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As we continue to learn about efforts to challenge proton therapy denials by groups such as the Proton Therapy Law Coalition, the fundamental question becomes: Will the insurers actually get the message and change their ways? A recent article suggests that even when a jury awards a large punitive damages figure against a health insurer, the carrier is likely not truly getting the message.

In November 2018, an Oklahoma jury returned a $25.5 million verdict against Aetna for improperly denying coverage for proton beam therapy, a treatment the company considered experimental. In the largest verdict for bad faith in U.S. history, the jury found that Aetna “recklessly disregarded its duty to deal fairly and act in good faith” and awarded punitive damages. During the course of deliberations, the jury specifically discussed “sending a message” to Aetna and “making a statement” so Aetna would reevaluate how it handles appeals and requests for coverage.

However, many large insurance companies, if the state allows them to, carry their own liability insurance for just this occasion. It appears that about 20 states do not allow insurers to carry such liability coverage. But insurers are now turning to products sold by offshore insurers beyond the reach of state regulators.

In other words, a lot of insurers are not directly paying for the punitive damages awarded against them. This undermines the importance and impact of large jury verdicts on effectuating changed insurer practices.

What this reality tells us is that even the big verdicts you hear about on TV may not compel big corporations to change their ways when they have done something so egregiously wrong. That is why groups like the Proton Therapy Law Coalition advocate for filing lawsuits, big and small, all around the country.

The Coalition believes that by forcing insurers to spend money on litigation in states all over the country it will make it harder and more expensive for insurers to continue denying proton therapy treatment based on pre-determined outcomes and internally-developed practices that place profits over lives.

Although large bad faith judgments have a purpose in effectuating change, there are certain other avenues that may have more wide-ranging reach on insurers’ pocketbooks. In many ways, these paths revolve around posing challenges to insurer practices in the employee benefits marketplace.

A name you may be familiar with is eviCore, a third-party benefits manager that contracts with big-name insurance companies to approve or deny benefits for insurers. eviCore has wreaked havoc in the last couple of years denying a very high volume of prior authorization requests and claims for proton therapy. The degree to which eviCore makes its impact felt on the market is its use by insurance companies to make health benefits decisions for employers all over the country.

Most health insurance coverage in this country is obtained through your employer so naturally, any practices that are affecting coverage for services provided to this large segment of covered individuals will truly have a broad impact on the entire insurance marketplace. The best way to place pressure on companies like eviCore, and by extension major insurers like Blue Cross Blue Shield (who now use eviCore), is to challenge the broad, systemic practices that are being used to wrongfully deny health benefits in the employer coverage marketplace.

Because this marketplace is so large and insurance companies compete heavily for employer clients to provide them with their health insurance products, there is more opportunity for legal challenges to make a broad and deep impact on coverage decisions. For example, a prolific Twin Cities real estate developer, Kelly Doran, switched his company’s 250 employees from BCBS Minnesota to a HealthPartners plan this year leaving a large dent in BCBS’ pocketbooks.

This switch came after Doran himself was denied a routine scan by Blue Cross, an outcome which led Doran to do a deeper investigation into the experiences of his employees. He learned that he was far from the only person in his company to be forced to pay out-of-pocket for denied claims. Doran spoke directly with Blue Cross and Blue Shield only to be met with unbending resistance.

As a result of Blue Cross and Blue Shield’s decision not to compromise with Doran, Doran decided to take his company’s business elsewhere. As a result, BCBS lost a large company’s business likely costing the company millions of dollars a year. But BCBS remains entrenched despite this and other backlash from major players in the industry.

In a July 15, 2019 letter, the Minnesota Hospital Association wrote a public 27-page letter asking Minnesota state officials to investigate eviCore for “intentionally delay[ing] care for patients and enable[ing] Blue Cross to deny payment for as many covered services as possible.”

An interview with Blue Cross and Blue Shield’s CEO, Dr. Craig Samitt, made clear that the position of BCBS is to remain unapologetic for taking an approach that will even more greatly limit claims approvals and lead to more denials in coming years.

Samitt said, “I worry that, if costs continue to rise unsustainably, Medicare for All is a very possible outcome. I worry that if we don’t reinvent our industry from the inside out, someone will reinvent us from the outside in.”

It is clear that BCBS’ sole consideration when denying claims of all types, including for proton therapy, is its bottom line. The federal law, ERISA, that governs these decisions in the employee benefit context does not allow insurers to do that. In fact, ERISA specifically requires insurers to place the interests of employees ahead of their own interests. It is now time to hold insurers to the test under ERISA in federal courts.

The most compelling legal vehicle to change the attitudes of insurers on a system-wide basis is an ERISA class action lawsuit. More so than large jury awards in state court, ERISA provides a mechanism by which to require insurance companies to both reform their plans and to re-process past wrongfully denied claims.

The ability to force insurance companies to look back at all of the claims they have wrongfully denied and to make sure they change their practices for the future is the kind of legal outcome that large bad faith judgments just do not capture. The fight against insurers cannot be won with one single strike. It can only be won with a meticulous, concerted and widespread offensive in federal courts around the nation.

If you have questions about proton therapy treatment being denied, please contact one of our insurance law attorneys for a free consultation or complete our online contact form. We are here to help you if you need legal counsel.