Can a health insurance company be held liable for breach of contract

A NYS sponsored health insurance company
sent a letter to my company stating that,
moving forward all company’s that provide the
same specialized medical services as my
company are going to be forced to accept a
new substantially lower reimbursements fee
schedule. I learned after dropping my contract
with this insurance carrier that they did not in
fact send this letter to my competitors and my
competition is still being paid at the previous
acceptable fee schedule. Is this company liable
for breach of contract or other violations?

Asked on April 11, 2016 under Insurance Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

No, they did not breach their contract because *you* dropped the contract with them. A contract breach is based on actions, not on negotiating ploys or statements of intent: if you had not dropped the contract and instead, they had done something to violate the agrement or their obligations under it, that may have been breach of contract. However, because you dropped the contract before the did anything but indicate an intention to lower reimbursment in the future, they did not breach.

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