for more than just the cost of the procedures denied. Policyholders can seek additional statutory damages, damages for additional harm caused by a delay in treatment, and even punitive damages where an insurance company’s conduct was especially malicious or egregious.
If you’ve been the victim of a wrongful claim denial or bad faith by a California health insurance carrier, get help you can trust from the seasoned and compassionate Los Angeles insurance bad faith lawyers at Gianelli & Morris by contacting them for a free consultation at 213-489-1600.
