Disability Insurance Claim Advice
ABANDONMENT: One of Many Claim Management Strategies in the Disability Claims Arena
Health Insurnce Underwriter (N.A.H.U.), October 2000
By Art Fries
There was Armageddon the movie. Now there is the Armageddon that goes beyond Hollywood and brings to real life the current state of disability claims.
Whether your client is submitting a new claim, having a problem with an existing one, or has been terminated by the insurance company, help is needed. Enter the disability claim consultant, giving advice or breathing life into the claim, hopefully to enable a claimant to be paid fairly. In turn, enabling the insurance company to honor the claim as promised in their disability contract.
Today, insurance carriers use video surveillance, independent medical evaluations, outside investigators, CPA consultants, and a host of other support to try to prove the claim is not worthy of being paid. And sometimes they are right! However, I'm seeing many claims that should be paid that aren't!
The current claim environment appears to be related to economic issues in which the policyholder/claimant as well as the broker/agent has little or no control. Decisions are made by many insurance companies from the top that relate to quarterly statements and stock market performance. In other words, short term decisions that have long term implications.
The purpose of this article is to let you see a disability claim from the perspective of one who has experienced such on a personal basis. In addition you will get a glimpse of the type of advice a disability claim consultant can provide. (Note that any name I use is fictional for privacy purposes.)
Ed was a practicing dentist in a major metropolitan area who went on total disability at age 54. His diagnosis was major depression and
pharmaceutical abuse (overuse of valium and xanax). One week of rehab did not work for Ed, so he was sent to a rehab facility in another state for six months, away from his family and friends.
This treatment was a success in keeping Ed drug free, and he continues as such to this day. He goes to substance abuse meetings (alcohol/drugs) weekly and continues to see a psychiatrist and psychologist on at least a monthly basis, since he still battles the demons of depression. Might I add that after being drug free for six months, Ed went back to work part time for 20 hours per week, but found that he was not able to function well in a clinical dentistry practice. He was, in fact, a danger to himself as well as his patients.
After six months of working part time and collecting under a "residual" (partial) disability definition, he stopped working again and went back on total disability. Shortly thereafter he was able to secure a part time position teaching second and third year dental students at a local dental school four days a week.
He is not involved with any of the complicated surgeries or other procedures he performed in the past, but he oversees the work of his students in addition to his teaching responsibilities.
Ed's attending physicians have maintained all along that he cannot go back to practicing clinical dentistry; and, based upon my conversations with this claimant, it is clear that if he goes back to work in a dental office, he will again abuse drugs since the desire continues. He has attempted suicide in the past, and the potential is there again if pushed in the wrong direction.
Ed expected to receive a check for the rest of his life, according to the terms of his disability policy, which says he is totally disabled if he "cannot perform the important duties of his regular occupation." For four years the insurance company paid his monthly benefit after being convinced of his illness by their own independent medical evaluation early in his disability.
The company requested another independent medical examination to "update" the previous one. The examiner formulated an opinion that the insured "by choice" (new flavor of the month terminology) didn't want to go back to work in clinical dentistry. As a result the claim was terminated in conflict with all prior medical documentation. Think of which end of the depression scale Ed was on when he received the termination letter.
So what's this all about? This is a strategy on the part of the insurance company to see if the claimant will: (1) Accept the company's conclusion without question. (2) Complain to the insurance company indicating that the termination is not justified. (3) Hire an attorney.
Based upon the response by the claimant, the insurance company will determine its course of action. Many times a situation like this becomes a game to see who can move the most paper and to see if the claimant and/ or his attorney can be "worn down."
In Ed's case I was hired by him directly in a consulting capacity.
After a careful review of various documents, shaping up the claim with additional clarification and bringing in our own independent medical examiner, the insurance company paid back-payments of some ten months and is now continuing the monthly benefit. The claim is now being paid under a "reservation of rights" (a scare tactic in and of itself), and the company is implying that he is disabled, but on a partial basis only. The company has also indicated that it is still reviewing further documentation to determine in which direction to proceed.
In the meantime my client becomes further depressed by these actions and may have to prove even further what has previously been proven that his claim is valid. A humiliating and time consuming experience for one who may not be up to par to begin with.
Many insurance companies are bombarding claimants with tremendous paperwork and confusion, the likes of which you and I have never seen. Some are insulating themselves with quantities of bodies to keep you and your clients further confused. As an example, one of the major players has its claim department broken down into various sub-classifications. Their "psych unit" hierarchy starts off with an assistant claim representative and goes upward as follows: associate claim representative, claim representative, senior claim representative, chief claim representative, consultant, director (or unit manager) and finally vice president (who is in charge of the "psych unit") who in turn reports to the senior vice president in charge of all disability claims. Count them; eight people before you get to the top guy. Some companies call the top guy the "director of claims," but in the aforementioned company you would only be getting the third guy from the top. Getting confused? You betcha, and that's the purpose of it all.. .to insulate the top guys from the pack and keep claimants running around in diminishing circles.
In addition, there may be one or more others involved in a claim; such as caseworkers, registered nurses, rehabilitation counselors, CPAs, medical directors, medical consultants, ergonomics consultants, ad infinitum. Where does it end? It seems like it doesn't! In the case of Ed, the insurance company stood to save $2 million by terminating his claim. Now you see why current claim management practices take on a new meaning.
Going it alone in today's disability claim environment can prove to be economically devastating. A disability claim consultant can help in submitting a new claim in a clear, logical fashion so that the claimant does not prejudice his rights. Unfortunately there is a shortage of talent in this area, but those who have a proven track record of disability sales or have worked for an insurance company in a seasoned capacity can most likely provide this valuable service. There is definitely a learning process, and most of this will come from personal experience.
What Does a Disability Claim Consultant Do?
Once hired, the job involves (but is not limited to) the following.
1. Reviewing all policies, including copies of the original application for coverage as well as any changes or increases that may have occurred over the years.
2. Reviewing diagnosis/prognosis reports from physicians that provide insight into the medical history which has created the claim.
3. Helping answer the questions on the claim forms or any related questionnaire.
4. Providing advice on how to communicate with the attending physician(s).
5. Determining if it is a total or a partial (residual) claim.
6. Determining if the claim relates to "your occupation," earnings (or both), or some other definition.
7. Advising how to handle visits by claim investigators, CPAs as well as visits to independent medical examiners.
8. Advising how to prepare a list of pre and post disability duties, broken down hourly and weekly.
9. Helping to determine what the claimant can and cannot do with respect to post disability duties when there is more than one policy. Playing golf or tennis may not be a problem for one claimant, but may be a problem for another.
10. Providing advice on the meaning of exclusions, offset provisions; earning clauses, if applicable; and a host of other contractual wording.
A disability consultant should also be able to help develop a strategy in connection with the claim. There may be a need to bring in another consultant such as a CPA, another physician, or another professional to help. Often the disability claim consultant will be able to provide advice to attorneys when the services of such an individual is appropriate to the claim.
A consultant should always be caring and credible. Any claim that smells of fraud should be dismissed immediately.
Preparation and more preparation is what has given you the confidence to achieve success in selling disability insurance. Guidance from a disability claim consultant can be a valuable third party influence, and you will be relieved of the burden of getting involved in a claim for which you will lose renewal commission.
When expertise is needed, look for those who can be there when you can't -the disability claim consultant.