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

UPDATED: Sep 30, 2022

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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 6 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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