Michigan Personal Injury Blog - Consumer Protection

Wrongfully Denied Insurance Claims

Timothy Smith — Tue, 04 Aug 2009 09:37:07 GMT

My readers may not know this, but Michigan is one of only four states that doesn't protect its consumers from some of the most underhanded practices in the home, auto and health care insurance industries - wrongful denial of benefits.

Wrongful denial consists of an intentional business plan by these companies that delay or deny legitimate property, auto or health care claims at the expense of the consumer. By not honoring their contractual duty to be there for consumers in their time of need, insurance companies boost their profits, forcing Michigan families into bankruptcy and even foreclosure just to care for the people they love.

The story of State Representative Mike Simpson is both heartbreaking in it's brutality and typical in that I see this type of behavior daily here in Michigan. Why? Because in Michigan, if an insurance company acts wrongfully in denying claims, the only punishment is a $500 fine....

Here is Representative Simpson's story:

State Rep. Mike Simpson: Representative Mike Simpson, and I don't just stand in front of you today as a legislator, I also stand in front of you as a victim. I applaud these individuals for coming forward to publicly talk about a crisis and a tragedy in their life is incredibly difficult, and it talks a lot of guts. And your story… is my story. In 1993, my daughter was diagnosed with lung cancer, and within nine months I buried my daughter. And, I remember, on December 11th, 1993, looking at the MRI report with the diagnosis with the doctor because it was my birthday. And the doctor told me that she had a 3% chance of living. I picked up the phone, I called my insurance company, they said Mr. Simpson, don't worry, we'll take care of you. Boy, did they take care of me. I soon found, that I was in the fight of my life not only trying to help my daughter fight off a disease that was most assuredly going to take her life, I was also fighting my insurance company because they didn't want to pay the bills. They're your best friend in the world when you make your premium payments, but when you have a claim you're the enemy. It's just wrong. That's why I ran for office the first time. I never wanted to see this happen to another family. These are not isolated circumstances, they happen hundreds of times all across this state every single day. And the people standing behind me, they put a human face on the reality of what we always kind of look the other way, it didn't happen to my family so we don't worry about it.

During that nine-month fight, I sold everything I owned. You'd sell your soul to save your child. But it wasn't enough, and ultimately it bankrupted my family, it crushed us. Our American dream had turned into an American nightmare, and after my daughter's death I found myself standing in front of a federal bankruptcy court judge, detailing how many pieces of clothing and toys my other two surviving children own, and could we please keep them or did we have to give them to the creditors too. It's time to put consumer back in consumer protection in the State of Michigan. It's that simple. You know if we enter a contract or make a promise we have to keep it. If we commit fraud and break the law, we go to jail. If the insurance company does it, they get a slap on the hands from the insurance commissioner and they got to pay 500 bucks. To most of these CEOs, that's a missed lunch or a golf date, that's it. For the main purpose of making sure their bottom line looks better, they destroy lives in a heartbeat and never look back. And this is only one of four places in this country that you can do that. Michigan, Massachusetts, Louisiana and Nebraska and that's it. We're the disgraceful part of the Final Four, and today the House Dems are saying no more.

The State House here in Michigan has drafted a series of bills that will protect consumers from this type of behavior by insurance companies here in Michigan.

The bills include laws that would:

* Strengthen consumer protections by punishing insurance companies that wrongfully deny consumer claims with penalties, including a $1 million fine.

* Punish corporate leaders who knowingly create, foster or encourage wrongful denial of claims by making the misconduct a felony that could result in four years in prison plus a $50,000 fine.

* Create a whistle-blower protection plan to shield employees who report that an insurance company is engaging in wrongful denial of claims.

In auto accident claims, the wrongful denial of valid medical claims is rampant. It has even prompted investigations by numerous media outlets here in Michigan.

http://www.youtube.com/watch?v=JJ5f3SH667Q&eurl=http%3A%2F%2Fwww%2Emichiganautolaw%2Ecom%2Fcaraccidents%2Fcarinsurancebasics%2Ephp&feature=player_embedded

If you believe that this type of behavior must be corrected, click here to sign a petition to learn more and show your support as a consumer here in Michigan for increased protection from these predatory practices by insurance. No more profits over people. It's time for a change.

Originally posted at InjuryBoard by Timothy Smith

Special Needs Children Pay When Insurance Companies Don’t

David Mittleman — Tue, 30 Jun 2009 14:29:44 GMT

Last week I posted an article about Blue Cross Blue Shield and its agreement to pay families of autistic children a total of $1 million for behavioral therapy coverage. Although this settlement is a step in the right direction, health plans have a long way to go before children with special needs receive fair treatment.

Developmental problems are pervasive in their nature. They affect nearly every aspect of a child’s life. Some disorders, such as birth-trauma induced cerebral palsy, impact both the mental and the physical development of the child. As a result, these children often require specialized equipment, supplies, services, or devices able-bodied children do not need.

Unfortunately, health plans and insurance companies characterize such special requirements as not "medically necessary" - almost always at the plan administrator’s sole discretion - and deny these benefits. As a result, many families are forced to pay expenses out of pocket or to make the unsettling choice of forcing their child to do without the needed benefit. Compounding the insult is the fact that the law makes it exceedingly difficult to reverse the decision of the plan administrator.

One glaring example of the anti-consumer state of the law is the Employee Retirement Income Security Act (ERISA). Originally designed as a measure to protect workers and ensure they would receive the promised benefits of their employment, a series of court decisions over the past two decades gave plan administrators tremendous authority to deny claims. Only very recently have some Courts begun ruling in favor of individuals instead of corporations.

The time period in which to challenge an adverse decision is usually very limited. If your health plan has denied a claim you believe you are entitled to, contact us to see if we can help.

Originally posted at InjuryBoard by David Mittleman

Pre-Dispute Binding Arbitration Clauses Perpetuate Injustice

David Mittleman — Mon, 15 Jun 2009 12:32:41 GMT

When someone is wronged by another, he or she expects to find recourse in our justice system. When a corporation takes advantage of a consumer, that person often takes solace in the fact that she will have her day in court. More and more, however, these hopes and expectations are never realized. Victims are shocked to learn that they have contractually signed away their right to go to court.

Many (if not most) consumer contracts, from cell phone plans to credit card agreements, now contain what are known as Pre-Dispute Mandatory Binding Arbitration clauses. These clauses require that any dispute that should arise out of the contract must be settled by binding arbitration rather than by filing suit in a court of law. Nearly always, the result is worse for the consumer. Arbitration clauses are usually hidden in dense legal documents, making it hard for the average person to even know if the contract contains such a provision. Even if the consumer is aware of the mandatory arbitration requirement, he or she cannot negotiate it out of these all-or-nothing contracts of adhesion.

In many cases, these pre-dispute mandatory arbitration clauses result in manifest injustice. National Public Radio (NPR) recently reported on one of the most appalling instances of the iniquity of mandatory binding arbitration clauses. A 20-year-old female Halliburton employee working in Iraq was brutally assaulted by her coworkers, resulting in devastating and permanent physical and emotional injuries. When the Justice Department refused to intervene, this young woman sought accountability by suing in civil court. Unbelievably, the company insists that the case must go to binding arbitration rather than a judge and jury.

Pre-dispute mandatory binding arbitration agreements represent a fundamentally unfair method for holding corporations responsible for their wrongdoings. Consumers and employees are kept in the dark as to their rights, and they are not free to bargain for a better deal. Instead, they must "take it or leave it" and run the risk of facing a potentially biased tribunal who will decide the outcome of their case.

Originally posted at InjuryBoard by David Mittleman

It’s Time To Rescue Michigan’s Consumer Protection Act

David Mittleman — Tue, 19 May 2009 15:48:13 GMT

Michigan’s once treasured Consumer Protection Act now sits in squalor thanks to the Engler dominated Michigan Supreme Court of the past few years. Last year marked the ultimate demise of any remaining teeth the law may have had when the Court, led by sleeping ex-Chief Justice Cliff Taylor exempted most, if not all, business regulated by state or federal law, such as home improvement contractors, mortgage companies, and plumbers.

In the midst of a housing fiasco the likes of which this society has never seen, consumers who were victims to the tactics of predatory mortgage companies find little solace in knowing that justice to the state’s highest court meant protecting big business instead of average citizens. Moreover, if you’re lucky enough to get financing for a new home, but you can only afford one that needs substantial renovations, you can forget about relying on the Consumer Protection Act as a guarantee that those roof shingles get fixed by builders.

With a new face on the state’s Supreme Court, and a chance to remove another justice (Robert Young) in 2010 who prefers corporate welfare over true justice, it’s time the Supreme Court roll up their sleeves and get to work on undoing the carnage of the past few years.

Originally posted at InjuryBoard by David Mittleman

GM-Certified Used or Welded Together Wrecks?

David Mittleman — Tue, 05 May 2009 10:59:56 GMT

State Consumer Protection Acts have been enacted in every state in the nation to protect consumers. Each state law varies in the degree to which they are effective. Michigan's Consumer Protection Act bans 29 unfair, deceptive or unconscionable business practices in the sale of goods and services. Once considered to be one of the best Consumer Protection Acts in the country, the Michigan Act has been rendered practically useless by two Michigan Supreme Court rulings. The first ruling, issued in 1999, was written by Justice Robert Young and supported by his conservative majority. That case ruled that businesses whose general conduct was specifically governed by another state law, were exempt from the act, even if the conduct was unfair or deceptive. Reaffirming its decision in 2007, but broadening the scope, the court exempted all businesses governed by federal or state law from the act, in effect, making Michigan a buyer beware state. Businesses exempt from the law include: banks, mortgage brokers, debt collectors, finance companies, home builders, home improvement contractors, new and used car dealers, auto repair shops, funeral homes, plumbers and electricians.

Back in 2004, Paulette Day, a 38-year-old Romulus homemaker, went to a Southgate dealership and purchased a $20,350, what she thought was practically brand new, GM-certified used, bright red Monte Carlo. She became suspicious about the car after a family member noticed blue paint on the gas cap. When Paulette attempted to return the vehicle under the GM satisfaction guaranteed policy, the dealership refused to honor the promise. Six months later, the Day’s hired an attorney, Dani Liblang of Birmingham, who had an expert examine the car. The expert determined that the car was actually two vehicles welded together as one and sold as a "demo". Now, while their case is pending in circuit court, the Days are stuck with a vehicle that makes funny noises and wears out tires quickly. Until the law is changed, consumers in Michigan will feel cheated and stuck fighting an uphill battle with little recourse.

Originally posted at InjuryBoard by David Mittleman