As a law firm dedicated to assisting and representing physicians and health care professionals with disability insurance claims and cases, we have seen, first hand, the disability insurance companies’ response to their “bad block of business” resulting from sales of excellent policies to the physician target market.
During the 80’s and early 90’s, the “heyday” of the disability insurance business, physicians were the most highly sought-after market by the disability insurance companies. Benefit periods were extended, contract language was liberalized, and additional benefits, such as residual benefits and COLA, were added in vying for market share.
Unfortunately, as physician claims on their policies increased, the companies started losing money on those lines of business. As a result, the companies responded with drastic changes in their business structures and an increasingly more aggressive and “hard-line” approach in considering their claims. What this means to you is that your “prized-policy” claim will be highly scrutinized from its inception with increasingly more resistence to payment of benefits even if liability is initially accepted.
The most important advice that I can give to any physician considering filing a claim, or even on claim, is to know and understand your policy and what is required to obligate your disability insurance company to pay you benefits. There are essentially two types of policies, the individual disability income policy (DI) and the group or long-term disability policy (LTD). One of the most important differences between the policies is that LTD policies are governed by ERISA, which sets forth an appellate procedure which must be followed in the event of an adverse decision (and also which must be exhausted before filing suit in Court), more often is governed by an “arbitrary and capricious” burden of proof, and does not allow a recovery under the state’s bad faith laws. In addition, LTD policies are written to limit benefits and contain more restrictive contract language, usually incorporating multiple benefit limitation provisions.
Each policy contains many important provisions. You must become familiar with all provisions and how various provisions relate to and effect each other. Some of the most important provisions are the Pre-Existing Condition clause which your company may try to invoke to exclude conditions from coverage; the Definitions of Total and Residual Disability that form the foundation of your claim, which must be established in order to receive benefits; and the Incontestable Clause which sets forth whether your company has the ability to contest your policy, usually after two years. There are, of course, many other provisions that must be considered and understood and, also, don’t forget the Riders that you may have paid additional premiums for, which may provide additional benefits or more liberalized contract language.
The fact that you know and understand your policy doesn’t mean that you’re “out of the woods” with regard to obligating your company to pay your claim. There are a myriad of legal issues and defenses that will be employed and raised by your company when considering your claim. Your company will perform an occupational evaluation that may very well conclude with a much more complicated multi-direction occupational picture than simply the speciality in which you happen to practice in an attempt to attack or reduce your claim. Your company will certainly consider your post-disability activity level in considering whether or not you can perform your pre-disability material and substantial duties. Of course your company will conduct a comprehensive investigation and evaluation of your disabling condition or conditions and how those conditions impact the performance of your occupational duties. Your company will also consider other issues such as licensure and privileges that may impact your claim. The bottom line is that your company employs a very well trained team of claims and medical consultants, as well as a network of support staff and experts, all skilled in the art of “finding a way not to pay” your claim.
You, on the other hand, are well trained in the performance of your speciality, not in prosecuting disability insurance claims. However, when considering a claim, you will likely be taking on a force evermore increasingly resistant to paying your claim with a financial incentive and goal to make sure that you are an asset to your company instead of a liability. You must anticipate your company’s reaction and response to your claim, and all information that you submit in support of your claim, in advance of its submission. If you thought that this process was going to be a “cake-walk”, unfortunately, you’re in for a rude awakening. Filing and maintaining your claim, at a time when you are likely most vulnerable and in need, can, in and of itself, be debilitating. Remember, this is about claiming disability benefits from your company, not letting your company benefit by disabling your claim.
This article originally appeared in M.D. News: A Business and Lifestyle Magazine for Physicians, Philadelphia Metro Edition Vol. 2, No.1.