Repairer Driven News
« Back « PREV Article  |  NEXT Article »

Lawsuit alleges USAA uses computer system to arbitrarily deny, reduce claims

By on
Announcements | Insurance | Legal
Share This:

A Washington class action lawsuit claims USAA uses a computer program made by a CCC company to arbitrarily reduce or deny personal injury protection and/or medical payments, Washington Superior Court for Clark County documents say

The suit, filed in November, is the latest to claim USAA systematically denies policyholder medical payments after vehicle crashes, according to San Antonio Express-News. The insurer, headquartered in San Antonio, has faced similar suits for more than two decades, the paper says. 

USAA told the newspaper that it denies allegations made in the suit and remains committed to the computer program.

The article says most suits against USAA focus on the use of the computer system called Auto Injury Solutions (AIS). The system is a part of CCC Intelligent Solutions Holdings Inc., the paper says. 

According to their website, “AIS, a CCC company, delivers customizable, end-to-end solutions to leading auto insurance carriers in all 50 states in support of their handling of first and third-party casualty claims. As the leading provider of casualty claims solutions and analytics, AIS helps you make sense of enormous amounts of claim data and helps your claims professionals get to the right decision faster.”

The AIS site points back to the CCC Casualty Solutions page, which identifies “lower costs, faster decisions, and more accurate information” through “data, analytics, and dynamic rules engine and photo-based AI capabilities, [which] contribute to an end-to-end casualty solution.”

When asked by Repairer Driven News about the allegations, CCC said it doesn’t comment on pending litigation.

USAA is alleged by the Washington suit to use AIS for its Medical Bill Audit (MBA) process. It states AIS is used by the insurer with no human input. 

“From at least November 16, 2017, to the present, thousands of USAA Washington insureds submitted reasonable medical expense bills for payment under PIP [personal injury protection] and/or MedPay [Medical Payment] coverage contained in policies purchased from USAA, and they will continue to do so,” the suit says. “Under the terms of USAA’s PIP and/or MedPay coverage, USAA assumed the obligation to conduct an investigation into each bill for  medical expenses submitted, to make coverage decisions based on readily available information, and to pay all reasonable and necessary medical expenses incurred for the treatment of injuries sustained in a covered occurrence. 

“Instead of conducting an investigation into each bill for medical expenses submitted, USAA has arbitrarily denied or reduced PIP claims submitted by its Washington insureds by improperly delegating its insurance claims adjustment duties to AIS who, through its computerized MBA process, arbitrarily and improperly reduces or denies PIP claims.” 

The suit claims the AIS uses the Milliman Database, which is comprised of an outdated 5% nationwide sample of charge data from patients 65 years or older collected by the U.S. Department of Health and Human Services/Center for Medicare and Medicaid Services. 

“This Medicare patient sample has no bearing on the reasonableness of charges for the medical services provided to USAA’s insureds, does not reflect the entire range of fees charged in the geographic area where the medical services are provided, and is comprised of data not organized by a provider’s years of experience, background, or qualifications,” the suit says. “USAA denies or reduces payment of its insureds’ medical bills based only on AIS’s automated review process and does not conduct any independent or individualized review to assess whether the charge is a reasonable and necessary medical expense.”

The suit also claims AIS engaged with nurses and physicians to create “sham medical reviews.” 

“In denying payment, USAA relies on a letter written by the AIS-engaged physician in connection with the sham medical review,” the suit says. “The physician conducts only a cursory, hollow review of the provider notes and related documents contained in the AIS database and does not communicate with either the insured or the insured’s provider. USAA does not conduct any independent investigation, but instead relies only on the sham physician review in denying reimbursement of the insured’s PIP and/or MedPay claim.” 

AIS uses the medical review and flagged medical codes to create an explanation of review (EOR) letter, the suit said. 

In another settled court case from 2016, a couple filed a criminal conspiracy complaint under the Georgia Racketeer Influenced and Corrupt Organizations Act against USAA and AIS, according to the San Antonio Express-News. 

The couple claimed AIS created a “labyrinthian denial scheme,” the article says. The article, referring to court documents, said USAA’s claim review was outsourced to AIS employees and agents who provided false and misleading information to USAA insureds. 

USAA and AIS denied the allegations of criminal conduct and conspiracy. The case was settled out of court about a year and a half after the complaint was filed, the article says. The terms of the case were not disclosed. 

In 2018, the Insurance Division of the Vermont Department of Financial Regulation issued a stipulation and consent order requiring USAA to pay an administrative penalty of $85,000 after an investigation between 2013 and 2015 found the insurer in violation of state law.  

The order states USAA accepted an unnamed third-party vendor’s determination regarding medical necessity and denied coverage without conducting a reasonable investigation.

USAA was required to set up reasonable standards for investigating claims that may include interviewing and or taking recorded statements from the claimant, the provider, and any other relevant party, the order said. 

It also noted the state would review any third-party vendors used by USAA to ensure vendors performing activities are properly licensed. The insurer also was ordered to discontinue the use of physician review letters. 

In the recent Washington case, Plaintiffs Caryn Jennings and Tricia Harder are seeking monetary damages in the suit along with an injunction relief of USAA’s alleged improper and unlawful claims handling practices. 

The suit says Jennings was injured in a vehicle crash on Sept. 30, 2016. She specifically was denied $840 in reimbursement for a massage therapist in July 2017, it says. 

USAA denied the reimbursement based on Patient Responsibility (PR) codes and physician review letter, the suit says. The claim alleges the code and letter are a “sham.” 

“The physicians did not analyze the documents in the file,” the suit says. “Moreover, the physicians never examined or even spoke with Plaintiff Jennings and never spoke with Plaintiff Jennings’ providers.” 

Harding was injured in a vehicle crash on Dec. 30, 2017, the suit says. It states reimbursement she sought for medical treatment related to the crash was reduced or denied by USAA. The suit does not provide the financial amount Harding was denied. 

USAA denied or reduced Harding’s claims based on numerous medical codes reviewed by the computer system, the suit says. 

The San Antonio Express-News article says USAA denies the allegations and remains committed to using the contractor for reviewing medical bills. 

“Our method of flagging excessive, unrelated, and duplicate medical charges, which are not uncommon, is appropriate and protects our members,” USAA spokesman Roger Wildermuth said in an emailed statement to the paper. “By identifying unwarranted charges, we preserve our members’ auto insurance limits to pay for reasonable and necessary medical expenses.”


Photo courtesy of Mesh Cube/iStock

Share This: