COMMENTARY

Why Not Sue Insurers Who Deny Care if the Patient Suffers Harm?

Keith A. Raymond, MD

Disclosures

September 14, 2022

Should healthcare insurance providers be held liable — and face malpractice suits — when patients suffer or die owing to care coverage denial? This is an important concern during a time of nondisclosure agreements, liability waivers, and absolute avoidance of responsibility for one's actions. There are several arguments for and against suing healthcare insurers for malpractice, although the default opinion to date has been a definitive no.

First, let's examine why the current policy is in place. Because healthcare insurance providers are beholden to their investors, reducing cost and maximizing profit is a major goal. Insurance companies also reduce overall healthcare costs by reining in practice expenditure. They direct physicians to lower-cost medications, create networks to limit specialty fees, and refuse to cover risky and unnecessary procedures.

Healthcare insurance companies insist — both directly and indirectly — on less expensive care options and drive hospital discharge planning protocols. This reduces not only the overall cost of care, but the cost of coverage for care recipients. At the same time, healthy consumers pay lower premiums. Controlling out-of-network referrals also reins in excessive spending because the contracted specialists provide services at lower rates than the market standard. This benefits consumers, insurers, and government programs.

However, care denials ordered by insurers can result in definitive care delays while working through inefficient medications, trials of less expensive imaging, and postponement of needed procedures. This could drive down the standard of care, and physicians end up bearing the burden of these denials.

Consider insurance claims outside the healthcare sector. The carrier investigates and disputes many claims. Legal intervention to settle a claim is required in most instances — even when there is evidence that the claim is both valid and covered by the contracted insurance. Moreover, the carrier may then delays reimbursement, placing clients in financial jeopardy that they purchased insurance coverage to avoid.

In addition to harming a practice's bottom line, insurance coverage delay can lead to increased patient morbidity and mortality. Physicians have to get creative when an insurer denies care coverage.

We end up seeking alternatives that are not necessarily harmful but are not optimal. As a result, we suffer the backlash of patient complaints, dissatisfaction, and poor outcomes. These factors harm our reputation and may lead to malpractice claims against us. Meanwhile, the insurance provider still makes money.

It's easy to be seduced by the alleged greatest new drug, procedure technique, and research. Insurers safeguard physicians from such folly. Yet, insurers can also deny patients access to best practices. They even slow progress by sticking to the tried and true until a study demonstrates a long-held practice is not efficient or valid.

Making healthcare insurers liable for malpractice due to denial of care adds a check and balance to a system that is one-sided. By making not just the company but the policymakers within the company responsible for care denial provides an accountability standard that is currently not in place. Sure, the insurer might claim this will drive up the cost of insurance, but shared liability will relieve physicians of total responsibility for insurers' decisions.

Indeed, why should physicians be held solely responsible for decisions that they do not make? Shifting the responsibility to insurers would not just be appropriate but ethical. The argument that "I was following orders" was an ineffective legal defense at the Nuremberg trials and shouldn't apply to physicians who don't create the insurance policies affecting their practice. Though those policies benefit insurance companies, they do not necessarily benefit patients.

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