New bill aims to allow patients to sue health insurance companies

If you’re looking to sue your health insurance company in federal court for denying your claim or not paying your medical bills on time, you probably can’t. But some Democrats want to change that.

Many of the major health insurers have so-called mandatory arbitration clauses in their contracts that require patients to resolve disputes using a private dispute resolution method called arbitration. These clauses also typically prevent consumers from participating in class action lawsuits.

Consumer advocates argue that arbitration proceedings are far less transparent than the federal court system and that consumers are denied the opportunity to proceed before a jury of their own kind. The outcome of these cases is rarely public and there are usually fewer opportunities to appeal.

Rep. Katie Porter, D-California, on Thursday tabled a new bill, Justice for Patients Act, that would prevent health insurers from including provisions in group sickness plans or individual coverage agreements that compel them to arbitrate disputes. Instead, patients could file lawsuits against health insurers and join class actions and arbitration if they so choose.

“Right now, health insurance giants are using mandatory arbitration to evade accountability when they defraud patients and deny them statutory care,” Porter said in a statement. “When families do not have access to the justice system, it is the special interests of companies that win.”

Companies typically claim they are using arbitration because it saves time and money for everyone involved. But whether consumers are actually doing better is controversial. The Economic Policy Institute found that consumers received monetary relief in only 9% of the arbitrations examined.

Arbitration agreements are widespread. A 2019 scientific study found that 81 of the 100 largest companies in the US have included legal clauses in the fine print of their customer agreements that discourage consumers from suing them in federal courts.

As of 2017, more than half, or approximately 60 million, American workers had to use arbitration to resolve disputes, including battling serious claims such as discrimination, civil rights violations and sexual harassment, EPI found. If nothing changes, the nonprofit predicts that roughly 80% of workers will be covered by arbitration agreements by 2024.

But Porter’s bill would only protect against health insurers. A broader law, the Forced Arbitration Injustice Repeal Act, or FAIR Act, was passed by the House of Representatives in September 2019, but the Senate never received a vote.

The FAIR Act would deprive companies of the ability to use arbitration clauses in labor, consumer, or civil rights cases, and would allow Americans to fight their lawsuits in federal courts. If consumers and workers wanted to use arbitration, they could anyway, but it would be voluntary, as opposed to their only option.

Rep. Hank Johnson, D-Ga., Reintroduced the legislation in February. It was referred to the Subcommittee on Antitrust, Commercial and Administrative Law. According to Skopos Labs, the bill currently only has an 8% chance of being enacted.

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source https://dailyhealthynews.ca/new-bill-aims-to-allow-patients-to-sue-health-insurance-companies/