Dean Health Plan, a Madison-based HMO, has settled a lawsuit alleging wrongful denial of an insurance claim (Watch Out!, 6/24/10). Andrew Erlandson, a local attorney who filed the suit on behalf of Joe "Kay," says the insurer agreed to pay $3,250, several times more than the $646 it initially refused to pay.
"He'll get the claim plus interest, and [our law firm will] get the rest," says Erlandson of the settlement. He adds that Kay rejected Dean's request to keep the settlement's terms confidential.
Kay's story came to light in an Isthmus article about the state Office of the Commissioner of Insurance ("Unable to Resolve Your Complaint," 10/22/09). Kay complained that Dean refused to pay the cost of stitches when he went to the emergency room with a cut hand, deeming this an "ancillary" service - which is, on its face, ridiculous. OCI, a state agency funded entirely by the insurance industry it supposedly regulates, did not challenge Dean's denial or even insist that it provide a clear explanation. (Dean has refused to discuss the case with Isthmus, citing patient confidentiality rules.)
Erlandson says he's baffled by OCI's role: "I don't get it." How can state regulators wink at a coverage denial this dubious? Eileen Mallow, OCI's assistant deputy commissioner, puts it like this:
"[W]here contract language is ambiguous and not a direct violation of state law, OCI has been given limited ability by the Legislature to intervene. In those circumstances, we provide the consumer with information on how to further press their claim, including their right to pursue a claim through the court system."
Erlandson makes a similar point, suggesting OCI is "a necessary but ultimately fruitless step in the process" of holding insurers accountable, but "not the end of the story."
In other words, don't expect the state to help you; get a lawyer.