Dr. Kevin Lynch says he's having trouble meeting the bottom line because so many insurance companies aren't paying what they should for patient care. "What would happen if you didn't get your paycheck for 3 months at a time?"
Now he's one of thousands of doctors across the country suing 11 health insurance giants for allegedly cheating patients and doctors, even breaking the law, to get bigger profits, reports CBS News Correspondent Sharyl Attkisson.
Tim Norbeck of the Connecticut State Medical Society claims insurance companies are systematically, intentionally denying legitimate claims.
As unbelievable as it sounds, Wade Harper says it's possible. He's a former vice president of United Health Care, one of the companies being sued.
"On occasion, management instructed claims examiners to actually discard claims; legitimate claims, throw them away," says Harper.
When that happens, doctors can take up the loss or pass along the expense to patients, even if the claim should have been covered by insurance. It's just one of many illegal tactics insurers are using to turn bigger profits, according to the lawsuits filed by physicians.
"During part of the time I was with the company, there was significant pressure on earnings. Wall Street expectations had not been met on several occasions and there was pressure put on employees at all levels, especially management levels, to increase profitability and ultimately drive stock price," explains Harper.
Another tactic, according to the lawsuits, is called "downcoding." When a doctor submits a claim for a skin biopsy, which costs $120, the insurer may change it, "downcode" it, to a service that pays half an office visit.
Harper says United did it using a special computer program.
When he was asked if that meant physicians were getting paid less for their services because the computer was actually downcoding their claims, Harper said, "They were getting paid less for their services or they were not getting paid at all."
Insurers also allegedly deny claims for completely bogus reasons. United covered surgery to remove a cancerous tumor but refused to pay to close the wound, saying it wasn't needed.
Physicians Health Services supposedly rejected some claims for being submitted late. Yet the company's own statement shows all the claims were filed on time.
Harper says when doctors caught the mistakes, his company dragged out the appeals while earning interest on the money. "It was a way to frustrate doctors and sometimes keep the money longer, and sometimes get the doctors and physicians to the point where they would simply give up and accept the fact that they weren't going to get paid."
For doctor's assistant Marion Boyd, the frustration factor is high. "Normally to get paid, we have to resubmit three times."
The insurers being sued strongly deny any plot to avoid paying. Dr. Don Young represents the insurance industry and says with 5 billion clams a year, there are bound to be some honest mistakes, especially with most doctors still filing on paper instead of electronically.
"We have absolutely no evidence that claims are being denied on purpose," says Young. When asked if he would agree that they at least have a public relations problem, Young says, "We know that we have a problem. We've been working very hard over the last 1 to 2 years to deal with that problem."
Harper says United forced him to resign after he blew the whistle.
United calls him a disgruntled ex-employee who's trying to get a better severance package. Harper is now in arbitration with the company. As for Harper's claims, United says, "Nothing could be further from the truth."
Florida's insurance department did fine United $65,000 for some of the very practices Harper complained about. But he says that's small change compared to the millions insurance companies can make by cheating doctors and patients.
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