I recently submitted some medical insurance claims to my medical insurer. They are requesting proof of payment of my medical bill since I'm requesting that I be paid, not the provider. Am I required to show them proof that I've paid the provider? If so, why?
In some cases it is normal for the funds to go directly from the insurance company to the medical office. This is especially true in the United States when going to an in-network doctor. The insurance company knows how much of the bill you are responsible for, and they know how much they are going to pay for their portion of the bill.
In the above described situation, they don't expect you to pay the full bill, and then look for refunds from the insurance company and the medical office. Therefore when it is done in a non-standard way, they want proof that the bill has been paid, before they send what could be hundreds of dollars to you and then still get a bill from the medical office.
In order for them to send you the money, they want proof, and they are telling you what proof they need.