On Sunday December 14, 2014, CBS’ 60 Minutes program contained a segment entitled “Denied” which highlights that insurers routinely deny, based on lack of medical necessity, treatment for patients with mental illnesses, especially those for long-term in-patient care at mental health facilities.  This segment was an indictment of health insurance companies’ actions (especially Anthem Blue Cross) to deny legitimate claims for such care, sometimes with tragic results.  According to 60 Minutes, “we found that the vast majority of claims are routine but the insurance industry aggressively reviews the cost of chronic cases.  Long-term care is often denied by insurance company doctors who never see the patient.  As a result, some seriously ill patients are discharged from hospitals over the objections of psychiatrists who warn that someone may die.”

As we see all too often, insurers rely on their non-independent physician consultants, who are paid handsomely for their opinions, who render decisions favoring the insurers’ attempts to deny legitimate claims.  These physician consultants do not see or physically examine the insureds, but rather perform a “peer review” or “paper review” based on a review of medical records and other information.   These physicians typically attempt to contact the insured’s treating physicians to ask questions, but in reality use these “attempted” phone calls as a pretext to opinions against the insured’s interest (i.e., that the insured does not need additional mental health care) so that the insurer can deny these claims.  This is very often done without giving the treating physician adequate time for a response.  This is exactly what the 60 Minutes segment found.

This problem is so prevalent that when McKennon Law Group clients hire us to represent them to handle ERISA or non-ERISA insurance claim correspondence and appeals, we now instruct insurers that if they wish to contact our clients’ treating physicians, any communications between the insurer’s consulting physician and the treating physicians must be in writing, include only those questions that are pertinent to the claim and include a reasonable time to allow the treating physicians to adequately respond to the questions.  This allows the treating physicians the time necessary to adequately respond to the questions in writing, with the benefit of allowing them to review the most recent medical records.  All too often we have seen a scenario in which an insurer’s consulting physician makes a “cold call” to an insured’s treating physician without an appointment to speak to him or her in the midst of a busy practice schedule.  This creates several problems.  First, the treating physician may not be able to immediately take the call because he or she is treating patients.  As a result, the insurer’s physician notes that the treating physician did not take his call and an implication is raised that the insured’s physician does not support the claim.  Second, even if the treating physician is able to take the call, he or she may not be prepared to thoroughly discuss the claim or the restrictions and limitations without a review of his or her records.  If pressed for answers regarding the date of last examination or clinical findings, the treating physician may, understandably, not be able to give complete or accurate answers.  Of course, this does not stop the physician consultants and insurance companies from arguing that the treating physicians do not support the insured’s claim.  Communication in writing alleviates these problems.

The real problem is that (as the CBS segment notes) doctors hired by the insurance companies are paid for each medical review they complete, and in many cases, the so-called independent physician consultants conduct hundreds of reviews per year for these insurers.  They are thus economically motivated to render opinions that allow insurers to deny legitimate health insurance claims because they want repeat business.

California Insurance Commissioner Dave Jones commented on the 60 Minutes segment, stating that:

State and federal mental health parity laws are in place to prevent health insurers from denying coverage for mental health care.  California Insurance Code section 10144.5 requires health insurance policies to cover diagnosis and medically necessary treatment of severe mental illnesses for patients of all ages.

One issue not mentioned in the 60 Minutes segment is that insureds typically have a review or appeal process available to them.  In order to navigate this complex area of the law, it is advisable that they seek out the advice of experienced attorneys in this area of the law when they are faced with insurance claim denials.