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Bad faith laws and the "doctrine of bad faith" have been used by attorneys, families, and advocates to force managed care health insurers to pay for contractually obligated insurance benefits such as: acute care benefits, sub-acute rehab, short term and long term rehabilitation benefits, coma stimulation and nursing and health care benefits for the catastrophically ill and injured. Under a "bad faith theory", managed care health insurers have a duty not to withhold or deny contractually obligated health insurance benefits without reasonable cause. Advocates argue that managed care health insurers are playing a "bait and switch" game"...health insurers accepted a premium for lifetime health insurance benefits, but they change the rules and deny the benefits once a serious illness or injury has occurred.

Examples of bad faith practices:

• Misrepresentation of policy and contract provisions relating to coverage.
  
  
• Failure to provide in a timely manner to the insured or his representative the requested master insurance policy/master insurance contract.
  
  
• Failure to provide the treatment guidelines, scientific evidence, and criteria relied upon by the insurer to deny the claim.
  
  
• Changing a pre-certification approval after it has been granted.
  
  
• Failing to provide the written reason for the denial of treatment or denial of requested services in a timely manner.
  
  
• Failure to confirm or deny coverage to a patient, his representative, his attorney, or health care provider in a reasonable time.
  
  
• Setting up a pre-certification process that is "designed" to deny the claim.
  
  
• Failure to schedule a timely appeal.
  
  
• Changing the appeal procedures in the middle of an appeal.
  
  
• Changing the reasons for the denial of treatment or denial of requested services continuously throughout the appeals process.
  
  
• Delaying the payment of benefits by requiring submission of multiple forms which contain essentially the same information.
  
  
• Delay in responding to a claim.
  
  
• Oppressive and unfair demands.

Bad faith has been described as "not an honest mistake by a health insurer" but a systematic practice which denies health insurance benefits. I argue that managed care health insurers set up a pre-certification process and an appeals procedure which guarantees that unless a family has an advocate, attorney, or is persistent, they will be denied the health insurance benefits that they contractually paid for and that the insurer was obligated to provide.

In addition to a bad faith claim, families have the following remedies when challenging a managed care decision or pre-certification decision:

1. File an internal appeal (this aoppeal is heard by a panel set up by the managed care health insurer).
   
   
2. File an external appeal (members of the community who do not work for or not hired by the managed care health insurer to sit on the appeal committee).
   
   
3. Contact your local Congressman or United States Senator for assistance.
   
   
4. Contact your State Department of Insurance for assistance.
   
   
5. File a lawsuit.

"The laws assist those who are vigilant, not those who sleep on their rights". This legal maxim could never be truer than in today's world, where managed care health insurers are arbitrarily denying needed medical and rehabilitation benefits for children and adults who are catastrophically ill and injured. Patients and health care providers must realize that obtaining health insurance benefits from managed care health insurers is an adversarial process. Family and health care professionals must be proactive and aggressively fight for the benefits to which they are entitled.

The Federal government has issued new rules designed to tackle one of the most difficult issues in health care: the amount of time it takes health insurers to rule on treatment decisions and appeals. The new rules will cut the time required for an answer on coverage, which is currently ninety days or more, to as few as fifteen days. The regulations, which will affect about one hundred thirty million (130,000,000) private-sector employees, are due to take effect on January 1, 2002. The rules do not apply to government employees or patients who buy their own insurance. Families and health care providers should carefully examine a patient's health insurance policy to determine how long a health insurer has to rule on pre-certification issues and appeals. Many existing health insurance policies require that precertification and appeal decisions be made within a thirty to ninety day time period.

These new rules, the first changes to the claims and appeals process since 1974, were approved by the administration after congress could not agree on a comprehensive patents' bill of rights.

Under the new rules:

• Health plans will have fifteen days to decide on requests from patients seeking pre-certification approval for treatment or procedures.
  
  
• For urgent claims, health insurers will have up to seventy-two hours to decide an appeal.
  
  
• Insurers must decide within thirty days whether to pay for treatments that patients received without prior approval. Insurers will also have up to sixty days to decide on appeals of denied treatments.
  
  
• New rules will also require insurers to tell patients how and why their claims were denied.
  
  
• There are no civil penalties for non-compliance by health insurers, but patients can take insurers to court if deadlines are missed.

Clearly, the "rules: on appealing managed care health insurers decisions are not fair for families and health care professionals, but these new appellant rules are a step in the right direction.

A child suffered a catastrophic injury in a recreational accident. The school district was not able to provide for the educational needs for the child, either in the local school district, or the intermediate unit (county wide system). I successfully filed a claim against the school district forcing the school district to pay for an approved private shool (APS) and an adie for fourteen hours a day.

A child suffered a catastrophic head injury in an automobile accident. The parent's health insurance policy had a 1 million dollar lifetime maximum. The school district and the managed care health insurer disagreed as to who was responsible to pay for ongoing therapies, attendant care (aides), and transportation costs. By creatively using the coordination of benefits clause, we were able to maximize the benefits from the health care policy and from the special education benefits.

I recently authored an article entitled "Special Education Benefits: Myths and Realities". A free copy of this article can be obtained by contacting my office by telephone at 1-800-331-4134 or via email at info@josephromanolaw.com