Quiat on Claims

Leave No Stone Unturned

Michael Quiat — Thu, 25 Feb 2010 15:35:10 -0500

A case in the Sixth Circuit, Balmert v. Reliance Standard Life Ins. Co., 2008 WL 4404299, S.D. Ohio,2008, reminded us that advisers to claimants, unfamiliar with the practice of disability income insurance claims, can sometimes overlook a client’s fundamental right.

An ERISA litigation is tough enough to win even when the claimant dots all the “i’s” and crosses all “t’s”. But, overlooking the claimant’s fundamental right to review and respond to a critical independent medical examiner’s (IME) report, bought and paid for by the insurer, see IME, is a disability insurance “no-no”.

It is important to note that in Balmert, the claimant wanted the plan administrator’s denial of her claim for benefits to be overturned because she had not been given the opportunity to rebut the report of the insurer’s medical expert.

The Sixth Circuit, in denying her appeal, stated clearly that she had a right to review the IME report and to rebut and/or otherwise comment on it, but her failure to review and rebut the report, since she had never asked to see it prior to the litigation, was not grounds for granting a reversal.

Not having seen it, we have no way of knowing if a review and rebuttal of the IME report could have carried the day in this case, but we do know that each and every report or piece of evidence used by the insurance company to reject a claim should be examined in detail and clearly rebutted by the claimant, if warranted, during the administrative appeal process. If a claimant waits for the opportunity to do so in the actual litigation, it may be too late.

For a claimant not to do so at the administrative level may hand the insurance company an undeserved “leg up” in its battle to deny benefits.

You Have To Know How

Michael Quiat — Thu, 11 Feb 2010 12:38:23 -0500

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!

You're Insured - Maybe

Michael Quiat — Mon, 01 Feb 2010 11:43:23 -0500

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

Pinching Pennies

Michael Quiat — Tue, 26 Jan 2010 13:23:33 -0500

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!

"No-See-Um" Docs

Michael Quiat — Tue, 19 Jan 2010 12:13:32 -0500

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.

The Right Relief

Michael Quiat — Fri, 15 Jan 2010 11:09:32 -0500

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. .

What Do We Want?

Michael Quiat — Mon, 04 Jan 2010 10:48:22 -0500

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?

For The New Year

Michael Quiat — Tue, 29 Dec 2009 11:09:22 -0500

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!

"read policy"

ERISA Is Great, But

Michael Quiat — Mon, 21 Dec 2009 11:53:14 -0500

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.

Less Than 30%

Michael Quiat — Fri, 18 Dec 2009 15:04:26 -0500

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?

Stand Up For Your Rights

Michael Quiat — Wed, 02 Dec 2009 11:41:02 -0500

Sometimes it’s a claim for millions of disability dollars and sometimes it’s a claim for $20,000. But, it’s all part of our ongoing, never-ending battle with disability insurance carriers to get people what they paid for and are entitled to – contractual policy benefits, especially when the coverage is governed by ERISA.

A while back, our firm was asked to assist Vermont counsel, Anderson & Eaton, P.C., Rutland, VT, appeal a Federal District Court’s summary judgment decision upholding Vermont Blue Cross & Blue Shield’s (BCBS) refusal to pay for a “standing component” for their client’s motorized wheelchair. The burden we had to overcome was the tough “arbitrary and capricious” standard because the plan, under ERISA, gave BCBS of Vermont discretionary power to determine eligibility for benefits.

There was no argument about the claimant’s disability – he was paralyzed and needed the wheelchair. However, when he asked for a “standing component” which would lift him up and hold him in a standing position, BCBS refused, purportedly on two grounds:

* There was no proof that the “standing component” was medically necessary because no peer reviewed clinically controlled studies showed improved net health outcomes, and
* There was no evidence that such a feature would help or restore the claimant’s health. Instead, BCBS argued, the standup component would be simply a “convenience” for the claimant without any real therapeutic value.

On appeal, the United States Court of Appeals for the 2nd Circuit rejected the first argument because it found no requirement in the ERISA plan contract supporting the lack of peer reviewed clinically controlled studies. Rather it found that the actual plan documents outlined a lower standard as a requirement.

As to the second ground, the court found it to be factually inaccurate. Claimant offered 10 medical journal articles which supported the use of a “standing component”, citing various medical benefits of the component for patients with claimant’s condition.

In overturning the summary judgment, the 2nd Circuit remanded the case to the Vermont Federal District Court for further proceedings.

But, we are happy to report, BCBS of Vermont saw the handwriting on the wall and has agreed to settle the matter equitably thereby ending the need for further litigation.

To read the opinion, click here.

Give Us A Break

Michael Quiat — Mon, 30 Nov 2009 12:35:38 -0500

We wonder how the naysayers in Congress would act if they lost their health insurance as so many have in this recession? Would the members be so sanguine when it comes to cost and coverage and finally bringing health car costs and the insurance companies to account?

It’s easy to say no when you have a health insurance policy which covers you and your family for everything and anything and doesn’t cost you one thin dime. When you are up on a mountain, the flood doesn’t bother you nearly as much as those who live by the river.

Just to emphasize how this works, take ERISA. Although just about every other group health policy in the nation is covered by ERISA, Congress exempted Federal (this includes Congress) and State employees from ERISA provisions.

So, those who have the good fortune to be employed by the government, do not have the burden of dealing with the discretionary clause, the one which gives the group plan administrator, usually the insurance company which pays the claim, the first right to decide if a claim is valid.

Talk about a stacked deck!

Why should government employees be exempt from this provision which has plagued the rest of the ERISA disability population for decades? If as the Constitution says, we are all created equal under the law, why aren’t we insured “equal” under the law?

Come on, Congress. You have a great health plan that we, the taxpayer, pays for.

What about the rest of us?

How About Paying Us Back?

Michael Quiat — Mon, 23 Nov 2009 10:34:22 -0500

Drug companies have been raising their prices in anticipation of a government health reform program which may try to rein in uncontrolled drug price rises the companies have grown used to pocketing over the years. So, what’s new?

As reported in the NY Times, the wholesale price of drugs has gone up about 9% in the last year while the Consumer Price Index fell by about 1.3% during the same period. The drug industry claims the prices have risen at this rate, a rate unprecedented for the last
15 years, for good and valid business reasons. Realists say the industry is preparing for health reform, one of the cornerstones of which is trying to curb drug spending.

Whichever it is, the consumer gets caught in the middle again. While the drug industry trumpets its agreement to cooperate in lowering the nation’s drug bill by $8 billion a year in support of national health reform, it has already increased the nation’s health bill by more than $8 billion even before the health legislation gets its legs under it.

The excuse they use is the old saw that they have to charge more to generate monies for research and development of new products. Drug manufacturers have been using this excuse for raising prices for decades although the real reason is to keep their shareholders happy.. But, nobody seems to give a darn about the end user, the person who desperately needs the drug to stay alive or functional. Whether or not these afflicted people can afford the price, they have to find some way to pay.

Speaking of new product research and development, how about the billions and billions taxpayers spend on basic research at universities which lead to the development of many of these drugs and medications? Why doesn’t the taxpayer get a cut of the profits just as shareholders do? Why does all of the good stuff (profits) go to the company owners, while the taxpayer whose funds started the research and development, gets zilch?

It’s amazing how the drug companies, among others, have no argument with the government (taxpayers) putting money into basic research which leads to discovery, but object to government (taxpayers) sharing in the fruits of discovery.

Businesses in public transportation are held to a higher standard of care in their business because of their obvious obligation to see to the safety of the public. Why aren’t drug manufacturers which get a patent (and a monopoly) on a critical medication also held to a higher standard when it comes to pricing these vital drugs? These drugs also are an integral part of public safety for our most disadvantaged population – the elderly, the sick and the injured.

Not only that, the drug companies use the same “research and development” ploy to do away with the competition they claim to love. They get government agencies, which are huge buyers of their product, to tie their hands when it comes time to negotiate pricing, thereby bloating Medicare and other budgets, while fattening profits for “research and development”. And, who ultimately pays? Us, the taxpayer.

It’s time to stop blithely accepting the “research and development” excuse for allowing drug companies to price vital medications at whatever they choose. “Research and development” should be thoroughly researched to determine a valid percentage of cost which makes sense for the drug companies as well as consumers. Then that percentage should be used in pricing a new drug so that consumers are not swamped by what drug companies decide they need for “research and development”.

Once that percentage is established, drug companies should not be allowed to price above what that percentage calls for. No more nebulous “trust us to be fair” leeway for drug companies to price at whatever they see fit while holding a monopoly on a patented drug.

If Congress and the drug companies won’t go for that, then give the taxpayer a “research and development” percentage for all of the tax monies used to develop that drug.

But, don’t add it to the price. Just take it out of profits, for a change

Back To Basics

Michael Quiat — Tue, 17 Nov 2009 15:31:37 -0500

Sometimes getting back to basics is the most helpful way to keep people informed about their disability income insurance coverage. One of the most basic of the basics is to read and understand your disability income insurance policy. It has always distressed us to find that many, many people don’t read their policy - the contract under which they will present a claim for benefits.

The first basic is what type of disability income insurance you have. Is it a group policy covered by ERISA or is it an individual policy?

Many policyholders are not certain of the difference the answer to this question makes in terms of coverage and requirements for proving a claim of disability.

An ERISA policy purchased by an employer for employees is not nearly the same as a policy bought by an individual. The ERISA policy is somewhat of a mystery to the employee because usually no policy is delivered to the individual. The employer has the policy and may give the employee only a Summary Plan Description (“SPD”) of what is in it.

Anyone familiar with insurance companies and policies knows a summary does little good when a claim is contested and the insurance company looks into every nook and cranny of the policy language to find a reason not to pay.

So, if you are covered by an ERISA policy it would be most wise for you to take a good look at it before a disability arises so that you know what protection you have or don’t have and can prepare yourself before a sickness or injury strikes. Ask your boss or your Human Resources Director for a copy so you can read and understand the ERISA policy yourself.

But because a disability income policy may be privately purchased and not subject to ERISA doesn’t mean that it doesn’t remain a mystery. If a policyholder doesn’t read and understand the terms of the policy, the individual doesn’t really know what protection is afforded and is, therefore, as much in the dark as an uninformed ERISA policyholder.

Relying on an insurance agent’s or an insurance company ad’s description of what protection is in the policy is never a good idea. It is a particularly bad idea when a disability income policy is involved because of the complications of exactly what is covered, how it is covered, for how long it is covered, and the difficulty of the hoops the policyholder will have to go through to get benefits.

In both ERISA and individual policies, once you know what you have, you are able to decide if that coverage is what you want for yourself and your family. If it is – fine. If it is not, then you may seek to change your individual policy or buy additional individual coverage to add to an ERISA or private policy to bring your coverage up to your standard.

Either way, once you understand your policy, you will be certain of what protection you have before disaster strikes and it is too late to do anything about it.

We know all too well that insurance policies are boring to read and difficult to understand. But, don’t be lazy. Don’t be intimidated. Take your time. You can do it!

But, if you do all of the above and you still have questions, get the answers you need now while you can still do something about any changes you might want to make for the sake of yourself and your family.

Human, Or...?

Michael Quiat — Tue, 10 Nov 2009 17:08:54 -0500

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?

Medicare For All

Michael Quiat — Fri, 06 Nov 2009 14:34:20 -0500

There was a very enlightening statistic in Nicholas Kristoff’s column in the NY Times today (11/5/09) – Americans over 65 years of age have a longer life expectancy than people in the average industrialized nation, while Americans under 65 rank 31st in life expectancy (on a level with Chile and Kuwait) when compared to those nations..

The obvious reason is that people over 65 in the U.S. have the protection of “government-run health insurance” while those under 65 are left to the tender mercies of private insurance health plans or no plan at all.

With this statistic staring people in the face one can only wonder why there is such vehement opposition to a Medicare type health system for all Americans. People tend to forget that there was much the same outcry against Medicare when it was first proposed for passage in 1966. How many Medicare beneficiaries would give Medicare up today?

The latest Ken Burns TV documentary on our National Parks is a strong reminder that not everything run by the government is a flop. In fact, as shown by Burns, some are startling successes and do a lot of good for the American people..

When the statistics show that life expectancy for Americans bumps up substantially when Medicare-style health care comes into the picture, why not try it?

Who knows – in another 60 years we might find that none of us wants to give that up either!

I.M.E. Spells Insurance Fraud

Michael Quiat — Tue, 03 Nov 2009 11:50:06 -0500

t’s time to stop being polite and call it like it really is: ERISA disability claimants’ motives are highly suspect in the eyes of the courts, while insurance company motives are given the greatest leeway.

One has to wonder if this is because the workingman has few, if any lobbyists in Washington while the Capitol reeks with the smell of highly-paid insurance lobbyists who can toss campaign money and other largesse around without rhyme but with plenty of reason.

A recent article in the Los Angeles Daily Journal, once again highlighted the fraud of insurance company hired doctors who “call them like they see ‘em”, i.e., to hold onto their lucrative arrangements with their insurance meal ticket. Their motto: NOBODY IS DISABLED!

What excuse do insurers use to foist this corrupt system on people at the worst time of their lives – your treating doctor may feel sorry for you and shade medical opinion in your favor, so that your disability claim may be approved. Therefore, the insurers say, we have to check your doctor’s opinion with one or more of our doctors.

This seems fair enough, except that the insurance company doctor, although not formally employed by the insurance company, is in many, many instances beholden to the insurer.

To construct the façade of “impartiality”, insurance companies hire doctor “agencies” which hire physicians to do what are facetiously called Independent Medical Examinations, purportedly because the insurance company wants to catch malingerers. These doctor agencies scout out MDs, many of whom do not practice medicine as a vocation, but stick strictly to IME exams. These exams provide most, if not all of their income.

These physicians are paid to be highly skeptical of disability claim and claimants. Most of their exams are based on the written reports of claimants’ doctors, but yet they are supposedly able to determine that a claimant is not in pain or restricted in movement or otherwise afflicted, even though they never see the claimant!

Despite this, many courts still give these insurance-hired and paid IME doctors reports enough weight under ERISA to uphold denial after denial, leaving truly disabled people out in the deep freeze of life. How can this be?

Why does ERISA give insurance companies the right to to stack the deck, simply because these companies say some claimants may be faking it? In reality, the insurance companies are faking it with a sham system of Independent Medical Exams which are not even close to being independent and in most cases are not even real exams.

Yet many courts feel constrained under the law to give inordinate weight to these exam “findings” and thereby dump many needy and deserving policyholders into a sea of desperation without the ability to earn an income for themselves and their families.

If the courts were permitted to truly evaluate these exams through cross-examination or even simple discovery, without being hampered by ERISA, they would find that many of the I.M.E. doctors do not practice anything but ways to find that there is no disability, no matter the medical facts. When the M.D agencies that employ these examining doctors make millions from their insurance exams, would any fair-minded person see them endangering their relationship with insurers by having their doctors call them as they really see them?

Can any one imagine that insurance companies, which make money by paying as few claims as possible, would continue to employ a doctors’ agency or an examining physician who called the shots straight? Such an agency or doctor would find themselves out of the money loop and on the street in one big hurry.

So, why don’t we call this unsavory system, loaded against claimants, what it is – a fraud hiding in sheep’s clothing, aided and abetted by hamstrung courts, which are prevented by ERISA from looking for the truth.

At least then, ERISA disability claimants will really know what they are up against.

Chronic Fatigue Is Real

Michael Quiat — Thu, 22 Oct 2009 14:04:56 -0500

Chronic fatigue syndrome is not hoax. As long-time disability income insurance attorneys, we have seen too many people devastated by this disease to believe that it is not really a severe illness.

People in our line of work generally develop a knack for spotting falsity in claimants trying to wheedle their way into a long term benefits bonanza while still having plenty of capacity to work. We have always found that people truly suffering from CFS are really ill, although medicine has failed to find a viral or bacterial culprit.

Now, it appears that the causes of this devastating affliction are starting to see the light of day.

In an Op-Ed piece in the New York Times, author Hillary Johnson reports that a researcher has found a human gammaretrovirus, XMRV, was present in tissue samples of a significant number of chronic fatigue syndrome patients, going back as far as 1984. Recently discovered, XMRV is the third human gammaretrovirus, the other two being H.I.V. and human lymphotropic viruses, which cause leukemia and lymphoma.

For the full text of the article, see http://www.nytimes.com/2009/10/21/opinion/21johnson.html?_r=1&scp=3&sq=XMRV &st=cse.

Hopefully, this discovery is the key to unlocking the mystery of CFS, which has plagued an expanding number of people down through the years. Finding a cause for this affliction would be the first step in finding a cure.

Having seen firsthand the devastation this malady causes in a person’s quality of life, a cure can’t come too soon.

Hospital Hypes - Patient YIPES!

Michael Quiat — Tue, 20 Oct 2009 14:56:12 -0500

We can't help notice the recent striking increase in hospital and health insurer advertising on radio and television. It seems that every hospital and health insurer suddenly feels the need to sing its own praises, in commercials which are elaborately produced, at great expense, by professional spinmeisters, and are designed to inspire a sense of fear and awe in any patient who might even consider going elsewhere.

Indeed, hospitals are now being marketed just like any other commodity. We are told repeatedly, not only of their prowess in medicine and technology, but also of the kindness and caring which makes each one special and superior to the next.

We recently went to visit a friend at a local hospital and were amazed to see, displayed on a mantel behind the main reception desk, (which, by the way, had the look of a 4-star hotel), a series of ornate plaques announcing the ratings given the hospital by a well known private commercial testing agency (heretofore known more for its evaluation of cars than care).

When exactly did we come to this point, and why? Is nothing, including life and death, free of spin anymore?

More importantly, as the hospital and insurer rush to publicly proclaim and "sell" the public about their claimed superiority becomes more pervasive, has there been any corresponding increase in quality of care? Has there been any sign that the cost of health care is going down? Unfortunately, the answer to both questions is a resounding NO. Are the spinmeisters being hired to distract us from these very sad facts .

As the nation debates the wisdom and cost of national health insurance, and bemoans the outrageous expense of health care in this country, maybe we should start to think about what is really important in the delivery of health care. Why are slick commercials and private ratings accolades becoming so important, and what does that say about the delivery of healthcare in this country?

Perhaps the healthcare and insurance industries, and hospitals in particular, should spend less time and money telling us how good they are, and more time and money actually being good.

What a revolutionary concept!

A Stacked Deck

Michael Quiat — Thu, 15 Oct 2009 15:23:23 -0500

Some recent case reports made us wonder once again why IMEs are called Independent Medical Examinations. They are hardly “independent”.

These “examinations” are the evidentiary foundation upon which disability insurance companies rely to deny disability income claims so that these denials can withstand subsequent scrutiny from the courts.

How do you “fix” a game so that it favors you? When you are the manager, you pick the players who you think will win the game for you. Medical “experts” who can be counted on to deny a disability are key to getting the outcome the carrier is looking for. That part is obvious. What is not obvious is that Congress and the courts have permitted this corrupt practice to flourish, making this already one-sided affair a knockout blow for disabled claimants.

ERISA, supposedly passed by Congress to make it easier for employees to level the playing field, gives the insurer, which is also an administrator of a plan, discretion to determine whether a disability claim is covered by a disability policy. It doesn’t take a great brain to figure that if a claim is denied, the money that would have been paid to the claimant goes right to the insurance company’s bottom line.

Ever since the Supreme Court ruled in Firestone v. Bruch, 489 US 101 (1989) that courts must give deference under ERISA to the finding of the plan administrator as to whether a claim is covered, insurance companies have been having a field day denying claims that should have been paid and having the courts, with their hands tied by Firestone, back them up.

What does the IME have to do with this? Insurers have gathered to themselves a coterie of doctors who know only one thing – which side of the bread their butter is on. These “experts” make all or most of their income year after year from insurance company examinations (some in excess of $1 million per). They know that if they were actually impartial in their work, their source of income would dry up fast. So, these “independents” lean heavily in favor of their meal ticket. The result? Disabled policyholders, who may have been paying premiums for years, suffer.

On top of this, courts have had their hands tied since 1989, and have to give these slanted medical reports not only credence, but deference. If any of these so-called “independent” medical reports supports the denial of benefits by the administrator, the court has to uphold the denial even if the court may feel, on the basis of the evidence it has heard, that the denial is flat wrong.

So, why are these reports commonly referred to as “independent”. They are anything but.

(This blog is the first in a series of blogs we intend to publish on the misnamed “Independent” Medical Examination).