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

Many times people get in the habit of taking the simpler road without giving much thought to the action. This is true even of lawyers who are trained to think things through.
 

One habit that really galls us is that of complying with insurance company requests for medical and even psychological reports to which they know they are clearly not entitled. Insurance companies are always looking for an edge and they have no compunctions about trying to get information which will help them fight a claim, even if the law says that the information is off-limits.

The area of the law in which this information tactic is most abused is that of discovery in disability claims involving psychiatric matters.
 

Although it arises with any disability claimant who happens to see a psychologist regularly,
what insurers like about these types of psychiatric claims is that claimants are usually somewhat fragile and may be easy to discourage because they fear that their psychiatric disabilities may become known to business associates, relatives, friends or even the general public.
 

The barest threat of disclosure may be enough to get a claimant to back off and drop a psychiatric disability insurance claim. What an easy way to drop a nice chunk of money to an insurance company’s bottom line. So, insurers will almost invariably demand the claimant’s psychotherapy notes when defending a psychiatric claim.

Most lawyers who litigate with insurance companies probably instinctively get a queasy feeling when asked to disclose the type of information contained in their client’s psychiatric case notes, but they may do it in the spirit of disclosure which has been the hallmark of litigation philosophy during the last several decades. However, their queasy feeling is the correct one and they should not disclose the psychotherapy notes no matter how loudly the insurer demands them.
 

In fact, the attorney would arguably be violating the Health Insurance and Patient Protection Act (HIPPA) if they did provide the notes. The Act, recognizing the intimate and personal nature of psychotherapy notes, requires a health care provider to receive a very specific authorization from the patient to release any such notes even to another health plan provider.
Busy lawyers, especially, those who do not practice extensively in the health care field, may not be aware that psychotherapy notes should not be made available unless the client clearly authorizes it or a court orders it.
 

HIPPA proscribes the furnishing of such information by a health provider unless clearly authorized by the patient, 45 C.F.R. Sec. 164.502(b), Sec. 164.508(a)(2)(4).
 

The patients’ actual medical record, i.e., results of clinical tests, the length of time of counseling sessions, the type and frequency of treatment sessions, and prescribed medications, along with the diagnosis, course of future treatment and prognosis, will most times provide sufficient information for the insurance company to make a proper decision on whether or not to honor a disability claim. The psychotherapy notes are the “gossip” in the case and just serve to open the door to information which is superfluous to the essence of the claim, but can be most damaging to a claimant if it reaches the wrong ears.
 

HIPPA makes this very clear in 45 C.F.R. 164.501, when it prescribes that the psychotherapy notes be kept separate from the patient’s medical record.
 

So, the next time a disability insurance carrier demands the psychotherapy notes in a disability claim, tell the insurer to take a hike.
 

The walk will do it good.

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A recent decision of a Federal District Court judge in Alabama raises the crucial question of the intent of Congress in passing ERISA and the result of judicial tinkering with ERISA claims. (Edgar v. Disability Reinsurance, 2010 WL 3906651).
 

Federal Judge William M. Acker, Jr., clearly spells out the issue by pointing out that Firestone v. Bruch, 489 U.S. 101 (1989) , seems more intent on preserving the willingness of insurance companies to maintain lower premiums for employers, than to afford stricken employees with the help Congress apparently intended them to have.
 

The issue is important, but the question is: Should the Supreme Court deal with it or should Congress deal with it? Judge Acker points out that the legislation clearly sets forth that a stricken litigant can bring a civil action to recover benefits due under the terms of the plan. Judge Acker differentiates between a “civil action” which he says is mandated by ERISA and a “review” which he claims is mandated many times in ERISA matters by the decision in Firestone.
 

The argument centers on Federal Rule 56 (summary judgment), which Judge Acker believes is not applicable to ERISA litigation when there is a dispute of material facts cited by the opponent of the motion. Why, in such a situation is summary judgment permitted when no judge would think of allowing it in a non-ERISA civil case where there are disputed facts.
 

In support of his thinking, Judge Acker relies heavily on Krolnik v. Prudential, 570 F3rd 841, 7th Cir., 2009, in which the court applied contract law to the ERISA case before it, declaring that Firestone does not change the fact that at base, an ERISA dispute is a dispute over the meaning of the language in an insurance policy, which requires the application of contract law.
 

Judge Acker sets forth the long-standing law of Rule 56 cases:  Only if after all evidence by a non-moving party is considered true, there is still no dispute of a material fact, judgment may be granted to the moving party, if the party is entitled to judgment as a matter of law.

If every other litigant in a Federal District Court is entitled to the benefit of this long-standing interpretation of Rule 56, why aren’t ERISA claimants afforded the same rights? As Judge Acker and Krolnik point out, the issue involves an insurance contract and should be adjudicated according to long-standing insurance law concepts.
 

To do otherwise indicates an attempt by the courts, with Firestone, to “fix” the legislation. This is not its province. If the legislation, as they wrote it, is actually “broken” in the view of Congress, then Congress should fix it.
 

For courts to give insurance companies an extra weapon in their already overloaded arsenal (“arbitrary and capricious”) is not the answer. Such a weapon adds a burden to the already overloaded claims wagon the ERISA claimant has to haul.
 

ERISA indicates clearly that Congress wanted to protect stricken employees. Why did the Supreme Court rebuff this intention by deciding Firestone as it did?

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Health insurance companies have a great system going for them. They make inordinate amounts of money and then use that money to buy legislative influence so that they can make more inordinate amounts of money.
 

Who wouldn’t want to be a part of a system like that – if you are the one raking in the cash, not the one who pays it out.
 

A Chicago Tribune report, http://www.chicagotribune.com/business/ct-biz-1004-health-insurance-politics20101004,0,6752608.story, spells out in detail the flood of money being provided by insurance companies to Republican candidates hopefully headed for Washington.
 

Now that the Democrats have passed a health law which greatly expands the market for health insurance companies, they have switched allegiance to the Republicans in an effort to elect Congressmen and Senators who will severely restrict those parts of the law which insurers don’t like and curb the reach of regulations to be formulated pursuant to the health law.
 

In 2009, the Tribune found from federal election filings, that donations to the two major political parties from the five largest insurance companies and their Washington-based lobbying arm was almost equally divided. This year, these insurers have given more than three times more in contributions to Republican campaigns than to Democratic ones.
 

Why the sudden change? In 2009, the legislative branch was locked in an epic struggle over the issue of enlarging health insurance coverage in the nation. A major issue was forcing everybody in the country to buy health insurance. Since there were 45 million people without health insurance, what an expansion of the insurance market for the companies! So, they did everything they could to see that, at least, this part of the expansion became law.
 

They succeeded and got the increased market. But, then they looked at the entire law and found that there were parts of it that actually favored policyholders and would tend to curb insurance company profits. So, the companies shifted gears and decided to back the people who opposed the law so that they could milk them for the legislative and regulatory “fixes” the insurers want.
 

Any person who thinks about it has to come to the conclusion that an insurance pool cannot work if the people who are most likely to need the insurance are the only ones in the pool. Unless many who will not require the insurance pay premiums just to play safe, there would not be enough funds in the pool to pay the claims of those most at risk.
So, just as automobile insurance is required from all, so health insurance will be required from all.
But, having obtained this treasure trove of possible new business, the insurers then set about paring the potential amount of benefits they would have to pay. They have a laundry list of items they want to cut or excise from the law. After all, they have what they want in the way of potential business, now it’s time to cut down on potential payouts.
 

Some of the things in the new health law that have insurance companies on the warpath are:
 

* Prohibiting denial of coverage to sick children
* Prohibiting canceling policies when policyholders get sick.
* Prohibiting lifetime caps on benefits to disabled consumers.
* Policyholders will receive new appeal rights when a claim has been denied.
* Insurers will have to cover payment for more preventive care for their policyholders.
Which just goes to show:

To the policyholder, health insurance is a life-saving mechanism which hopefully protects the family in the event of disaster.
 

To the insurance company, health insurance is a cash cow which keeps on giving and giving and giving…

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