USAA once again is defending itself against charges it utilizes a “cost containment program” to improperly reduce or deny medical payouts to insurance customers injured in auto accidents.
The latest claims against the San Antonio financial and insurance company were made in a federal lawsuit filed this week in Oregon.
The lawsuit, which seeks national class-action certification, charges that USAA uses an outside auditor to assess claims and to “uniformly conclude that medical treatment was not needed.”
USAA denies the allegations.
USAA previously settled two class-action lawsuits that accused it of using flawed data to arbitrarily deny a portion of the medical benefits for injured customers who have personal-injury protection (PIP) or other medical-payments coverage on their USAA auto-insurance policies.
One of those cases, filed in Arizona, was settled last summer. Claims are still being processed, so the amount to be paid out under the settlement hasn’t been determined.
The other case, filed in Illinois was settled in 2005. Lawyers for the plaintiffs valued the settlement on their website at $35 million, a figure USAA spokesman Paul Berry called “probably wildly” inflated.
USAA settled the two cases because it was the “right thing to do for our membership,” Berry said. He noted both courts endorsed USAA’s bill-review practices.
“We pay all reasonable, necessary and accident-related bills,” Berry said. “That doesn’t mean we pay all bills. If you had injuries or you received some treatment that had nothing to do with (an auto) accident, we’re not going to pay those bills.”
USAA relies on Alabama-based Auto Injury Solutions Inc. to help review medical bills to determine whether they are reasonable and necessary and to weed out duplicative and fraudulent claims. Bills deemed suspicious are reviewed by a doctor or other health-care professional, Berry said. Even when one of its doctors concludes the medical care wasn’t necessary, the bill still goes through several other reviews, he said.
USAA also can choose to override any instance where a bill is rejected, Berry said.
In the latest Oregon lawsuit, four unrelated USAA customers in separate accidents allege the medical reviews were a “sham.”
According to the suit, the reports generated by Auto Injury Solutions and the doctors are “template forms” that include an “electronic signature to give the false impression that a physician created and approved each report.”
“In reality each report generated is substantially the same in reaching the uniform conclusion that benefits should be denied. These reports utilize identical and the same conclusionary language,” the lawsuit contends.
USAA has about 8 million customers, comprised of current and former members of the military and their families. It routinely scores high in customer satisfaction surveys.
“We work for our members, and our members own this company,” Berry said.
Daniel Gatti, the Salem, Ore., lawyer who filed the latest lawsuit against USAA and who has been suing insurance companies for 37 years, said USAA was once one of the most honorable insurers in the country. But now, he said, USAA is more focused on reining in costs.
“It’s designed to save USAA money at the expense of our soldiers,” Gatti said.
Berry disputed that, saying USAA paid $1.3 billion in dividends to customers based on its financial performance last year.