Bad Faith Insurance Lawsuit Costs Aetna $25.5 Million

November 26, 2018

To anyone who has ever had a medical insurance claim denied by an insurance carrier, it may come as no surprise that someone would file a bad faith insurance lawsuit against a provider. What may be surprising, however, is that directors at Aetna reportedly admitted they handled dozens of cases in a day and that they spent more time preparing for a bad faith insurance lawsuit than they did researching the claim itself. That acknowledgment, however, is part of the reason a jury in Oklahoma awarded more than $25 million to the family of a cancer patient who died after Aetna denied treatment.

Insurance companies have a duty to policyholders to uphold their end of an insurance contract. Too often, however, they put profits ahead of people and the all-too-real result is that patients do not receive vital care, sometimes paying the ultimate price.

Insurance Claim Denied Because Company Deemed Treatment “Experimental”

In 2014, Orrana Cunningham was diagnosed with stage 4 nasopharyngeal cancer with a tumor near her brain stem. Standard radiation treatment came with a risk of severe side effects, including potential blindness, and had a low chance of success so her doctors recommended Cunningham receive proton beam therapy. Proton beam therapy is a form of radiation treatment that focuses on the tumor and does not come with the same risk of side effects. It also has a higher success rate. Cunningham’s doctors deemed it the best possible therapy because it gave her the only chance of survival.

Orrana filed a claim for the treatment, but Aetna denied it, with the Aetna director reviewing the claim calling proton beam therapy “investigational or experimental.” Two other doctors reviewed the claim and upheld the first doctor’s decision despite the Food and Drug Administration (FDA) having approved proton beam therapy. Cunningham died in 2015 at the age of 54.

Bad Faith Insurance Lawsuit Alleged Aetna Directors in Conflict of Interest 

In appealing Aetna’s decision, Cunningham’s physicians “adamantly requested” the insurance company have a radiation oncologist with experience treating head and neck cancer review the claim, but Aetna refused. The bad faith insurance lawsuit filed by Cunningham’s husband argued the people who made the decision to deny Cunningham’s treatment were “medically unqualified to make a good faith decision in this regard,” as none were radiation oncologists, none had treated any patients with radiation, and none had treated head and neck cancer generally.

“Further, none of the Aetna employees who repeatedly denied coverage under Orrana’s Policy had ever heard of the duty of good faith and fair dealing,” the lawsuit stated. “At the time they repeatedly denied Orrana’s claim for coverage for [proton beam therapy], none of the Aetna employees were familiar with the obligations owed to Aetna policyholders under Oklahoma law.”

The bad faith allegations included arguments that none of the employees who denied the claim spent more than an hour reading and reviewing materials Cunningham and her physicians sent in support of her claim. It further argued that Aetna’s directors face a conflict of interest because insurance company offers annual bonuses that are partially based on how profitable the company is, giving the directors motivation to deny claims.  

In his bad faith insurance lawsuit, Cunningham’s husband alleged the company’s denial of her claim violated her insurance policy, the medical directors who denied the claim did not have the medical expertise to make such decisions, and Aetna’s claims system is “intentionally and maliciously” biased toward increasing profits, meaning policyholders’ claims are not reviewed in good faith.

Jury Awards $25.5 Million in Bad Faith Insurance Claim

A jury in Oklahoma agreed with the plaintiff and awarded Orrana Cunningham’s family $25.5 million in bad faith damages, finding that Aetna was reckless in its duty to handle Cunningham’s claim in good faith. One juror said that she felt the insurer repeatedly failed Cunningham by rubber-stamping denials without conducting due diligence. She noted the jury found that proton beam therapy was not at all experimental and was angered that the medical directors admitted they spent more time preparing for the lawsuit than they did reviewing materials when they denied Cunningham’s claim.

In all, the jury awarded $10 million in punitive damages and $15.5 million in emotional distress damages.  

Bad Faith Insurance Lawyers

Bad faith insurance attorneys at Cutter Law understand the catastrophic consequences of insurance companies acting in bad faith. At best, it unreasonably delays treatment and causes the patient undue stress and pain. Frustratingly, situations like Orrana Cunningham’s, where a patient is denied potentially life-saving treatment with no medical basis, are all too frequent. In cases like this, suing the insurance company for bad faith could be the only way to obtain justice for you and stop insurance companies from continually violating their policies.

We’re proud to fight against insurance companies to defend the people whose lives are put on the line so these insurers can maximize profits. We work tirelessly to ensure patients’ rights are protected and they receive the full compensation they’re entitled to in their bad faith claim against the insurance company responsible. If you’ve had your claim unreasonably or unfairly denied or delayed, contact a bad faith insurance lawyer at Cutter Law today to discuss your legal options.

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