LOUISVILLE, Ky. (WAVE) — Have you ever faced the frustrating reality of needing a medical procedure or test only to have your health insurance deny it? This is a challenge that many, including myself, have encountered multiple times.
The Denial Letter Dilemma
The correspondence is all too familiar. One denial letter read, “After reviewing the information we have, we determined we cannot approve this request. We found the service requested is not medically necessary in your case.”
For those who have received such notifications, the wording strikes a chord. Frank Beifuss and his wife, grappling with a rare genetic disorder, faced similar hurdles.
“To me, it was unfathomable how much we had to battle with the insurance company to secure her coverage,” Beifuss expressed. “And many of these battles ended in defeat. A lost battle often meant she didn’t receive the vital care she needed.”
The Research That Sparked Change
Frustrated by the ongoing denials, Beifuss turned to research, which led to the creation of his paper titled “Illusory Remedies: Why Lacking Oversight and Penalties Leave Half the Country with Only a Shadow of Healthcare.” Recently peer-reviewed and published in the University of Louisville Law Review, this paper highlights significant flaws in the employer-sponsored healthcare system that affects over half of the U.S. population.
The Dark Truth About Claims Denials
Beifuss embarked on a quest to uncover how often insurance claims are denied. To his astonishment, he discovered a disturbing truth: there is no concrete data on the frequency of claims denials.
“What I found is that no one has a clear understanding of how often claims are denied, nor does anyone track these occurrences,” Beifuss stated. “Everyone assumes that someone else is responsible for monitoring it, but the reality is that no one is empowered to take action.”
Lack of Oversight and Its Consequences
Beifuss poignantly noted, “No entity tracks the prevalence of health plan claims denials.” This absence of oversight renders it impossible to ascertain how often wrongful claim denials happen. The only organization that monitors such denials is the Centers for Medicare and Medicaid Services (CMS), which denied over 18% of in-network claims.
“If we examine the Medicare/Medicaid data, less than 1% of those denied claims are appealed,” Beifuss pointed out. “Furthermore, about 70% of the appeals that do occur are typically approved. Insurers have created a system filled with obstacles, knowing that many people will simply abandon their claims.”
The Roadblocks to Justice
How many obstacles are there? In many states, you can appeal internally twice, and each appeal process can stretch on for months. Following that, if you still haven’t succeeded, you have the option for an external appeal, typically managed by a company hired by the insurance provider.
“If you go through all these steps, then you can claim you were wronged, and pursue legal action,” Beifuss explained. “However, very few attorneys are willing to handle these types of cases.”
The Dismal Reality
“So, you’re primarily out of luck?” I inquired.
“Mostly, yes,” Beifuss confirmed.
Your health may deteriorate during the lengthy waiting period. Even if you eventually succeed and attempt to sue, Beifuss found that you would likely recover zero dollars outside of the original denied care costs.
“Insurers of these group health plans are shielded from numerous penalties for misconduct,” Beifuss elaborated. “Cloaked in legislative protections, insurers can avoid fulfilling claims because the penalties for breaching their duties are less burdensome than actually meeting their obligations.”
“The only consequence for misappropriating funds in these scenarios is occasionally having to return what was taken,” Beifuss added.
The Unbalanced System
Beifuss discovered that even the doctors employed by insurers to determine medical necessity for claims are protected by consulting physician malpractice immunity.
“Your physician meets with you, assesses your health, and makes a recommendation based on years of experience,” Beifuss explained. “If that doctor makes critical errors or fails to meet the standard of care, they can face severe medical malpractice liability. Conversely, the doctors reviewing your insurance claims are not held to the same standards and are exempt from such liabilities.”
A Worsening Landscape for Healthcare Consumers
The situation for consumers is deteriorating. Beifuss observed, “After decades of litigation and legislation, the insurers’ standing has mostly improved.”
“The United States Supreme Court has consistently upheld the interests of insurers, often in near-unanimous decisions,” he noted.
A Hard-Won Victory
After years of navigating the healthcare denial landscape and learning to construct “sophisticated appeals,” Beifuss ultimately succeeded in getting his wife’s healthcare approvals.
“Most individuals are not equipped to navigate the complexities of healthcare,” Beifuss lamented. “They are confronted with a vast, intimidating network working against them. This scenario places ordinary individuals in a position where they cannot access the healthcare they need, forcing doctors to act as their own insurance law firms. It’s a bizarre and troubling state of affairs.”