The complaint for this class action claims that insurer USAA hired another company to “review” medical claims submitted to it for Med Pay benefits and that that company used unfair systems to refuse, reduce, or deny claims for benefits for injured people.
The class for this action is
- All Montana consumers,
- Who were insured by USA for Med Pay benefits, and
- Who submitted a claim for Med Pay Benefits within the applicable statute of limitations, and
- Who had their claim processed by AIS, resulting in any rejection or reduction or delay.
“Med Pay” benefits are a form of first-party medical insurance that pays for medical expenses when an insured is in an accident, regardless of who is at fault. The complaint alleges that USAA has the obligation to make a reasonable investigation, make coverage decisions, and pay for medical expenses of insureds in covered accidents, but that it has instead given the work to Auto Injury Solutions, Inc. (AIS), a company which the complaint alleges does not do so fairly.
The complaint alleges that AIS does not make a reasonable investigation of claims, and that it uses an automated computer-based system to deny as many claims as possible, without requiring the human investigation or review that the complaint claims is required under Montana law. In fact, the complaint claims that insureds are told to submit their claims and any appeals directly to AIS, not to USAA.
When AIS receives a claim, it first sends it through a Medical Bill Audit which the complaint claims takes place largely through automated computer processes and which it claims uses “coding errors, sham medical necessity reviews, and confidential statistical information, rather than the individual character of health care services required by an insured and their related expenses.”
The complaint claims that the medical review reports generated by AIS, supposedly created by doctors and nurses, are without basis and contrary to the health treatment plans of the insureds.
To determine the amounts that should be paid for medical care, the complaint claims that AIS uses a software program that makes two kinds of reductions. First, it “uniformly, unilaterally, and arbitrarily” reduces the amounts based on a determination that the billed amounts are “unreasonable,” based on confidential data of its own for the region. Second, it uses databases of rates for preferred provider organizations (PPOs) and preferred provider networks (PPNs) to set allowable rates, even though USAA has no PPO or PPN networks that would charge such low rates.
AIS is allowed to deny claims on USAA’s behalf without any input from USAA, the complaint alleges, and it also claims that USAA’s payment structure gives AIS incentive to reduce reimbursements by paying AIS a percentage of the savings from its reductions and denials.
All of this, the complaint claims, constitutes breaches of contract and fiduciary duty, as well as unfair trade practices.
Article Type: LawsuitTopic: Consumer
Most Recent Case Event
USAA Denial/Reduction of Med Pay Insurance Benefits Montana Complaint
November 17, 2017
The complaint for this class action claims that insurer USAA hired another company to “review” medical claims submitted to it for Med Pay benefits and that that company used unfair systems to refuse, reduce, or deny claims for benefits for injured people. Some of the bills, the complaint contends, are refused via “coding errors, sham medical necessity reviews, and confidential statistical information, rather than the individual character of health care services required by an insured and their related expenses.” For other ones, the complaint claims that payment amounts are reduced by declaring them “unreasonable” or applying PPO or PPN treatment rates that do not apply to the insureds’ medical providers.
usaa_first_party_medical_insuance_complaint.pdfCase Event History
USAA Denial/Reduction of Med Pay Insurance Benefits Montana Complaint
November 17, 2017
The complaint for this class action claims that insurer USAA hired another company to “review” medical claims submitted to it for Med Pay benefits and that that company used unfair systems to refuse, reduce, or deny claims for benefits for injured people. Some of the bills, the complaint contends, are refused via “coding errors, sham medical necessity reviews, and confidential statistical information, rather than the individual character of health care services required by an insured and their related expenses.” For other ones, the complaint claims that payment amounts are reduced by declaring them “unreasonable” or applying PPO or PPN treatment rates that do not apply to the insureds’ medical providers.
usaa_first_party_medical_insuance_complaint.pdf