How many ways can an insurance company find not to pay your medical bills? Well, quite a few. Some are inventive and require long-term planning on the part of the insurance company and sometimes groups of insurance companies. The lengths to which an insurance company will go to avoid making payments under a valid policy, even one on which you have been making premium payments for years, can be quite impressive in their creativeness.
Case in point: N.E. PHYSICAL THERAPY PLUS, INC. vs. LIBERTY MUTUAL INSURANCE COMPANY, 466 Mass. 358 (2013).
Here are the facts:
N.E. Physical Therapy Plus, Inc. (NEPT) provided therapeutic services to the passenger of Liberty Mutual’s insured after they were involved in an accident. NEPT invoiced Liberty Mutual for the services to the passenger. Liberty disputed the amount of the bills, which were for chiropractic care over the course of about three months and were in the total amount of $4465.00. Liberty thought the bills were unreasonably high. Frankly, they do not sound that high to me for three months of treatment. Liberty paid all but $734.32. NEPT wanted the rest, so they sued Liberty in the Lawrence District Court back in 2008.
In that Court, Liberty wanted to introduce into evidence statistical analysis produced by a company called Ingenix, Inc. This company was owned by United Health Group, the owner of United Health Care, which is one of the biggest health insurers in the country. Ingenix collects information from insurance companies across the country on the prices they have paid for various health services, like chiropractic care. It then produces reports which analyze whether the costs claimed by a provider are too high in a given geographic area. Not surprisingly, the Ingenix information indicated that the NEPT bills were too high.
The District Court Judge found that the Ingenix material was not reliable and did not allow it in to evidence at trial. Liberty lost. So, they owed NEPT $734.32. Of course, Liberty appealed over this small amount of money. It’s the principal of the thing. Insurance companies do not like “bad law”. Bad law, as they call it, is law that may in the future cost them more money. That’s why they fought tooth and nail. It was not just the $734.32.
Liberty also lost at the next level, the District Court Appellate Division. Then they appealed to the Massachusetts Appeals Court, where Liberty lost again. Finally, the Supreme Judicial Court took the case. Here is what the SJC said:
“… Ingenix is a sister company to one of the largest insurance providers in the country; it relies on the voluntary submission of data on medical costs from the limited universe of insurance companies who choose to participate in the program; it applies a proprietary relative value and conversion factor to the raw data; and it has never verified that the data produced as a result of this formula accurately correspond with actual charges for medical procedures.”
“In other words, the data contained in the Ingenix database derives from raw data that is voluntarily submitted by participating insurance companies, not fully verified, and to which Ingenix applies its proprietary methodologies. On a largely identical record, the Appellate Division of the District Court held "there is nothing in the record to establish the accuracy or reliability of Ingenix's raw data and, thus, its statistical extrapolations." [citation omitted]
“In addition to this evidence, the judge had before him evidence that the New York Attorney General conducted an investigation of Ingenix and found that the "rates produced by Ingenix were remarkably lower than the actual cost of typical medical expenses." On such a record, we *367 cannot say that the judge abused his discretion in excluding the evidence. … See Cruz v. Commonwealth, 461 Mass. 664, 670 (2012).” At 466 Mass. 358, 367 (2013).
So, what does all of this tell us? Well, think of it this way: the auto insurance providers are selling a product that you and I are legally required to buy. That’s darn good for sales. Despite that, Liberty Mutual fought for 5 years because it wanted unreliable insurance industry data to be taken seriously by the Massachusetts Courts. How many of your tax dollars were used up through all of these hearings and trials over the course of five years?
Probably more than $734.32.