Cariers and Third-Party Administrators

CHCS Services

CHCS Services is a third-party administrator for long-term care insurance companies, including Prudential Insurance Company of America, CAN, CMFG Life Insurance Company, State Farm, and several state-run long-term care insurance plans.

If you have encountered frustration in dealing with CHCS Services, you are not alone. We encountered CHCS Services in the case of Turley v. Prudential, after it had wrongfully terminated our client’s long- term care benefits. Sometimes, insurance companies try to avoid bad faith liability by pointing the finger at its third-party administrator. But in California, insurance companies have a nondelegable duty of good faith and fair dealing. (SeaBright Ins. Co. v. US Airways, Inc. (2011) 52 Cal.4th 590.) That means that insurance companies are accountable as a matter of law for the actions of those they hire to administer claims. The duty of good faith and fair dealing requires insurance companies and their third- party administrators to thoroughly investigate before denying a claim for benefits. (Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 819 [“it is essential that an insurer fully inquire into possible bases that might support the insured’s claim before denying it”].) Shockingly, in our Turley case, CHCS Service’s claims manager testified in deposition that the Company need not obtain all pertinent medical records before denying benefits:

Question: All right. I just want to know whether or not it, from the company’s perspective, it is incumbent upon it to obtain all pertinent medical records before denying benefits.

Answer: No.

[Deposition of Christopher Piggot]

That is the exact opposite of what the duty of good faith and fair dealing requires. If you are having difficulty with CHCS Services regarding the administration of a claim for long-term benefits, contact us for a free consultation.