Last Year, 60,000 Medical Consultations by Insurance Companies... Controversy Over Use as Means to Reduce Insurance Payments

Refusal of Insurance Payments in Over 4,800 Cases After Medical Consultation
"Plays a Role in Preventing False and Excessive Insurance Claims"

[Asia Economy Reporter Oh Hyung-gil] Jeon Jung-ho (55, pseudonym), a self-employed person, recently claimed insurance benefits after suffering a disability in his left ankle from a fall on the stairs. However, the insurance company suspected that Jeon did not receive a disability diagnosis from his primary treatment hospital but from another hospital. Ultimately, after consulting the primary treatment hospital's doctor, it was confirmed as a 'temporary disability,' leading to a conclusion of excessive insurance claim.

It was revealed that insurance companies denied payment on 8% of claims last year through medical consultations. Insurers argue that since consultations were conducted at a rate of about one per 1,000 claims, this is a minimal deterrent against excessive claims. However, criticism that insurance companies abuse medical consultations to avoid paying claims has not subsided.

According to the insurance industry on the 22nd, life and non-life insurers conducted 61,535 medical consultations out of a total of 62,368,432 insurance claims last year. The consultation rate compared to claims was less than 0.1%.

The number of cases where insurance payments were denied based on medical consultations was 4,873, and partial payments were made in 17,682 cases. The denial rate was 7.9%, and the partial payment rate was 28.7%.

Notably, life insurers had a higher denial rate. Life insurers denied payments in 3,755 cases out of 19,573 medical consultations, approaching a 20% denial rate. Non-life insurers rejected payments in 1,118 cases (2.6%) out of 41,962 consultations.

Insurance companies seek medical consultations from healthcare institutions when medical judgment is necessary to decide on insurance payments. However, concerns have been raised that medical consultation results are abused as a means to reduce or deny payments, putting the practice under scrutiny.

Medical consultations are requested by insurers and paid for by them, raising doubts about the objectivity and fairness of the opinions provided. During the 20th National Assembly, bills were proposed to require disclosure of the consultant's name, affiliated institution, and consultation results to consumers (by Assemblyman Jeon Jae-su of the Democratic Party), or to mandate direct interviews of the insured by the medical consultation institution for review (by Assemblyman Lee Tae-gyu of the People's Party), but these bills were discarded due to the expiration of the session.

Meanwhile, criticism of medical consultations has continued. The Korea Consumer Agency recently pointed out that claims related to colon and thyroid cancer in cancer insurance are the most frequent, identifying the insurers' own medical consultations as the main cause.

However, the insurance industry claims that medical consultations play a role in preventing insurance fraud involving false claims and excessive hospitalization or diagnosis. They also maintain that insurers have the right to seek expert assistance in deciding on insurance claim reviews.

Experts suggest that insurers should explain medical consultation results in detail and inform consumers that they can seek a third-party consultation if they do not agree. The establishment of an objective consultation body is also being discussed. In the United States, federal or state governments establish Independent Review Organizations (IROs) that select medical consultants.

A financial regulatory official stated, "Since last month, it has become mandatory to inform consumers about the grievance procedures related to medical consultation results," adding, "We plan to mandate the establishment of a Medical Consultation Management Committee to discuss the selection of consultation subjects and other matters."

This content was produced with the assistance of AI translation services.