Since my last article appeared in this publication in March 2001, there has been even more press, in this publication and others, about difficulties related to payment of disability benefits. This is just not anecdotal; more physicians call me now, and call earlier in the claims process, for assistance with their disability insurance claims.
Although many claims are paid, the insurance industry has become more restrictive in its acceptance of liability of a claim. For instance, several disability carriers have required that the insured provide objective evidence of disability, notwithstanding the fact that such a provision or requirement does not exist in the policy. There is no question that the insurance industry is interpreting policy language with a hard-line attitude.
Insurance companies are required to conduct a fair and thorough investigation of each and every claim. Due to declining profits, many insurance companies have turned to re-engineering claims practices with an emphasis on shortening the duration of a claim, reducing the liability acceptance rate and increasing claim terminations. Most insurance carriers have changed from a customer-focused approach to a financially-driven one that is geared toward satisfying shareholders. This shift in strategy has had an adverse effect on the relationship between the insured physician and the insurer.
The disabled physician is a potentially long-term liability for the company. There is no question that, once the insured files a claim, his or her relationship with the insurer changes from representing a source of revenue (asset) to being a loss of income (liability). One claim can potentially cost a disability insurance company millions of dollars; multiply that thousands of times, and it is easy to see why the insurance industry has re-engineered its strategy to protect its assets. This has created a more adversarial relationship, evident in the number of lawsuits filed and bad faith verdicts awarded against disability insurance carriers.
Companies can no longer afford to give the benefit of the doubt to the physician claimant. If you are unable to satisfy the company’s demands, notwithstanding the fact that you may have satisfied the definition of disability in accordance with your policy provisions, your claim may still be denied. It is the responsibility of the company to explain to its insured what it expects to perfect the claim. However, the company’s failure to offer reasonable explanations for not paying benefits, based on the policy provisions, has become a common practice. Companies are relying on interpretations and definitions not evident in the policy.
The “rules” relative to the process of bringing a disability claim have changed. The insured has a duty to cooperate and provide all the information pertinent to the claim. The insurer has an obligation to investigate only pertinent information. Unfortunately, the disability insurance carrier will leave no stone unturned in an effort to develop information that may refute the claim. Conversely, the company does not always attempt to develop information for the purpose of supporting the claim.
Unfortunately, while the insurance industry has taken the position that it needed to become more aggressive regarding suspected fraudulent claims, it has apparently applied this aggressive approach to the handling of claims in general. This overzealousness has shaken the insureds’ confidence and trust in the insurance industry.
There are several factors that have contributed to the problems that exist today. Perhaps the most important component of the entire claims process is communication. Once communication breaks down, the insurer and insured take on defensive postures and the relationship becomes more adversarial. It is critical to the claim process that the lines of communication remain open and honest. The company is required to maintain communication in a timely and effective manner.
With the disability insurance company dictating the “rules,” the insured physician must become proactive in his or her relationship with the company. The insured should always communicate with the company, cooperate and provide information in an attempt to perfect the claim. It is imperative that the insured be reasonable and adhere to the provisions of the policy. Avoid the pitfall of failing to provide appropriate information, or of being unreasonable or uncooperative. The company will invariably use this position against you. Faced with this reality, you must take whatever steps are necessary to increase the likelihood that your claim will be honored and maintained. Concurrent to properly perfecting your claim, you will be laying a solid foundation for success if your case goes into litigation.
The key is to involve yourself in the process in such a way as to best present the facts and details of your claim and lessen the likelihood that it will be questioned, therefore giving your claim the highest probability of being honored and paid. In order for a disabled physician to navigate the rough waters of a disability claim, it is important to establish from the outset of the claims process a solid foundation for the claim itself. The following five rules should always be followed when considering a disability insurance claim:
Dual Purpose Medical Professionals. Besides choosing a doctor or medical professional whom you trust to provide you with appropriate care, you must choose health care professionals that are well credentialed and have experience in treating the disabling condition that you suffer. Make sure that they are willing to participate in the claims process, including filling out forms, keeping appropriate records and writing reports for the disability insurance companies in a timely manner.
Know Your Policy. Remember, we are talking about contractual obligations—you have them too. Make sure you know what you have to satisfy to obligate the insurance company to pay you benefits. Those provisions often include being under the “regular care” or “regular attendance” of the treating physician, and/or receiving “appropriate care” for the condition causing the disability. All policies are different, and even policies within the same company can differ from one year to the next.
Know Your Issues. You may face one or more of a myriad of legal issues when your claim is evaluated by the insurance company. These can include those that I addressed in my previous article such as relating to pre-existing conditions, the incontestability clause, potential legal or social vs. factual disability issues, and the nature and extent of the medical condition that is claimed as disabling.
Know Your “Own Occupation.” Know specifically what is material and substantial or important to your specialty, and make sure your treating medical professionals know it too. This includes not only the specific duties of your particular specialty, but also how much time is spent on and revenue raised by each particular activity.
Disability Equation. Essentially, you and your treating doctors need to establish the restrictions and limitations you face as result of your condition or conditions and how those restrictions and limitations prevent you from performing the material and substantial/important duties of your own occupation. Make sure any opinions are medically well founded. Understand that any information you submit for your claim will be scrutinized by the disability insurance company’s claims department and its internal and external staff of medical “experts” and consultants. Unfortunately, in today’s world they are looking to find ways “out” as opposed to ways “in.”
You may need to make them keep their “promise.” Spend your time and effort solidifying your claim. The best way to stay out of court is always to assume you will end up there.
Mark F. Seltzer, Esq., is an attorney who practices in Philadelphia, Pa.