Class Action Blog : Class Action Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz : Consumer fraud, Personal Injury

A civil lawsuit has been filed against Central United Life Insurance Company (“Central United”) alleging that the company illegally changed the terms of its cancer insurance policies in order to avoid paying thousands of dollars due to its policyholders who get treatment for cancer.  Central United sold insurance contracts known as “specified disease” policies which promised to pay policyholders the amount charged to them for their medical care if they are diagnosed with cancer, even if their treatment is actually paid for by health insurance.

The lawsuit, filed by the Missouri Department of Insurance, alleges that Central United changed its claims-handling practices to drastically reduce payments to policyholders with cancer.  It is alleged that Central United decided to pay policyholders based on treatment costs, rather than actual damages.  For example, when consumers with health insurance receive medical treatment, insurance companies pay a negotiated rate, which is less than the rate billed to the consumer.  Central United allegedly reimbursed its policyholders who got cancer the lower negotiated rate -- not the actual rate billed to the consumer -- thereby shortchanging its policyholders of thousands of dollars on their medical claims and saving itself thousands, if not millions, of dollars.

“The very essence of insurance is providing protection when life-changing events occur,” said John M. Huff, Missouri Department of Insurance, Financial Institutions and Professional Registration, commenting on the civil lawsuit filed against Central United.  “There are few events more life-changing than cancer, and this arbitrary decision by Central United is an attempt to abandon its solemn responsibility to protect its policyholders facing a serious and sometimes deadly disease.”

If you are a consumer who purchased a Central United cancer policy, please contact us to discuss your legal options.

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The Missouri Department of Insurance conducted a market conduct examination of United Healthcare after patients and chiropractors filed complaints about the company improperly denying claims.  The Department of Insurance found United Healthcare violated state insurance laws by failing to evaluate the medical necessity of treatment before denying claims.  Pursuant to a settlement with the Missouri Department of Insurance, United Healthcare has agreed to reexamine at least 50,000 claims filed since 2004 by chiropractors who treated the company’s policyholders and will pay $536,000 in fines.

“When Missourians entrust their health coverage to an insurance company, they expect and deserve to be treated fairly and legally. We have taken this action to make sure that happens,” said John M. Huff, Missouri Department of Insurance, Financial Institutions and Professional Registration.  “We believe the review of these 50,000 files may determine money is due to other providers and possibly consumers.”

For any chiropractic claims it finds were improperly denied, United Healthcare must reimburse the physicians for those claims, plus interest.  In some cases, consumers may have paid the bills, rather than the chiropractors.  Those consumers would be entitled to reimbursement directly from United Healthcare.

Update:  Two class action were recently filed by chiropractors against insurance companies that have tried to recover what they believe were unwarranted payments.  The first suit, filed in New Jersey Federal Court by five practitioners and three state associations, charges that Aetna made improper repayment demands and that its post-payment audit process violates the federal Employee Retirement Income Security Act (“ERISA”).  The class action also claims that certain Aetna clinical policy bulletins misclassify chiropractically accepted procedures as experimental and investigational.  The second class action, filed in Chicago by 15 practitioners and their state associations, accuses the BlueCross BlueShield Association and a number of its state-based licensees of similar wrongdoing.

If you are a chiropractor or a consumer with health insurance coverage, and believe that your chiropractic claim was denied improperly, please contact us to discuss your legal options.

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New York State insurance regulators have fined American Medical and Life Insurance Company (“AMLIC”) for marketing limited health insurance policies through “misleading” advertisements which promised “peace of mind” for just $5 a day.  In reality, AMLIC policies were not comprehensive health insurance and left patients only with huge hospital bills.

For example, AMLIC advertised that its health insurance policies were a low cost option for the uninsured and underinsured, intimating that its policies provided comprehensive coverage.  In fact, the policies were limited coverage policies that did not provide comprehensive coverage.  Moreover, in one television advertisement the narrator states that AMLIC health insurance is available, “regardless of any pre-existing conditions,” while the print on the television screen stated, “most pre-existing conditions accepted” and the fine print on the policy itself stated that there was a six-month waiting period.

New York’s two year investigation of AMLIC found a Rochester woman who had purchased an AMLIC policy and ended up with hospital bills totaling $28,000.  Her AMLIC limited policy covered only $1,164 of the hospital bills.  In another case, a 36 year old New Yorker who suffered a stroke found out that his AMLIC policy covered just $250 in medical bills, leaving him with a bill of $29,917.

In commenting on AMLIC’s misleading ads, Governor David Paterson said, “Many New Yorkers are desperate for affordable health insurance. Unfortunately, some businesses are taking advantage of that need to sell limited health insurance in ways that mislead consumers into believing they are getting full coverage.”

If you purchased a health insurance policy from American Medical and Life Insurance Company, please contact us to discuss your legal options.

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State insurance regulators in Michigan have charged two businesses with selling fake health insurance policies, and the Georgia Insurance Commission issued cease and desist orders to two organizations allegedly acting as unlicensed insurers.

The Michigan Office of Financial and Insurance Regulation (“MOFIR”) ordered American Consumers Insurance (“ACI”) and its partner agency, Real Benefits Association (“RBA”), to stop selling allegedly fake health insurance policies.  The allegedly fake policies, which were marketed through radio advertisements, were sold in Michigan, Arkansas, New Jersey and New York.  “Basically these consumers [who purchased health insurance] were holding worthless pieces of paper,” said Jason Moon, a spokesman for MOFIR.  Regulators have also advised consumers who purchased health insurance coverage from ACI and RBA to immediately seek out and purchase legitimate medical insurance.

In Georgia, the Insurance Commission issued cease and desist orders to The Butler Aid Society and God First Missionary Membership Association and Floral Club.  Both organizations offered cash payments to members upon death, though neither entity is a licensed insurance company or registered as a pre-need funeral business.  “There’s a serious financial risk to consumers whenever you have a small operation like this, run out of somebody’s hip pocket without proper capitalization and regulatory oversight,” said Insurance Commissioner John W. Oxendine.

If you have purchased a health insurance policy through ACI and/or RBA, or a policy from The Butler Aid Society and/or God First Missionary, please contact us to discuss your legal options.

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All too often a physician treats a hospitalized patient and is then informed by the insurance company that the in-patient services, provided both by the hospital and physician, are not covered.  The physician accepts the insurance company’s representation and believes the matter is closed.  Far from it!  What the physician does not know is that the hospital appeals the denial of payment and is successful in receiving most, if not all, of the reimbursement from the insurance company.  At no time did the insurance company ever inform the doctor of the hospital’s appeal.  As a result, the physician either never finds out that the hospital has been reimbursed or does learn about it, tries to appeal, but is told that the appeal is now untimely.  As a result, doctors who fully deserved to be paid for the services they rendered are not compensated at all.

We believe the insurance companies have a duty to inform the physicians if the hospitals appeal under these circumstances so that the physicians can also submit a timely appeal and be appropriately compensated.

If you are a physician who provides in-hospital services, there is a good chance that you were/are a victim of this scheme.  If you have any questions or comments about this, please contact us at mdpcelaw.com or (914) 517-5000.

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Most physicians are quite familiar with the following scenario. The insurance company advises the physician that he or she will be paid according to a certain fee schedule. Time passes, the physician examines the amounts reimbursed for services rendered and it is evident that the amounts paid are far less than what was agreed. The physician complains and the insurance company advises the physician that the fee schedule was modified and that the physician was notified about the modification before it was implemented and, in fact, had agreed to the modification. On further inquiry the insurance company explains that it faxed a “notice” to the physician informing the physician of the change and that unless the doctor opted out within a certain period of time (usually 30 days) the doctor is deemed to have accepted the revision. The insurance companies have used this notification methodology for years because they understand that most physicians are simply too busy to review every piece of paper that comes to them by fax or mail and that by the time the physician finds the “notice” (that is assuming the physician even received it), the physician is deemed as having accepted the modification. Such “notices” have been used to revise many important components of the provider-payor relationship.

Now the insurance companies are using this methodology coupled with potentially fraudulent practices to force physicians who never agreed to treat Medicaid patients to accept Medicaid patients at Medicaid rates. First, the insurance companies send the physicians the “notices” advising them that, unless they opt out within 30 days, they will be deemed as having accepted treating the insurance companies’ Medicaid insured at the Medicaid rates. The physicians never see the notices so they are deemed as having accepted the obligation. Second, when the Medicaid patients show up at the physicians’ offices, they present health coverage cards that identify them, not as Medicaid patients, but rather as commercial HMO patients (which has a higher reimbursement rate). The physicians render the services not realizing that they are treating Medicaid patients at Medicaid rates. It’s only when the physicians are reimbursed (assuming they are even reimbursed) that they realize what has happened. But by then it’s too late!

If you are a physician and find yourself encountering this situation, please contact us at mdpcelaw.com or (914) 517-5000. 

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A California court has severely criticized the use of chiropractic contracts in which patients pay in advance or agree to pay for many visits at a "discount" price, and held that two women were entitled to refunds from their chiropractor because their chiropractic extended treatment contracts were unconscionable. Chiropractors who offer these type of contracts typically tell their patients that long-term care is needed to prevent what they call "subluxation degeneration" (a mythical condition). Even if some treatment might be helpful, it is not possible to know in advance that a large specified number of visits will be needed.  In addition to excessive visits, these contracts often contain provisions intended to discourage quitting. Many of the contracts state that if treatment is stopped before all of the visits are used, any discount will be cancelled and visits used will be billed at their "full" price, and/or an "administrative fee" will be charged for early cancellation.

Moreover, in April 2008, the Maryland Board of Chiropractic and Massage Therapy Examiners advised chiropractors not to use extended treatment contracts. In February, 2009, the Kansas State Board of Healing Arts settled charges against a chiropractor through a consent order under which he must pay investigative costs plus a $5,000 fine; serve probation for two years; and provide full refunds to several patients who did not receive all of the treatments for which they contracted.

For details of these cases and links to the legal documents click here.

If you entered into an extended treatment contract with your chiropractor, please contact us to discuss your legal options.

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You may have recently come across a newspaper advertisement with the headline “Cut off set for free Universal Health Card.” The advertisement at first glance seems like a legitimate news item, when in fact it is a paid advertisement touting the Universal Health Card (“Card”), which purportedly gives you free “affordable care provided by 561,000 doctors, dentists, pharmacists and hospitals.” But the Card is not free; you have to pay an $18 “registration fee” to get a 30-day “free” trial. Thereafter, you must pay $49 per month to continue using the Card. Moreover, the Card cannot be used as a supplement, or replacement, for traditional health insurance. Rather, it can be used only to obtain a small discount at participating doctor’s offices, hospitals and pharmacies. 

Many State Attorneys General have received complaints about the Card, including from people who were told that their doctors participate in the program only to find out their medical providers do not accept it. Some consumers have even dropped their regular health insurance policies for the Card thinking it was cheaper, not realizing that the Universal Health Card is not health insurance, and that most doctors and hospitals do not accept the Card anyway.

A story broadcast on WAFF-TV in Alabama reports on the advertisement’s deceptive claims. The reporter contacted a number of the medical providers listed on the Universal Health Card website, and found that they did not accept the Card. The broadcast also noted that the Alabama Better Business Bureau contacted some of the Card’s listed medical providers and found that most did not accept the Card. WAAYYTV in Huntsville, Alabama broadcast a similar investigative report, and the Massachusetts North Adams Transcript has a story on insurance scams generally, including deceptive claims relating to the Card. The ombudsman of the North Carolina News & Observer even took his newspaper to task for accepting the Card’s advertisement, as he found the claims made in the ad were either deceptive or outright false.

If you have a purchased the Universal Health Card, please contact us to discuss your legal options.

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A Senate inquiry has found evidence that AARP’s health insurance products were deceptively marketed to its members. At issue are insurance plans that were sold by UnitedHealth Group and carry the AARP brand. According to the New York Times, more than a million people have bought the policies, which have names like AARP Medical Advantage, Essential Plus and Hospital Indemnity Plan. The Senate Finance Committee found the marketing of these health insurance policies misleading because it suggested that they offered comprehensive coverage. In fact, the policies pay fixed cash benefits for selected services, often times much less than consumers had been promised or expected.

For example, AARP’s Medical Advantage plan pays a maximum of $5,000 for surgical procedures that usually cost many times that amount. A consumer guide to this plan issued by AARP states that a Medical Advantage insurance policy “can be a real lifesaver for early retirees, part-time workers or people who just need to supplement their current health insurance.” Thus, uninsured members of AARP have purchased these policies thinking that they provide comprehensive medical coverage, when in fact they do not.

In response to the Congressional inquiry, AARP has suspended sales of the health insurance policies and has hired an outside investigator to look into sales of these policies.

If you have a purchased a limited-benefit health insurance policy through AARP, please contact us to discuss your legal options.

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