Making Your Health Insurance Company Pay Up

Tricks of the Trade_insurande_fraud

Making Your Health Insurance Company Pay Up


Quite commonly patients report their health insurance claim has been denied by the insurance company. If you think about it, the health insurance company makes money by denying health care to sick people. In most countries, this is prosecuted as criminal behavior. However, here in the US, scamming sick people is considered a normal business practice. This article is part one of a series, for part two click here.

Tricks of the Trade- Medical Review of Claims

The Health Insurance Company will deny your claim by using a “Gimmick”, a contrived procedure called, “Medical Review of Claims and Benefits” which is intended to result in denial of claim. This process of “Denial of Medical Claim” is a pretense and masquerade. Under this “review of care” procedure, the insurance company proposes the medical claim fails their “Guidelines”, and is therefore denied. How are these “Guidelines” created?

Denial Based on Guidelines

insurance scamGuidelines are created by health professionals employed by the health insurance company who work for the benefit of their employer. Their job is to create guidelines that deny health care. These “Guidelines” have no application to the way your doctor actually practices medicine. If your doctor follows the “Guidelines” then he has unwittingly become an agent of the insurance company, allowing them to dictate how he practices medicine. What to do if your claim is denied? Appeal

Manufactured Excuse for Denial of Claim

Tricks of the TradesssThe guidelines provide a manufactured excuse for denial of care based on one of the following:

The guidelines have determined that the health care is medically unnecessary, experimental, dangerous to the patient’s well-being, or outside the standards of care provided by a professional association or governmental agency. 

The healthcare may be denied because it uses an off-label indication (for a medicine or device). 

However, the real reason for denial of the claim is obvious;  the claim is denied because the health insurance company payment of your claim will result in lost profits. The health insurance company prefers to keep your entire monthly premium payment as profit, rather than pay a claim.

Prior Authorization-Another Trick of the trade

Sleight of HAnd Card tricksThe Insurance Company had decided that certain tests and treatments require “prior authorization”.  Seeking prior approval consumes inordinate amounts of the doctor’s time, which is not compensated.  Because of this uncompensated time, the doctor may avoid seeking “prior authorizations”, thereby avoiding the best treatment or best medication, device or procedure.  In fact, the doctor would rather walk on a bed of hot coals rather than hang on the phone with clerks seeking “prior authorization”.   To secure approvals, the doctor may be forced to exaggerate the urgency of the medical condition or use creative medical coding.

Fee Pressures from the Insurance Company

The health insurance company does not pay ordinary and customary doctor’s fees.   Instead, the health insurance company creates their own fee schedule, paying a fraction of the usual fees.  The physician has the choice of either accepting this paltry fee schedule, or opt out of the insurance system.  If the doctors accept the insurance fee schedule, they are faced with financial ruin, as the resulting income is insufficient to support a medical office.

Cut the Fees, and Increase the Volume

Sleight of hand_999If the physician accepts the insurance company skimpy fee schedule, the physician is faced with shrinking income.  The only remedy is to cut patient services by increasing volume to 60 patients a day, and by so doing,  profoundly change the quality and level of the practice of medicine.   Seeing sixty patients per day allows only 5-10 minutes per patient, making impossible a  true health care encounter.   Can a physician deliver ethically responsible health care in 5-10 minutes ?  I don’t think so.  You try it and let me know.

The result has been a lower quality of medical care, increasing malpractice litigation, a loss of confidence in the medical profession,  a loss of physician self-esteem,  and an unbearable economic burden on our nation.

Corporate Corruption of the Government

Tricks of the Trade_aaaThe exorbitant profits gleaned from denial of care to sick patients are put to good use by the health insurance industry.  The money is used to purchase the loyalty of the United States Congress, which then creates new legislation and new regulations favorable to the health insurance industry.

Prohibit Collective Bargaining by Physicians

For example, the health insurance lobby has secured federal legislation that prohibits physicians from forming  unions to negotiate their fees with the insurance industry.  This collective bargaining would have given the doctors the ability to negotiate from strength.  Instead,  doctors find themselves isolated, divided  and powerless against large insurance companies on an unequal playing field.

Massive  Political Contributions

Virtually every health insurance company hires lobbyists in Congress.  The health insurance industry is the largest political contributor, making frequent and massive political contributions to members of Congress.  Although this practice corrupts our democratic process, it is currently legal.  This is one reason we have not had a truly representative government in decades. Political payoffs from corporate special interests represent high corruption of government, and trades money for political influence and favorable legislation.  We need reform in government which means public financing of elections and a ban on special interest money.

Here is an excellent article by the  American Association of Justice on how the health insurance industry is ripping you off:  Tricks_Trade_Insurance_Companies_Deny_Delay_Confuse_Refuse

Once your Claim is Denied, What to Do Next ?  Appeal.

Here is a sample letter for sending in your appeal.


Links and Refernces:

How to Appeal a Health Insurance Denial


10 Tips for Appealing a Denied Health Insurance Claim
by Andrew Fitch on September 2, 2014 | posted in Health insurance, Medical Bills, Personal Health Finance

Profits Before People  11.24.14

Health insurance claim is denied. What now? By Chris Kissell •

Up to a quarter of claims are denied

A 2011 study by the U.S. Government Accountability Office found that claim denial rates vary significantly among states and health insurers. Of the small number of states tracking such information, denials ranged between 11 percent and 24 percent of claims.

My Insurance Company Killed Me, Despite Obamacare

Malcolm MacDougall, a prominent speechwriter and creative director, was diagnosed with prostate cancer earlier this year. Even after the passage of the Affordable Care Act, his insurance company delayed and denied cancer treatments despite MacDougall paying his premiums. This is his story, in his own words, written five days before he died.


How do national health insurers compare on denying claims? November 13, 2014

Susan Koerner, with the Hand and UpperEx Center in Pine Township, said a frustration she’s had with national insurers is when local offices “edit” the insurer’s national coding, overlaying their own coverage guidelines that end up superseding the national ones she had been following.

“There are no two insurers that are alike. Some will cover something and some will not,” she said. “That’s very frustrating from an office standpoint.”


Handling a claim denial

It’s not unusual for some claims to be denied or for insurers to say they will not cover a test, procedure, or service that your doctor ordered. The new health care law gives consumers more information and the right to appeal a claim denial. For example, an insurer must notify you in writing of a claim denial within 30 days after a claim is filed for medical services you’ve already gotten, and within 72 hours for urgent care cases.


Rocky Delgadillo, LA City Attorney, Modern Hero

Court Case Against Health Net  and Blue Cross of California

July 2008: Los Angeles City Attorney, Rocky Delgadillo filed suit against HealthNet and Blue Cross for engaging in unlawful and deceptive business acts and practices, which have led to the denying or delaying of authorization for thousands of health insurance claims or the rescinding of coverage after initially issuing a policy.

For decades, health insurers have gamed the system and reaped billions ,” said City Attorney Delgadillo.

“The time has come to pursue judicial law enforcement actions, and criminal prosecutions, to set things right.”

The Pre-Existing Condition Gimmick

A typical ploy the insurance company uses to cancel insurance coverage is the “pre-existing condition”. Los Angelos City Attorney Rocky Delgadillo said,

“This is an industry with a history of putting profits before people. Their practices are not only illegal, they are immoral and we are going to hold them accountable.”

In November 2006, state regulators fined the company $1 million for lying about its incentive program for reaching cancellation targets. Delgadillo is investigating individual employees who received bonuses based on canceling policies of people who had expensive medical bills. This is condidered criminal activity.(1)(2) A California State legislature introduced a new law last week that would prevent this abusive cancellation for pre-existing condition.(45)

July 15, 2006 UnitedHealthcare Settles Complaint and Pays $600,000 Fine.

“In what could be the largest penalty ever imposed by the state against a health insurer, UnitedHealthcare of Wisconsin and two affiliates will pay $600,000 for not adequately responding to consumer complaints and grievances, not paying for certain benefits, and other violations of state insurance regulations. This was part of a settlement reached with the Office of the Commissioner of Insurance in November.” (4) By Guy Boulton, The Milwaukee Journal Sentinel Jul. 15, 2006.

Read the consumer complaints here. (5)

Jan 9, 2007 Nebraska is not happy with United HealthCare, Pays Fine

Jan 9, 2007, “UnitedHealthCare Group violated 18 insurance laws hundreds of times during a review period, state insurance regulators say. Nebraska Insurance Department attorney Ann Frohman said that numerous complaints prompted a review of United HealthCare which revealed decision delays, wrong decisions about coverage and bad information given to consumers.”(3)
Sept 6, 2007 UnitedHealthcare will pay $12 million in penalties,

United HealthCare was forced to overhaul its claims handling practices under a settlement announced Thursday with 37 state insurance departments. Total penalties could rise to as much as $20 million if additional states join the agreement, UnitedHealthcare said.  The Minnetonka, Minn.-based unit of UnitedHealth Group had been under investigation by 37 state regulators following nationwide complaints about coordination of benefits, appeals and grievances, explanation of benefits letters, utilization review procedures and other areas of claims handling. Among other things, the investigations found numerous claims processing errors, such as not applying correct fee schedules and deductibles, according to a statement by the New York State Insurance Department….Under terms of the larger settlement, UnitedHealthcare will implement a national claims handling improvement plan and undergo collective monitoring of its market practices by the five states that led the investigations: New York, Iowa, Florida, Connecticut and Arkansas. The plan also establishes benchmarks for improving claims accuracy and timeliness, reviewing appeals and handling consumer complaints, with the possibility of additional penalties if it fails to meet those standards.” Quote credited to JoAnn Wojik Business Insurance(46)
New York Attorney General Andrew Cuomo, Modern Hero,

Goes After United HealthCare

February 13, 2008, New York Times: New York Attorney General Andrew Cuomo Announces Industry Wide Investigation into Health Insurer’s Fraudulent Re-Reimbursement Scheme for Out-of-Network Doctor Visits.

“Health Insurers such as United Healthcare have been systematically cheating patients and doctors of fair reimbursement for medical services through the industry’s arcane procedures for calculating “reasonable and customary” rates”, according to a New York Times editorial. (New York Times, 2/18). (6)

United HealthCare Corporate Profits Going Up (7)

Shares of UnitedHealth are up 563% for the five years ending 2004. Their CEO McGuire was given 1.6 billion dollars in stock options.(47) These obscene Corporate profits are maximized by rewarding employees for not paying medical claims. Another gimmick to increase profit at the expense of vulnerable Americans is the “Denial Engine”.

The simple solution is for the states to regulate the health insurance industry same way they regulate the public utilities. Some states are actually starting this process of regulation.  Lawmakers in several states are passing new laws which limit health insurers’ ability to cancel health policies for pre-existing conditions. (45)

Get  Help 

Toll Free Help Line to File a Complaint, Call for Help at the Florida State Dept of Insurance Toll-free Helpline,
8 a.m. to 5 p.m. M-F

Join with thousands of others who have filed complaints.
Make the Call. There is strength in numbers.

Contact Your State Insurance Commissioner and File a Complaint, the State Regulators will start a review.

Do you have a complaint about your insurance company? Call or write to your state insurance commissioner:

Florida Insurance Commissioner, Kevin M. McCarty
Commissioner of the Office of Insurance Regulation
Office of the Commissioner
200 East Gaines Street
Tallahassee, Florida 32399-0305

This is the Number to Call For Help:
Florida State Dept of Insurance Toll-free helpline,
8 a.m. to 5 p.m. M-F

Outside Florida? Use this handy map to find your insurance commissioner contact information for any state.(8)

Articles with Related interest:

Health Insurance CEO’s Rewarded for Denying Care

Jeffrey Dach MD
7450 Griffin Road
Suite 190
Davie Fl 33314

link to this article:


(1) 1 LA City Attorney Delgadillo Files Lawsuit Against Health Net Inc. February 21, 2008 KNBC TV LA

(2) LA Sues Health Net Over Cancellations, Los Angeles City Attorney Sues Insurer Health Net, Alleging Scheme to Cancel Policies

Jan 9, 2007 UnitedHealthCare Accused Of Breaking Insurance Law. WCCO Channel 4 TV

State fines health insurer $600,000, UnitedHealthcare settles complaint, By GUY BOULTON
July 14, 2006, Milwaukee Journal Sentinel


A typical complaint found here: <quote>They are the worst company I’ve ever had. They refuse to pay any of the claims, even though they recognize they absolutely have to and should cover those charges. I’ve spent hours on the phone with them for almost 3 months. At this point my company is dealing with them through their representative to resolve payments. It would be 10 times cheaper for me to just go to the doctor and pay whatever then pay them and now I have to pay the hospital too for whatever the reason is they can’t explain.. <endquote>

(6) deleted

Chart showing obscene profits of United Healthcare increasing every year. Shares of UnitedHealth are up 563% for the five years ending 2004, versus a 17% loss for the benchmark S&P 500.

TAKE CONTROL OF YOUR HEALTH, Fight for Your Health Care, By Lori Andrews Published: January 20, 2008 Parade

10) deleted

USA Today, UnitedHealth CEO McGuire, retires amid options scandal Updated 10/16/2006 9:13 AM ET

Tuesday, March 20, 2007 UnitedHealth Declares “The Health Care System Isn’t Healthy” – But Is the Company Part of the Problem?

Disputes with United HealthCare over payments

Uniterd HealthGroup Accused of Fraud

(15) Listing of News Stories on United Health Group


Andrew Cuomo to sue major health insurers By MICHAEL GORMLEY, Associated Press Writer
Wed Feb 13.

Business Week, February 21, 2008, Wrangling Over ‘Reasonable’ Fees, It’s a no-holds-barred battle between health insurers and hospitals, with customers caught in the middle. By Chad Terhune, with Brian Grow

Huffington Post, Falling in Love with Andrew Cuomo by Eve Gittelson Feb 14 2008.

New York Times, Andrew M. Cuomo, New York State attorney general, announced an inquiry into health insurance Wednesday. By REED ABELSON, February 14, 2008


UnitedHealth unit charged with fraud New York state says alleged practices left consumers shortchanged By Russ Britt, MarketWatch Feb. 13, 2008


Cuomo to Sue Biggest Health Insurer, Others to Receive Subpoenas Over Reimbursements, N.Y. Attorney General Andrew Cuomo says he will sue UnitedHealth over setting artificially low limits on how much patients are reimbursed for medical-care claims. (By Robert Caplin — Bloomberg News) Washington Post


UnitedHealth Draws Criticism for Its Out-of-Network Reimbursement Policies. I have posted a number of previous notes about UnitedHealth, particularly with regard to its punitive policies toward physicians for out-of-network lab testing.

(24) Confessions of a Pediatric Practice Consultant, True stories from the land of pediatric practice management. Andrew Cuomo, UnitedHealthCare: Duh. February 14, 2008 . Cuomo’s investigation also found a clear example of the scheme: United insurers knew most simple doctor visits cost $200, but claimed to their members the typical rate was only $77. The insurers then applied the contractual reimbursement rate of 80%, covering only $62 for a $200 bill, and leaving the patient to cover the $138 balance.

NPR Radio story on Andrew Cuomo And United Health

(26)  Health Insurer to Face CRIMINAL CHARGES by California Nurses Shum, Fri Feb 22, 2008 This could be the start of something huge. The sociopaths who run our nation’s health insurance corporations might–just might–begin to face justice for the countless Americans that have suffered at their hands.  Health Net, one of the largest insurers in the nation, is facing multiple civil and criminal charges for retroactive recissions, their habit of kicking people off the insurance rolls as soon as they get sick.This practice is not a coincidence–it’s at the heart of their business plan, in fact of the whole model of for-profit health insurance.  Los Angeles City Attorney Rocky Delgadillo was brave in standing up to the practice,and justified.  We need other activist prosecutors to follow his lead, and help turn the public disgust with insurance corporations into national momentum for replacing them with universal, non-profit guaranteed coverage…also known as single-payer healthcare.


L.A. sues insurer over cancellations, The city attorney says Health Net defrauded policyholders by dropping patients who needed costly care. By Lisa Girion, Los Angeles Times Staff Writer,February 21, 2008.

(28) File your health insurer complaint with LA City Attorney Delgadillo: “If you believe your health insurer has wrongfully denied or delayed your claim and/or canceled your coverage, we urge you to provide us with a description of your complaint. If you are a health care provider who has had payment withheld, payment delayed or has been retroactively denied payment for services rendered under a health plan or insurance policy.”


California Nurses Association. Submit Your Story Web Site. Are you getting the healthcare you need, when you need it, at a price you can afford? Nearly 48 million Americans have no health insurance at all and nearly 50 million more are under insured with high deductibles and co-pays discouraging them from seeking the care they need in the preventative stages. We’ve created this form to collect your stories, which may be used on our websites, in the news, to educate the public, and/or at legislative hearings.

(30) N.Y. Attorney General Investigation Highlights Problems In Navigating Out-of-Network Charges


Legislation would crack down on insurers. Victoria Colliver, San Fransisco Chronicle Staff Writer, Thursday, February 14, 2008.  A California lawmaker introduced legislation Wednesday that would require health insurers to get permission from state regulators before retroactively canceling a member’s coverage. The bill, introduced by Assemblyman Hector De La Torre, D-South Gate (Los Angeles County), comes on the heels of news this week that Blue Cross of California had been sending letters to doctors asking them to report pre-existing conditions and discrepancies that could be used to cancel a new member’s policy.

Clinton Health Care Proposal called Managed Competition (Jan 1994) starts on page 6 of document.
Under managed competition, all doctors and other caregivers will be under the administrative
thumb of six or eight immense, for-profit insurance companies,which will have gobbled up hundreds of smaller insurers.



Florida State Office of Insurance Regulation. The Office serves Floridians through its responsibilities for regulation, compliance and enforcement of statutes related to the business of insurance.

A Consumer Guide to Handling Disputes with Your Health Plan or Insurance Carrier – Kaiser

(36) Making Them Pay: How to Get the Most from Health Insurance and Managed Care by Rhonda Orin “It’s time to get down to business-and that means learning the nuts and bolts of health plans…”

(37) The Book, Fight Back and Win: How to Get HMOs and Health Insurance to Pay Up by William Shernoff , Lawyer who won 9 million dollar settlement from Helath Net last week.

(38) Advocacy for Patients with Chronic Illnesses, Jennifer C. Jaff attorney and founder of Advocacy for Patients with Chronic Illness, Inc., a tax-exempt organization that provides free information, advice and advocacy services to patients with chronic illnesses

(39) deleted

(40) Law Firm of William Shernoff

Insurer fined $9M for dropping cancer patient. Cancellation had left woman with more than $129,000 in unpaid bills.  Insurance company pays up. Feb. 23: A woman battling breast cancer had her policy cancelled during her treatment. NBC’s Chris Jansing reports that action is costing the insurance company dearly.Associated Press.

LOS ANGELES – A woman who had her medical coverage canceled as she was undergoing treatment for breast cancer has been awarded more than $9 million in a case against one of California’s largest health insurers.  Patsy Bates, 52, a hairdresser from Lakewood, had been left with more than $129,000 in unpaid medical bills when Health Net Inc. canceled her policy in 2004. On Friday, arbitration judge Sam Cianchetti ordered Health Net to repay that amount while providing $8.4 million in punitive damages and $750,000 for emotional distress.

(42)  Florida State Division of Consumer Services, Medical Provider Informational Memorandum Attention: Florida Medical Providers Assistance, Complaints, Inquiries, online inquiry form.  The state regulatory agency with file inquiry with the insurance company.


February 14, 2008, NY AG on UnitedHealth Database: Garbage In, Garbage Out Posted by Dan Slater , New York Times


What is a Denial Engine? That’s the computer software that denies your claim.  Read more here:
Denial Engine Vendor Ingenix Keeps more than Usual and Customary Dollars. In my warnings to providers about denial engines — those sophisticated analytics tools that payers are increasingly using to reduce, deny, or re-collect claims payments — I try to emphasize that they can be used ethically.

States act to protect individual health insurance coverage, By Julie Appleby, USA TODAY 2/21/08

(46)  UnitedHealthcare settles claims dispute, Sept. 06, 2007 By Joanne Wojcik, NEW YORK—UnitedHealthcare will pay $12 million in penalties and overhaul its claims handling practices under a settlement announced Thursday with 37 state insurance departments. Total penalties could rise to as much as $20 million if additional states join the agreement, UnitedHealthcare said.

The Minnetonka, Minn.-based unit of UnitedHealth Group investigation by 37 state regulators following nationwide complaints about coordination of benefits, appeals and grievances, explanation of benefits letters, utilization review procedures and other areas of claims handling. There were numerous claims processing errors, such as not applying correct fee schedules and deductibles, according to the New York State Insurance Department.

(47)  McGuire, the longtime chief executive of UnitedHealth Group Inc., who worked hard to turn the Group into a behemoth in its field, was forced yesterday to resign from the company and to give up a portion of the $1.1 billion he holds in severely criticized stock options. The options that McGuire had been granted over the years have led to criminal and civil investigations and public disapproval.

Link to this article:

Jeffrey Dach MD
7450 Griffin Road, Suite 190
Davie, Fl 33314
Serving Areas of: Hollywood, Aventura, Miami, Fort Lauderdale, Pembroke Pines, Miramar, Davie, Coral Springs, Cooper City, Sunshine Ranches, Hallandale, Surfside, Miami Beach, Sunny Isles, Normandy Isles, Coral Gables, Hialeah, Golden Beach ,Kendall,sunrise, coral springs, parkland,pompano, boca raton, palm beach, weston, dania beach, tamarac, oakland park, boynton beach, delray,lake worth,wellington,plantation

Last updated on by Jeffrey Dach MD

Making Your Health Insurance Company Pay Up
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Making Your Health Insurance Company Pay Up
How to make your health Insurance company pay your claim.
Jeffrey Dach MD
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