Providence Health Plans was recently investigated for wrongly denying claims it should have paid.  Apparently, members of the health plan are required to send claims to an administrator for processing, rather than directly to a Providence office.  Nearly 7,000 claims, over a two-year period were incorrectly filed with a Providence office.

In response to the incorrectly filed claims, Providence sent a letter that told their member to send the claim to the administrator but also instructed that the claim was not covered under thier plan.  It turns out the claims were never investigated.

Providence was fined $30,000 for mishandling these claims and ordered to pay approximately $53,500 to consumers who had submitted valid claims.  In response to the investigation, Providence changed its procedures to ensure this problem does not happen again.

The News Release issued by the Department of Consumer & Business Services disclosed how the investigation began:

State law prohibits insurers from refusing to pay claims without conducting a reasonable investigation, which was the basis for the fine.

The department found out about the mishandled claims because of a complaint to its Insurance Division Consumer Advocacy Unit.

“Thanks to one consumer’s complaint, many others were able to recover the benefits they were entitled to as part of their health plan,” Miller said.

This story underscores the importance of reporting instances of questionable conduct by insurance companies in the handling of claims.  Not only in the health insurance arena but in any instance in which insurance is involved.  You can reach the insurance Division of the Department of Consumer & Business Services at 888-877-4894 or online. If you have further questions regarding the handling of your claim feel free to contact the Paul Krueger Law Firm at 503-222-0226.