USAA Faces Lawsuits Over Denied Medical Claims

The suit focuses on USAA's use of a third-party contractor to assess which medical claims should be paid.

The lawsuit argues USAA's use of a third party leads to unjust reductions or outright denials of payments for necessary health care expenses. Image via Shutterstock.

In a lawsuit filed in Washington State, USAA is facing accusations of systematically denying medical payments to its members involved in auto accidents, reported the San Antonio Express-News.

USAA relies on a third-party contractor, Auto Injury Solutions Inc., to assess which medical bills should be paid. This process, according to USAA, aims to filter out excessive, unrelated and duplicate charges, thereby keeping coverage costs affordable for its members. However, critics argue this method, which heavily involves automated computer processes, undermines the insurer's duty to conduct thorough and independent investigations into claims.

The lawsuit, filed by two women insured under different USAA subsidiaries, challenges the insurer's delegation of claim evaluations to the third-party contractor. They argue this approach leads to unjust reductions or outright denials of payments for necessary health care expenses, based on reviews they deem a "sham." The plaintiffs are seeking to make the lawsuit, which has been moved to a federal court in Washington, a class action lawsuit.

USAA insists its procedures are designed to protect members by identifying unwarranted charges, thus preserving insurance limits for legitimate medical expenses. Critics, including attorneys for the plaintiffs and consumer advocacy groups, argue such practices prioritize cost savings over patient care, often leaving insured members to bear the brunt of unpaid medical bills.

This is not the first time USAA has faced such allegations. Over the past two decades, the insurer has been involved in numerous lawsuits accusing it of similar practices. While many of these cases have been dismissed, arbitrated or settled, the recurring theme of denied claims has attracted regulatory attention and public scrutiny.

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