"Insurance Companies Deny Claims After Consulting Doctors... Over 4,800 Cases Last Year (Comprehensive)"

60,000 Medical Consultations by Insurers Last Year
Approximately 4,800 Cases of Insurance Payment Denials 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 became suspicious because Jeon did not receive a disability diagnosis from his primary treatment hospital but from another hospital. Ultimately, after consulting with the primary treatment hospital’s physician, it was confirmed as a 'temporary disability,' leading to the conclusion of an excessive insurance claim.

So-young Cho (42, pseudonym), an office worker with diabetes, claimed treatment costs from the insurance company after receiving outpatient treatment 1,155 times over eight years to administer insulin injections. This averages to more than 10 hospital visits per month. The insurance company, suspecting excessive treatment, obtained medical advice stating that 'diabetic patients need medical visits every 1 to 2 weeks during the first 1 to 2 months, but during the insulin adjustment period, a treatment interval of over one month is appropriate.'

It was revealed that insurance companies refused to pay insurance benefits in 8% of cases last year through medical consultations. The insurers argue that since they requested consultations for only about one case per 1,000 insurance claims, this is a minimal deterrent against excessive claims. However, criticism that insurance companies misuse medical consultations to deny payments 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 rate of medical consultations relative to insurance claims was less than 0.1%.

The number of cases where insurance benefits 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 refused payments in 1,118 cases (2.6%) out of 41,962 consultations.

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

Criticism began from the viewpoint that since medical institutions receive consultation fees from insurance companies upon their request, the objectivity and fairness of their opinions are difficult to guarantee. During the 20th National Assembly, bills were proposed to require disclosure to consumers of the name, affiliated institution, and results of medical consultations (by Jeon Jae-su of the Democratic Party), or to mandate that medical consultation institutions directly interview the insured for review (by Lee Tae-gyu of the People's Party), but these bills were discarded due to the expiration of the legislative session.

Meanwhile, criticism of medical consultations has continued. The Korea Consumer Agency recently pointed out that the majority of damage relief applications related to cancer insurance concern colorectal and thyroid cancers, identifying the insurance companies’ internal medical consultations as the main cause.

However, the insurance industry argues 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 insurance benefit payments.

Experts suggest that insurance companies should thoroughly explain medical consultation results 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, the federal or state governments establish Independent Review Organizations (IROs), which select medical consultants.

A financial regulatory official stated, "Since last month, it has been mandatory to provide consumers with guidance on damage relief procedures related to medical consultation results," adding, "We plan to mandate the establishment of a Medical Consultation Management Committee to discuss the selection of medical consultation subjects and other matters."

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