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Bad Faith in Health Insurance Claims




The runaround from your insurer is exactly what you don’t need when you’re in poor enough health to be filing a health insurance claim. For many people expecting to get benefits to help them through a sickness, injury, or disability, however, the runaround is exactly what they get. The insurer denies the claim, or doesn’t respond to the claim, or decides that the amount due under the policy is considerably less than what you have claimed. In the mean time, your finances are shot, you can’t get the medical or rehabilitation services you need, and your life is spinning out of control with anxiety and dread. In the worst case, your life may literally be on the line, waiting for the treatment you need to survive.

What can you do? If there doesn’t seem to be a reasonable basis to your insurer’s actions, you can get the help of an Arizona bad faith health insurance claim attorney who understands the fine points of health insurance law and will assist you in charging the insurance company with bad faith and violating their obligation to deal with you reasonably and fairly. The insurer can’t legally cater to its own financial interests and ignore your legitimate interest in getting the insurance benefits you’ve already paid for.

Why Choose Us?

The Surrano Law Offices has decades of experience helping claimants with delayed, denied, or significantly underpaid health insurance claims. Insurance bad faith is the only type of law we practice. That gives us the specialization, commitment, and experience to boost the odds of success for your claim.

  • We are highly effective litigators. We have a long track record of high settlements and verdicts throughout the United States.
  • We understand your financial hardship. We can establish a legal fee arrangement that works for you – including a contingency fee contract.
  • We offer free consultations at our local Scottsdale law office. We will answer your questions and analyze your case at no cost or obligation.

Charles Surrano, our lead attorney, spent years on the other side of the insurance industry. He understands the unethical tactics insurance companies use to save money, and can put this knowledge to use for you. Let our law office review your case for free today at (602) 264-1077.

How Can an Attorney Help?

A health insurance bad faith claim can feel like a David and Goliath situation. Health insurance companies are huge and have extensive resources to fight your claim. You may not know where to begin or how to make your voice heard. Hiring an attorney levels the playing field. Help from a lawyer can protect your rights. An attorney can investigate your claim, help you understand the terms of your insurance contract, and establish a legal foundation for your bad faith argument. You can focus on healing from your injury or illness while your lawyer forces a health insurance company to deal with your claim fairly.

What Are My Rights When an Insurance Company Acts in Bad Faith?

It is your right to expect an insurance company to handle your claim reasonably and in good faith. Good faith refers to how an ordinary and prudent health insurance company would handle your claim in the same or similar circumstances. Good faith is the standard of care all insurance companies owe their policyholders. It means the insurance provider must process your claim fairly, honestly and with the good faith belief that it is following all applicable laws and standards of care for your situation. Any breach of this duty could constitute insurance bad faith.

If a health insurance company acts in bad faith during your claim, you have the right to speak out. You – with help from your attorney – can hold the insurance company accountable for its actions and any potential wrongdoing. Bad faith is not something you have to tolerate as a policyholder. You have the legal right to demand good faith from the insurance company through one or more outlets. Once you receive a denial letter or another sign of bad faith, contact the insurance company and ask for an explanation. If you believe the insurer is not handling your claim fairly or within the parameters of your policy, say so. The insurance provider may change the way it handles your claim after you file your complaint.

Many health insurance companies do not take claimants’ demands seriously until they hire bad faith attorneys. The health insurance claims adjuster may assume you will back down, or that you do not fully understand your rights. When you hire a lawyer, it proves otherwise. It shows you are serious about demanding good faith practices. A lawyer can force your health insurance company to reevaluate your claim by filing an appeal on the decision. Your lawyer may then be able to negotiate a fairer settlement with the insurance provider out of court. If not, your lawyer can take the provider to court in a bad faith lawsuit to demand fair compensation. You have the right to file a lawsuit against an insurance provider for bad faith, if necessary.

A Bad Faith Filing Gets the Insurer’s Attention

The threat of a bad faith claim may itself be enough to get the insurer’s attention and change its attitude. Faced with the additional damages that a bad faith claim entails, the insurer may suddenly find lost paperwork, realize that the claim really is worth more than it originally said, or rethink its conclusion that you’re no longer entitled to disability benefits.

If they still fail to respond reasonably, a successful bad faith claim may produce damages far in excess of what you originally claimed under the policy. In some cases, you might be able to recover punitive damages and attorney fees, not to mention some compensation for that anxiety and emotional distress that dominated your life while you waited for the insurer to pay your claim.

What Amounts to Bad Faith in Handling Health Insurance Claims?

There is no limit to the number and type of actions that a health insurer can take that may amount to bad faith. The key is whether the insurer is acting legitimately—in good faith—or is simply abusing its superior position to minimize the amount of money it pays out on the claim. One common example of  insurance bad faith is the insurer using your dire need to coerce you into accepting less money than is actually due under the policy.

Another is to terminate disability benefits based on a determination that you are suddenly able to work again, despite there being no real evidence that you have suddenly become employable. From an insurer’s perspective, if you don’t object when it terminates your benefits, the insurer comes out ahead.

“Post-claim underwriting” is another common tactic for avoiding claims. Rather than investigating your application thoroughly before issuing the policy, the insurer may wait until a claim is filed then examine your application, looking for grounds to void the policy, for example by claiming a pre-existing condition that wasn’t disclosed on the application.

In medical insurance, many an insured has been told by the insurance company that it won’t pay for a treatment that the insured’s own doctors have recommended because the treatment isn’t “medically necessary.” How was that decision made? Who made it? What factors were considered and why? An experienced bad faith attorney knows where the answers to those questions reside, and how to bring them to light.

How to File a Health Insurance Bad Faith Claim in Arizona

If you suspect your health insurance company of bad faith, take steps to protect your rights. The Arizona courts give you permission to file a claim for monetary damages if you can prove that your health insurer is acting unreasonably, and that the insurance company knew of this fact yet failed to correct its conduct. First, start building your case on your own. Compile a folder with all the correspondence between you and the insurance company. Keep copies of letters, emails, and descriptions of phone conversations. You should also document your medical history by keeping copies of related bills, treatments, and prescriptions.

Then, scan all your documents in so you have digital files on your computer. You will need digital versions of your health insurance company correspondence to file an official complaint with the Arizona Department of Insurance. Use the department’s website to file your complaint. Give details of what you are experiencing and attach all related documents for the department to review. The Department of Insurance will look at the details of your claim and may take over your health insurance correspondence from there.

If the Department of Insurance believes your health insurer is not treating you fairly, it can issue a demand for corrective action. Your health insurance company may at this point change the way it has been treating you or dealing with your claim. While this can resolve your insurance issue, it may not give you compensation for bad faith. The Department of Insurance cannot act as your legal representation or help you file a civil claim for damages.

If you wish to obtain financial compensation for the amount your initial health insurance claim should have been worth, get help from an attorney. The lawyers at Surrano Law Offices can represent you during a civil lawsuit in Scottsdale. We can file your bad faith legal claim, help you prove the insurance company’s wrongdoing using any available evidence, and argue for your right to fair recovery. You could receive payment for your medical bills and lost wages, as well as other damages. You have two years from the date of the bad faith act to file your claim.

What Is the Time Limit for Filing a Claim?

Every type of civil claim in Arizona comes with a deadline to file, or a statute of limitations. Arizona’s statute of limitations on most personal injury and insurance bad faith claims is two years. In general, you will have two years from the date of the health insurance company’s wrongdoing to bring a claim. If you fail to meet this deadline, the courts will almost certainly deny your right to file at all. An important exception, however, is the discovery rule.

The discovery rule states a statute of limitations may toll, or extend, to the date the plaintiff discovered his or her injuries, even if that date differs from the date of the actual wrongdoing. In a health insurance bad faith claim, case precedence establishes the courts will allow the statute of limitations to begin on the date the plaintiff received a letter of coverage denial, rather than the date the insurance company allegedly began taking advantage of the insured person. You may, therefore, have two years from the date you received a denial letter to bring a health insurance bad faith claim.

Insurance bad faith claims are unique, however, in that the insurance company may have a policy in place that enforces a different deadline than the statewide statute of limitations. Health insurance companies have the right to impose unique deadlines. If your health insurance company has a deadline for filing a bad faith claim in its contract, you must follow this time limit rather than Arizona’s statute of limitations. In many cases, a policy-incorporated deadline is one year from the date of receiving a denial letter or encountering other forms of potential bad faith. Work with an attorney to understand the deadline for filing your specific claim.

Getting Legal Help is the First Step

None of these practices are new or mysterious to us at the Surrano Law Offices. We’ve encountered them already in our decades of successfully protecting the rights of people under their health insurance policies. Call us today and tell us what has happened so far, and we’ll explain what we can do. It isn’t a fair fight between you and a huge insurance company. Level the playing field by bringing Surrano Law on board for claims in Arizona and nationwide.