"Nameless, Faceless Medical Reviewers"

We have previously written about the serious problems which result when insurance companies hire doctors to perform “paper reviews” of insurance claims without ever meeting or examining the patient, and then use those paper reviews to justify termination of benefits. In an ERISA context, this is particularly difficult because claimants are denied in most cases the opportunity to confront those professional reviewers or to cross examine them to show they are financially biased or otherwise not competent to speak to the issues about which they have given an opinion. Even so, insurance companies in increasing numbers rely on these unnamed, unknown medical sources to justify termination of benefits. On December 14, 2014, 60 Minutes broadcast a piece which speaks in part directly to this issue and points out the fundamental unfairness, indeed the dangers which can result when insurance companies make claim determinations and deprive people of benefits to which they are entitled and which they desperately need.

www.cbs.com/shows/60_minutes/video/u0_Aa3sp_lwp28lFirqom4Ptr_ldUknq/denied/

Insurers Like Psych

The question of why mental illness is treated differently from physical illness was raised in a recent California case, Harlick v. Blue Shield , 656 3d 832 (9th Cir. 2011).   The case turned on the wording of a California statute which is not relevant to the purpose of this post.

What is most relevant is the reasoning behind the insurance industry’s effort to save itself money by classifying mental illness as less than physical illness.  Those who have had first-hand acquaintance with mental illness know that there is very little, if any,  difference in the disabling factor between the two.  If your mind can’t cope with the duties of your occupation, it is as if you have a physical disability which prevents you from performing.

Psychiatric disabilities can sometimes be cured in weeks or months and sometimes not for years.  The same is true of physical disabilities.

Yet, insurance companies frequently limit their obligation to pay LTD benefits to two years while physical disabilities will be paid for the term set forth in the policy. 

This has led to insurance companies developing a new tactic – all employment disabilities are caused by psychiatric problems rather than psychiatric problems being triggered by physical disabilities.  Now that the 2-year limit on paying for disabilities in disability income policies has become more or less standard, it has become the preferred denial “go to” for insurers when nothing else jumps right out at them.

If there is any psychiatric involvement at all in a disability income claim, you can bet your bottom dollar that the insurance company will be doing its darndest to say it was based upon a psychiatric disorder.  These days, it has become almost a knee jerk reaction.

So, if you are hit with this defense, whether as a claimant or a lawyer, don’t accept it without scrutiny.  The stakes are too high to take the carrier at its word. 

Insurance companies are not all the same and don’t act the same, except in one regard:

They hate to pay claims!

Human, Or...?


Almost 40% of health insurance consumers don’t understand they can appeal an insurance company denial of a claim, according to a recent survey by the National Association of Insurance Commissioners, an organization of State insurance commissioners.

This statistic means a large percentage of policyholders accept insurer denials at face value even though history clearly shows that most of these companies do their best to deny, deny, and deny claims. Add to this group many claimants reluctant to push their claims in the face of what they see as the impenetrable wall of insurance company resistance and one can begin to fathom the rich returns to insurers and their shareholders of insurance company intransigence.

How this works to the benefit of insurance companies may seem to require monumental mathematical machinations. But it is really quite a simple formula. The insurer calculates its underwriting risk by taking a mathematical “worst case” scenario and calculating its premiums based on this scenario. This affords the insurer the highest amount of premium to cover its risk in the event the worst happens. This is good business practice because there is no guarantee that the worst won’t happen.

But, having collected the highest premiums, the insurance company then wages all out war on claimants, denying many perfectly valid claims. These insurers rely on the fact that many claimants don’t know a claim denial can be appealed and also on the natural reluctance of many claimants to undertake an appeal. (See Don’t Be A Wimp).

What a windfall for the insurance companies! They charge the highest prices for their product because they base the premium on the high end of the underwriting spectrum and then they cut their outlay on claims so as to push them to the lowest end of the spectrum. All of the cash saved in between goes to insurance company profits. And, when you are talking health insurance, the cash saved amounts to billions of dollars.

Can anything be done about this system which hits many sick and injured people at the worst time in their lives? Yes, it takes an all out effort by lots of people to get the word out – insurance company denials are not the Gospel. If a claimant has a valid claim, then they must appeal the denial and right the wrong.

Those who can help:

* Friends and family who know that the insurance company turndown is not the last word. They have to let their uninformed relatives and friends also know.
* Doctors who treat claimants and lawyers who pursue claims have to preach to the uninitiated that they have the right to appeal for benefits for which they may have paid premiums for years.
* In the interests of compassion, fairness and morale, Human Resources Departments should inform employees that they have the right to appeal an adverse ruling by an insurance company even though the employer may think its interest lies in paying the fewest claims.
* Web sites and bloggers have to continually get the word out to those seeking information on claims at their sites that there is life after an insurance company claim denial.
* State Insurance Commissioners should mandate that a denial of a claim must be accompanied by a “plain English” and unequivocal outline of the claimant’s right to appeal the decision and the method for filing such an appeal. To be certain of the simplicity and clarity of the information, the State may require the notice to be in a certain form approved by it.

Insurance companies are entitled to deny claims in proper cases. They have to protect the financial stability of their businesses and have a duty to their shareholders.

But, this duty should not include taking advantage of almost 40% of consumers or a policy of denying claims knowing that a substantial percentage of the turned down claimants either don’t know they don’t have to accept the turndown or don’t have the gumption to fight the denial.

This is especially true when many of these claimants are making health claims at a time when they are seriously sick or injured. Denial may be a good way to jack up profits but it’s an awful way for one human being to act toward another.

And, all insurance companies act through the agency of human beings. Or do they?

 

 


 

No Good Deed Goes Unpunished



There’s nothing a disability insurance carrier likes better than a claimant who is “Mr. Nice Guy”. These are people who keep trying to do work even though they can no longer continue the occupation for which they have an “own occupation” policy and have a
clear cut claim for disability benefits.

What’s wrong with trying to keep working, one may be tempted to say? It’s the pioneer spirit. “Don’t give up the ship” and all that.

What’s wrong is that Mr. Nice Guy may scuttle his claim for benefits by trying to work at another job before making a claim under his policy. The carrier may have the right to say the claimant can perform duties similar to the ones he is performing at the time the claim is made, so he is not disabled as defined in the policy and, therefore, is not entitled to any benefits, let alone benefits for the occupation and income intended to be protected when the policy was purchased.
The problem is that “own occupation” is interpreted to mean the actual occupation at the time of claim – not the original occupation for which the insured originally purchased coverage.

So, if you modify your occupation to accommodate a disability, by giving up the duties you can no longer perform, then those duties are no longer considered part of your occupation when you subsequently file a disability claim.

Also, even if the carrier has to pay, the carrier may be required only to pay benefits based upon the salary or income of Mr. Nice Guy’s employment at the time of making the claim. These benefits would likely be much less than the benefits originally contemplated by the policyholder at the time of purchase. And the hefty premiums paid for the anticipated coverage would be gone with the wind.

So, if you have been astute enough to cover yourself and your family with an “own occupation” disability policy and you become disabled under its terms, don’t be a Mr. Nice Guy. To be safe, make your claim with your insurer under the terms of your “own occupation” policy when you become disabled under its terms and before you start doing any other work.

Certainly be Mr. Nice Guy to your family, your friends and even to people you may meet in the street. But, not to your disability insurance carrier.