Lawsuits Allege Insurers Rely on Medical Necessity to Deny Claims

Los Angeles, CADenied disability insurance lawsuits allege insurers use a variety of unethical tactics to deny an insurance claim, but perhaps the most dubious tactic is to deny a claim on the grounds that treatment is not medically necessary. Patients who have had their claims denied on “not medically necessary” grounds know all too well the pain of having their own doctor prescribe treatment only to have an insurer reject medical advice. Now, lawsuits are being filed against insurers alleging they’re acting in bad faith.

One such lawsuit was reportedly recently settled for an undisclosed amount, according to the Los Angeles Daily News. That lawsuit involved a Los Angeles County sheriff who underwent surgery to have meat removed from his esophagus in 2014. Sgt. Glen Williams didn’t wake up after the surgery and to this day is incapacitated. He was transferred to a different hospital for three months and then moved to a medical center. His insurer, Anthem Blue Cross, reportedly found that his stay at the medical center was not medically necessary and denied a claim for coverage.

The lawsuit was filed by Williams’ wife, alleging Blue Cross breached its contract by using an undisclosed definition of medical necessity. The suit sought more than $1 million in damages and was reportedly settled in August.

Blue Cross also faces lawsuits alleging it has withheld necessary hepatitis C treatment from patients on the wrongful basis that the treatment is not medically necessary. Harvoni, a drug approved by the FDA in 2014, has been found to cure hepatitis C in 8 to 12 weeks with few side effects. It’s expensive, though, with treatment running between $64,000 and $99,000, and so insurance companies have allegedly denied Harvoni treatment on the grounds that the treatment is not medically necessary.

According to a lawsuit filed by Janie Kondell (case number 0:15-cv-6118), Blue Cross refused to cover Harvoni treatment because her liver had not deteriorated enough.

“Defendant decided that Ms. Kondell hadn’t suffered enough, and her liver hadn’t been damaged enough, by a disease that causes irreparable harm and death, for which a cure is finally available,” the lawsuit alleges. “Florida Blue said it would not consider approving Harvoni for Kondell until her liver has a certain amount of scarring (advanced fibrosis of stage F3 or greater) on a liver biopsy.”

Despite Kondell having the support of her doctor, who argued the treatment was medically necessary, Blue Cross repeatedly denied the claim.