UnumProvident Sued for Accessing Personal Files

San Francisco, CAMost people don't know this, but health insurance companies like UnumProvident can deny claims based on confidential information, even if the claimant has not given permission for that information to be released.

This is exactly what happened to one California woman who is now suing both UnumProvident for unfairly denying her claim and the hospital where she was treated for giving the insurance company her confidential information.

According to a report in The Wall Street Journal, the plaintiff contends that in 2001 she was in a car accident that resulted in four herniated discs and chronic back pain. However, when she applied for long-term disability leave two years after the accident, she was denied insurance coverage based on information UnumProvident found in her psychologist's notes; notes she was told were completely confidential. Not only did UnumProvident have access to her confidential records, she claims the company completely misinterpreted the notes and wrongly denied her insurance coverage.

The reason UnumProvident was able to access her confidential records was that her psychotherapy notes were scanned into a hospital computer record system along with her general medical records and therefore had no special protection for confidentiality. When the plaintiff applied for long-term disability, she had to sign a release that covered her medical records; she was told that if she did not sign the release her claim would be denied. The plaintiff says she signed the release only after she ensured that her therapy records could not be given out without specific consent.

In denying the plaintiff's claim, UnumProvident cited notes contained in the patient's files, notes the plaintiff says were taken out of context and entirely misunderstood. However, despite her ability to prove that the UnumProvident misread her file, the insurance carrier refused to alter its decision.

This is not the first time UnumProvident has been accused of improperly denying policyholders' claims. Back in 2002 a class action lawsuit was filed, along with 2,500 individual suits, claiming UnumProvident operated "disability denial factories," in which policyholders were wrongly denied claims.

In 2003, UnumProvident suffered a $31.7 million damage verdict against it after a jury found in favor of a doctor who claimed the company refused to pay the monthly benefit he was entitled to.

A 2004 settlement was intended to protect disabled workers from UnumProvident's dishonest practices. That settlement required the insurer to reassess previously denied claims, to restructure their claim handling procedures, and to pay a $15 million fine. The settlement was in response to an investigation conducted by the New York State Attorney General's Office, the New York State Insurance Department and state insurance regulators from various states.

If you are a UnumProvident policy holder and your claim has been rejected for unfair or illegal reasons, contact a lawyer to discuss your options.