Med-Pay is suppose to be an easy way to get medical bills paid when someone is injured in an automobile accident. As most insurance lawyers can tell you, that is not always the case. The San Antonio Express-News published an article on January 6, 2016, dealing with the way USAA, based in San Antonio, treats its customers when it comes to Med-Pay benefits in their policies. The article is titled, Med Pay Lawsuits Dog USAA.
San Antonio’s USAA continues to be dogged by lawsuits that allege it uses a “cost containment scheme” to delay, deny or reduce medical payouts to customers injured in auto accidents.
USAA has been vigorously defending such cases for more than a decade, though the number of lawsuits couldn’t be determined.
Just last week, a Montana judge certified a class-action lawsuit brought by two individuals who charge the insurer delayed or denied medical payments. The size of the class could number 154 Montana residents or more.
USAA spokesman Roger Wildermuth said it disagrees with the ruling and is appealing to the Montana Supreme Court. The merits of the plaintiffs’ claims have yet to be decided.
In September, USAA agreed to pay up to about $4.2 million to settle a class-action lawsuit brought by three Washington state health care providers and a USAA member who was injured in an auto accident. They alleged USAA failed to pay the full amount of medical bills submitted for payment under the personal injury protection coverages on automobile insurance policies. In settling, USAA denied the allegations and said it did not do anything wrong.
Another lawsuit was filed in October in Tampa, Florida. That suit seeks class-action certification.
In prior years, similar suits were filed against USAA in Arizona, Illinois, Oklahoma and Oregon. Those were either settled or dismissed.
John Heenan, a lawyer in the Montana case, said it’s part of USAA’s business strategy to deny or pay less than it owes on claims.
“It goes right to the bottom line,” Heenan said. “That’s a good business model if an insurance company can collect people’s premiums, not pay claims and keep all the money.”
In an emailed statement, Wildermuth said, “USAA employs its Medical Bill Audit tool to preserve member benefits by identifying medical charges that are excessively high, duplicative of other charges and possibly unrelated to a particular accident. By identifying billing inaccuracies and other inappropriate charges, this also helps prevent fraud.
“USAA takes allegations attacking this tool seriously, and we will continue to defend it when challenged,” he added.
Heenan was critical of USAA’s process.
“Lord knows how many of these (claim) reviews they do in a day, (and then) second-guess the treating doctor and say it’s either not medically necessary or it’s causally related to the accident,” Heenan said.
A handful of USAA members have gone to the company’s website to express their frustration with not getting reimbursed for medical payments.
In a February posting, a member complained after being in a three-car accident. USAA reimbursed her for her totaled car but not for her medical bills, she wrote.
“I submitted medical bills for almost $800.00 and have another $1,400.00 that I paid out of pocket (and still counting) and have not been paid one penny and this has been going on for 3 months now,” the woman said. “My husband and I have been USAA members for 25 years and have always been pleased with them, that is until now. What good is MED PAY if you are denied the use of it when you need it? SHAME ON USAA!”
One of Heenan’s clients, Peter Byorth, suffered a spinal injury after being struck by a car while riding his bike. His medical bills, lost wages, and pain and suffering totaled “hundreds of thousands,” Heenan said.
The driver’s insurer immediately cut a $100,000 check to Byorth, but USAA “dink and dunked with him for months” before paying him the $10,000 limit on his coverage for medical payments, Heenan said.
Byorth had to hire an attorney and file a complaint with the Montana insurance commissioner before he got paid, Heenan added.
Even after USAA paid the claim, Byorth continued to receive form letters from USAA informing him that his claim had been denied, Heenan said.
The Montana lawsuit accuses USAA of breach of contract and with violating Montana’s Unfair Trade Practices Act. USAA has denied the allegations in a response filed with the court.
USAA has more than 11 million customers, comprising military members and veterans, and their spouses.
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