Delay in Paying Claim

Texas Laws On Health Insurance And Billing By Health Care Provider

October 15, 2009 | Mark S. Humphreys

Did you know that there is a law in Texas which requires a health care service provider to bill the patient or other responsible person for services, not later than the first day of the 11th month after the date the services are provided. This law is found in the Texas Civil Practices & Remedies Code, Section 146.002.

Whether a patient receives care at a hospital or clinic in Dallas, Texas, or in Arlington, Grand Prairie, Weatherford, or anywhere else in Texas, the health care service provider is required to bill the patient or the issuer of health benefits plan for services within the time frame set out above. An exception would be the unlikely event that the contract between the health care provider service provider and the health care insurer provide a longer time to submit the bill for services. It is an unlikely for this exception to exist because from a practicle standpoint, no health care service provider is going to sign a contract requiring them to wait longer than 11 months before getting paid.

If the health care service provider is required to directly bill the third party payor who is operating under State or Federal law, including Medicare and Medicaid, the requirement is the same as stated above.

Penalties And Punishments For Texas Insurance Companies Who Do Wrong

October 7, 2009 | Mark S. Humphreys

Texas insurance companies are regulated by the Texas Department of Insurance. The written laws for most insurance companies are found in the Texas Insurance Code. These laws and regulations apply to all insurance companies in Texas. So whether the company is located or does business in Dallas, Fort Worth, Arlington, Irving, Grand Prairie, Carrollton, Mesquite, Weatherford, Granbury, or anywhere else in the State of Texas the same laws and regulations apply to the insurance company.

The worst acts of insurance companies may be criminal in nature, but the majority are violations of civil laws and statutes, and what are being addressed in this writing. Violations of these civil laws and statutes may result in fines to the companies and issuance of cease and desist orders, and revocation of licenses or suspensions of insurance licenses. Most of the penalties just mentioned are enforced through the Texas Department of Insurance or the Texas Attorney Generals Office.

The recourse for insureds against their own insurance companies for violations to them personally, are addressed in different parts of the Insurance Code and depend on exactly which statute the insurance company violated. Punishment for violations of Insurance Code, Chapter 541 are found in Section 541.152. Here, the plaintiff who prevails in their cause of action may obtain: 1) the amount of actual damages to the plaintiff, plus court costs and reasonable and necessary attorney’s fees, and 2) any other relief the court determines is proper. What is important here and in other statutes that allow for the recovery of attorneys fees, is that if your cause is just and right, that at the end of your case, you can recover your court costs and attorneys fees. This is also why it is important to seek an experienced Insurance Law Attorney so that they can inform you whether you have a case worth pursueing.

What If A Texas Insurance Company Does You Wrong

October 5, 2009 | Mark S. Humphreys

The recourse that a Texas insurance policy holder has against their insurance company depends on exactly what it is that the insurance company does that is wrong or illegal. The types of wrong that can be committed by insurance companies are too numerous to mention all of them here. However, there are a few wrongs committed by insurance companies that policy holders should be aware of when dealing with their insurance agent or the insurance company.

Again, keep in mind that there are many wrongs that can be committed by an insurance company. The most wrongs that can be found without reading all the laws related to insurance can be found in the Texas Insurance Code Section 541.051, Section 541.060 and Section 542.003.

These Sections are appropriately found in Subtitle C of the Texas Insurance Code which is titled “Deceptive, Unfair, And Prohibited Practices”. Section 541.051 is in Chapter 541 and titled “Unfair Methods Of Competition And Unfair Or Deceptive Acts or Practices”.

Texas Bad Faith Insurance Laws / Deceptive Trade Practices Act

September 29, 2009 | Mark S. Humphreys

The Texas Department of Insurance has the authority to punish insurance companies and agents who commit wrongs. The punishment can be fines or in some cases “cease and desist” orders are issued.

When an insurance company or one of their agents commits a violation of the Texas Insurance Code, the person who sustains actual damages may bring an action for those damages caused by the person or company engaging in the wrongful action. Section 541.151 of the Texas Insurance Code allows for this private cause of action. Any violation of Subchapter B, defined to be an unfair method of competition or unfair or deceptive act or practice in the business of insurance, or Section 17.46(b) of the Texas Business & Commerce Code, may bring this private cause of action against the insurance company or its agent.

A person who prevails in their claim against the insurance company or its agent may obtain the amount of actual damages plus court costs and reasonable and necessary attorneys’ fees, plus any other relief the court determines is proper. If the insurance company is found to have knowingly committed the act complained of, the judge or jury may award an amount up to three times the amount of actual damages.

Duty To Cooperate Under Texas Insurance Law

September 4, 2009 | Mark S. Humphreys

Before discussing the topic of this writing, a little side note. When suing insurance companies, they of course do not want to be sued, but when that happens they prefer to fight their battles in Federal Court rather than State Court. The Plaintiffs, who are the people usually suing the insurance companies would prefer to be in State Court. There are many reasons for this but what is important to know is, one, only an experienced Insurance Law Attorney fully understand what was just said and, two, only an experienced Insurance Law Attorney knows ways of preventing an insurance lawsuit from being removed to Federal Court, if it can be done.

Texas Insurance Law requires that the insured person cooperate with their insurance company when the company is investigating a claim. This is true whether the claim is being made by the insured person against their insurance company for benefits or the claim is being made against the insured person by a third party. The reasoning for this is not difficult. The insurance company needs to know what happened so that they can evaluate the claim being made. An obvious example of the insurance refusing to pay on a claim is found in a recent Federal Court case, State Farm Lloyds vs. Tony Ray Brown.

In Brown, the insured, Brown, had shot another person in the face. Brown would not cooperate with his insurance company in any way when he was sued for the shooting. He did not turn the lawsuit papers over to his insurance company, he did not cooperate with their investigation as to the shooting being an accident or deliberate, he did not cooperate with the insurance company’s efforts to determine if the victim had done anything wrong in causing or contributing to the shooting. Brown simply did nothing. The only thing the insurance company knew about the incident was what the victim and the victims lawyers said. This case was a blatant “lack of cooperation” and thus the Court voided the insurance coverage.

How Do I Know What My Rights Are In Texas With My Insurance Policy?

August 31, 2009 | Mark S. Humphreys

For the most part insurance companies are regulated by State Law. Federal Laws in the insurance industry exist but I’m not going to talk about that here. You just need to know right now that if you are in Texas, that any insurance policy you have is probably controlled by Texas Insurance Laws. This is true most the time even if you actually purchased the insurance out of state or from an insurance company that is not based in Texas.

Whether you purchased an insurance policy in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or where ever in Texas the politicians in Austin and the Texas Insurance Commission regulate the policy. As long as you are now living in Texas, the laws and regulations of Texas are going to apply with few exceptions.

Prior to 2003, the rates paid and the policy forms used for writing insurance coverage were uniform through out the State and anybody who dealt with insurance policies on a frequent basis such as agents and attorneys knew what the policies said and how they should be applied. In 2003 the insurance companies prevailed with rate deregulation and also obtained the ability to deregulate policy forms. The insurance companies ran with this new found freedom, and as a result, there are many policy forms in the market today, which makes it difficult for consumers to compare different products. One attempt to compare different insurance products can be found at http:www.opic.state.tx.us/hoic.php

Texas Insurance Law On How Claims Are Paid

August 22, 2009 | Mark S. Humphreys

In 1929, a case was decided that has had deep effects on the claims handling process in Texas. The case was G. A. Stowers Furniture Company vs American Indemnity Company. The case arose out of a situation in Galveston, Texas, but applies to any place in Texas including Dallas, Fort Worth, Arlington, Grand Prairie, Irving, Weatherford, or any other city or town in the State.

In this case, Stowers had a $5,000 insurance policy with American. A claim was made against Stowers wherein the claimant was willing to settle the claim for $4,000. The claim was potentially worth much more. American decided to deny the claim. American’s thinking was that the worst that could happen to them was that if the case were tried and lost that American would be out $5,000 which was the top limit on the policy. So instead of settling the case for $4,000 the case went to trial and a judgment was taken against Stowers for over $14,000. American paid the policy limits of $5,000 and walked away leaving Stowers to make up the difference.

Stowers sued American saying American refused to act as a reasonable and prudent insurer would have acted and thus cost Stowers money. Stowers said it was unreasonable for American to have not settled the case for $4,000, when they could have, rather than expose Stowers to a judgment in excess of the policy limits. The court agreed with Stowers.

This law, now known as the “Stowers Doctrine” in Texas says that if an insurance company is given the opportunity to settle a case for an amount less than or equal to the policy limits and refuses to do so, then the insurance company and not its insured is responsible for any judgment in excess of the policy limits. The test is, would a reasonable and prudent insurance company go ahead and settle the case, given the facts of the case, rather than expose its policy holder to the risk of a judgment in excess of the policy limits.

There have been several adjustments to this law over the years that involve issues of liens and subrogation interests. Plus the exact language of any offer to settle for an amount equal to or less than the policy limits is scrutinized closely by the courts to see if the offer properly invokes the “Stowers Doctrine”. If this “Stowers Doctrine” is properly taken into account and the claim is not paid by the insurance company then the policy holder has a claim against its insurance company for its conduct in the matter.
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What If My Texas Insurance Company Goes Out Of Business?

August 20, 2009 | Mark S. Humphreys

It is not an over-statement to say Texas Insurance Companies make lots of money and profits. Many of these companies are based in or have big offices in Dallas and Fort Worth. Having said that, every few years one will go out of business. When an insurance company goes out of business it is usually the result of a natural disaster such as a hurricane effecting an area where they have a lot of policies issued. Not once has it been because of too many lawsuits.

So what happens if your insurance company goes out of business? In Texas, when an insurance company becomes insolvent, meaning its liabilities or debts exceed its assets, the company is placed in receivership by a state District Court Judge and this authorizes the Texas Commissioner of Insurance to take charge of the company.

So what happens to your insurance claim? In Texas, all licensed insurers must be members of the guaranty association for their particular type of insurance. There are associations for title insurance, life and health insurance, annuities, property and casualty, auto, and home, etc.

The purpose of the guaranty associations is to pay lawful claims made to the insurance company that has been placed in receivership. The thing to keep in mind is they will play games with you and give you a feeling of “hopelessness”. It has been our experience that it is definitly more difficult and time consuming, but in the end we have always been to get our clients situations worked out.
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