The truth about long term disability insurance denials
Written by Kantor and Kantor insurance Matters on October 6, 2013
Insurance delays and denials can surface at the most inconvenient times, multiplying your obstacles which, unfortunately, can then intensify the symptoms of your illness. Insurance delays and denials can put your health, recovery, and even your life at risk. Insurance is designed to protect us in times of injury, illness, and insurmountable medical bills. Why is it then that so many insurance companies leave their members without benefits, without access to treatment, and without access to the appropriate level of care?
The answer to this question can be best explained by the complex internal workings of insurance companies.
The Bottom Line
Perhaps the most influential factor in an insurance denial is the insurance company’s bottom line. "It's an insurance company that administers the plan, that decides on the claim, and ultimately has to foot the bill if the benefit is granted – and that's a conflict of interest that everyone can easily see," said Sean M. Anderson, a University of Illinois expert in employee benefit plan policy and regulation. When insurance companies are calling the shots (rather than medical experts) for oftentimes very serious medical conditions, it most certainly draws attention to the offensive bias that can afflict the outcome of an insurance claim…the bottom line.
What is an insurance company’s bottom line? Wendell Potter has referred to this as “the industry’s lethal bottom line,” as it has successfully preserved insurers’ profits while denying countless insureds access to healthcare and medical treatment for ages. While the insurance industry has trillions of dollars in assets, enjoys profits of over $30 billion per year, and pays its CEOS more than any other industry (see http://www.justice.org/cps/rde/xbcr/justice/InsuranceTactics.pdf) many consumers remain either uninsured or afflicted by high premiums and consistent insurance denials. It is not uncommon to find insurance companies who will deny claims to boost their bottom line, insurance companies who will reward employees for denying claims, and insurance companies who will effortlessly replace employees who will not participate in unjust insurance denials.
Not So “Independent” Medical Reviewers
How do insurance companies get away with such behavior? There are several ways that an insurance company can deny, delay, and refuse payment for a claim – including the use of “independent” medical reviewers. An Independent Medical Exam ("IME") is often arranged by the insurance company during a long term disability claim. This is an exam arranged by the insurance company, usually with an expected outcome… support for a claim denial. There is rarely anything "independent" about these exams. The credentials for these internal (and even external) reviewers are not always clear, and it is possible for them to contribute to an insurance denial without possessing much medical or disease-specific knowledge of your case.
There Is Almost No Risk To The Insurance Company In Denying A Claim
If you get your insurance coverage through your employer, as most people do, you fall under the umbrella of ERISA (Employee Retirement Income Security Act). Designed to protect individuals, ERISA was established in large part to protect employee pension benefits. The law is very complex and spills over into other employee benefits such as short term and long term disability. While the legislation can be helpful in protecting individuals against unethical employers, when it comes to disability claims, the laws of ERISA can essentially allow insurance companies to deny claims with ease.
The bottom line is that there is almost no risk to the insurance company in denying a claim. The worst that happens, IF the claim is appealed, and IF the insured gets a lawyer, and IF the lawyer will take the case, and IF the court rules in favor of payment, is that the claim has to be paid. That’s a lot of “ifs,” and insurance companies bank on the fact that most of those “ifs” never happen. Even if they do, it doesn’t cost the insurance company any more than it would have had they decided to pay the claim in the first place. The odds are stacked in their favor. These issues are most pronounced in the area of health, life, and disability claims, and it has become nearly impossible for individuals to have these claims fairly evaluated and properly paid. As a result, insurance companies have a very strong incentive to deny claims for benefits.
For more on ERISA see: http://www.creakyjoints.org/blogs/insurance-matters/why-was-my-long-term-disability-claim-denied.
Although painfully clear to those who suffer, many disabling and chronic illnesses are often referred to as “invisible illnesses,” as their symptoms are often not visible to outsiders. These types of illnesses are often characterized by subjective and self-reported symptoms, and they are often difficult to diagnosis and understand. This creates an additional challenge for those seeking long term disability benefits, as insurance companies require very specific “objective” evidence of disability.
The Elderly and the Sick
This group of individuals is especially susceptible to being taken advantage of by their insurance company. The ill and the elderly are both easy targets for insurance companies to delay claim payments, or deny them altogether. “The bottom line is that insurance companies make money when they don’t pay claims…They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die,” said Mary Beth Senkewicz, former senior executive at the National Association of Insurance Commissioners (NAIC). By delaying as long as possible, insurance companies hope that their members will lack the resources, strength, and persistence necessary to appeal such decisions.
The Regulations governing ERISA claims have time limits governing the claim and appeal process. According to the Regulations, a claimant has a minimum of 180 days to appeal a denied disability claim. An insurer must decide the appeal within 45 days, or if “exceptional circumstances,” exist, may request an additional 45 day period to decide the appeal.
Recently, we have seen insurers attempt to obtain additional time by delaying or “tolling” the appeal, while they purportedly obtain additional information from third parties (such as an “independent” medical examination). We believe that any delay due to a request for third party information is an insufficient basis to “toll” the time for conducting an appeal and is an improper delay of the appeal process.
What can you do about it?
- Read your policy carefully. If you don’t understand your policy, you don’t understand the rules. If you need help making sense of your long term disability policy, do not hesitate to contact us.
- Be very careful when filling out forms and when communicating with your physician. Do not leave out any information about your symptoms, treatment side effects, and how your illness has impacted your life.
- Put everything in writing. Documenting and confirming in writing is a crucial piece of the insurance claim puzzle. If you can’t prove that a conversation with your insurance company happened, it doesn’t exist. Communicating with your insurance company will likely be a frustrating and confusing experience. Be sure to keep a record of everything your insurer tells you over the phone. If possible, get the name and title of the person you are speaking with.
- Get written support from your physician about the debilitating nature of your illness, and from any co-workers, family, or friends who have experienced the devastating impact of your illness. Written support from medical experts (and loved ones) can help objectify and support your long term disability claim.
Insurance companies have become experts in what many would call “insurance indecency”: delaying claims, denying claims, and confusing their members… in hopes of fatigue, exhaustion, and submission. Please understand that an insurance denial is not the final word. At Kantor & Kantor, we have a team of dedicated attorneys who understand the internal workings of insurance companies, and understand how to challenge insurance denials to get insurance claims paid. We are available to help you sort through your policy, challenge unfair insurance denials, and access the disability benefits to which you are entitled.
We understand, and we can help.
www.kantorlaw.net (800) 446-7529