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What to Do If Your Insurance Co. Won't Pay

Trying to collect on health claims from insurance companies can be a frustrating experience. In this morning's Eye on the Law segment, our legal expert Robert Tarver has some tips on what to do if and when your insurance company refuses to pay.

Now, more than ever before, people rely on health insurance to protect them from the high cost of medical care. But health claims processors say there's been a sharp rise in the number of claims being rejected or simply ignored by insurance companies. As a result, families are sometimes saddled with medical costs they thought would be covered, and they're often left without answers.

People rely on health insurance as a safety net in time of crisis. The very idea of insurance is that the insurance companies promise under certain conditions to pay for costs associated with medical illnesses or emergencies. These costs can sometimes be devastatingly high. It is for this reason that health insurance is such a necessity for American families.

Many rejections have little or nothing to do with the substance of the claim but are casualties of a faulty processing system. We’ll explore options for those whose claims have been denied by health insurance companies.

Robert Tarver spoke with parties involved in the process of trying to get health insurance claims paid.

Lisa Gray is the owner of a medical insurance claim-processing company who is the liaison between the health insurer and the consumer. She herself had a personal experience when her son broke his arm and she found herself in the middle of the doctor not being paid by her insurer. Ultimately, she wound up paying the bill.

Mary Struthers heads a healthcare business solutions company that tries to recoup money from health insurers to pay the doctors. Mary says the health insurance business is a "racket." They invest the consumers' money instead of paying the doctors. They use all kinds of stall tactics not to pay, she says. In addition, Mary blames lazy claims processors who, she says, are not getting the paperwork out quickly enough.

Daniel, who doesn't want to give his last name, is a former claims processor who worked for two different health insurers. He concurs with Mary Struthers. As a claims processor, he witnessed a lack of productivity in efforts to process the claims in a timely manner. He also tells the story of hundreds of claims being found in the ceiling of a restroom. Daniel said health insurance companies give incentives to claims processors depending on how many they process. If a good number of them are done by Thursday, they will get Friday off. This means the more complex claims forms or the ones with the most paperwork get put to the side.

Tarver tells us that the best way to deal with unpaid insurance claims is to first try to resolve them with the company. The first step is to speak to a claims supervisor, not simply a representative. There's a tremendous amount of power vested ithese people. And quite often forming a good relationship with them can mean the difference between getting your claims paid or owing money to a doctor.

If that does not work, many states have what is known as an insurance commissioner, who is responsible for overseeing insurance companies. Contact your state insurance commissioner with your complaint, and quite often the insurance companies will respond much more quickly to these regulatory agencies than they will to an ordinary citizen.

Lastly, if all else fails, take them to court. You should understand that the law favors you in a suit against the insurance company because most insurance contracts are issued on a take-it-or-leave-it basis (meaning, it's non-negotiable). Because there is a difference in bargaining power many courts will favor the weaker party, and anything ambiguous will be resolved in favor of the insured.

In order to be successful in any suit, you must first look at your insurance policy to maksure you are in fact covered under the terms of the policy. Remember, a policy is a contract and the insurance company is only responsible to pay what they contracted to pay.
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