When insurers fail to pay, legal action may be worth considering

April 19, 2013

When insurers fail to pay, legal action may be worth considering

Article provided by The Stevenson Law Firm, PC
Visit us at http://www.texashealthlawattorney.com

Suing an insurance company for nonpayment can seem like a daunting proposition, but in some cases it can be more effective than many Texas health care providers may expect. As opposed to haggling with internal administrators at the insurance company, taking an insurer to court can often be a faster -- and fairer -- way to secure payment for treatments provided. The key to success when suing an insurer over payment issues is in knowing when to take action and how to build a strong case.

Deciding when to sue an insurer

One issue to consider when weighing the possibility of suing an insurance company over payment issues in Texas is the amount of money at stake; generally speaking, the higher the disputed amount, the more sense it makes to pursue legal action.

In some cases, however, it may be worth going to court even over a relatively small sum. This is especially true in situations involving a repeated pattern of nonpayment by an insurer. While the individual amounts may be small, the cumulative effects of systematic nonpayment by an insurer can have a major financial impact on providers. In these cases, it is important for doctors to consider the long-term consequences of nonpayment as well as the immediate effects.

Contract may limit the right to sue

Going to court is rarely the first step that a doctor should take when payment issues arise. If a dispute cannot be resolved by working with a lower-level claims administrator, it is often worth taking the issue up with someone who has more authority within the organization. If contacting a higher representative of the insurer is unsuccessful, it may be time to consider taking legal action.

When attempting to resolve insurance payment issues, Texas doctors should be aware of any contractual provisions that may limit their right to seek payment through the court system. Many contracts contain arbitration clauses that require disputes to be resolved through binding arbitration. Because arbitrated resolutions are generally final, and are not bound by the same rules of evidence and fairness as the courts, it is often wise to seek representation from an attorney when seeking to settle a payment dispute through arbitration.

Building a strong case
In order to build a strong case for payment, whether in arbitration or in court, a doctor must present credible, relevant evidence that the charges billed are reasonable. Among other things, this involves thoroughly documenting the treatments provided and compiling information about the rates charged by similarly qualified practitioners for the same treatments.

In Texas, doctors may be eligible for additional payments according to the state's prompt payment law, which requires insurers to pay damages if they unreasonably delay payment after receiving all necessary forms and materials. Texas physicians considering legal action against an insurer over payment issues should contact an attorney for a thorough discussion of the options and for assistance building a strong case.