Given the complexity of the legal issues involved and the tendency of insurance companies and health plans to vigorously defend claim denials, especially after appeal and grievance procedures, evaluation of any potential legal claim on behalf of an insured or plan member should be undertaken by an attorney experienced in insurance claims and bad faith litigation.

Cases against health insurers and health plans resulting from claim denials, including bad faith remedies, are frequently undertaken on a contingency fee basis whereby the attorney investigates and evaluates the case before filing a complaint, advances the costs of investigation and litigation, and is paid attorney fees only if there is a recovery. In the event of recovery, the attorney is paid a percentage of the recovery as attorney fees.

While the details of contingency fee contracts may vary from state to state, and within a state from attorney to attorney, as a general rule the typical contingency fee is 25 to 33-1/3% of the value of benefits or services recovered and 33-1/3 to 40% of any extra contractual or tort damages, such as emotional distress and punitive damages recovered.