Central United Life Insurance fights back against accusations it shortchanged cancer clients

Central United Life Insurance Co. has come out swinging against a lawsuit filed by the Missouri Department of Insurance, which accused the carrier of improperly paying claims to cancer patients. In the a suit, which was filed last month in the Circuit Court of Cole County, Mo., John M. Huff, Missouri's insurance director, accused the insurance company of paying out less than it was supposed to on claims filed by clients with cancer. Instead of covering the full cost that health care providers assessed for certain cancer treatments, starting in Feb. 2003, Central United started paying its claims based on the costs insurers actually paid and that were accepted by the clients' health carrier as full payment for covered services, Mr. Huff alleged. However Central United now claims that it had been speaking with the Missouri department for the last six years on precisely this issue and that the department had supported the company's payment methods. “Contrary to its current position, the [department] in 2003 and 2005 issued written statements that supported Central United's method of payment of actual charge benefits to policyholders based upon the real amounts paid and accepted as payment in full instead of the list prices providers are ethically, legally and/or contractually forbidden to charge most patients,” John McGettigan, Central United's general counsel, said in a statement. “Central United's payment of actual charges benefits is consistent with policy language and supports making supplemental insurance more affordable for all Missouri policyholders,” he continued. “We are surprised and disappointed with director Huff's unfortunate and incorrect public comments on this issue.” The company said it will file an appeal to the suit soon. Travis Ford, spokesman for the Missouri department, said that the office indeed started talking to Central United six years ago about its practices, although it had approached the carrier after consumers began complaining about the company’s practices. “We talked to them over the years and made our concerns very clear to them about what they did,” Mr. Ford said. “The heart of the lawsuit is that executives at Central United unilaterally decided to reduce benefits to cancer victims in February 2003, without notice, without permission and without a reduction in premiums,” Mr. Ford said. “Our department did not authorize this change.” Central United is domiciled in Arkansas but has its home offices in Houston.