Attorney General: Attorney General Says Court Ruling Confirms Suspicions Of Abusive, Pervasive Insurance Coverage Denials

Connecticut Attorney General's Office

Press Release

Attorney General Says Court Ruling Confirms Suspicions Of Abusive, Pervasive Insurance Coverage Denials

March 15, 2007

Attorney General Richard Blumenthal today announced that a South Carolina court ruling this week alarmingly substantiates concerns here about Assurant Health Insurance's potentially abusive insurance coverage denials in cases of catastrophic illness.

Blumenthal said the state Department of Insurance (DOI) must act now to complete its long delayed audit involving Assurant's coverage denial practices so that his office can take immediate action to protect patients here.

The DOI claimed it would release an audit last month - but has failed to do so - involving Assurant Health Insurance's (a.k.a. Fortis and John Alden Company) retroactive or "look-back procedures used to bar coverage on the basis that patients conditions pre-existed policy onset dates.

In the case of Mitchell v. Fortis Insurance Company, a South Carolina court found that Fortis pre-programmed its computer to recognize billing codes for expensive health conditions, triggering an automatic fraud investigation. The court awarded $15 million to the plaintiff, who was improperly denied coverage by Fortis for his AIDS treatment.

"This case confirms our worst suspicions - that Assurant calculatingly denies coverage for catastrophic illnesses," Blumenthal said. "Assurant promised benefits, but abandons them when they face cancer and other devastating diseases. Our Insurance Department must act now to issue the audit that it promised six months ago. This audit is vital to take legal action protecting Connecticut consumers denied vital promised health benefits.

"I am deeply disturbed by several reports of consumers - people suffering from debilitating diseases - who were questionably denied coverage. I have tirelessly urged our legislature to strengthen the law protecting patients from abusive and arbitrary denial of promised health benefits. In the meantime, my office is prepared to take any action necessary to enforce the law."

Blumenthal said the highly focused audit - which he requested six months ago - could have been done quickly because only limited information about the company's short-term policies is needed for the review.

The audit is vital for Blumenthal's office to take legal action to stop potentially illegal or improper denial of health benefits. Several patients have complained after Assurant questionably denied coverage for life-saving treatments promised under short-term health plans.

Blumenthal said the audit should inventory all of Assurant's denials under its short-term policies on the basis of findings of pre-existing conditions. Those denials should then be cross checked with a categorical claims review of the particular conditions that were determined to be pre-existing.

The audit would allow state investigators to confirm whether Assurant provides meaningful coverage for diseases such as cancer with any level of consistency under its short-term health insurance policies.

Complaints to Blumenthal's office - and now the South Carolina decision -indicate a pattern of arbitrary or abusive coverage denial:

  • A 34-year-old woman was diagnosed with Hodgkin's Lymphoma one month after her enrollment in a six-month policy underwritten by Fortis Health Insurance. During a post-enrollment diagnostic visit, the woman recalled experiencing mild shortness of breath while exercising some six months prior to her doctor's visit. Fortis, in seeking to deny coverage, concluded that the shortness of breath she recalled during a single workout six months prior to enrollment constituted a pre-existing condition because the symptom should have caused her to seek medical treatment prior to enrollment.

  • Another woman is diagnosed with a skin condition weeks prior to insurance enrollment. The patient was covered by a prior Assurant term policy at the time of this diagnosis. Along with the diagnosis and issuance of a topical prescription, the doctor ordered a battery of tests that, subsequent to enrollment, yielded results that prompted him to recommend further assessment. All of these events evolved without undue medical delay. Further assessment yielded a diagnosis of cancer, requiring intensive, expensive and life-saving treatment - all covered benefits under the policyholder's insurance contract. In an effort to deny coverage, claiming a pre-existing condition was knowable, Assurant has argued that this patient should have sought medical care before enrollment, even though she did; that the patient received medical advice regarding the condition prior to enrollment, even though her doctor had diagnosed a completely different and distinct condition other than cancer; and that a reasonable doctor should have diagnosed the cancer prior to enrollment.