South Dakota regulators are working to sort out confusion over coordination of benefits provided by auto insurers and health coverage providers after a vehicle accident, a problem that is reportedly affecting multiple states.
State Division of Insurance officials say there is “a broad-based problem” involving claims filing, billing practices and mixups about which coverage is applicable in different circumstances. Regulators and insurers took part in a fact-finding hearing earlier this year aimed at gauging the extent of the problem and exploring regulatory changes, but a state official says they have yet to come up with concrete answers.
“There have not been any legislative or rulemaking changes proposed as a result,” Randy Moses, deputy director of the division, said in a phone interview.
Medical payment coverage foots the bill for medical and funeral expenses resulting from a crash, covering hospital, surgical and other medical costs, as well as funeral expenses.
That coverage can duplicate benefits provided by a person’s health insurer, however, creating confusion for policyholders and insurers.
South Dakota regulators say a number of consumers have complained about instances in which providers have not paid claims according to the terms of their policies. Like regulatory agencies in other states, the division regularly fields consumers’ questions about auto insurance, helps resolve disputes between policyholders and companies, and oversees the business and financial practices of coverage providers licensed there.
The division has investigated multiple claims from insurers involving both medical payments and health coverage, and state officials have noted an underlying lack of consistency in claims process and a lack of knowledge as to how the two coverage types should be coordinated.
Moses said the coordination of benefits issue was taken up recently at a meeting of National Association of Insurance Commissioner’s (NAIC) regulatory framework task force, which he chairs, after regulators from several other states expressed concerns. The panel is scheduled to revisit the issue at its next meeting in March.
Moses said South Dakota officials plan to wait to see what changes are proposed as a result of the NAIC discussions and will likely follow the association’s lead.