Quiat on Claims

Perils Of Technology

Michael Quiat — Mon, 22 Apr 2013 08:00:34 -0500

Speed and efficiency are great goals in medical practice, but they can’t be at the expense of accuracy, especially when it comes to documenting ERISA disability claims.

We had an experience recently which brought this problem to the fore in a way that was disheartening for disability claimants. Streamlining medical procedures and reporting is OK, but not when that streamlining leads to pertinent and relevant medical data being omitted from a medical record or to inaccurate and misleading information being included.

The case involved a leukemia patient who required a heavy drug regimen for treatment. Such drug use invariably leads to severe fatigue and listlessness. Yet, when the doctor produced his medical chart for our client’s insurance company, the record reflected an affirmative finding of “no complaint” of fatigue although the patient had complained of fatigue at every visit.

The doctor agreed that fatigue had been an ongoing complaint but that he had not noted it because “it was listed in a pre-established laundry list of possible symptoms which he was required to check off in his computer program for each patient visit. He didn’t consider this “laundry list” important enough to spend the required time on for each patient. So, he ignored it.

What the physician didn’t realize is that when the computer program produced a report for his patient’s ERISA insurance company, it reviewed all of the input boxes for the patient and then produced a summary report in which, because no “fatigue” boxes had been checked, stated there had been “no complaints of fatigue” from the client.

Of course this was red meat for the insurer since the claimant was claiming a long term inability to work because of fatigue, among other things.

We’ve all heard the phrase, much used since computers came into vogue: “Garbage in, garbage out.” A computer can only evaluate the data it gets. Data can be turned into “garbage” several ways:

* The original data can be in error
* A mistake can be made in entering the data.
* A failure to enter complete data.

If the “garbage” record errs in favors of the insurance company, you can bet the insurer will rely on it. And that leaves the doctor’s patient with a tough row to hoe, indeed.

In our case, the doctor, when advised of his erroneous report would not change it. When asked how this report was released, he said his computer program produced the report “by default” and he was unaware that if the fatigue box was not checked by him the report would automatically print “No complaint of fatigue”.

So, we have a situation in which doctors use technology without being fully trained or understanding it, creating medical records which say things they never intended to say. A physician who knew his patient constantly complained of fatigue would never write a report saying the patient never had complained of fatigue. A computer, being a machine, might very well do so. In this case, it did.

The importance of this occurrence is to teach doctors they should not rely on computers unless they carefully review what the computer reports. A physician with a computer system must know the system thoroughly.

The doctor must know what the equipment does, how it handles data omissions and what conclusions it draws by default from those omissions. He or she must also make sure the system works properly and in no way misrepresents the patient’s condition.

Whether a doctor has a computer system to record exam data or still relies on the pen and pencil method, the doctor must remember the Hippocratic oath: “Do no harm”.

Using a computer system to try to speed up delivery of medical services in no way relieves the physician of that obligation.

Not An ERISA "Back Door"

Michael Quiat — Mon, 01 Apr 2013 08:00:00 -0500

Unbeknownst to some insureds and their attorneys, ERISA can thwart the most obvious intentions of insureds if they are negligent in following up on changes in beneficiary status. Most of the time this issue is involved in matrimonial and estate cases.

Except in the most unusual cases, a spouse who divorces his or her mate, does not want the proceeds of his or her estate (ERISA andotherwise) to go to the divorced mate.

Yet, should the participant in an ERISA plan fail to properly change the plan beneficiary to reflect the changed circumstances of his or her life, the ERISA plan administrator is forced to pay benefits to the beneficiary listed in the plan, Kennedy v. Plan Administrator for DuPontSavings & Investment Plan, 555 U.S. 285 (2009).

Because ERISA preempts all other law which might affect this outcome, the beneficiary shown in the policyholders’ plan documents is the one who to whom the plan administrator has to deliver the benefits.

The Kennedy court based its decision on three main points:

* ERISA requires simple plan administration.
* Avoiding the danger of the administrator having to pay double benefit payments.
* Encouraging speedy benefits payments.

It is essential for a plan participant to get to the administrator as quickly as possible with any change in circumstances. To delay may mean

that ERISA may cause benefits to go to the wrong person or require extensive litigation and legal costs for the benefits to go to the personactually intended by the plan participant.

Although Kennedy supported the law of ERISA preemption strongly, it specifically left open the issue of whether preemption applied once the benefits had been paid as required by ERISA.

The United States Court of Appeals for the Fourth Circuit recognized that this “straitjacket” approach can lead to obviously inequitable results as shown in Andochick v. Byrd, 2013 WL 781978 (CA4 (Va.)) .

In that case, Mrs. Andochick married Mr. Andochick in February, 2005, and separated in July, 2006, at which time Mr. Andochick agreed to and signed a marital settlement agreement in which he gave up any rights to Mrs. Andochick’s survivor benefits and life insurance policies in both of which he had been made beneficiary by his wife at the time they were married.

Following Kennedy and a long line of cases, the Fourth Circuit Court of Appeals agreed with the District Court that Mr. Andochick, as the named beneficiary in her ERISA plan, had to receive the benefits of the plan and the proceeds of his ex-wife’s life policy.

But, the Court also agreed that once proceeds were allocated to the ex-husband, state or Federal courts were not preempted from dealing with the proceeds in line with his waivers and free of ERISA preemption.

The opinion makes it clear that ERISA’s strict interpretation of which party gets ERISA
benefits proceeds, is meant to facilitate the swift and smooth operation of ERISA plans.

Preemption is not meant as a back door through which a party can grab benefits to which, by all reasonable and equitable measures, he isnot entitled.

De-Conflicting Medical Reports

Michael Quiat — Mon, 18 Mar 2013 08:00:00 -0500

A new Federal rule which would require prescription drug and medical device manufacturers to report what they pay doctors for consultations and speeches is just what the doctor ordered for ERISA insurance claims.

The Centers for Medicare and Medicaid Services proposed the rule which will require the gathering of such data on August1, 2013, with the CMS scheduled to release the data on a public web site at the end of September, 2014.

What has this to do with ERISA claims? Lots!

The purpose of the new rule is so that the public should know what financial relationship the doctor who recommends a drug or treatment has with companies which supply the pharmaceuticals or medical treatment a patient may need. This transparency allows the patient to have a meaningful discussion with the doctor about what the doctor is prescribing

The whole point, according to CMS, is to reduce the potential for conflict of interest in the doctor- patient relationship.

Why don’t courts require the same openness in ERISA litigation? Federal judges are becoming more and more aware of the potential conflict of interest when a physician makes a substantial portion of his or her income from insurance company exams to determine the validity and extent of claimed injuries or illnesses for which his or her insurer would have to pay benefits.

Why not make insurance companies provide a breakdown of all of the monies paid to a doctor to perform so-called “independent medical exams” along with the doctor’s report? That would give the court, considering whether benefits should be paid to a disabled employee an insight into the credibility of the physician’s report.

Attorneys representing ERISA claimants have been complaining for years that many of the doctors called upon by insurance companies to examine claimants are more interested in continuing to be paid for reports, than they are in giving honest opinions. If a doctor’s opinions are not heavily in favor of insurers, how long do you think that doctor would continue to get paid for opinions by insurance companies?

The beginning of the end for secrecy about physician track records began with the U. S. Supreme Court decision in Metropolitan Insurance v Glenn, 128 S.Ct.2342 (2008),when the court seemed to wake up to the fact that there is an innate conflict of interest when medical experts are paid by insurance companies to “independently” evaluate disability claimants.

Why it took so long for the Court to reach this obvious conclusion is anybody’s guess. Arguably, Glenn opened the door to allow discovery in this area. But, to be fair to claimants who are suffering not only from their illness or injury, but also from total loss of income when unable to work, much more light should be shone on the insurance company-“independent” medical examiner relationship so Federal District Courts can properly value the worth of medical reports in ERISA cases.

What better way than to follow the CMS rule and have each doctor whose report is being considered by the court present the details of the financial relationship that doctor has with the insurance company the doctor examined for?

The details should include:

* How many medical exams the doctor performed for insurance companies during the last two years.
* How much money insurance companies paid the doctor for these examinations during the last two years.
* The percentage of these exams in which the doctor found the insured too disabled to work.
* Any other financial arrangement in which the doctor receives any remuneration from the insurance company.

We can’t see the difference between the conflict of interest which may be generated by a physician being paid for “consulting” or “speeches” and being paid for examining claimants.

Both activities affect the insurance company’s bottom line and are therefore suspect.

"Residual" Adds Protection

Michael Quiat — Mon, 11 Mar 2013 08:00:00 -0500

Many people don’t realize that you actually don’t have to be flat on your back to get financial help from a disability insurance policy. Many policies provide for partial disability which can provide substantial disability benefits even after your medical crisis or injury have improved.

This fact was pointed out in a recent Wall Street Journal article by financial planner Michael Relvas, Rockville, Md., who noted that it is sometimes very hard to know about this benefit because many times you need a code breaker to decipher disability insurance contract language. However, it is definitely worth the time and effort to find out if you have this benefit.

From an actuarial perspective it has been shown repeatedly that the risk of suffering a partial disability is substantially greater than the risk of suffering total disability. Yet, many disability policies do not provide benefits for only partial disability.

Residual benefits are the key words in determining if you have such coverage in your disability policy. If you are fortunate enough to have it, then you may receive benefits even if you are able to return to work, provided, in most cases, that your income is at least 20% less than you were making before your disability struck.

You may be entitled to residual benefits which will bring your post-disability income up to 80% of your pre-disability income.

Mr. Relvan also points out that residual clauses in older policies may be more valuable. Many older policies will pay benefits till age 65. Newer policies typically pay residual benefits for only 2 years.

Not all disability income policies have residual benefit coverage. Particularly if you are the owner of a small business or in a profession, such as medicine or accounting, this type of coverage can be vital in the event of a disability.

As we have said before, it is vital to read your insurance policy before a triggering event rather that after one. Before, you can do something about a gap in your coverage. After, you are out of luck.

When it comes to protecting income, you have to be thoughtful. Medical disabilities often come with longer, drawn out recoveries which may permit a return to an occupation, but at a less remunerative level.

You have to decide:

Do I need insurance coverage for this eventuality?

Shop At An Online Policy Market?

Michael Quiat — Mon, 04 Mar 2013 08:00:00 -0500

An insurance law professor recently pointed out that “Insurance is the one product where you can’t find out what you’re buying until you’ve bought it.”

He came up with the suggestion that all state insurance regulators follow an initiative of the Nevada Department of Insurance, according to a recent article in the Newark Star Ledger.

Rutgers University professor Jay Feinman pointed out that you can choose coverages and deductibles, but you can’t read the fine print in your insurance policy until after you have bought it.

Those who have been exposed to insurance law (and readers of this blog) know full well that, with insurance policies, the “the devil is in the details”.

Why not put policy forms online so that people can read them and understand what they are going to get before they buy a policy?

The professor suggests that a Nevada initiative should be adopted by all states to give people better understanding of their coverage.

According to him, the state of Nevada began publishing online the policy forms of 10 of the state’s largest home and auto insurance carriers. These carriers do about 80% of the home and auto business in Nevada.

We agree with Professor Feinman that making this material available to the public online is not likely to help too much in educating the public because policyholders are notorious for not reading their policies even after a triggering event occurs.

But, there are many consumer advocacy groups can and will provide consumers with easy-to-understand guides to compare rates and the coverages offered.

Although this present situation covers only auto and home policies, there is no reason why it can’t be expanded to cover ERISA disability, life, health and other types of insurance which are based upon standard types of insurance policy forms.

As well as helping employees to understand what insurance protection they have, the employer could also benefit by having an easy-to-understand comparative guide covering both benefits and cost.

These guides can be formulated by large employer associations as a service to their members.

Greater transparency – What a concept!

Get Psyched On This Problem

Michael Quiat — Thu, 21 Feb 2013 08:44:15 -0500

As if people with mental problems didn’t have enough headaches, a recent change in psychotherapy treatment codes has dumped a whole new layer of complexity on the plates of those needing treatment.

According to a recent story in the Wall Street Journal, mental health professionals providing treatment are not being paid since the change because insurance companies claim that the changes are bigger and more complicated than was expected and companies are having difficulty setting up their systems to accommodate the code changes .

And all of this is happening when there is a growing public demand for better mental health intervention.

Millions of mentally ill people are facing diminished care because their mental health providers are not being paid for their services.

The American Medical Association updates the codes annually. Only 30 codes out of 8,000 or 9,000 were changed this time. But those 30 changes, which had to do with mental health services and hadn’t been modified since1998, threw a monkey wrench into the system.

Worst of all, many of those who are hurt can ill-afford the stress and uncertainty of having their treatment affected.

With about 11.5 million Americans suffering from serious mental conditions, according to the WSJ article, and public demand growing for more and better interventions with the mentally ill since the recent spate of shooting massacres, these coding problems could not have come at a worse time.

The biggest worry of mental disability providers is that this coding chaos will affect care for their vulnerable patients. With many insurance companies being unable to estimate when the coding problems will be fixed, it is anybody’s guess when some order will be restored to the mental health system.

In a field of treatment where one missed appointment may undo months of intense work, it is hard to foresee how far this glitch will set things back.

With a so much hanging in the balance, we urge everyone involved to get the lead out and get the mental health system working again.

Life Insurance Dirty Tricks

Michael Quiat — Wed, 13 Feb 2013 08:00:00 -0500

Would you believe that insurance companies withheld $1 billion in death benefits from beneficiaries of life insurance policies? If your answer is “No”, think again, according to an advanced story in TODAY about a Consumer Reports article to be published this month.

This finding of insurance company cheating doesn’t surprise us, but the amount is staggering.

Life insurance companies had their own version of “Don’t Ask, Don’t Tell” when it came to informing beneficiaries of policy benefits when an insured died. If a beneficiary didn’t know about the policy or about the insured’s death, the insurance company wouldn’t tell.

More than that, some companies, even knowing that their insured had died, not only didn’t inform the policy beneficiaries, they continued to charge the policy with premiums they knew couldn’t be paid until the policy ‘s cash reserves were drawn down before canceling the policy.

Now that practice has stopped in those states that called the insurance companies on it. Not only did the companies have to pay a fine, they also had to install systems which would be likely to see to it that beneficiaries were informed and paid when an insured died.

It’s not that insurance companies did not have a resource for learning when a policyholder died. The Master Death List of the Social Security Administration is open to them and they used it willingly to locate annuitants that had died so that they coukld stop paying annuities. But, they didn’t use the same information to notify beneficiaries of policyholder’s death. SHAME ON THEM!

To avoid any of these insurance industry shenanigans, everyone who takes out a life insurance policy should let the beneficiaries know about it. It is not necessary to know the amount, but beneficiaries should know there is a policy, the name of the insurance company and how to reach the company in the event of death.

If you can do it tactfully enough, you might want to mention this life insurance dirty trick to an older friend or relative who might have a policy. This will suggest that they give the necessary policy information to their beneficiaries if they haven’t already done so.

Insurance companies fight tooth and nail to keep from paying benefits.

Let’s not make it easier for them.

When You Need An ERISA Lawyer, Get One

Michael Quiat — Tue, 05 Feb 2013 11:13:02 -0500

You may not always need a lawyer when making a legal claim, but when you do, you really, really do need one. This is particularly true in ERISA and disability claims against insurance companies. Why?

Because they employ armies of experienced and knowledgeable lawyers and claims adjusters who all have one purpose in mind – to destroy your claim ASAP so they can keep the money your claim represents. It is in the very nature of insurance claims because insurance is a business and all businesses are after profits.

Insurance companies fight claims like yours a thousand times a day.
You get only one shot to get it right.

Because fighting claims such as yours is all they do day in and day out, these insurance company minions know ERISA and disability insurance law and how to use this knowledge to try to sink your claim.

That’s why you need an attorney who handles ERISA and insurance law day in and day out. Why should you, as a claimant, use an attorney who is unfamiliar with the law and the procedures necessary to successfully file and prosecute a claim, while your enemy, the insurer, has knowledgeable experts defending it?

Insurance claims, by their nature, are usually hotly contested because insurance companies make money by not paying. Being profit oriented, they have many ways to get around a claim. They study these methods and use them without compunction whenever the opportunity arises.

Some of their common methods are:

Getting you to “wimp” out.
Subjecting you to a “no see’em” IME.
Losing your paperwork.
Asking for more and more paperwork.

Secret video and social media checks.

This is only part of the arsenal insurers use to fight claims like yours each and every day. And, you can be sure that if you make a claim, the insurance company’s natural instinct it to deny it by using any or all of the methods listed above.

Know this for sure: When you make claim, be prepared for a battle to the bitter end.

That way you’ll be neither surprised nor disappointed.

The Real Threat Of Drug Relapse

Michael Quiat — Tue, 29 Jan 2013 10:25:25 -0500

The danger of relapse in some cases can be as much a disability as the actual disability itself, the 1st Circuit Court of Appeals has ruled in Colby v. Union Security Insurance Company, et als, 2013 WL 174419, C.A. 1 (Mass.).

Dr. Colby was an anesthesiologist who became addicted to opioids and, because of this condition, was unable to continue working. But, the insurance company stopped her benefit payments immediately upon her release from the treating facility, claiming that the threat of relapse was not a condition covered by her employer’s ERISA disability policy.

The Court itself framed the basic central question: In an addiction context, can the risk of relapse be so significant as to constitute a current disability requiring the payment of disability benefits? The Court found that under the facts in this case the answer was yes.

Dr. Colby was admitted to a treatment facility for her addiction.. She was released from the facility after having received benefits for just a few weeks because there was a 90-day waiting period before benefits began. Following her release, the insurer refused to make any more benefit payments to her, taking the position that the risk of relapse is not the same as a current disability and she was not entitled to any more benefit payments under the ERISA plan.

It is common knowledge in the medical and disability insurance fields that doctors and, particularly anesthesiologists, are more likely to become addicted to drugs than is the ordinary person. This is because in their line of work they have easy access to drugs.

Although the Court recognized it had to pay deference to the decision of the plan administrator, it said that giving deference in the review doesn’t mean the Court is not to review at all.

Throughout the proceedings, Union Security, in defense of the claim, maintained that the risk of relapse, no matter how serious, could not be a disability under the ERISA plan.

The Court held otherwise. There was no reference to “risk of relapse” in the plan. The administrator’s denial of benefits, the Court said, has to be based on the text of the plan and the meaning of the words used. Here nothing was said about “relapse”.

Finally, claimant’s doctors all were of the opinion that because of the particular stress factors in her life and various other mental health disorders she suffered from, putting Dr. Colby in a situation where she would have access to opioids, would make her relapse just about inevitable.

With no “relapse” language in her ERISA plan, these factors amounted to a disability entitling her to benefits, the Circuit Court ruled.

Omit ERISA Data At Your Peril

Michael Quiat — Tue, 22 Jan 2013 11:56:27 -0500

If you don’t put all of your eggs in one basket when filing an ERISA claim, you’ll most likely to wind up with “scrambled” rather than with your “sunny” side up.

Knowing that the insurance company is likely to deny your claim no matter how good you think it is, it is imperative that you present a full and complete story of your claim from the very beginning, leaving nothing to the imagination. There is little to no chance that you will be able to add to the record after a claim denial.

Why? Because the basic foundation of an ERISA claim is what is called the administrative record. This record is ordinarily composed of witness reports, medical and hospital reports, and medical and occupational evaluations and other written or pictorial evidence which is presented to the insurance company, and what the insurance company relies on in making its claim decision.

If you fail to provide a necessary piece of the case, the insurance company can’t and won’t consider it and it is likely a denial of claim will be upheld even if appealed to a Federal Court.

Obviously, an insurance examiner can’t weigh evidence you don’t provide. And the examiner’s decision can’t be faulted by a court if you didn’t provide the necessary data. If you have evidence that will support your claim – use it or lose it!

Despite omitting crucial evidence, a claimant caught a break in Acree v. Hartford, 2013 U.S. Dist. LEXIS 3687, because the Hartford so overreached in denying an ERISA accidental death and dismemberment claim, that the Court felt compelled to send it back and to allow the claimant to add evidence for that new review.

The issue was whether an insured died as a result of suicide or was accidentally killed while cleaning his gun. The final autopsy report listed the cause of death as “undetermined” although there was mention of suicide in the preliminary autopsy report and in the police incident report.

Naturally, Hartford grabbed on to the “suicide” reference and denied the claim, ignoring the final “undetermined” finding of the coroner. Death by suicide was not covered by the policy and Hartford could pay nothing to the unfortunate victim’s family.

There were pictures of the scene of death which showed that the deceased had beside him gun cleaning paraphernalia which would seem to clinch the theory that the shooting was an accident which happened while the gun was being cleaned.

However, the claimant failed to provide the photos when filing the claim. Therefore, even though the insurer was aware that there had been pictures taken, the picturtes were not provided for the record by claimant and were not considered.

Luckily for claimant, there is a negative presumption in Federal common law against suicide. Unless the evidence shows that the deceased likely committed suicide there is an affirmative presumption of accidental death. Ignoring this presumption weighed heavily in causing the Court to send the matter back for a de novo review and reopening the record thereby allowing the claimant to put the pictures of the scene of the accident into the record.

The importance of having a full and complete record before filing suit on an ERISA claim denial is clearly set forth by the Court at Page 5 of the opinion, when Judge Treadwell says:

“In the Court’s experience, lawyers for ERISA claimants all too often do not appreciate the importance of getting all of their evidence in the administrative record, Thus, it is not uncommon for ERISA claimants, when they get to court, to discover they cannot use what they think is critical evidence.”

Your first step (the administrative appeal) in appealing an ERISA insurance denial is likely your last word. Make sure you’ve got it all and you’ve got it right!

Plain English Or Not - It's Still A War

Michael Quiat — Mon, 14 Jan 2013 08:36:46 -0500

One little-known benefit for the public in Obamacare has nothing to do with treatment or medication. In plain English, it’s plain English.

Thanks to the policyholder’s friend, Wendell Potter, who used to work for an insurance company, we now know that it’s the law that insurance policies will have to be written in words that the average person can understand.

Whoa! You mean somebody buying a policy doesn’t have to rely on the insurance company’s statements anymore? An ordinary person can read for him or herself and understand what he or she is buying? What a breakthrough!

Not only will you understand what the insurance company is required to do for you, you will also have a very good idea what monies you will be required to pay for various medical and hospital services. Just as importantly, insurance companies will have to deliver these plain English summaries in a standard format. This will make it easier for those needing insurance to compare the benefits of competing companies.

During earlier hearings before the U.S. Senate on the Affordable Care Act, Professor Karen Pollitz of Georgetown University testified that the average American reads at an 8th grade level but that insurance policies are generally written at a first year college level. It’s no wonder we find in our disability income insurance practice that very few policyholders even try to read their policy until they become disabled. Unfortunately, by then, it may be too late for them.

The standard format summary to be provided by the insurer requires an estimate of the respective costs to the policyholder and insurance company of delivering a baby or treating a disease such as diabetes. This feature also makes it simpler for those seeking policies to evaluate the offerings of various companies so as to choose the best deal.

This year (2013) the estimate of cost will be based on a “best estimate” formula provided by the government since there is no history. After this year, the estimates in the summary will have to be based on the actual experience of the individual insurance company based upon its actual claim experience.

And, if any of our readers are feeling sorry for insurance attorneys because Obamacare will make it easier for claimants to understand their rights – DON’T!

Insurance companies, based on their history, will enhance their old ways and find new ways to try to duck their benefit obligations. With the complexity of disability insurance law and insurers’ ability to frustrate claimants who are fighting not only an illness or injury, but also complete lack of income, there should be plenty of work for claimant’s attorneys.

The policy language may become friendlier under Obamacare, but collecting benefits from an insurance company will be as tough or tougher than ever.

"Little People" Are "Our People"

Michael Quiat — Mon, 07 Jan 2013 08:15:32 -0500

The above holiday card message from a client reminded us of what our disability insurance practice is all about – “little people”. “Little people” is not a reflection of a claimant’s standing in the world. It describes a claimant’s position when fighting a mammoth insurance company for policy benefits.

No matter how wealthy or well connected you may be, your wealth and power pales in comparison to the resources of an insurance company. They not only have the “bucks”, they have armies of claims adjusters and experienced insurance attorneys and plenty of ways to throw a monkey wrench into a claims procedure.

Luckily there are legal procedures which level the playing field somewhat so long as you know how to use those procedures properly. Those who practice this type of law do know and help to bring an insurance company down to a size which is manageable by a claimant. We have been doing this for more than 30 years and never once worked on the insurance company’s side of the street!

Being able to bring hope to those insurance claimants who are overwhelmed by the thought of what they are up against is an added bonus to the way we make our living as attorneys. It helps us to keep going when things get rough.

The client who wrote the holiday card was fearful of going ahead with her LTD claim when she first came to see us. We encouraged her to move ahead with her claim after reviewing her circumstances. She had a perfectly valid claim under her policy.

There should have been no question that her carpal tunnel condition kept this accountant from working as she couldn’t operate a computer or an adding machine without severe pain and numbness. For an accountant to be unable to operate a computer or an adding machine is almost the same as a carpenter being unable to use a hammer.

But, did this obvious fact dissuade her insurance company from terminating her disability claim? Hardly. One of the biggest moneymakers for insurers is discouraging their policyholders from pursuing valid ERISA and private disability claims. After all, when a policyholder drops a valid claim, the benefits payments go from “Debit” to “Profit” for the insurer.

Although she was discouraged and doubtful about whether to challenge her insurance company’s denial of her claim, this client was resilient enough (See “Wimp”) to be able to take on the challenge after we spoke and take the fight to her insurance company. She recognized the insurance company denials and tactics for what they were: A ploy to make her drop her claim.

With help from us, the insurer reconsidered on appeal and now pays her disability benefits.

What makes this claim stand out is that a claimant was brought back from the abyss of giving up a rightful claim which would have made her life a greater struggle because of her finances. She still can’t work but has the security of the disability insurance benefit to which she is entitled to under the terms of her disability policy.

Her card said, “…thanks for watching out for the little people and keep being defender of the faith!”.

Watching out for “little people” is what we have been doing for more than 30 years, particularly when ordinary folks are matched against insurance Goliaths and their “denial machines”.

We intend to keep doing this until we can be of no further use to “little people”.

Disability Attorneys Must Be Prepared

Michael Quiat — Mon, 24 Dec 2012 08:24:00 -0500

As if people with mental problems didn’t have enough headaches, America’s psychiatrists are changing their mental disorder guidebook, according to a recent article by the Associated Press.

This would be the Fifth Edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-V), published by the American Psychiatric Association. The revision has been in the works for several years.

Many people might not consider this announcement earth-shaking. But the DSM’s definitions define the clinical characterization and treatment of mental problems. Disability insurance companies and school systems usually base their decisions on benefits on how the DSM defines mental conditions and the treatments recommended.

Scheduled for publication next May, the new DSM seeks to capture the current state of knowledge of psychiatric disorders, according to the Association.

Just what effect the new DSM will have on the care and treatment of people with mental disorders will have to await publication of the manual and digestion of its contents by the lay, medical and insurance communities.

One thing we are sure of, insurance people will be all over the manual with a fine tooth comb, looking for new excuses not to pay mental disability claimants, or how to stop payments to some already being paid benefits. How do we know this? Because we fight with these companies every day over claims that are as plain as the nose on your face to everybody, except insurers.

Any attorney involved in a mental disability claim must be familiar with the new DSM and study it. Disability and ERISA lawyers must follow comments on the Guide which are bound to be published shortly after it is published so as to be up on the latest thinking in this field of claims law.

Knowing as much or more about the DSM changes than insurance company’s minions is an absolute must. Disability income insurance attorneys are bound to be bombarded with calls from beneficiaries who are being threatened by insurers with a loss of benefits because of how insurance companies interpret the new DSM.

Like the Boy Scouts, these attorneys must “Be Prepared”.

Doctor "Do No Harm" In An APS Report

Michael Quiat — Mon, 17 Dec 2012 10:30:53 -0500

The Hippocratic Oath of doctors to “do no harm” takes on new meaning when a physician has a patient with an ERISA or disability income insurance claim.

Unfortunately, medical schools are not known for giving courses in how to complete an Attending Physician Statement (APS) which will satisfy disability insurance companies, particularly as those companies are notorious for not wanting to be “satisfied”.

The APS is a form generally used by disability insurance companies when asking for medical reports on claimants.

In the real world, doctors get many patients who suffer an injury or illness to their body which then leads to an injury to their ability to earn a living. No matter the actual injury to the body, the loss of ability to earn may have a profound effect on a patient’s ability to recover.

Doctors are by definition busy people. They have always worked hard but find their time for patient care even more limited with the trend in recent years toward more government rules and insurance paperwork. It’s likely this trend will continue.

When a disability income client comes to us, one of the first things we try to learn is if the treating doctors understand the importance of complete, accurate records regarding the client’s condition. An APS must not only accurately describe the medical condition, but must also set forth why, in the doctor’s medical opinion, the condition makes it impossible for the patient to perform job duties.

This part of the APS is known as “restrictions and limitations”. Response to this portion of the APS is crucial to any patient’s disability claim even though it does not involve diagnosis and treatment, the usual subjects of medical reports.

Without the doctor’s clear opinion of what the patient can and cannot do vocationally, the patient’s disability claim is almost certain to be denied.

Doctors have to know that insurance companies are not in the business of paying benefits if they can avoid doing so. Insurers and their stable of captive physicians try mightily to find any excuse for not paying benefits. They are experts at it.

One of their favorite ploys is to use a shoddy, ill-considered doctor’s record to shoot holes in a claimant’s case. If a patient loses benefits because of a sloppy report, the doctor is actually “doing harm” to the patient, contrary to the oath.

One example: Physicians should not lightly predict when an illness or injury will be alleviated to the point that the patient will be able to go back to work. People heal at varying rates and an average time for healing includes the fastest and the slowest healers.

If a medical report projects an average healing time, but the patient is a slow healer, you can bet the insurance company will not recognize the difference and the patient will suffer.

Just because an APS asks the physician to provide a “return to work” date doesn’t mean the doctor has to provide one unless he or she is certain of the date. It’s OK for the doctor to say, “I don’t know”, because being some time in the future, the “return to work” date is something they really can’t be sure of.

Insurance companies love to lead doctors to believe they should answer the “return to work” question. Then, if it turns out the doctor was mistaken, the company has an excuse to deny benefits to the doctor’s patient. “Do no harm”. If a doctor is not certain, the doctor should say so.

Physicians are trained to “do no harm” in giving patients the best care and treatment. Doctors should also try their best to “do no harm” when writing an APS about a patient with a disability insurance claim.

If called upon to render a report or APS in a disability case, a doctor must do it carefully after fully considering all of the facts involved. For the patient’s sake, it’s important to take the extra time required to be complete and accurate.

A mistake can cost a patient years of benefits needed to feed the family.

Relying On SPD In An ERISA Claim Is A "No-No"

Michael Quiat — Mon, 03 Dec 2012 16:07:55 -0500

An ERISA SPD (Summary Plan Description) is supposed to help employees understand the insurance protection they have from their employer by explaining that protection in plain English.

However, since the SPD is compiled by a person who may or may not have the needed abilities to read, understand and transcribe in plain English the complex language of an ERISA plan and its underlying insurance policies, the SPD may very well contain errors, misinterpretations and may even omit important requirements.

To rely only on the information in an SPD in making an ERISA claim is to court disaster. Proof of this is in Cigna v. Amara, 131 S. Ct. 1866 (2011), which holds that even when an SPD provides incorrect information, a claimant has no right to rely upon it. Only what is actually in the plan controls.

ERISA claims are dependent solely on the terms of the ERISA plan specific to each employer, regardless of what the SPD says. The plan has to conform to strict Federal regulations modified only by case law which pertains to ERISA.

The one consistent rule is that the specific terms of the employer’s plan itself are the only reliable guidelines for evaluating an insurance claim under an ERISA plan.

The result is layer after layer of complex, many time obtuse “legalese”, inserted in the plan by people who know exactly what they are doing. To most people, including some lawyers who don’t practice ERISA law, the plan may as well be written in a foreign language.

To determine whether an employee’s claim is covered by an employer’s ERISA plan, one must first read and understand the plan and the accompanying insurance policies. Only if the claim is covered by the plan will the claimant have a shot at succeeding.

In most cases an employee will never have seen a copy of the plan. He or she may not know where to find one. ERISA requires employers to furnish an employees with a copy of the ERISA plan when asked.

If circumstances are forcing you to think you might have to make an ERISA claim, getting a true copy of the plan and the insurance policy associated with it, should be your first order of business. Most employers make them available through their Human Resources departments. uman Resourcersd departmentsd.

When you get the necessary documents, if the language is a bit much or you think you don’t have the expertise, get help from a lawyer, preferably one who has experience with ERISA claims.

The SPD is OK for giving you a general overview of the ERISA coverage afforded you by your employer.

But, when matters turn serious, rely only on the terms of the ERISA plan and the insurance policy which supports it. To do otherwise may do you great harm.

Hope For Long Term Care Insurance

Michael Quiat — Tue, 13 Nov 2012 12:05:53 -0500

Every great once in a while, the interests of an insurance company and a policyholder coincide and we all say, “Hallelujah!”

Much of the general public isn’t aware that such a coincidence of interests is a possibility. More and more Baby Boomers are wondering how to protect themselves against the vagaries of old age. The good news is that we are living longer, sometimes healthier lives. The bad news is that the cost of caring for older people is fast expanding. Solutions are hard to come by.

Add to this that long term care insurance, as we knew it just a few years ago, is a thing of the past. The cost of such insurance has exploded and many companies are just not writing it any more. What to do?

One solution receiving an upsurge in interest is a new, modified method of paying for long term care protection – using life insurance benefits to help pay the high cost of living in a senior residence or a nursing home.

Generally the way it works is that the policyholder uses a part of a life insurance death benefit now to help pay his or her assisted living or nursing home costs. It is a trade-off between the life insurance benefit and the burden of present living costs.

So, what the insurance company pays for the policyholder to live in a nursing home today is subtracted from what the policyholder’s beneficiary would get tomorrow on the policyholder’s death. Of course, there is a reduction in the total benefit to sweeten the pot so the insurer will have an interest in making the deal.

By means of this method, cash-strapped senior policyholders are able to meet their heightened living costs by deducting them from their eventual life insurance payout. Such a system can be tough on beneficiaries but it certainly eases the sometimes harsh burdens of later years for their benefactors.

The arithmetic of such a deal is complicated with the parties having to weigh the relative values of present circumstances, i.e., age, health, payment amounts and payment schedule, among other items before coming to a decision. The closer death seems, the more likely the insurance company will be to cooperate to get a reduction from the policy death benefit.

As people grow older, they should consider such a program with their life insurance carriers, so as to stretch their resources to make them last as long as possible.

But, it is not recommended that the ordinary policyholder go into a negotiation with an insurance company without some independent expert help who has no ax to grind.

Your insurance agent or broker may not be your best bet because of commission or relationship issues.

Get help from some one knowledgeable who has nothing to gain or lose because of the advice.

ERISA Has A Heart

Michael Quiat — Mon, 12 Nov 2012 10:40:01 -0500

Too often, because of the case law interpreting ERISA, ERISA claims are denied by courts which are required to defer to claims administrators even though the courts would have found for the claimant on the basis of the evidence. There are a flood of such cases throughout ERISA jurisprudence and such unnatural outcomes are not foreign to those who labor in the ERISA field day in and day out.

So, it was refreshing when a Federal District Court Judge in Alabama recently opted to favor interpreting ERISA with emphasis on plan fiduciaries’ discharging their duties solely in the interest of participants and beneficiaries. The clause containing this clear direction, 29 U.S.C. Sec. 1104 (a)(1)(A), is too often overlooked or denigrated by judges in deciding ERISA claims.

Historically, because of the Supreme Court’s decision in Firestone v. Bruch, 489 U.S. 101 (1989), courts have given deference to the decisions of plan administrators (fiduciaries), while sacrificing the primary objective of ERISA – to give employees’ interests top priority in their deliberations. Insurance companies, who most often act as ERISA plan fiduciaries, have made it a religion to ignore this guiding precept of ERISA. That is why this recent Alabama decision is so noteworthy.

Going back to basics in Howington v. Smurfit-Stone, 856 F. Supp. 2nd 1235 (S.D. AL, 2012), District Court Judge Kristi K. DeBose told a fiduciary that a mistake on an application should be corrected so that a claimant’s application could be fairly considered, rather than being dismissed out of hand because the claimant had made a simple mistake in entering the date when his disability arose.

The plan administrator took the position that because the plan documents allowed correction of such an error only if a prior SSDI court Administrative Law Judge made the correction first, the claimant could not rectify the mistake although it was clear that the date was actually in error. Further compounding the mix was the fact that the time within which claimant might have asked the SSDI judge to revise the record had expired.

But, rather than take the “straitjacket” Bruch view (that an administrator’s discretion must be upheld if there is anything in the record to support it), which has been adopted in an overwhelming line of cases since it was first promulgated in 1989, Judge DeBose went back to the basic language of ERISA citing the fiduciary duty owed by an administrator to a claimant.

The Court held that the administrator’s refusal to determine the correct disability date was arbitrary and capricious and the denial of benefits was sent back to the plan administrator for further consideration of Mr. Howington’s real date of disability.

So, instead of taking the hard Bruch line, as many courts have done to favor administrators, Judge DeBose opted for the more humane “prudent fiduciary” standard.

This makes more sense. After all, the purpose of ERISA, as expressed in the statute, is to help disabled employees – not to provide an unfair, unwarranted windfall to claim fiduciaries, because of a simple, honest mistake on the benefit claim forms.

Insurance Noses And Faces

Michael Quiat — Tue, 23 Oct 2012 11:31:28 -0500

Insurance companies, with their inflexible “no pay, no way” attitude towards disability income benefits, are cutting off their own nose to spite their face. Insurers have long ago adopted the basic philosophy that claimants are malingerers and cheaters and not really people who are hurting

Support for this view was recently revived by a guy named Rabbat who finally gave up his heroics and applied for long term disability benefits. Naturally, his disability insurance carrier turned him down despite strong evidence that he was telling the truth about his disability. See Rabbat v. Standard Insurance Company, 2012 WL 4504557 (D. Or.).

Mr. Rabbat had been afflicted with Familial Mediterranean Fever since his early teens. This rare affliction attacks the joints making them very, very painful. It is also a condition which worsens over time.

He went to work for the plan employer in 2005 and worked through his pain until October, 2008, when he went on short term disability. In November, 2008, he applied for long term benefits.

Despite Rabbat’s doctors, who had treated him for years, reporting on his battle with his disease, Standard turned him down because its flunky doctors, who had never laid eyes on Mr. Rabbat, said he could work. The court, which had no conflict of interest, found for Mr. Rabbat.

Why we say insurance companies, in fighting cases similar to Mr. Rabbat’s, are cutting off their nose to spite their face is that there are probably tens of thousands of people at work right now who could rightfully claim disability benefits but who choose to work through the day.

Standard’s attitude in the Rabbat case clearly discourages this exemplary type of behavior. Using their commendable behavior against them to deny benefits to employees when they are finally forced to give in, discourages others from trying to work through their disability.
We have written about this before Stiff Upper Lip.

What insurance companies overlook is that every day a person works, even though disabled, is another day the insurer did not have to pay benefits. When you multiply these days by tens of thousands, it comes to a tidy sum, even for an insurance company.

The 7th Circuit Court of Appeals said it best in another case in which an employee claimed to have fought through a disability for a long time before giving in, Hawkins v. First Union Corp., 326 F.3d 914,(7th Cir,2003):

“…A desperate person might force himself to work despite an illness that everyone agreed was totally disabling... Yet even a desperate person might not be able to maintain the necessary level of effort indefinitely. Hawkins may have forced himself to continue in his job for years despite severe pain and fatigue and finally have found it too much and given it up even though his condition had not worsened. A disabled person should not be punished for heroic efforts to work by being held to have forfeited his entitlement to disability benefits should he stop working…”

Insurance companies should give such hardy souls a medal rather than a hard time!

The Disability Claims War

Michael Quiat — Tue, 16 Oct 2012 13:03:19 -0500

People forced by circumstances to seek income disability benefits should keep one mantra in mind at all times:

I am in a war with my insurer and I should always act accordingly.

A little understanding of the mechanics of the disability insurance business will make the above statement abundantly clear:

• An insurance company earns its income from premiums and interest on investments.
• The company has some control over premium income.
• The company has no control over the interest markets.

Interest markets have tanked in the last few years meaning substantially less income for the insurance company. Therefore:

• The company pays out overhead expenses, salaries, and benefits from income.
• What is left over is profit.

So, if overhead and salaries remain the same, the company must reduce benefits to maintain profits. Therefore, it will use every method and excuse it has to discourage and minimize disability benefit claims:

• First and foremost, deny, deny, deny claims to discourage policyholders.
• If that fails, make the filing of a claim difficult with forms that encourage errors.
• If that fails, lose claim material and delay responding to claimants.
• If that fails, use a stable of captive doctors to denigrate and minimize the disability claim even without the doctors examining or even seeing the claimant.
• If that fails, try to video the claimant in a moment which will throw the claim in doubt.
• If that fails, cull the Social Media for a post or two that can be offered as proof that the policyholder is faking the claim.

This list could go on and on. Insurance companies have always been in the business of fighting claims and they have thousands of claims adjusters and attorneys whose job it is to defend against and discourage claimants.

Down through the decades, these minions have come up with endless ways to slow or defeat disability claims. Insurers have an arsenal of ways to say “NO!”

If your disability claim happens to fall under ERISA, the situation becomes worse. In a 1989 case, Firestone v. Bruch, 489 US 101 (1989), the U.S. Supreme Court made the situation more dire by decreeing that courts had to give deference to the ERISA plan administrator. Since the administrator is usually the insurance company which would have to pay the benefit, it is not hard to guess how these decisions go.

This is why a disability claim is likely to become a declaration of war. Insurance companies which fight the war everyday are aware of it and treat it as such. Inexperienced claimants are many times the unwitting victims of this war.

To win this war (and many times they do), claimants must understand what is happening and why it is happening. Above all, they must persevere.

If you have a valid claim, “giving up” is not an option. It is exactly what the insurance company is hoping for.

Disability Insurance Discouragement

Michael Quiat — Tue, 02 Oct 2012 12:28:46 -0500

Some short term disability insurance carriers seem to have become enamored of a new excuse for stopping disability benefits:

“You were fired so you lose your benefits.”

We had just completed the task of convincing a carrier that their policy gave it no authority to stop benefits because a covered employee was terminated, when we took on another case on behalf of another policyholder against another carrier on the same issue.

Is this the new ploy companies are adopting to discourage disability income claims?

This tactic is patently ridiculous. If this insurance company interpretation of policy language is accepted, what protection would a policy offer?

* You become employed and as part of your employment, you are made a beneficiary of your employer’s ERISA benefits plan.
* You become disabled and can’t work.
* You start receiving short term disability benefits.
* You are terminated by your employer.
* The insurance company stops paying benefits because your employment was terminated.

It would be almost comical if it were not so serious for the disabled employee and his or her family. Most likely they are without income and have few resources to meet their daily living expenses except for the benefits they are receiving. On top of that the breadwinner is injured or ill, making the future uncertain. It is at that point the insurance company piles on by making the ludicrous claim that because the employee was fired while receiving benefits, the employee is no longer covered and benefits are halted.

What a Catch-22 for an employee!

* An employer pays a premium based upon the insurer’s benefits experience with the employer.
* An employee gets sick and can’t work.
* Insurer starts to pay disability benefits.
* Employer, worried about premiums going up, fires employee.
* Insurer says employee no longer works at employer and is no longer eligible for benefits.
This tactic would surprise someone who doesn’t deal with disability insurance carriers all of the time. But, we who deal with them daily, hardly react because we see insurers weaseling on claims all of the time. If there is a chance the company might discourage the claimant, it tries to do so.

Misinterpreting the language of policies is a major weapon in the disability income benefits denial arsenal. Others are:

* Losing claim paperwork.
* Dubious medical reports from highly paid doctors who don’t even examine the claimant they are reporting on.
* Following the claimant with video cameras.
* Overlooking facts supporting the claim.

The list could go on and on. Suffice it to say that a person with an ERISA claim should protect against these disability insurance ploys by talking with an attorney who knows them and deals with them all of the time.
Don’t give up because the insurance company makes it tough for you.
Making it tough is their first line of defense. They will try it every time.