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Lawsuits challenge new health insurer tactics to deny claims and benefits.

Article Excerpt
To keep their bottom lines growing, health insurance companies are testing a variety of new tactics to deny claims and benefits, consumer advocates say, including rescinding policies after claims are filed and directing claimants to pursue other sources of benefits, such as Social Security Disability Insurance (SSDI). Some of these methods are more effective than others, but all keep injured consumers from receiving necessary insurance payments, according to trial lawyers representing policyholders.

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Currently in the spotlight are the policies of "dual-role insurers"--those who both pay benefits and decide who is eligible to receive them. The Employee Retirement Income Security Act (ERISA) permits insurance companies to play both roles, but consumer advocates argue that these insurers have a built-in conflict of interest. When these companies deny claims, how much weight should that potential conflict carry in a lawsuit? Lower courts have issued conflicting rulings.

The U.S. Supreme Court is considering that question in MetLife v. Glenn; it heard oral arguments in April. (Metropolitan Life Ins. Co. v. Glenn, 2008 WL 1775019 (argued Apr. 23, 20008).) MetLife stopped paying Wanda Glenn's disability benefits after two years, when it decided her condition had improved. Glenn sued, arguing that the company had a financial incentive to deny her claim. The Sixth Circuit ordered her benefits reinstated because the insurer "acted under a conflict of interest" and made the decision without "principled and deliberative" reasoning.

In appealing to the Supreme Court, MetLife argued that...

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