Carrier accepted premiums but now refusing to pay

[Paula Burge]

We secured our individual health insurance plan through a sponsor, BWSR (Bureau of Wholesale Sales Representatives), who contracted with insurance company, NAI (North American Indemnity), an off shore company based in Belgium. NAI accepted premiums and are now refusing to pay claims of any of the subscribers incurred during an approximate 5 month period. (BWSR changed carriers after this point.) During this period, my family incurred over $30,000 in medical expenses. BWSR has filed a lawsuit against NAI, but there is no resolution in sight. In the interim, the providers are seeking payment of these outstanding claims. What do we need to do to protect our rights. What are our obligations to providers? Some are being reasonable, others not. Can you provide any assistance or guidance? We are in NJ. BWSR is in GA.
The TPA, (Managed Health Care) is in TX. Thank you.

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[ellencee]

You have to pay the providers. If you read the financial agreement with the providers, most likely you will find that you are responsible for the entire bill and as a courtesy, they are filing your insurance. They have filed for your benefits and received a denial of coverage. You may someday collect from the insurance company. In the meantime, you have to pay the providers; most will set up monthly payments that you can afford.

 

[ALawyer]

The fact that you bought insurance from a bankrupt of fraudulent insurance company does NOT impact your obligation to pay the doctors and hospitals.

It MAY give you the basis for a lawsuit against the organization or the brokers and others involved, however.

FURTHER, the doctors are really entitled only to the fair value of their services, not necessarily their "rack rate" or the amount they bill the insurance companies. Most insurance companies and Medicare have special deals that enable them to pay a fraction of the rack rate. For example, for Surgery X the doctor may bill the insurance company $2,500 but under the deal with the insurance company, the doctor agreed to take ony $800. (That happened to me.) If I were you, I would suggest that what you will pay the doctors and hospitals only the prevailing rate they receive from Medicare and insurance companies, NOT the rate that they would like to get from patients that no longer is what they commonly are paid.