Quiat on Claims : New York Disability Insurance Lawyer & Attorney : Michael Quiat : Uscher Quiat Uscher & Russo Law Firm : ERISA, Denied Claims

Don’t expect a disability insurance company to spend a lot of time analyzing a claim which appears to be clearly deniable on its face. We all know insurance companies are not in the business of paying, especially if they find what appears to be a clear exclusion to hang their denial on.

We recently took on an appeal from a Unum denial for an emergency room doctor who had suffered from glaucoma for years.

Having made full disclosure to the insurance carrier of his glaucoma condition when he bought the policy in 1993, Unum issued the policy, but inserted an exclusion to cover the possibility of his glaucoma condition causing him to become disabled. Our client had accepted this reasonable restriction, believing he could rely on treatment and medication to keep his glaucoma in check.
His policy exclusion read:
 

“The insured is not covered for any loss resulting from either or both eyes, except by the following table of benefits on form 809 attached.”

In 2006, the doctor suffered some optic nerve damage from Sarcoidosis, resulting in some minor visual loss, but was able to continue working as an emergency room physician.
In 2008, our client underwent coronary bypass surgery after which he noticed a marked loss of vision. This loss of vision was attributed to postoperative hypotension which diminished the flow of blood to his optic nerve and resulted in ischemic optic nerve damage.

Being no longer able to work because of his vision problem, the doctor filed a long term disability claim. Unum took the position that his loss of vision was caused by his eyes and was therefore clearly excluded under the policy. Unum paid for the 12-month exclusion period and then refused to pay for further long term disability benefits. Unsurprisingly, Unum took the position that the loss “…resulted from either or both eyes…”

Why should Unum or any other insurance company look further under these conditions? Usually when talking about the eyes, we are talking about “seeing” or vision. If the doctor’s claim was based upon loss of vision, end of story as far as an insurer is concerned. Why look further if the exclusion seems to mean the insurer doesn’t have to pay?

When the case came to us, we reviewed carefully the language of the exclusion. Then we carefully examined the doctor’s medical history and found that his loss of vision was not caused by his “eye or eyes”, but was caused by damage to his optic nerve which is not part of the eye. So, if the doctor’s loss of vision was not caused by his “eye or eyes”, it is not excluded and the disability policy should pay in full according to its terms.

So, what at first blush would seem to be a slam dunk for the insurer turns out to be a slam dunk for our client if he can get the insurance company to see it his way. Although the claim had been denied, we appealed to Unum on behalf of the claimant, offering proof that his occupational disability was not caused “by his eyes” but was caused by his optic nerve ischemia, the optic nerve not being part of his eye.
This condition was no different from a vision impairment caused by a blow to the head which damaged the optic nerve and caused a loss of vision.

Before filing the appeal we gathered the appropriate medical reports and set forth our arguments in what we thought was a clear and cogent manner, particularly pointing out that the exclusion had been written into the policy by the insurance company so that under the law, any question about its meaning would be interpreted against the insurer.

After reviewing this appeal, (copy of which is available on request), Unum reversed its earlier rejection of the claim and now has agreed to pay benefits.
It’s tough to lead an insurer to water, let alone make it drink, following denial of a claim which an insurer believes is clearly excluded by its policy language.

Luckily for our client, experience, research and a narrowly focused analysis made it happen.

Sometimes, we love what we do!

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A recent article outlining the effect of insurance regulators trying to do away with the “discretionary clause” in ERISA disability income insurance policies raised an interesting and basic issue concerning life in these United States.

Why do we keep kidding ourselves about what we do?

The “discretionary” issue here concerns whether plan administrators should have the discretion to determine whether a claim is covered by an ERISA policy when the insurance company is both the insurer which will pay the claim and the administrator of the ERISA plan. It doesn’t take a genius to know that this “discretionary” situation creates a powerful incentive for the administrator to favor the insurance company in making that decision.

Defenders of this “discretionary” system say this procedure keeps costs manageable and that to do otherwise would raise the cost of insurance because with the discretionary clause the insurer will pay fewer claims. They are correct. But, what does unfair favoritism have to do with protecting the sick or disabled?

Is it better to call a thing a nice sounding name, but not give the nice-sounding protection the name implies? Have we become so used to Madison Avenue that we are willing to play the ad game with the terms of our insurance policies?

When you buy an insurance policy, you expect to be fully protected against risks you bought the policy for. Why should the insurer insurer have the advantage of unfairly denying your claim and then having the courts constrained to defer to that unfair denial, simply because such a system leads to smaller disability payouts and, hence, lower premiums. If the insurance doesn’t cover what it is supposed to cover, who cares how low the premiums are?

What good is a policy that doesn’t do what it s supposed to do? And, how far do we carry this sham?

Policies are supposed to be statistically underwritten so that the insurance company knows the risk and sets its price accordingly. If the price is high, so be it. Reduce some of the benefits so that the premium meets the cost. Don’t use an artificial stricture on paying benefits to deprive deserving claimants what is due them.

During the last decade, we have all had the experience of living a lie: Banks urging people with bad credit to take their credit cards and use them recklessly; calling “liar’s loans” home mortgages; thinking housing prices would go up and up and up forever; Wall Street becoming a crap-shooting gambler, shuffling paper back and forth and making billions in bonuses on the paper shuffle; rating companies being fooled (or worse, just okaying any deal for the fee money); and on and on and on.

We are suffering for living the lie because it felt so good. Now, let’s start getting real. If insurance requires a certain premium, require that it be paid. Shortcuts created by fudging what is actually going on leads to injustice and worse.

If an ERISA policy calls for “discretion” on the part of an administrator who works for an insurer, and the decision is required to get deference in the courts, let’s call it what it is:

A maybe disability income policy

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Disability income insurance claimants never expect an easy time with their insurers, but the recession we are going through has toughened insurer attitudes to the point of “Scrooginess”. If you hear money screaming it’s because insurance companies are pinching it so hard it hurts!

Cash and liquid funds are ordinarily “king” in any business, but the recent economic crunch has magnified by many times insurance company resolve to hold on to every dollar for as long as possible, no matter their obligations under the terms of policies with their policyholders.

Lawyers experienced in this field have found in the last year that claims which have been established to a point where they would have been settled in the past are now still being denied by companies who want to hold on to their dollars for as long as possible.

What this means to the disability claimant, at a bad time in his or her life because of being unable to earn income due to illness or injury, is that they now face a steeper hill to climb in dealing with their disability insurers because companies are doing everything they can to delay paying their policyholders for as long as they can.

For policies covered by ERISA, insurers have a built-in delaying mechanism with the discretionary clause which gives the administrator of the ERISA plan the authority to determine whether the claim is covered by the ERISA policy when the claim is first submitted.

It doesn’t take much imagination to conclude that the ERISA administrator, which many times is the insurance company which will have to pay the claim, will tend to protect its cash by denying the claim in the first instance and then to keep denying the claim to protect the insurance company’s cash reserves.

This right to determine a claim’s validity at its inception not only gives the insurer a leg up in the first instance but sets an impediment which the claimant has to overcome throughout the prosecution of the claim. The claimant is always playing second fiddle because the denial sets the tone for the case and must be overcome if the claimant is to prevail.

So, if you are being forced by circumstances to file a disability income claim, be prepared for more flak than insurers usually give such claims (and, believe us, it is usually plenty). But, you can’t wimp out and abandon the claim. That’s exactly what the insurer wants you to do.

If you have a valid claim, pursue it diligently and get the help you need from some one experienced in disability income insurance law and all of its pitfalls. (You can be certain that your insurance company and its cadre of attorneys know all of the pitfalls).

If you have a valid disability claim, be prepared for a longer, harder fight for benefits these days because of the recession. But, also know that you can win this fight!

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It’s time litigants and the courts deal with the biased world of insurance company doctors who make diagnoses and reports about claimant disability conditions without ever seeing a live body.

This is today’s world of insurance company “examinations” with doctors who make their living from an insurance company or from a medical agency which makes its living from the insurer.

The U.S. Supreme Court recognized the problem in Metropolitan Life Insurance Company, et al      v. Glenn, 128 S. Ct. 2343 (2008), but there is a long way to go before there is any fairness in the procedure in disability income claims.

We are happy that the Supreme Court finally found that the way insurers get their medical information requires further scrutiny because of the rampant biases inherent in the process.

But, the system, having recognized the problem, should go to the heart of the matter much more quickly and with fewer road blocks. What the court in Glenn recognized is that there is a world of medicine which plays by self-interest rules rather than by the rules of the Hippocratic Oath, i.e.

Since insurance company MDs do not see the claimant in person, they feel they do not owe the ordinary patient-doctor duty to the claimant. These “no-see-um” physicians believe they can range far and wide with their “opinions”, buttering their bread on the side of the one who pays them – the insurance company.

Feeling thus relieved of the professional duty clearly owed a patient in making an examination and diagnosis which the patient will rely on in seeking treatment, insurance company “Independent Medical Examiners” give their imaginations free rein so as to arrive at a diagnosis of “no disability”, which is exactly what their employers, the insurance companies or the insurance companies’ puppet agencies, want.

There is no mystery about this. For many years, courts have allowed Insurers to rely on the reports and diagnoses of doctors who have never seen the patient. And as this trend became more entrenched, insurance companies went out and found MDs who did not practice medicine but who enjoyed reading other doctor’s work so they could naysay it and make loads of money doing so.

Although some courts have found that Glenn opens the door, via discovery, to claimants’ ability to find out the history of each doctor to determine a leaning or bias which might affect his or her opinion, it does not go far enough. It requires court permission to examine the physician’s expertise and inclination to lean in favor of the insurer.

Why not save the court (and the parties) a load of time by having the doctors who are being relied on in a matter provide a curriculum vitae and answers to a standardized questionnaire which will immediately apprise the court and the litigants of details to consider in arriving at a decision on the expert’s impartiality.

Such a system, with appropriate penalties for certifying falsely, would immediately give the court and the litigants a bird’s-eye view of the innate fairness with which the physician undertook the medical duties in the matter. Insight into the relationship of the MD to the claimant, the basis upon which the physician made the report or diagnosis, the ongoing business relationship of the physician with the insurance industry and company, the fee paid and the amount of fees paid in last few years, etc.

The questions seem fairly obvious and would not be a burden for a doctor to answer, especially if the doctor worked often in the disability field. It would not be difficult to propound such a questionnaire with 6 to 8 questions which would do the trick.

But, what a savings for the court and litigants to have the information up front and not have to go through the hearings on motions for interrogatories and all that that pretrial motion practice entails. Every one would have the important information at the start and could evaluate the balance of the evidence with that information in mind.

And, you know what? It wouldn’t surprise us if this sensible procedure led to a lot of insurers dealing much more reasonably with claims if they know that the “no-see-um” doctor defense was now out in the open for all to see.

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We think it was a welcome relief for recently discharged or about-to-be-discharged employees that a law, recently enacted by Congress and signed by President Obama, extended much needed help to those in need. The American Recovery and Reinvestment Act extends COBRA subsidies for an additional six (6) months for a total of fifteen (15). months..

In a move to help those laid off between September 1, 2008, and February 28, 2010, the government provides a subsidy to employers of up to 65% of the COBRA health insurance premium to be paid on behalf of a recently unemployed person. The COBRA beneficiary will have to pay the balance of 35% of the premium.

The subsidy program is available to employees discharged between the requisite dates whose adjusted gross income for tax purposes was less than $124,000 for an individual and $250,000 for a couple.

The details of the legislation are somewhat complex. For those interested in more information, click here.

If the administration and Congress really want to come to grips with this recession, they should provide more of this type of grassroots relief. Such relief gives hope and hope is the foundation stone upon which this country will climb out of the recession. .

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A recent article on the high cost of air ambulance service raised an old issue in our mind: How much would you be willing to pay to save the life of your loved one? Or somebody else’s loved one?

When a child is ill and running a high fever from a cause unknown, a parent would pay almost anything to get the fever down and make the child well. But, once the emergency is over, the parent looks carefully at the charges and may become upset at the cost.

Air ambulances are usually used in emergencies where the medical personnel on the ground evaluates a victim and believes the illness or injury is so severe that the trip to the hospital by ground ambulance would be life-threatening and that the most immediate full facility attention is required.

When this occurs, neither the patient nor any friend or relative, worries about the cost of air transport. They just want to get the best available medical personnel and equipment working to save the victim. It is only after the patient is stabilized and on the way to recovery that the $12,000 to $25,000 cost of the flight becomes an issue.

• This observation is not a criticism of people’s conduct. It is an observation which goes to the     basic foundation of the type of health care system we want in the United States.
• Do we want a system which gives basic medical, hospital and custodial care to all people? Do we want a system which gives the utmost care to all people?
• Do we want a system which gives the utmost care to only people who can afford to pay?
• Do we want a system which gives the utmost care to people who are lucky to be old enough to    be covered by a government system which will pay, while younger people with much longer life expectancies are left out in the cold?

To find our answer to these questions we must put ourselves in the position of a parent with a very sick child. What would we want in the way of care for that child?

The air ambulance is a good example. It is called when time appears to be of the essence. Trained, high-priced air and medical crews have to be on standby 24 hours because one never knows when an emergency call will come in.

Once on the scene, should the aircrew check the victim’s insurance papers before acting? And, if the crew finds the victim isn’t insured should they refuse him or her transportation to a hospital even if it means the person will die?

These are basic questions we must answer to have a coherent approach to health care in this country.

Slick slogans won’t solve the basic problem: Do we want a health care system that gives everyone a chance to get the medical help they need or do we want a system which favors some and ignores others?

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What better way for us to start the New Year than with resolutions that are apropos for disability income insurance claimants, both ERISA and private.
So, here goes:
 

For a potential claimant: I will read my policy carefully and ask some one who knows to clarify what stumps me. And, I will do it now, before I become disabled.
 

For an actual claimant: I will do my best to get myself back on track so that I may go back to work (if I can get a JOB!).
 

For an insurance company: I will do my best to:

Train my claims employees to consider all of the evidence fairly when assessing claims.

 Halt the practice of getting a stable of shill doctors to “examine” claimants and call these exams “independent”.

Spend more money paying claims and less on fighting people who I know are entitled to benefits.
 

For an Independent Medical Examiner: I will call them as I see them, reread my Hippocratic Oath and conduct disability physicals so as to “do no harm” to those I examine.

For a treating physician: I will pay strict attention to my medical reports, knowing that insurance companies are just waiting for me to make a mistake or an omission which will prejudice my patient’s claim.

For myself, as a disability income attorney: I will continue to work hard to get all disability claimants the benefits they have paid for with their premiums.

For all of us: A wish for good health and that you never have to make a claim to any insurer for anything!

                   What a Happy New Year that would be!

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If you have an ERISA income disability policy (a group LTD insurance policy most often purchased through an employer), you may think you have the same coverage and benefits as a privately purchased disability policy – but, you would be flat out wrong.

First off, in most states you would have to deal with the ERISA “discretionary clause” which puts a policyholder behind the 8-ball before a claim is even filed. Some 16 states have prohibited the clause in new policy language, but most states haven’t.

This clause allows the insurance company, which will pay the claim, to initially determine if the claim is covered by the disability policy. If the insurer says “no”, then the claimant has to climb out of a deep legal hole to prevail no matter what the actual facts of the claim.

A private policy has no “discretionary clause” to put the claimant on the defensive right from the start. If a private insurer denies a disability claim, the policyholder has to prove the disability is covered by a straightforward preponderance of the evidence and does not have to prove that the insurer’s denial of a claim was “arbitrary and capricious” a tough standard of proof in any court.

Other advantages of private over ERISA polices are:

* The way covered earnings are calculated. ERISA covers base salaries while private policies usually cover base plus incentive compensation.
* Taxation. ERISA benefits are taxed to the extent of employer contribution. Private benefits, usually paid with after-tax dollars are non-taxable.
* No benefits offsets. ERISA benefits are frequently subject to offsets from other group insurance benefits, SSDI, and Workers Comp. Private policies usually hve no benefits offsets.
* Portability. Private disability income policies are transferrable if employment changes. ERISA policies are generally not transferrable.
* “Own Occupation”. Private policies have “own occupation” clauses which are more tailored to the policyholder’s occupational status at time of policy purchase. ERISA policies usually have a 2-year “own occupation” coverage and then switch to an “any occupation” disability definition.
* Contract Changes. Private coverage usually prohibits rate increases until age 65 while ERISA rates can increase during the life of the policy.
* Cost of living. COLA increases are much more common in private coverage while it is rare in ERISA policies.
* Mental and nervous disorders. ERISA policies often limit benefit coverage to 2 years. With a private policy, even an unlimited benefit coverage for these types of ailments may be purchased.
* Legal rights. Private policy claims permit jury trials, while ERISA claims do not. In addition, private disability insurance allows full discovery and punitive damages in a proper case while ERISA coverage permits very limited discovery and no punitive damages.

If you are covered only by an ERISA policy and believe you would like to have some of the benefits of a private disability income policy, there is nothing stopping you from buying additional cover age to supplement what you have under ERISA.

If so, don’t delay. Buy the additional coverage BEFORE something untoward happens. Otherwise you’ll cry over spilt milk and lost benefit dollars.

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 A recent article on msnbc.com reported that Social Security disability claims are increasing rapidly. The article says that the nation’s economic downturn and arrival of the baby boomer generation at the peak years of disability are the causes of this stark upturn.

To get this benefit (commonly known as SSDI), claimants must prove they are unable to work because of a medical condition that is expected to sideline them for at least one year or is expected to result in death. Almost two-thirds of first SSDI applications are rejected by the Social Security Administration, benefits being provided only in the most obvious cases, such as terminal cancer, etc.

The next step after rejection of a first application is a request for reconsideration which is a review of the initial decision. These requests are dealt with, usually within a few months, and approximately 14% of those requests to overturn the adverse decision on the first application, are granted.

The next step for those who pursue SSDI benefits is to file for an in-person hearing before an administrative law judge. At this hearing new evidence may be introduced and the judge, who will make the decision, actually sees and evaluates the claimant. About 55% of these hearings result in a turnaround with SSDI benefits being granted.

The big problem with these hearings by a judge is that it can take up to 2 years from filing for such a hearing to the date of hearing. And, during that wait, the claimant may not have any income on which to live.

What it all boils down to is that fewer than 35% of claimants ever win entitlement to SSDI payments. Not only is the number cut by the findings in the proceedings, but the number is whittled down further by the “wimp”  factor, a pervasive tendency among claimants to give up because of their personality or their attitude that “you can’t fight City Hall”.

Which leads us to wonder – the number of SSDI applications has soared. Will the number of those who get benefits do likewise?

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