CareFirst Insurance Reimbursement Denial Class Action

Few US consumers understand the complicated terms of their health insurance policies. Plaintiff Richard Ades believed he understood his, but the insurance company disagreed.

According to the complaint for this class action, Richard Ades purchased a PPO health insurance policy that covered himself and his family from GHMS, a subsidiary of CareFirst, Inc. During the term of the policy, the complaint says, an orthodontist recommended that Ades’s minor son see a surgeon who could deal with the complicated surgery needed for the boy’s sleep apnea. 

The complaint says that the policy distinguishes between Preferred Providers, those who have “contracted with CareFirst to provide Covered Services,” and Non-Preferred Providers, those who do “not contract with CareFirst to provide Covered Services.” According to the complaint, Non-Preferred Providers are not under obligation to see CareFirst patients and they can charge them whatever they deem reasonable, while Preferred Providers have an agreement with CareFirst as to what services are covered and what amount CareFirst will pay for them.

The complaint quotes from Ades’s policy, which allegedly says that the payment, or “Allowed Benefit,” for Non-Preferred Providers who provide Covered Services will not be less than for similarly licensed Preferred Providers in the same geographic region, and it also states that CareFirst will pay the Allowed Benefit and the policy holder will pay the “Balance Bill.” The Balance Bill is defined as the difference between the Allowed Benefit and what a Non-Preferred Provider actually charges for a Covered Service.

According to the complaint, Mr. Ades chose Non-Preferred Providers for both the surgeon and assistant surgeon, paid them in advance, and sought reimbursement according to the terms of his policy. However, the complaint says, the reimbursement was less than it should have been. The complaint claims that CareFirst reimbursed Mr. Ades based not on the Allowed Benefits but on reductions in the Allowed Benefits it had negotiated with Preferred Providers, with reductions of 50% to 80% in some of the line items in the bills. These reductions are part of a Provider Manual with is not incorporated into Mr. Ades’s policy and therefore, the complaint states, not part of CareFirst’s contract with him.

The complaint therefore alleges that CareFirst is guilty of breach of contract because it is not abiding by the terms it agreed to in the policy for Mr. Ades’s family.

The class for this action include all persons who purchased a policy from CareFirst or GHMS, between June 6, 2014 and June 6, 2017, who received care from a Non-Preferred Provider for a Covered Service, and who were reimbursed based on the terms of the Provider Manual and not the terms of their policies.

Article Type: Lawsuit
Topic: Consumer
Tags: Deceptive Insurance Practices, Incomplete payment of benefits due