Managed Care Outlook 2024

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Bad faith litigation in 2022 and 2023 has brought heightened scrutiny of insurers’ handling of claims and member data that can be expected to carry over into 2024. Key issues such as experimental or investigational treatment denials, the use of technology and data privacy have been significant topics in bad faith and other tort litigation in recent years and should be considered as part of health insurers’ overall risk assessment strategies in 2024 and beyond.

Increased scrutiny on investigational/experimental claim denials

Investigational and experimental denials have come under particular scrutiny over the past few years. Last year, a Nevada jury rendered a large verdict in a bad faith case involving the denial of proton beam therapy to treat lung cancer on investigational and experimental grounds. Earlier this year, a putative class action involving the denial of proton beam therapy on investigational and experimental grounds was settled for up to $3.4 million. And in 2022, plaintiffs in two other proton beam therapy cases succeeded in reversing their claims denials, showing that courts will scrutinize and overturn experimental and investigational denials when clinical guidelines conflict with plan terms. Although in those two cases, the plaintiffs’ claims were brought under ERISA, the reasoning in both cases can apply with equal force in bad faith litigation that carries a risk of punitive damages. Given the potential for significant payouts to plaintiffs, insurers can expect to see new lawsuits alleging these issues in the coming year, and they should consider taking a closer look at their internal coverage guidelines and medical policies regarding investigational or experimental treatments.

Key takeaways
  • Health insurers can expect heightened court scrutiny of their handling of claims and member data
  • Increased reliance on technology to manage health care data and claims can create a minefield for health insurers and increase the risk of bad faith exposure
  • Data breaches are an ongoing concern and can trigger member lawsuits. Establishing safeguards for members’ data can minimize the risk of costly litigation
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