Because of the significant increase in disability claims filed by physicians over the last several years, insurance carriers are now scrutinizing the terms of their policies and any claims made thereunder, utilizing novel and creative theories when denying benefits. Physicians should familiarize themselves with their policies and the claims process. The following are common mistakes made in connection with filing a claim for disability insurance benefits:
Mistake # 1: Failing to Consult With a Disability Insurance Lawyer
Healthcare professionals who are considering filing a claim for disability insurance benefits are advised to meet with an attorney experienced in the area before submitting a claim for payment. Disability insurance provisions vary greatly in terms of the language used, and coverage is often circumscribed and restricted by qualifying words and phrases. Accordingly, each insurance policy must be individually reviewed to determine whether a particular claim is covered and, if so, how that claim is best presented to ensure payment.
Action Step: Physicians should make a coordinated effort with the assistance of an attorney when interpreting their policy, presenting their claim, and providing subsequent information to their carrier.
Mistake # 2: Misunderstanding the Definitions Of "Disability" And "Occupation"
There is no such thing as a "standard" disability insurance policy, and the definition of "disability" can significantly vary. Most physicians purchase "own-occupation" policies that provide compensation following a disability that prevents the insured from performing the particular duties of his or her occupation. Thus, the insured may be entitled to benefits even if he or she could in fact perform work of a different nature. The central issue in many cases is the definition of "total disability," which could variously mean that the insured cannot perform "all" or "every" duty of his or her occupation, or the "substantial and material duties" of his or her occupation. Similarly, the term "occupation" may be specifically defined in the policy, e.g., "invasive cardiologist" or "surgical anesthesiologist" or may refer to the insured’s occupation immediately prior to the time that disability benefits are sought. In the latter situation, if the physician reduces his or her hours in the months preceding claim filing, the carrier may consider his or her occupation to be part-time rather than full-time. Similarly, the term "occupation" may be comprised not only of the duties of a physician’s specialty, but also significant travel time, teaching engagements or other areas in which he or she spends time or draws revenue. For example, your "occupation" may be defined as "physician/professor/business owner," in which case you may not be "totally disabled" if you can still teach or perform management functions.
Action Step: Physicians should read and fully understand their policy terms before filing a claim for benefits.
Mistake # 3: Inadequate Documentation of the Claim Review Process
When a doctor is submitting a claim and speaking with their carrier, it is important to take notes to assist them in remembering what was said in the event that their claim is denied. They should keep notes of all telephone conversations (including the date and time of the call, and what was said) and identify the person with whom they were speaking. Every conversation with the carrier should be confirmed in a letter sent by certified mail so that there are no misunderstandings. The "paper trail" may later be used as evidence to establish unreasonable treatment during the claim administration process.
Action Step: Starting with their first telephone call to their carrier, physicians should document in detail their conversations and meetings, and confirm everything in writing, sent by certified mail.
Mistake # 4: Blindly Attending an Independent Medical Exam
After submitting your claim, you may be asked to submit to an "independent" medical examination by someone chosen and paid for by your insurance carrier. Before submitting to an "independent" medical exam or any other exam, you must first ensure that your carrier has a right to conduct the exam per the policy language. For example, a neuropsychological exam is conducted over several days by a psychologist, not a physician, and the subjective findings from such an exam are often used by the carrier to deny benefits. If your policy requires that you submit only to "medical exams" or exams "conducted by a physician," there is certainly an argument that you need not submit to neuropsychological testing. Further, you may wish to be accompanied by an attorney or other legal or medical representatives who can monitor your "independent" medical exam. Other considerations include receiving the examiner’s curriculum vitae in advance; limiting the scope of the exam to ensure that no diagnostic test that is painful, protracted, or intrusive will be performed; having the exam videotaped or audiotaped; and receiving a copy of all notes and materials generated.
Action Step: Because the "independent" medical exam is a tool used for denying benefits where possible, physicians should work with an attorney to ensure that their rights are protected during this process.
Mistake # 5: Believing All Mental Conditions Are Excluded or Subject to Limitations
Most disability insurance contracts differentiate between mental and physical disabilities. More recent policies cut off benefits for psychiatric conditions after two or three years. Insureds often blindly accept their carrier’s decision to deny or limit benefits based on these conditions without considering numerous relevant factors, including whether there are any physical aspects to the mental condition, whether the mental condition has a biological/organic cause, or whether another, covered condition was the legal cause of the disability. Without exploring these issues in detail, insureds often blindly accept that certain conditions are limited or excluded from coverage when in fact they are not.
Action Step: Physicians should understand their policy’s mental conditions limitation and work with counsel on submitting their claim in such a manner as to ensure payment of benefits.
Mistake # 6: Inadequate Communication With a Treating Physician
Insureds should not discuss their claim or that they are considering filing for disability insurance benefits with their treatment provider until after you have had several visits. Physicians are often reluctant to support claims for benefits if they question the patients’ motivations. A physician who has treated you without success will likely be more willing to cooperate. It is also important that you communicate your symptoms and limitations to your treating physician in an organized and detailed manner so that all relevant information is recorded in your medical records, which your insurer will ultimately request. When finally speaking to your treating physician about your claim, you should ensure that your treating physician understands the definition of "disability" under the terms of the insurance policy, which can often be different than the definition as that word is normally used, so that he or she can accurately opine as to your ability to work.
Action Step: Physicians should fully discuss their condition with their treating physician to ensure supportive medical records and, after several appointments, work with him or her on submitting the claim for "disability" as that term is defined in the insurance policy.
Mistake # 7: Quantifying Your Time
You should be wary of insurance companies asking you to compartmentalize in percentages what your activities you engaged in pre- and post-disability. To the extent that there is any cross-over, companies will often deny benefits or provide benefits for merely a residual disability. It is important that you broadly describe your important duties – rather than your incidental duties – so that your carrier has a clear understanding of the thrust of your occupation. For example, in response to a question about principal duties and the percentage of time spent at each duty, an anesthesiologist may be better of stating "100% surgical anesthesia" rather than compartmentalizing each and every incidental task (e.g., patient intake, supervising nurses during surgery, post-operative visits) into discrete percentages. The reason is your insurer may erroneously consider an incidental task a "principal duty," and therefore downgrade the amount of your benefits. For example, where a physician has duties as a businessman (i.e., supervising staff, overseeing payroll), the insurance company may argue that the disabled physicians can still manage his or her practice and is therefore partially disabled only.
Action Step: Physicians should not quantify their time until after they fully understand the definitions of "principal duties," "disability," and "occupation" under the terms of their policy.
Mistake #8: Ignoring the Possibility of Surveillance
Insurers are likely to videotape or photograph physicians who have filed for disability insurance benefits. Physicians who engage in any activities that they claimed they could not perform and are caught on tape are likely to have their benefits denied and the contract could be terminated.
Action Step: Physicians should not compromise their policy benefits by submitting a fictitious claim.
Mistake #9: Blindly Accepting That Subjectively Diagnosed Conditions Are Not Covered
Disability insurers often deny benefits by insisting that the insured’s subjective symptoms do not provide objective, verifiable evidence of disability. In many cases, there is no provision or contractual requirement mandating that the insured submit objective evidence of disability. Therefore, from the insured’s perspective, these insurance companies are merely trying to save money by generously interpreting policy language in favor of a claim termination. Notwithstanding the subjective nature of a particular condition, the insured may be able to secure benefits with ample evidence bearing on the extent and severity of his or her limitations, which is far more important than providing a definitive diagnosis.
Action Step: The severity and extent of the limitations are more important than an objectively verifiable diagnosis and must be fully communicated to a physician’s insurer.
Mistake #10: Tossing Out the Disability Insurance Application, Policy, and Claims Documents
From the time of application forward, physicians should keep copies of everything (including notes from meetings with the insurer’s sales representative or agent, the policy application and the policy itself). If the sales representative provided a letter or a verbal representation that the physician jotted down, those notes can go a long way if the insurer says that the policy says something different. Similarly, information that the physician provided on the application may have a bearing on his or her reasonable expectations at the time of purchase.
Action Step: Physicians should keep all of their disability insurance papers and notes in an organized file.
Disability insurance companies are vigilant in protecting their own interests, which often means not paying claims. Insureds may often need to be even more vigilant in protecting their own interests by seeking experienced counsel to assist them in submitting their claims for benefits.
The information in this article has been prepared for informational purposes only and does not constitute legal advice. Anyone reading this article should not act on any information contained therein without seeking professional counsel from an attorney. The author and publisher shall not be responsible for any damages resulting from any error, inaccuracy or omission contained in this publication.