Those words, “is it time yet?” we hear frequently around the holiday season. For example, we hear that with children anxious to leave their beds and open presents on Christmas morning.  We hear that with children anxious to start a holiday celebration such as Hannukah. The same difficulty with patience is heard from kids during a long drive to an exciting destination with the words “are we there yet?” These comments also capture the impatience of attorneys who see unfairness in the law toward health claim clients. They see outrageous unfairness but pleas for changes in the law are ignored. With the death of an insurance executive again I ask again, “Is it time yet?”

A significant percentage of our population have health insurance through the workplace. Most private employers, other than churches, have their health claims governed by ERISA. Federal Government employees have their claims governed by the Federal Employee Benefits Administration (FEHBA) which is similar to ERISA. Those 65 and older have their claims governed by Medicare. Three things are common in all three areas of law. First there is too much deference provided to healthcare insurance companies regarding their claim decision. Second, even with the worst claim denials, there is no reward or incentive to advance these cases. That is because there are no extracontractual damages awarded as there can be with state law insurance matters. Thus there is no risk to the insurer. Third, such claims are too difficult and expensive for the vast majority of people.

The unfairness of the medical claim process was challenged recently in a New York Times article. It reported on accusations that UnitedHealthcare is denying claims using algorithms rather than sound medical judgment from a fair physician. UnitedHealthcare Has Faced Scrutiny Over Denying Claims, by Sarah Kliff and Reed Abelson, December 5, 2024. https://www.nytimes.com/2024/12/05/nyregion/delay-deny-defend-united-health-care-insurance-claims.html?smid=url-share. The timing of this article intentionally coincided with the brutal murder of a UnitedHealthcare executive.

Frankly any insurer can deny any claim by delaying the matter repeatedly, and if pressed it can deny the claim. If there is an appeal it can pay a regularly utilized physician for an opinion backing up that denial. The tragic and horrifying death of a United Healthcare CEO, who was about to share the company's financial wellbeing with shareholders, involved bullet casings that had the words “delay” and “deny” on two of the casings. The New York Times article raises a question wondering if the words “…could be a reference to the tactics used by insurers of all kinds to avoid paying claims.” Those words are linked to insurer practices mentioned in a 2010 book Delay, Deny, Defend: Why Insurance Companies Don't Pay Claims and What You Can Do About It.

The problem is there is little to no fairness in the process. First under ERISA the arbitrary and capricious standard of review controls for many jurisdictions. FEHBA is no better. Thus, a claim decision may be delayed repeatedly and then if pressed, it is denied. If the denial is challenged it is backed up by a paid non-examining physician opinion.  If the matter is taken to court, the fact that the insurer had physician opinion, even in the face of treating physician opinions, is too often enough for the win. For insurers it is a “no-brainer” to work the system by paying a doctor $250 or maybe $750 for a medical opinion to buttress a claim denial. Claimants are outraged and many suffer. They cannot win without great expense, and when it involves serious injury or a life and death matter, rage boils. There is no hope in the justice system. It is time for that standard of review to go.  

Second, there are no extracontractual damages with such claims. All that can be sought is simply the required payment of the benefit money, which is due to go to the medical provider or perhaps reimbursed to the claimant. That underscores the necessity of charging an hourly fee for counsel, but also reduces any leverage for good behavior for the insurer. The profit motive dictates that the claim be denied and if a claimant takes the matter into litigation, the worst thing that will happen is to pay the claim. So even if a claimant wins there is no reward even for the most egregious denials.  It is time to change that and allow typical contractual damages.

Third, the process is expensive and cumbersome. The typical case must be handled on an hourly fee basis, any hope to see fees awarded or reimbursed is misplaced in most of the country. That is because fees are not automatic if the claimant wins. They are discretionary. Thus, many judges will not award fees even when the claimant overcomes an unfair standard and prevails.

Further attorney's fees are never awarded to assist the client during the claim process before litigation, which is usually vital for the claim. That is especially so given the review in court may be over the claim record. Attorneys then must charge clients an hourly fee rate for the claim process and then also for litigation. The vast majority of claimants cannot afford that. Instead, they suffer while paying significant premiums. This occurs with Medicare claims as well, which may involve significant work for a challenge before an Administrative Law Judge.  It is time to award a successful claimant with fees automatically both during the claim process and during litigation.

In the aftermath of an insurance company executive being gunned down in broad daylight, many people have been quick to come forward with health insurance horror stories.  We are not back in the wild west where violence was greater than the rule of law. Yet this tragedy has tapped into the rage of many people who have experienced wrongful claim denials without fair redress. Insurers, however, are only using the rules as permitted. The problem is the rules.

I have personally seen people dying of cancer who desperately needed a cancer fighting drug to extend life only to see that refused as “not medically necessary” despite the opinions of respected oncologists. I've seen men battling prostate cancer, rejected for proton beam therapy which would minimize damage to other organs. Despite multiple recommendations by treating physicians, one regularly paid doctor for the insurer says it is not medically necessary. I have seen retirees on Medicare who suffer a serious fall and are not able to feed themselves or go to the bathroom, yet they are denied rehabilitative inpatient care that would allow them to learn those skills. We need fairness and we must encourage respect for the rule of law. No insurance company executive should be the victim of anger toward an unfair medical claim system.