Why do health insurance companies take so long to pay out?

PR Newswire

Doug Terry explains When will my health insurance payout?

EDMOND, Okla., Oct. 19, 2023 /PRNewswire/ -- Health insurance companies frequently delay payments on valid claims in order to boost their own profits, according to Doug Terry Law, a law firm specializing in health insurance law.

"Health insurers have a fiduciary duty to their customers to process claims in a timely manner," said Doug Terry, founder of Doug Terry Law. "Yet we often see insurers stall payments for months through repetitive requests for unnecessary medical records and other documents."

This tactic, known as "delay, deny, and defend," allows insurers to hold onto money that should go toward customers' medical bills. The firms invest these funds and earn interest during the delay period. A single delayed claim of $50,000 could generate $2,500 in interest over 3 months. Multiply that across thousands of customers and millions of claims, and the profits add up quickly.

"Health insurance companies should not benefit financially from delaying access to care or delaying payments for their members," Terry said. "It's unethical and can have serious consequences on people's health and financial well-being.

Terry advised customers of health insurance companies to be on alert for improper denials or delays of their claims. Some warning signs include:

Requests for the same medical records multiple times. Insurers often ask for records they already have as a stalling tactic.
Denials due to "lack of medical necessity" without a clear explanation. This is a common excuse used when there is no legitimate reason to deny a claim.
Long lag times between claim submission, requests for more information, and final determination. Most claims should be processed within 30 to 60 days. Anything longer is a red flag.
Pressure to accept less than the full amount owed. Insurers may offer a reduced payout to settle the claim and avoid paying the remaining balance. Customers should insist on the full, correct amount.

If faced with any of these situations, Terry recommended consulting with a health insurance attorney to determine appropriate next steps, which could include filing an appeal with the insurance commissioner or pursuing legal action. No one should have to fight their insurance company to access the benefits they've paid for, Terry said. But when that fight becomes necessary, customers have advocates and legal protections on their side.

About Doug Terry Law:
After 25 years practicing in a larger firm, Doug Terry chose to open his own practice in Oklahoma. He brings his wealth of knowledge and his skills as a litigator to bear for his clients in matters of insurance bad faith, personal injury cases, and class actions.

Doug has the distinction of being awarded a Martindale-Hubbell "AV Preeminent" rating from his peers in the legal community. He has also been selected as an Oklahoma Super Lawyer.

If you've been wrongfully denied by your insurance company for a legitimate claim, then your insurer may have acted in bad faith. You don't have to accept an insurance company's decision. Contact Doug at 405-463-6362 and speak to an advocate who will set things right.

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