Responsibility for the payment of health insurance claims

Responsibility for the payment of health insurance claims

Berkowitz v Neuman, 283 AD2d 179

This “denial of health insurance benefits” case was brought on behalf of Mildred Neuman, a retired employee of the Mount Vernon City School District, who was a beneficiary under the District's Employee Health Benefit Plan.

The health insurance plan [plan] was administered by American Group Administrators (AGA) until August 31, 1997, when United HealthCare became the insurance carrier for the District.

Although the greater part of the ruling addresses questions concerning Neuman’s eligibility for benefits based on her receiving treatment that was a “covered medically necessary” in contrast to seeking benefits for “excluded custodial care,” the Appellate Division also addressed the question of liability for the payment of benefits in the event a health insurance plan administrator is found to have incorrectly denied a covered individual benefits available under the health insurance plan.

The Appellate Division's conclusion:

Even if the plan administrator was solely responsible for determining medical necessity and made an incorrect determination, payment of the claim would still be the plan's responsibility.