What happens if an insurance company receives an itemized medical invoice for a deceased person’s policy claim but does not issue a decision? – South Carolina

Short Answer

The insurer’s silence does not automatically approve or deny the claim. In South Carolina, the authorized claimant should confirm that the insurer received all required proof, request a written coverage decision, and preserve the policy’s deadlines. An unreasonable delay may support a complaint to the South Carolina Department of Insurance or a court claim, but the estate must handle medical creditor claims separately during probate.

Understanding the Problem

The issue is whether a South Carolina insurer must decide a deceased policyholder’s cancer-treatment claim after the personal representative or another authorized claimant submits an itemized medical invoice. The answer depends on whether the invoice completed the insurer’s proof requirements, whether the treatment falls within the policy, and how long the claim has remained unresolved.

Apply the Law

South Carolina law requires insurers to process covered claims reasonably and promptly, but an invoice alone does not necessarily establish a complete or payable claim.

Key Requirements

Authorized claimant: The submission must come from the policy beneficiary, personal representative, medical provider, or another person authorized under the policy. If the estate owns the claim, the insurer may request proof of the personal representative’s appointment.
Complete proof of loss: The insurer may require its claim form, an itemized invoice, treatment dates, diagnosis information, medical records, and proof that the charges fall within the policy’s coverage.
Covered benefit: The treatment and expense must satisfy the policy’s definitions, exclusions, benefit limits, and filing requirements.
Prompt handling: The insurer should acknowledge communications, investigate the claim, request any reasonably necessary missing information, and provide a payment or coverage decision without unreasonable delay.

If an insurer requires a proof-of-loss form, it generally must provide that form within 20 days after receiving notice of the loss. For claims that qualify as clean health care claims, South Carolina generally requires an insurer to direct payment within 20 business days for an electronic claim or 40 business days for a paper claim, measured from the later of receipt or receipt of all reasonably necessary information. A supplemental cancer-policy submission from an estate may not qualify as a clean provider claim, so the policy’s language remains important.

A refusal to pay for 90 days after the holder of the policy or contract makes a demand can affect the recovery of attorney fees if a court later finds that the refusal lacked reasonable cause or occurred in bad faith. The passage of 90 days does not automatically create coverage, establish bad faith, or excuse compliance with the policy.

What the Statutes Say

S.C. Code Ann. § 38-59-10 (Proof-of-Loss Forms) – Requires an insurer to provide a proof-of-loss form within 20 days after notice or accept qualifying written proof submitted within the policy’s deadline.
S.C. Code Ann. § 38-59-20 (Improper Claim Practices) – Identifies unreasonable claim delays, failures to acknowledge communications, and failures to pursue fair settlement when responsibility is reasonably clear as improper claim practices if committed without just cause and with such frequency as to indicate a general business practice.
S.C. Code Ann. § 38-59-230 (Clean Health Care Claims) – Establishes conditional 20-business-day and 40-business-day payment periods for qualifying electronic and paper claims.
S.C. Code Ann. § 38-59-40 (Refusal to Pay Insurance Claim) – Permits attorney fees in certain lawsuits when an insurer refuses payment for 90 days after demand and the court finds that the refusal was without reasonable cause or in bad faith.
S.C. Code Ann. § 62-3-805 (Priority of Estate Claims) – Gives reasonable last-illness medical, hospital, and personal-care expenses statutory priority when estate assets cannot pay every claim.

Analysis

Apply the Rule to the Facts: The itemized invoice supplies evidence of the treatment and amount, but it may not establish claimant authority, a covered diagnosis, or satisfaction of every proof-of-loss requirement. The insurer’s statement that the claim was forwarded internally shows receipt or internal review, not approval. Continued silence becomes more concerning if the insurer has all required documents, coverage appears clear, and repeated written requests produce neither a decision nor a specific request for additional information.

The insurance claim and the medical provider’s probate claim remain separate. A pending insurance payment does not automatically suspend a medical creditor’s deadline or permit the estate to ignore the bill. Additional guidance is available on handling outstanding medical bills after death in South Carolina probate.

Process & Timing

Who files: The beneficiary, personal representative, or other authorized claimant. Where: The insurer’s claims department. What: A written demand identifying the policy and claim number, the itemized invoice, any required claim form, proof of appointment or beneficiary status, and supporting medical documentation. When: Within the policy’s proof-of-loss period; if a demand has already been made by the holder of the policy or contract, preserve evidence of the insurer’s receipt and calendar the 90-day period relevant to S.C. Code § 38-59-40.
Request a definite response: Ask the insurer to confirm whether the claim is complete and to identify every missing document or policy provision affecting coverage. If the claim qualifies as a clean claim, compare the delay with the applicable 20-business-day or 40-business-day period.
Escalate unresolved delay: An authorized claimant may submit a complaint to the South Carolina Department of Insurance. If payment remains unresolved, a contract action may be filed in the South Carolina trial court with jurisdiction. The county Probate Court continues to supervise estate administration and creditor claims but does not replace the insurer’s coverage process.

Exceptions & Pitfalls

An invoice may be incomplete: The insurer may reasonably request proof of diagnosis, treatment records, a signed claim form, or proof that the submitting person has authority to act for the estate.
Clean-claim deadlines may not apply: A fixed-benefit cancer policy or estate reimbursement request may differ from a standard provider claim submitted on an accepted health insurance form.
Probate deadlines continue: A creditor generally must present a pre-death claim within the earlier applicable period, which may be eight months after first publication, 60 days after actual notice, or one year after death. The precise deadline depends on the notice given.
Allowance does not mean immediate payment: Even an allowed medical claim may remain unpaid until the personal representative determines the estate’s assets, expenses, creditor priorities, and unresolved claims.
Do not treat silence as a denial: A formal denial usually identifies the policy basis and appeal rights. Without one, the claimant should request a written decision rather than assuming the insurer has rejected the claim.
Keep the two claim files separate: Maintain one record for the policy claim against the insurer and another for the medical provider’s claim against the estate. Related information appears in this discussion of recovering insurance proceeds owed to a South Carolina estate.

Conclusion

An insurer’s failure to decide a deceased person’s medical-benefit claim does not automatically result in approval or denial. Payment depends on claimant authority, complete proof of loss, and coverage under the policy; qualifying clean claims may carry 20- or 40-business-day payment periods. The next step is to send a documented written demand to the insurer now, while calendaring the policy deadline and, if the demand is made by the holder of the policy or contract, the 90-day period that may affect attorney-fee relief.

Talk to a Probate Attorney

If an insurer is delaying a policy claim while medical bills remain pending against an estate, our firm has experienced attorneys who can help clarify claimant authority, probate obligations, coverage documents, and important timelines.

Disclaimer: This article provides general information about South Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed South Carolina attorney.