California Insurance Lawyer Blog

An article in U.S. News & World Report briefly mentions the travail our client Claire Krumpotich and her family have encountered with Conseco Senior Health Insurance Company. We've written several times before about Conseco, its financial problems, and its seeming unwillingness to make good long term care policies. Once again we have a client who has fallen victim to the company, and this time U.S. News is writing about it also. See: “Pros and Cons of Long-Term Care Insurance,” http://www.usnews.com/health/managing-your-healthcare/healthcare/articles/2009/12/21/pros-and-cons-of-long-term-care-insurance.html. While the article has a lot to say about how valuable LTC policies are if the insurer honors the terms of its contract, it fails to adequately describe the dilemmas of our client and many others like her who bought the policies years ago and are now vainly trying to get Conseco to admit their policies say what they say.

In our client’s case, Conseco continues to insist that her care does not meet her policy terms.

It appears that Conseco will not pay benefits because Claire no longer lives in a home similar to the one she resided at when she bought the policy, even though the word “home” is never defined in the policy.

Ironically, in July 2008, Conseco increased Claire’s premium payments because “[w]ith the introduction of assisted living facilities and adult day care, and the growth of home health care providers, consumers now have more options for receiving assistance than ever before. As a result, more insured’s are now using benefits and the cost of providing those benefits has increased.” Claire began paying almost $6600 a year, up from an initial premium of $470 a year when the she purchased the policy in 1990. Claire and others like her began paying for services Conseco now alleges they were never entitled to.

That sounds like insurance bad faith to us.

Unfortunately, U.S. News hasn't yet delved deep enough into the issue. The fact is that Ms. Krumpotich, and far too many others often must engage in protracted and nonsensical negotiations, and even litigation, in order to try and get claims paid. For the elderly and infirm, this is often an insurmountable challenge. A policy can look good on paper, but its value may be artificial. All we can say is read your policy carefully, research the company, and talk to others about their experience before paying for a benefit that may never materialize.

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California Law Displays Understanding of Eating Disorders
That Insurers Should Emulate

Insurance companies that routinely misunderstand eating disorders should pay attention to California Health and Safety Code Section 1254.5, which provides a refreshing perspective on the nature and treatment of eating disorders. In its findings under Section 1254.5, the California Legislature states, “[T]he disease of eating disorders is not simply medical or psychiatric but involves biological, sociological, psychological, family, medical, and spiritual components. . . . the treatment of eating disorders is multifaceted, and like the treatment of chemical dependency, does not fall neatly into either the traditional medical or psychiatric milieu.”

This legislative comment reflects what we find in our law practice representing clients suffering from eating disorders whose treatment should be covered by their health insurance. We often explain to insurance companies, mediators, and judges how residential treatment for an eating disorder involves intensive treatment of the psychological mindset that perpetuates the eating disorder. Treatment is not limited to the mental aspects; it also involves frequent monitoring of the disorder’s physical symptoms through blood work and weight gain. Education on nutrition and exercise also gives patients the tools to stay in recovery when discharged from treatment facilities.

Combined with Mental Health Parity Acts, such as California’s codified in Insurance Code Section 10144.5, the Section 1254.5 language supports our arguments that treatment for an eating disorder is truly multi-faceted and often residential treatment is the only means for conquering an eating disorder.

Section 1254.5 will not create coverage where it didn’t exist or force an insurance company to pay a claim. But it can increase awareness and recognition in the legal forum when presented to courts and insurance companies.

-- Elizabeth Green

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A new study published last week in Science magazine announced that a retrovirus called XMRV may cause Chronic Fatigue Syndrome (CFS). The virus' actual name is xenotropic murine leukemia virus-related virus,and it was found in nearly 98 percent of about 300 patients with the syndrome. See, NY Times, Virus Is Found in Many With Chronic Fatigue Syndrome by Denise Grady.

This discovery provides hope for researchers because if the retrovirus – part of the same family as the HIV virus that causes AIDS – definitively proves to cause chronic fatigue, the disease might be effectively treated with antiretroviral drugs. Currently, no treatment or cure is available for chronic fatigue syndrome. Researchers also believe that they can create a blood test to determine if a patient is infected with XMRV virus, much the same way a blood test can determine HIV.

Chronic fatigue patients are also hopeful that their symptoms – severe fatigue and body aches – will now be taken seriously by doctors and insurers. Because chronic fatigue can only be diagnosed by ruling out other illnesses, some in the medical community refuse to treat chronic fatigue as a legitimate disease or attribute it to a psychiatric disorder. As a result, most health and disability insurers are skeptical about providing benefits for chronic fatigue sufferers who are too ill to work. Many are accused of “malingering,” that is, lying about or exaggerating their symptoms. Now the medical community may have valid research to back up a diagnosis of chronic fatigue.

The study is considered significant for two other reasons: First, the XMRV virus has been linked to prostate cancer. Second, about 4 percent of healthy people studied were carriers of the XMRV virus. According to the Wall Street Journal, that means that “10 million people in the U.S. and hundreds of million people around the world are infected with a virus that is already strongly associated with two diseases.”

The National Cancer Institute has authorized more research to find out if the virus is linked to any other diseases.

Dr. Judy Mikovits, one of the lead authors of the XMRV paper, told the Wall Street Journal, “Just like you cannot have AIDS without HIV, I believe you won’t be able to find a case of chronic-fatigue syndrome without XMRV.”

We have seen it time and time again… insurers downplaying the symptoms of CFS and even accusing our clients of being untruthful about their inability to function normally, all because there was no “objective evidence” of their Chronic Fatigue. Hopefully, this will all change soon as more is learned about XMRV. Has your insurer refused to consider your diagnosis of chronic fatigue seriously? Kantor & Kantor can help.

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"Tort Reform, Tort Reform, Tort Reform," the phrase has almost become a song. Nobody likes to see undeserving people win huge, unjustified damage awards, but the fact is, it doesn't really happen in California, except on maybe on TV. Los Angeles Times business columnist Michael Hiltzik couldn’t be more correct when he writes that one of the biggest fans of so-called tort reform is the insurance industry, “because the less money they pay out to plaintiffs, the more they get to keep.” See “Why Tort Reform Is a Frivolous Diversion.”

While that statement is enough to make sensible people wary of the deep pockets behind tort reform movements, Hiltzik clears the confusion and makes a very good case about why limiting an injured victim’s ability to use the legal system to be made whole is not the great fix for rising medical costs insurers and many politicians claim.

The argument for tort reform, as Hiltzik explains, is that plaintiff lawyers are filing too many “frivolous” lawsuits and claiming millions of undeserved dollars. Doctors are ordering unnecessary tests to ensure they don’t misdiagnose or fail to diagnose something that could end up in court. As a result, medical costs escalate.

“The truth is that medical liability isn’t a big driver of health costs overall,” Hiltzik writes. “[T]he cost of malpractice litigation, in court and through defensive medicine, [is] roughly 2% to 3% of all U.S. healthcare spending.”

In California, since 1975, the Medical Injury Compensation Reform Act (MICRA) has capped recovery for pain and suffering to $250,000. That’s next to nothing when to compared to what plaintiffs can receive in other types of cases. Lawyers’ fees are also limited.

But did MICRA help consumers? According to a 2004 Rand study, the MICRA caps don’t amount to a fair distribution of justice. Victims of medical errors who had small economic losses but suffered major damage to their quality of life are unfairly compensated. Women are disproportionately affected. The MICRA cap isn’t adjusted for inflation. In today’s dollars, the award has the same purchasing power as $62,000 did in 1975. And the most unsettling result of all is that may unjustly injured people won’t even pursue a case because the award may not even cover the litigation cost.

The big MICRA winners are insurers, who last year paid out only 17 cents of every dollar they collected on medical malpractice insurance. And carriers don’t even have the good sense to be humble about it.

“At American Physicians Capital,” writes Hiltzik, “claims were falling so fast in 2007 that its chief executive publicly compared his underemployed claims managers to ‘the Maytag repairman.’ The next time you find yourself nodding in assent while some politician carries on about tort reform, remember that its benefits will go to characters like this.”

Clearly, this only reinforces what we’ve been saying all along: If you want real reform, start with the perpetrators, not the victims.

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According to Medical News Today, fibromyalgia is no longer an “invisible” syndrome. Citing a study reporter in the Journal of Nuclear Medicine, the article reports that researchers in France were able to detect functional abnormalities in the brain after performing brain scans on 20 women diagnosed with fibromyalgia. Those scans were then compared with scans from 10 healthy women. See “Fibromyalgia Can No Longer Be Called an Invisible Syndrome.”

The diagnosed brain abnormalities directly correlated with the severity of the disease, as reported by the women on questionnaires they filled out in advance of the scan. The results of the study disprove the widely held belief that fibromyalgia is caused by depression. The study found that the brain abnormalities were “independent of anxiety and depression status.”

The study follows news earlier this year that a Stockton, Calif., surgeon patented a process to objectively determine the presence of chronic pain. See, “Surgeon’s Patent Removes the Subjectivity from Chronic Pain.”

Dr. Robert England uses an MRI image to compare the brain image of a person in chronic pain receiving stimulation such as a finger squeeze or mild electric shot to the brain image of a healthy person undergoing the same stimulation.

For people with fibromyalgia, England said his studies showed 13 areas of pain when the patient's thumb was squeezed. When a pain-free person's thumb was squeezed, only one area of pain appeared in the brain.

When these tests will be widely available – and whether insurance health plans will accept them as valid documentation – is still unknown. But they are encouraging developments for people with fibromyalgia who are often accused of fabricating the severity of their illnesses so that the insurer can deny disability or health benefits.

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“Most Americans do have insurance and have never had less security and stability than they do right now because they’re subject to the whims of health insurance companies,” President Obama told a group of nurses, speaking from the White House the morning after his Sept. 10 address to a joint session of Congress about his plan to overhaul the nation’s healthcare system. “Obama Keeps Up Health Care Push, Citing Uninsured,” New York Times.

As part of his Wednesday night speech, the president said the legislation he seeks would guarantee insurance to consumers, regardless of pre-existing medical conditions, as well as other protections. “As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most," he added. Obama: Time for Bickering Is Over,” Associated Press.

Even though the bulk of the healthcare debate tends to focus on the issue of whether our country could support both private and public health insurance options – we believe it can – the real truth about the way the insurance industry does business cannot be over-emphasized.

The president has it right when he says health insurers must be held accountable. At the very least, any federal health care legislation should mandate that sick people get the coverage they pay for without delays or denials, time-consuming procedures, and claims adjusters forced to be more concerned with limiting benefits than caring for their customers.

Although legislators are showing concern that the debate has become “uncivil,” real progress toward insurance reform necessarily requires a vigorous airing of the issues. We applaud those lawmakers who refuse to bend to the insurance industry’s “whims.”

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California Attorney General Jerry Brown announced he will begin scrutinizing how health plans in California pay insurance claims, reports the Los Angeles Times. This move was based in part on a recent analysis published by the California Nurses Association that found six of the state’s largest plans rejected one in five claims during the past seven years - “State to Probe Insurer Denials.”

“These high denial rates suggest a system that is dysfunctional, and the public is entitled to know whether wrongful business practices are involved,” Brown told reporter Lisa Girion.

Brown joins other state regulators, most notably the California Department of Managed Health Care, responsible for policing the health plans. The DMHC, however, reacted defensively to the nursing association’s analysis, claiming it has “been very active in ensuring that providers of care should be paid fairly and on time.”

The insurance industry asserts that the analysis “mischaracterizes” claims data and “does not accurately reflect denials of care for insurers,” even though the numbers the association used to compile its report came directly from the companies own filings with the DMHC.

Although we and many others have frequently accused health plans of improperly denying claims, the Nurses’ Association analysis is the first-of-its-kind report to provide such concrete evidence.

We urge Attorney General Brown to use the powers of his office to conduct more than a cursory examination of this issue, perhaps resulting in something more than the usual slap on the wrist and innocuous fines typically imposed on the industry. Now is the time to institute structural reforms that could revolutionize health care in California, particularly since federal attempts to hold the insurance industry accountable have been compromised by the industry’s unprecedented lobbying. (090904)

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According to the California Nurses Association, California HMOs rejected one out of every five claims for medical care between 2002 and June 2009, reports Lisa Girion of the Los Angeles Times. That’s 31.2 million claims, or 21 percent of all claims during that period.

For the first half of this year, Aetna had the lowest denial rate -- 6.5 percent; PacifiCare the highest -- 39.6 percent. Anthem Blue Cross and Kaiser each rejected 28 percent of claims, and Cigna denied 33 percent.

Although such high denial rates aren’t news to us, it’s rewarding to see empirical data that supports our assertions that health insurers tend to delay and deny claims until policyholders are forced to sue them to receive the coverage they pay for. Sure many denials are justified due to actual misunderstandings about coverage, but far too many denials are improper, and even oppressive.

The nurses association used public data from the health plans’ financial reports posted on the California Department of Managed Care’s website to conduct its analysis. “Every claim that is denied represents a real patient enduring pain and suffering,” Deborah Burger, co-president of the California Nurses Association, told the Times.

Typically, the health plans denied the association’s analysis of their reports, stating that “claim rejections reported to regulators do not always reflect actual denials of treatment to patients.” Maybe not always…but often!

DMHC spokeswoman Lynn Randolph told the Times, “It’s important to point out that a denied claim means that the patient received the medically necessary services, but the doctor or hospital was not paid for that care.”

But what’s the difference? Doctors and hospitals are going to bill someone. If the health plan won’t pay claims, policyholders are then forced to pay out of their own pockets. People don’t buy health insurance for the benefit of hospitals and doctors; they purchase coverage so that in the unfortunate event they face catastrophic health challenges, they can get the medical care they need without going bankrupt!

Both the insurance industry and the California Department of Managed Healthcare fail to appreciate the pain and suffering endured by those whose claims are denied. Try being seriously ill, enduring the stress and indignity of life-saving treatment, then finding out your insurer won’t cover your bills. Now that’s real suffering.

For a copy of the California Nurses Association analysis, go to http://www.calnurses.org/media-center/press-releases/2009/september/california-s-real-death-panels-insurers-deny-21-of-claims.html.

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No matter which of the half-dozen healthcare overhaul proposals Congress is considering passing, the big winner will be the insurance industry, which is guaranteed millions of new customers, many subsidized by the federal government, reports the Los Angeles Times, “Healthcare Insurers Get Upper Hand,” Aug. 24. What began as a plan to create a public option to compete with insurers, thus driving down the cost of health insurance and the cost of care, has resulted in a windfall for the insurance industry.

But is anyone really surprised at the industry’s success in defeating potential competition?

“In the first half of 2009, the health services and HMO sector spent nearly $35 million lobbying Congress, the White House and federal healthcare offices,” reported writers Tom Hamburger and Kim Geiger, relying on information from the Center for Responsive Politics. In all, that sector employed more than 900 lobbyists.

Health insurance executive Robert Laszewski expressed the industry’s reaction: “Hallelujah!”

Shouldn’t alarm bells be going off all across the country? Is Congress really going to get back to work in the fall and pass “health reform” that has the insurance industry cheering? It is unconscionable that the industry that caused the country’s health crisis in the first place is likely going to be the only one profiting from the solution.

“They have beaten us six ways to Sunday,” Gerald Shea of the AFL-CIO told the Times. “Any time we want to make a small change to provide cost relief, they find a way to make it more profitable.”

If federal health “reform” does become law, we urge stage governments to do what the federal government can’t find the resolve to accomplish: Hold the insurance industry accountable to its millions of present policyholders – and all its potential new customers – to ensure they are getting the coverage they (and their federal subsidies) are paying for.

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The Long Island Business News reports that many people think they have enough insurance until they need the policy. Then they learn its limitations, find they have insufficient coverage, or discover “loopholes big enough to drive a truck through.” Laura Glasser, “With Insurance, the Fine Print Matters,” June 30, 2009. This is particularly true, the article reports, for health and long-term care policyholders because they aren’t reading their policies to understand coverage limitations.

“One reason many people get surprises is they don’t know much about their coverage to begin with. If you’ve read your policy lately, you’re in the minority. Most health policies, for instance, cover up to $1 million in lifetime benefits. But most people don’t know that,” writes Glasser. Here’s what two insurance industry executives had to say about the situation:
“The information’s there,” said Ian Laird, director of strategy, sales and programs for Empire Blue Cross Blue Shield. “It’s just in a document that I don’t think the average person bothers to read.”

“You expect people to read their benefits,” said William Golden, chief executive of UnitedHealthcare’s health plan for New York, of the source of many surprises. “I’m not sure that really happens all the time. It’s important to read the small print.”
Here are two insurance executives admitting in black and white that they are selling policies that people don’t read, filled with fine print that limits coverage, and they appear just fine with the situation. In fact, one wonders if they might be taking advantage of this information by filling policies with fine print loopholes that end up surprising many people.

We say it everyday…and we’ll say it again here: READ YOUR POLICY BEFORE YOU NEED IT. If you don’t understand something, ask someone who can help.

[090701]

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Is anyone surprised by Los Angeles Times reporter Lisa Girion’s article “Insurers Refuse to Limit Policy Cancellations"?

Executives from three of the nations largest insurers were “courteous and matter-of-fact” in their testimony before Congress about carriers’ practice of canceling coverage for sick policyholders known as rescission. When asked it the industry planned to stop the practice, all three executives said, “No.”

Members of the House Subcommittee on Oversight and Investigations must have been dumbfounded by the response, particularly those members who have taken up the industry’s cause in opposing government-sponsored health insurance.

“When insurance companies go under oath and admit they are cancelling innocent patients when they get sick, it makes it very difficult for lawmakers to pass a law that requires every American to buy a policy or face a tax fine,” said Consumer Watchdog advocate Jerry Flanagan. “It opens the way for a public option to hold the companies in check.”

It appears to us the health insurers must not be too worried about the possibility of a public plan or simply confident that they can influence Congress against it the same way they have for the last 30 years.

Will it take a public option to convince insurers to treat policyholders fairly? We wish we could say yes, but in all likelihood rescission practices, as well as denials and delaying tactics, may be so firmly entrenched in the way the industry does business, nothing but a complete overhaul by state and federal regulators – or fines that amount to more than just a slap on the wrist -- would make a difference.

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A couple of weeks ago we wrote about United Healthcare’s benefit denial for a young woman who's life is being threatened by her Anorexia.

Sacramento Bee healthcare writer Carrie Peyton Dalhberg reported June 14 about our client and her stuggle (Shepard v. United Healthcare) - “Woman Struggles to Escape Anorexia’s Grip.”

Because of the health plan’s delaying tactics in providing benefits, Ms. Shepard’s family exhausted its financial resources paying for her inpatient care. Our appeal to the California Department of Insurance was successful – United Healthcare was held responsible for Ms. Shepard’s medical expenses. The ruling came a few hours too late, however. Ms. Shepard had been discharged that morning. Ms. Shepard participated in outpatient care after her return, which proved unsuccessful. The article details the tragic result.

Litigation in this case is ongoing. We continue to fight for benefit payments on behalf of people suffering from disabling illnesses and conditions against insurance companies whose delay and deny tactics toward their own policyholders cause hardship and despair.

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Los Angeles Times business columnist David Lazarus is about as skeptical as we are about the insurance industry’s pronouncement that it is ready to work with the Obama administration to overhaul the nation’s healthcare system. “Insurers Return to the Table Again,” (May 17, 2009). Lazarus asks the question, “Does anybody trust them?” He couldn’t find anyone who said “yes.”

Lazarus compares this round of the industry’s enthusiasm to “serve the national best interests” to the 1970s when the Carter administration attempted to craft a national healthcare policy. “Nothing came of it,” said Alain Enthoven, who was a Carter consultant. “The whole thing was just a joke.” It happened in the 1990s during the Clinton administration. “They said they wanted to be at the table and wanted to deal,” former Clinton health official Karen Pollitz told Lazarus. “Then they all left. They saw that they could kill it.”

Insurance industry lobby America’s Health Insurance Plans’ Robert Zirkelbach told Lazarus “everything’s different this time.” But no one is buying it.

Here’s the industry’s compromise: If the government forces everyone to buy health insurance, the industry will quit denying sick people coverage and equalize premiums for men and women. And that’s if the Obama administration scuttles its plan for public insurance that would compete with the private sector.

And Lazarus’s point is this: This time, it’s not about what’s “politically feasible and financially palatable.” No, he says, this time it’s about the people who can’t afford health insurance but can’t afford not to have it. That, he concludes, is all of us.

We hope the Obama administration reaches the same conclusion and forces the insurance industry to keep their promises. But we’re still skeptical.

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America’s Health Care Plan Agrees the Practice Should Be Eliminated

U.S. Senator John Kerry introduced a bill this week that would end the insurance company practice of charging women as much as 50 percent higher premiums then men, reports UPI - “Health Insurers Agree to End Gender Bias.” The move could affect as many as 5.7 million women who are not covered by employer-sponsored plans but purchase individual coverage.

“The disparity between women and men in the individual marketplace is just plain wrong, and it has to change,” said Sen. Kerry. Testifying for the industry, Karen Ignagni of America’s Health Insurance Plan agreed that the industry should eliminate the practice.

The Associated Press took a more cynical view of insurer acquiescence. “Health Insurers Offer to Lower Rates for Women,” http://www.latimes.com/features/health/la-fi-insure-women6-2009may06,0,1110808.story?track=rss/. “The industry is trying to head off creation of a government health plan,” the article reported, “that would compete with companies to enroll middle class workers and their families.” Insurers fear of a government plan would ruin their business, and the industry is doing everything it can to prevent a public system.

That means that insurers are doing an “about-face” on financial positions they have insisted for years are necessary to keep them solvent. Such positions include charging women age 19 to 55 higher premiums because they are “more likely then men to have higher healthcare costs due to childbearing, a proclivity toward certain chronic illnesses and more routine healthcare habits.” In March, the industry agreed to stop charging sick people higher rates if the federal government required all citizens to have health insurance.

Whether or not the federal government is able to pass a public healthcare agenda, healthcare reforms that benefit women and the disabled are long overdue. Insurers subject illnesses that predominately affect women, such as multiple sclerosis, fibromyalgia, chronic fatigue, lupus, anorexia nervosa and bulimia (to name a few) to a double standard: If you are a woman who might suffer from one of these diseases, you get charged more on the front end in premium costs. But if and when you are diagnosed with one of these conditions, insurers routinely deny benefits when they are needed, or worse, cancel the insurance.

To quote Sen. Kerry, that is “just plain wrong.”

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Late last month a New Jersey federal court approved a class action settlement requiring Horizon Blue Cross of New Jersey to expand benefits for its 1.5 million policyholders with eating disorders, reports the New Jersey Law Journal.

As a result, Horizon can no longer limit treatment it covers to 20 outpatient visits each year and only one month of hospitalization, and 556 patients will split a $1.2 million award. Horizon agreed that in the future it would treat eating disorders the same it would other biologically based mental illnesses.

The article points out that the settlement provides insureds substantially the same benefits they were set to receive in January when the U.S. Mental Health Parity Statute becomes effective.

Although in California, state law provides a much broader mental health parity statute, people with eating disorders often must run a procedural gauntlet to get carriers to pay for residential treatment. In a recent Kantor & Kantor case, the plaintiff paid for her own treatment while a federal judge required an appeal to the California Department of Managed Healthcare which punted the case to the California Department of Insurance, which then sent the case to an outside reviewer for independent analysis. While the review resulted in a ruling favorable to the plaintiff, the time spent obtaining it was detrimental to the patient’s recovery.

Class actions such as the New Jersey case against Horizon draw attention to the disparate treatment people with eating disorders – mainly women – receive from their health insurers. We hope California takes note and revises its procedural quagmire, which proves to be simply another stalling tactic and roadblock carriers can take advantage of to intimidate their customers.

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Earlier this month, an Associated Press article renewed speculation about a debate many in the fibromyalgia community believed had been finally resolved. Is fibromyalgia a legitimate disease with recognizable symptoms, or is it a “murky ailment” drugmakers are promoting to increase sales of pharmaceuticals that offer pain relief? “Drugmakers’ Push Boosts Murky Ailment”

According the article’s author, reporter Matthew Perone, “Fibromyalgia draws skepticism for several reasons. The cause is unknown. There are no tests to confirm a diagnosis. Many patients also fit the criteria for chronic fatigue syndrome and other pain ailments.” Perone cites critics of fibromyalgia diagnoses accusing drug companies of unduly influencing doctors and patients to make a profit.

“I think the purpose of most pharmaceutical company efforts is to do a little disease-mongering and to have people use their drugs,” said Dr. Frederick Wolfe, who was lead author of the guidelines defining fibromyalgia in 1990 but has since become one of its leading skeptics.

The National Fibromyalgia Association is fighting back. Its president, Lynne Matallana, says the article “merely regurgitates the same arguments that have been published in the past and offers the opinions of the same two men who have built careers out of drawing attention away from the hundreds of scientists who continue to make amazing scientific strides toward understanding the underlying cause(s) and pathophysiology of what fibromyalgia patients experience.” Says Matallana:

This article misinforms readers in a way that undermines and victimizes innocent people. By telling only selective parts of the story the author is perpetuating misperceptions and making it difficult, if not impossible, for readers to grasp what is truly important: that we need to stop debating and pointing fingers and start asking why it is perceived as acceptable to stigmatize a patient population just because medical research hasn’t yet provided us with all the information needed to understand that particular illness. Every illness seems to go through a stage of having to prove its legitimacy, but why should the patients be suspect during that phase of research?

Perone’s article points out that Matallana’s group, as well as other disease organizations accept grant money from pharmaceutical companies that they use to lobby Congress and fund educational programs. I suppose he expects the reader to assume everyone is colluding to manufacture a disease so they can all get rich.

Kantor and Kantor has represented literally scores of individuals with Fibromyalgia. It only takes knowing one person suffering from that disease to understand how impossible it would be to invent the painful symptoms suffered by thousands of others.

Who is the real culprit here? We believe that if you scratch the surface slightly, you’ll find that the insurance industry has the most to gain from research attempting to cast doubt on the legitimacy of fibromyalgia. Insurers could save millions relying on such research to deny disability claims from people in constant, debilitating pain and then refuse to pay for the drugs proven to provide relief.

If you doubt this, keep reading the AP article, which quoted Dr. Nortin Hadler, a professor at the University of North Carolina who believes fibromyalgia is not a medical disease but a psychological condition. Until the recently passed federal mental health parity legislation, in most states (California is an exception) insurers had tremendously more leeway to deny or limit benefits for mental health treatment than they did for treatment of physical diseases. And it’s still unclear how strong the federal legislation will turn out to be. In other words, if fibromyalgia is a mental health condition, insurers may be better able to limit their exposure to pay benefits for treatment or drugs. Similarly, since most group disability policies have limitations on the amount of time benefits will be paid for mental disorders, insurers will benefits in this arena as well.

According to Perone, Hadler “has occasionally advised health insurers about how to deal with fibromyalgia.”

Need we say more?

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In a little publicized but highly consequential move, Conseco Senior Health Insurance Company, a leading provider of controversial long-term care insurance policies, requested Pennsylvania Insurance Commissioner Joel Ario establish a new company, Senior Health Insurance Company of Pennsylvania, to manage its 150,000 or so long-term care polices as the company struggles to remain solvent. Click here to review documents and comments.

In a letter to Ario, California Insurance Commissioner Steve Poizner expressed his concern that creation of a new trust would have a detrimental effect on policyholders around the nation, including California, leading to “unaffordable rate increases and the eventual insolvency of the trust.” Poizner exhorted Ario to make no decision without conducting a public hearing, even though Pennsylvania law does not require one.

Bonnie Burns, of California Health Advocates, was even more to the point: “I am writing to you with alarm,” she began as she urged Ario to deny Conseco’s attempt to “dump” its LTC polices thereby “creating a virtual death spiral from which there will be no recovery.”

Joseph Belth, professor emeritus of insurance in the Kelley School of Business at Indiana University and editor of “The Insurance Forum,” closely examined Conseco’s proposal. He advocates Ario should not merely disapprove the plan, but also should immediately seize Conseco Senior Health Insurance with a goal of preserving the assets then selling or rehabilitating the company. This alternative, he believes, would avoid “the drastic alternative of liquidation.” See http://www.ins.state.pa.us/ins/lib/ins/conseco/034.pdf.

Futhermore, says Belth, Conseco’s plan “would lead to a series of substantial premium increase requests that would place state insurance regulators across the country in a difficult position. Approval of the requests would place a severe burden on policyholders, most of whom are seniors, and force them to make difficult decisions about whether to absorb the increases or discontinue the policies.”

What happens in Pennsylvania will have repercussion around the country. If Conseco is let off the hook, how many other LTC and disability insurers will attempt to evade responsibility? How many more policyholder might be forced to wait in line for a shrinking pool of benefits when they need coverage?

Insurance commissioners around the country need to step up to protect policyholders by finding alternatives similar to the one Belth proposes. And insurers need to take note: The Conseco dilemma is a case study in how not to run your business.

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Posted In: Insurance Bad Faith , LongTerm Care Insurance

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At Kantor & Kantor we hear from people every day about their troubles in trying to obtain benefits under Long Term Disability, Long Term Care, Health and Life insurance policies. We created our Blog as a way to try and share some of the stories we hear, as well as the news being made in these and other related insurance areas.

Well, it seems people are reading our Blog and getting a benefit out of our efforts, all of which makes it even more worthwhile. Our Blog was just recently named as one of the Top 50 Legal Blogsites by the LexisNexis Insurance Law Center. This is what they had to say: "These blogsites contain some of the best writing out there on insurance on coverage, catastrophic loss, regulatory compliance, life insurance, health care and insurance issues in general,...They contain a wealth of information for the insurance community with timely news items, practical information, expert analysis, frequent postings and helpful links to other sites. These blogsites also show us how insurance issues interact with politics and culture. Moreover, they demonstrate how bloggers can impact the world of insurance law and insurance industry issues.”

Thanks LexisNexis. We will keep on blogging!

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Posted In: ERISA , Health Insurance , Insurance Bad Faith , Life Insurance , LongTerm Care Insurance , LongTerm Disability (LTD) Insurance

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Health Net Inc. has now joined the growing list of health insurers to reinstate policies it canceled after policyholders got sick, reports the Los Angeles Times. In the settlement, called the first of its kind because it involved both the state Department of Managed Healthcare and the Department of Insurance, reinstated 926 policies and forces the company to pay $3.6 million in penalties and $14 million in restitution for unpaid medical bills. Heath Net admitted no wrongdoing.

Critics are calling the deal only a partial solution, and we agree. As a result of the settlement, individual policyholders with legitimate suits against Health Net may be persuaded to give up their rights to seek damages for economic losses and emotional distress.

Health Net CEO Jay Gellert calls the deal an opportunity “to move forward” and help the state overhaul the healthcare industry.

What do you think? Are these settlements letting wrongdoers off the hook by allowing them to save millions in court costs, or is it more important that insurers are allowed the flexibility to fix past mistakes and perhaps do a better job in the future?

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Posted In: Health Insurance , Insurance Bad Faith

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Suit Seeks More Than $1 Billion in Damages

The Los Angeles Times reports that in a lawsuit filed July 16, Los Angeles City Attorney Rocky Delgadillo has accused health insurer Blue Shield of using complex and confusing applications to trick consumers into making allegedly false written statements the insurer can use against them in rescinding coverage. (“Blue Shield Sued for Allegedly Lying About Its Coverage”)

The suit alleges the insurer cancels coverage when insureds are ill and facing substantial healthcare costs. Blue Shield may have to pay more than $1 billion in fines and penalties. A similar recent lawsuit against Athem Blue Shield forced the California Department of Managed Health Care to review more than 2000 rescission cases to determine if the cancellations occurred after the policyholders became ill.

The article quoted Dr. Richard Frankenstein, president of the California Medical Assn. “Having health insurance does not mean you will receive healthcare when you need it,” he said. “Insurance companies promise you the moon and a thousand doctors, but if you really need your medical care you can bet they will be looking for a way to deny treatment or cancel your policy.”

We’ve been saying that all along, and its rewarding to know that the head of California’s medical community agrees with us.

Delgadillo’s attempts to keep health insurance carriers honest are praiseworthy, and we hope it is motivated by more than political aspirations. Ending this harmful rescission practice is a huge undertaking, however, and will require more than participation than just one California city attorney’s office. We urge the legal, medical and regulatory communities to get behind these efforts, and we challenge the state legislature to take note and begin to legislate accordingly.

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A report this month compiled by the American Association for Justice documents what most of us already know: Some of the county’s top insurance companies consistently place their own financial interest above the interests of their policyholders and raise premiums, delay claims and deny coverage. For "The Ten Worst Insurance Companies in America, see, www.justice.org/docs/TenWorstInsuranceCompanies.pdf.

Although Allstate stood out as number one because of its shameless mission statement “to earn a return for our shareholders,” our old nemesis Unum ranked number two. Conseco, another insurer we regularly battle on behalf of policyholders, ranked number five.

On page one of the report is this telling statement: “The insurance industry has so much excess cash, it may spark a downturn in the industry.” How did the industry amass such wealth? According to the report “the name of the game is deny, delay, defend – do anything, in fact, to avoid paying claims.”

Take disability insurer Unum, for example, which paid it CEO $7.3 million in 2007, raked in $679 million that same year, and has assets of $52.4 billion. Debra Potter sold Unum disability policies for many years as part of financial services packages. She bought one herself. She developed multiple sclerosis and filed a claim for benefits. Unum denied the claim, alleging the disease was “self-reported,” a euphemism for “fraudulent.” Potter’s physicians supplied letters and memos validating her illness. Unum continued to deny the claim for three more years. Potter hired a lawyer. Only then did Unum eventually pay Potter’s disability benefits.

We see this every day. It doesn’t matter the disease and, sadly, it’s beginning to infect the entire industry as more carriers realize what insurers such as Allstate and Unum are able to get away with until regulators step in and administer what many times is little more than a slap on the wrist.

The insurance industry is sitting on mountains of gold accumulated from policyholder premiums. Understandably, the carriers have a duty to their shareholder’s to protect assets from fraudulent claims. But, the carriers go way beyond that objective and deny valid claims every day knowing that the fewer claims they pay, the higher their profits will be. Nothing in the AAJ report shocked us. In fact, we would have been surprised had the report reached any other conclusion. But don’t expect the insurance industry to show any shame. They’ll deny and delay as always, and continue business as usual until laws are changed to prevent such conduct.

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Posted In: ERISA , Health Insurance , Insurance Bad Faith , LongTerm Disability (LTD) Insurance

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After more than two years of fighting, five months spent submitting claims forms, a protracted appeal, a lawsuit and a call from ABC News’ “Good Morning America,” Susan Kristoff, unable to work and being treated for stage 4 cancer, finally received her long-term disability benefits.
Cigna, her insurer, announced that its change of heart resulted from “additional information” uncovered during Susan’s appeal. Susan’s lawyer Alicia Grisham thinks differently. “The insurance companies understand that if they deny and deny claims, then many of the claimants will never pursue their claims,” Grisham said, describing a tactic known as “slow walking.”

We’ve seen this before: Bury the policyholder in mountains of claims forms, move your customer service department off-shore, keep your clients on hold, lose the paperwork, deny the claim, ask for more information, subject the sick or injured claimant to a confusing and prolonged appeal process, delay, deny, delay, deny, and perhaps the insured will give up or die.

The sad fact is that there are enough people in Susan Kristoff’s situation to keep “Good Morning America” on the air well into the next century.

Is the answer, as Grisham suggests, penalizing insurance companies for slow walking by allowing punitive damages in consumer lawsuits? Right now, the federal law known as ERISA protects disability insurers from such punitive damages in employee welfare benefit cases, and that give insurers little incentive to speed up claims processing and appeals.

At the moment, a policyholder’s best protection against slow walking is speed dialing an experienced disability insurance lawyer the moment a claim is denied. Two years without income is too long to wait, even if it means you end up featured on “Good Morning America.”

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We have been helping people with claims against insurance companies for over 18 years. Obviously, there is a lot to know about this process. From the countless claim appeals and lawsuits we have handled over the years, three basic, yet critical considerations rise to the top of our list of things to keep in mind when making a health related insurance claim:

1) ALWAYS GET A COPY OF THE POLICY, AND READ IT, BEFORE MAKING YOUR CLAIM.

It may seem obvious to suggest a careful read of the policy, but we have encountered countless people who forget about this critical step. Almost every insurance policy is written with subtle (and not so subtle) limitations on or exceptions to coverage. Look for things such as “mental and nervous” or “own occupation vs. any occupation” in exceptions in Long Term Disability policies. In health policies, look for limitations on “experimental” or therapeutic treatments, brand name pharmaceuticals, eating or psychiatric disorders. Long term care policies might require lengthy periods of hospitalization, or skilled nursing as prerequisites to coverage, or may condition coverage on an unreasonable definition of incapacity. Insurance companies are notorious for trying to characterize a claim so that it falls within one of the limitations or exceptions, and oftentimes mischaracterize an unwary claimant’s own words or writings to try and support a denial.

Often, policies are governed by ERISA (Employee Retirement Income Security Act) which is a Federal Law with very specific mandates about insurance claims, and can severely limit the available remedies.

2) PAY CAREFUL ATTENTION TO THE TIME LIMITATIONS SET FORTH IN THE PLAN.

Almost every policy has specific time limitations relating to things such as when a claim must be made, how much time the insurance company has to respond to a claim, and/or how long a claimant has to file a lawsuit if the claim is denied. The time limits are one of the very first things to look at, and calendar, when reviewing your policy. You might be able to make some legal arguments to avoid the harsh consequences of failing to comply with these deadlines insofar as they pertain to pursuing your claim, but it is always wise to act as though the deadlines are absolute.

3) ALWAYS COMMUNICATE WITH THE INSURANCE COMPANY IN WRITING, KEEP COPIES, AND USE CERTIFIED MAIL.

Insurance companies are in the practice of making copious notes about the substance of every phone conversation they have with an insured. The problem is, those notes may not always accurately reflect what you communicated, or even how the company representative communicated with you. The best solution to this is for you to send your questions in writing, AND to always confirm the substance of important conversations with a follow-up letter. If you can, try to get an email address for your representative, as email can serve as a very good substitute when sending letters via certified mail might be difficult.

Paying attention to these three simple rules related to insurance claims can greatly increase the probability of a successful claim, or if necessary, a successful lawsuit to force claim payment.

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Posted In: ERISA , Health Insurance , Insurance Bad Faith , Life Insurance , LongTerm Care Insurance , LongTerm Disability (LTD) Insurance

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