HOW INSURERS’ RECENT WRONGFUL RATIONING OF HARVONI DRUG TREATMENT FOR HEPATITIS C EXPOSES A LONG HISTORY OF UNREASONABLE AND HARMFUL INSURANCE COMPANY PRACTICES

Written by Tim Rozelle, Esq.

In July, August, October and December 2015, Kantor & Kantor filed class action lawsuits against Anthem Blue Cross Life and Health Insurance Company (and 26 other Anthem, Inc.-affiliated health plans nationwide), UnitedHealthcare Insurance Company (and 31 other United-affiliated health plans nationwide) and HealthNet respectively regarding the insurers’ categorical denials of Harvoni drug treatment for Hepatitis C. In denying treatment, the insurers told their insureds that their liver must reach a certain level of scarring (F3 or F4 on an F0-F4 scale) before treatment becomes necessary and would be approved.  In these respective lawsuits, our clients allege that the named insurers violated the Employee Retirement Income Security Act (ERISA) (or allege that the insureds breached insurance contracts) by using internal coverage guidelines (ICGs) to overrule providers’ determinations of appropriate medical treatment. Our clients claimed that the insurers forced them to live with a serious health problem and related issues until their livers became sufficiently deteriorated to approve treatment.

In a previous blog, we discussed the steps you need to take if you have a long term disability claim through a policy provided by your employer, before you hire an attorney. This blog will piggy back on that one, focusing on why the appeal itself is so important and more, why the quality of the evidence you submit during that appeal will make or break your claim.

Under the federal regulations governing ERISA claims, and the cases that have interpreted those regulations, your appeal is the only opportunity you will have to get evidence of your disability into your claim file. (There are a few exceptions to this general rule but for purposes of most cases, the appeal is it).

While you do have a right to litigate your claim once you have exhausted your administrative remedies under the plan, you do not have the right to testify, call witnesses or present new evidence to the judge. All the judge will see, if your claim goes that far, is the evidence that was submitted during your administrative appeal. Thus, the type and quality of the evidence you submit during your appeal is crucial to a successful claim.

Don’t ever assume that you Life Insurance policy will pay benefits to your beneficiaries.

Why? Because so often, benefits are not paid. We know this is true because we are in the business of suing insurance companies when they fail to pay valid claims. But, most people never imagine that a valid life insurance claim won’t get paid. Most of the problems we see at our firm involve insurance companies failing to pay life insurance benefits based on allegations of such things as fraud in procuring the policy, or that the policy was not properly applied for through an individual’s employer. Insurance companies often make these assertions without good faith, or without having performed a full and fair investigation of the facts. And often, when we challenge the insurance benefit denial, we get benefits paid for our clients.

But, what happens when someone doesn’t even know they are the beneficiary of a life insurance policy? Should the insurance company make an attempt to contact beneficiaries when they have knowledge an insured has died? Most state laws say”yes.” Should insurance companies continue to collect premiums (from policies with cash value) when they know an insured has died? Common sense, and the law, say”no.” Yet many insurance companies have been doing exactly what they should not be doing, and have realized mind-boggling profits by doing so. The television show, 60 minutes, ran a segment last night revealing these unfair practices. Florida Insurance Commissioner, Kevin McCarty, led the national task force investigating the industry. He explains as a result of the investigation, twenty five of the nation’s biggest life insurance companies agreed to pay more than 7 and a half billion dollars in back death benefits. For more information on the 60 minutes piece, click here: http://www.cbsnews.com/news/60-minutes-life-insurance-investigation-lesley-stahl/

On October 30, 2015, Kantor & Kantor LLP filed a class action lawsuit against Blue Shield of California. Later we amended the complaint to include “California Physicians’ Service doing business as Blue Shield of California.” Both Defendants are being sued for their unlawful denial of coverage and refusal to pay for “Harvoni,” an amazing drug that can seemingly cure chronic Hepatitis C (also sometimes referred to as “CHC”). Harvoni, developed by Gilead Sciences, Inc., is now viewed by doctors as a medically necessary treatment for Hepatitis C.

About Hepatitis C and Harvoni

Hepatitis C is a widespread contagious disease that can lead to severe liver damage, cancer, and even death. In October 2014, the United States Food and Drug Administration approved Harvoni for the treatment of Hepatitis C. Harvoni is the first drug approved for the treatment of chronic Hepatitis C that does not require combination with other drugs, and can effectively cure chronic Hepatitis C in 94% to 100% of cases with little to no side effects.

Today we revisit the case of LaVertu v. Unum Life Ins.Co. of Amer., 2014 U.S.Dist.LEXIS 40442 (C.D.Cal. March 25, 2014), a case which highlights some of the tactics insurers use to stop paying long term disability claims. Kantor & Kantor represented the plaintiff and was successful in getting her disability payments reinstated.

The Plaintiff worked as an administrative assistant for an insurance agency. She became disabled in 2007 due to back pain. Unum approved the claim, began paying benefits in 2008 after the expiration of the six-month elimination period, and continued paying benefits for more than two years. However, benefits were terminated as of March 21, 2012 based on Unum’s conclusion that LaVertu no longer met the contractual definition of disability. The plaintiff’s pre-litigation appeal was unsuccessful and she filed suit.

LaVertu introduced evidence that she had undergone three spinal surgeries. None of the treatment improved the plaintiff’s condition, however. The Social Security Administration concurred, and awarded LaVertu disability benefits under the Social Security Act. Unum obtained a copy of the entire Social Security disability insurance claim file. After reviewing the contents of the file, Unum’s in-house vocational consultant determined that the file supported sitting for no more than four hours per day; thus, the plaintiff could not meet the exertional demands of a sedentary occupation. Following that review, which took place in 2009, Unum internally noted,”Clmt is [totally disabled] any occ and R&Ls are permanent.” That information was communicated to the plaintiff in a follow-up letter stating, “we do not anticipate a change in your medical status and therefore, have made the decision to extend our approval of your benefits through February 20, 2030.”

As part of Kantor & Kantor’s”Throwback Thursday”, we take a look at Mondolo v. Unum Life Ins. Co. of Amer., CV-11-07435 CAS (MRWx) (C.D. Cal. 2013).

Kantor & Kantor LLP achieved a victory on behalf of client Tanya Mondolo, who sued Unum Life Insurance Co. in U.S. District Court for the Central District of California for wrongfully denying her disability insurance benefits. The court ruled that Unum, a Fortune 500 company and the largest group and individual disability carrier in the United States, abused its discretion in terminating Mondolo’s disability benefits. The court ordered Unum to reinstate benefits, with interest, and that Kantor & Kantor could make a motion for attorneys’ fees and costs.

Mondolo suffered from fibromyalgia and avascular necrosis, often called bone death. Her physicians believed the bone death was a late developing side effect from the chemotherapy regimen used years ago to treat her leukemia. She had difficulty walking, suffered from uncontrolled pain, and was too weak to tolerate prolonged sitting or typing.

Kantor and Kantor LLP was nominated and has now been awarded the 2015 Best of Business Award for the Small Business category.

The Small Business Community Association has been dedicated to empowering and recognizing small business owners who make a difference in their respective communities since 2006.

We are honored to accept this award and grateful that our firm is recognized in this way.

Most people don’t realize it, but life insurance claims often get denied.

You will immediately ask”wait, how can an insurance company deny a life insurance claim, once a person actually dies?” It’s a natural question, but life insurance is a little more complicated than we might like.

If you obtain life insurance through your employer, you are usually only asked to answer health related questions if you apply outside of regular enrollment periods, or apply for supplemental benefits. If you buy life insurance on your own (as opposed to obtaining it through an employer), a complete insurance questionnaire/application is almost always required. That application asks a whole series of questions about the applicant’s health history. When misstatements are made on that application, such as when a smoker says he doesn’t smoke, or a skydiver says she doesn’t skydive, the insurer can often use that misinformation to invalidate the insurance — even after the insured dies. Fortunately, California and most other states have”incontestability” laws which prohibit insurance companies from invalidating policies and refusing to pay benefits after a period of time. In California, life insurance policies become incontestable after 2 years. Some limitations apply, but for most cases, no matter what is on the insurance application, true or not, after 2 years in California, policies cannot be invalidated.

Kantor & Kantor is honored to announce the selection of four attorneys from the firm for the 2015 Southern California Super Lawyers list. Inclusion in this list is reserved for attorneys who exhibit distinct excellence in their practice.

Super Lawyers, a prominent attorney rating service, identifies exceptional lawyers from more than 70 practice areas. The selected attorneys have attained substantial peer recognition and widespread professional achievement. The extensive and multiphase process used to determine 2014 California Super Lawyers relies on peer nominations, evaluations, and independent research.

All four lawyers were selected for their successes in representing people denied disability – particularly those with disabling conditions such as eating disorders, autoimmune diseases, Alzheimer’s, Parkinson’s, Multiple Sclerosis, cancer and mental illness – as well as assisting people recover benefits under long-term care, health and life insurance policies. This recognition and honor demonstrates the talent, dedication, and diligence of these attorneys; all of which they utilize to obtain the insurance benefits to which their clients are entitled.

Many of our clients have disabling pain. However, the difficulty is proving that the pain is disabling. There is no test to quantify the severity of pain as it is an entirely subjective condition. This does not mean however, that an insurance carrier is free to disregards reports of disabling pain, merely because there isn’t “objective evidence” to quantify its severity.

An insurance carrier may not disregard a claimant’s reports of symptoms in the absence of a specific, clear and convincing reason. Subjective evidence of a claimant’s pain, based on his own testimony and the medical reports of examining physicians is more than ample to establish his disability, if believed. Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 872-3, fn 3 (9th Cir. 2008). Rather, the severity of symptoms of pain, so long as they are consistent with the prevailing diagnosis and are supported by the other evidence, will, of necessity, be established by symptom complaints.

What types of “other evidence” will a court consider as persuasive of disabling pain? Courts are often impressed with the severity of a claimant’s pain when it appears that the claimant has pursued treatments in an effort to relieve the pain.