July 13, 2020

Health Insurance Disputes

A health insurance dispute may arise when an insurance company refuses coverage, declines to cover certain medical procedures, charges unaccountable fees, or any number of other potentially contentious benefit issues. Some remedies:
Insurance companies frequently withhold policy benefits from beneficiaries and without just cause. However, every insurance contract or policy has an implied covenant to act in good faith. This means it will act in a reasonable and prudent manner toward your claims.

What Steps Can I Take?

Insurance companies that act in bad faith can have several steps taken against it. These include:
  • Writing a letter to your insurance company stating why you believe you are entitled to payment
  • Notify the insurance commissioner in your state and indicate the bad practices of the insurance company
  • Document all steps taken to provide good evidence of the bad faith of the insurance company - this might prove invaluable later in court
  • Contact an attorney

Why Do Insurance Companies Act in Bad Faith?

Insurance companies that act in bad faith can have several steps taken against it. These include:

Insurance companies have a strong incentive make a profit. Therefore, the less they pay, the more profits are increased. In addition, many policy holders don't want to fight insurance companies, allowing insurance companies to exercise these bad faith practices. Insurance companies have been getting away with it for years and it will continue in the future.

Do Insurance Companies Have a Right to Deny a Claim?

Insurance companies do have a right to deny a claim if an insured hasn't complied with the written terms of the contract of insurance.. For instance continuous late payments on the part of the policy holder might justify withholding claims payments. Additionally, if the insurer believes in good faith that the claim is fraudulent, it can justifiably withhold payment and might bring its own cause of action against the policy holder.

How to Address a Dispute with a Health Insurance Company

Preliminary Considerations for an Internal Review
  • Review the insurance agreement, including the Summary of Plan Description and the Evidence of Coverage.
  • Contact customer service and ask for the reversal of an improper charge or coverage denial.
  • Develop a record of all the documents and conversation that relate to the dispute.
  • Request a formal letter of denial from the insurance company.
How to Support Your Position in the Internal Review Process
  • Relevant sections and provisions from your Evidence of Coverage
  • Your doctors’ explanations of why the condition should be covered
  • Opinions of other doctors regarding your condition and treatments
  • Billing statements and other documents evidencing payment
  • Additional information about your medical condition
  • Information on treatment of your medical conditions
  • Explanation of benefits forms
The Actual Internal Review Process
  • If the first internal review is not successful, you may apply for a second.
  • The second internal appeal may involve a panel, committee, or hearing.
  • If the second review involves a hearing, you may be required to attend.
  • A lawyer can help you prepare for and attend an internal hearing.
  • An arbitration may also take place in addition to the internal review process.
  • During arbitration, you will be required to make arguments and present evidence.
Hearing Back from the Health Plan: When to Expect a Decision?
  • First internal review
  • Second internal review
  • External (independent) review
  • A legal case in court


Before resolving the dispute formally, you may seek informal solutions by contacting the insurance company. Seeking informal resolution will enable you to collect important information for a potential legal action.

If your coverage has been denied or an improper charge has been applied to your account, you may ask your insurance company to review the matter. Internal review is an internal appeals process that may efficiently resolve an error. Several steps should be taken before filing an internal review.

Before filing for an internal review, you should complete the following steps:

Make sure to file for an internal appeal within the appropriate deadline. If the deadline is missed, your internal and later external appeal rights may be jeopardized.

To support your arguments in the internal review process, you may consider preparing and submitting the following materials for the insurance evaluation:

When it comes to the actual internal review process, there are several things to keep in mind:

After you file an internal review, the insurance company must respond within a certain time. Your Evidence of Coverage may tell you the specific timeframe. If you’re in danger of suffering adverse health effects, you may ask for an expedited response. In such case, the insurance company may have to respond within 72 hours.