An insurance company is a business. The bottom line, like any other business, is to make money. So the more claims that are refused, even if some of them are unjustified, the more income is eventually kept by insurers.
Because of the underlying structure of the insurance business model, wrongfully refused claims will always occur on occasion. However, regulators step in and impose formal sanctions when the situation grows severe enough. This was recently the case in California when the California Department of Managed Health Care informed many insurance firms that they violated state law by neglecting to provide customers with coverage for medically essential procedures.
Almost All Of The Cases Examined Were Unjustly Refused
Blue Shield, Health Net, and Anthem Blue Cross were the three insurers engaged in the current round of unjustified claim denials. These companies allegedly designated speech and occupational therapy as non-medically essential therapies for policyholders.
Several people with valid health insurance or disability insurance policies that had their claims refused sought justice. Unfortunately, most of the refused claims referred for independent medical review were determined to be incorrectly denied because speech therapy, occupational therapy, or both were medically required expenses that the applicable plans should have covered. Given the obvious scale of the problem, the state intervened to penalize the violators formally.
The California Department of Managed Health Care ordered all three insurers to stop refusing genuine claims for medically essential treatments. One of the insurers, Health Net, was also fined $300,000 for repeatedly denying medically justified claims.
When justified claim denials are common throughout a certain category of insurance coverage, as they were in this case, the state will step in to require insurers to give policyholders the benefits to which they are entitled. Individual legal action is sometimes necessary, however, to obtain reimbursement from your insurer.