Insurance fraud may occur when an insurance product is misrepresented to a consumer. Almost any type of insurance can be the subject of fraud – life insurance, health care insurance, auto insurance, or property insurance.
Health insurance is one of the most common areas in which our attorneys investigate cases of Fraud committed by the insurance company against claimants. These claims usually involve the insurance company denying benefits to the claimant that the claimant thought was covered, as a matter of policy to save the insurance company money.
We are currently looking specifically at the following types of insurance litigation:
Life Insurance Fraud
We have uncovered alleged fraudulent accounting practices by life insurance companies concerning premium increases. The accounting method may result in the policyholder being charged excessive insurance premiums. A client that has a life insurance policy and has been notified of a substantial increase in premium payments, or if they have been told their policy’s “cost of insurance” has increased, they may have a valuable legal claim that our firm would like to investigate.
Self-funded Health and Pharmacy Insurance Plans
Third Party Administrators and Pharmacy Benefit Managers may have been charging unauthorized fees to self-funded insurance health and pharmacy benefit plans. These extra fees may be in violation of the contracts with the self-funded plan and a breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA). We are looking into these cases on behalf of self-funded plans.
Property Insurance Fraud
Insurance companies nationwide are unjustly depreciating labor costs on adjusted property claims (roof or fence damage for example). The depreciation of labor costs is contrary to many insurance policy forms and leads to policyholders either being undercompensated for their claims or not compensated at all as they fail to meet their deductible once labor costs are depreciated. If you have had an insurance claim on your property in the past six years then we would like to review the adjuster’s estimate and your homeowner’s or manufactured home policy as you may have a case.
Rental Car Insurance Fraud
We are working on class claims involving the fraudulent representations concerning insurance coverage on rental cars by rental agencies. If you have a client that has purchased rental car insurance with a major rental car company, they may have a valid legal claim that would merit class treatment.
Denied Disability Insurance
Many Americans have faithfully paid for disability insurance. They rely on this insurance to cover them if they become disabled and cannot work. However, many people are stunned when their insurance provider refuses to pay their claim.
Unfortunately for their policyholders, some insurance companies deny legitimate claims from seriously ill or injured customers, a corporate strategy that is designed for one purpose – to boost profits. A multitude of employees, both current and former, who are insured through these fraudulent companies have come forward to talk to media and to attorneys about the tragic situation.
Beasley Allen lawyers have found this occurs on a regular basis to honest people who are just looking to get out of their insurance what they were promised. When their claims are denied, they have nowhere to turn, and no means to live.
Supplemental Disability Insurance Denial
In addition to successfully litigating bad faith denial of benefits cases for years involving Disability Insurance, we also are interested in reviewing cases involving denial of Individual and Group disability insurance. These cases can be either employee sponsored benefit plan policies (ERISA), individually owned policies or non-ERISA governed supplemental insurance.
Average Wholesale Price (AWP) / Medicaid Fraud
This litigation alleges a number of pharmaceutical companies were overcharging state Medicaid programs for prescription drugs. An examination of the pharmaceutical company price lists demonstrates the difference in the AWP and Wholesale Average Cost (WAC), which are the prices provided by the manufacturers for reimbursement, and the actual price or cost of the drug. In some cases, the published AWP price was more than 2,500 percent higher than the actual price, and the WAC price nearly 600 percent higher.
Beasley Allen has recovered more than $1.5 billion in settlements and jury verdicts for the states we have represented in these claims. Taxpayer dollars have been returned to the states and the agencies providing services to vulnerable residents. As a result, pharmaceutical manufacturers have completely changed the way they conduct business with states and their Medicaid agencies.
Medicaid Insurance Recipients
Selling health insurance policies such as hospital indemnity, cancer, disability and other supplemental insurance policies to a consumer on Medicaid can be fraudulent. Most of these policies are virtually worthless to the medical recipient. Some insurance companies have actually targeted these lower income consumers with this type of predatory practice.
Bad faith is simply a cause of action against an insurance company that has intentionally denied the payment of a properly submitted insurance claim for no debatable reason. Bad faith claims involve health and life insurance, accidental death insurance, disability insurance, automobile, property, and cancer insurance.
Our firm has represented thousands of clients in bad faith actions and has had numerous verdicts in favor of our clients. We continue the tradition of representing clients who have been wrongfully denied benefits by their insurance companies.
We have pursued thousands of cases against the world’s largest insurance companies concerning disability policies, with specific attention to the “own occupation” disability policies. Our independent investigation of the insurance industries practices in evaluating and refusing to pay some of these claims is shocking. Further discovery has unveiled boardroom decisions to engage in a company’s schemes to wrongfully deny benefits to policyholders all in the name of profit.
From the 1930s until the late 1970s, at least 30 insurance companies engaged in the shameful practice of charging “race based insurance premiums” on so-called “burial policies” and/or “industrial life policies.”
This reprehensible practice involved a national scheme to unlawfully charge African Americans higher insurance premiums based solely on the color of their skin. Many of these companies further compounded their wrongdoing by undertaking sophisticated measures to cover up their misdeeds. Some charged this inflated premium up to 1980.
Our firm is involved in litigation against several insurance companies and their subsidiaries based on claims of race-based insurance fraud. We have previously settled more than 10,000 claims. The typical “race based insurance” case involves an insurance policy sold prior to 1980 with a relatively low face value (usually under $5,000.00).
We continue to lead the nation in this area of the law for those persons who wish to “opt out” of the class action lawsuits that often offer minimal benefits to certain policyholders compared to the potential recovery they may receive by filing their own lawsuit.
Death Spiral Health Insurance
For many years, our firm has defended the rights of policyholders who have been forced out of their health insurance coverage because of constant and exorbitant price hikes in premiums. As we continued to pursue discovery in these cases, we found that some health insurance providers engage in a practice known as “death spiraling.”
This practice involves a complicated process whereby companies move their unhealthy policyholders from their original risk group to another risk group that has all or a greater number of unhealthy policyholders, thus justifying higher rate increases due to higher risk. The company will continue to pull the healthy policyholders to another group, keeping them out of the “unhealthy group” in an effort for the company to “price out” and rid itself of the unhealthy policyholders. In this way, they insure only healthy people who file small or few claims.
This insidious practice has left thousands of people throughout this country without health insurance because they cannot afford the artificially inflated premiums. Our firm was one of the pioneers in this area of the law and we continue in that leadership role as we pursue these cases throughout the country.
A similar fraudulent practice has occurred with the sale of nursing home policies, home health care policies, and long-term care policies to the elderly, but these policies involve more of a “bait and switch” method. These policies are sold at “actuarially defective” prices (too low a premium to sustain the policy) and then the premium is “hiked” so high in the following months and years that the policyholder cannot afford it any longer.
Oftentimes, the company will “hike” the premium on an elderly person’s policy at a time when they need it the most. This fraudulent practice results in a large cash flow to the companies in the early years of the policies and elimination of risk to the company later, when they price these loyal paying consumers out of the policies.
Sale of Annuities Fraud
Many insurance companies and national banks have joined forces to sell annuities to bank customers. Some of these annuity sales are based on fraudulent representations, inducing customers to purchase a product that will not perform as represented.
Our law firm has filed a number of class action lawsuits against national banks and major insurance companies for their combined fraudulent conduct in the sale of annuities. As a result of recent banking deregulation, banks are now allowed to sell insurance products to their customers, and in some instances, banks have combined with insurance companies to underwrite these products. As a result, some of these insurance products are being sold based on blatant misrepresentation, especially concerning the explanation of how these insurance products perform.
We continued to file these classes throughout the country in an effort to protect consumers from these fraudulent sales practices.