California Insurance Lawyer Blog

In 2004, a series of automobile accidents left our Client unable to work due to severe pain in her lower back (which radiated into her leg) caused by degenerative changes in her spine with nerve impingement. As a result, our Client was awarded disability benefits from the Social Security Administration as well as from Reliance Standard. After four years of disability, without any improvement in her spine, and a Functional Capacity Evaluation (“FCE”) which objectively verified our Client’s disability, Reliance Standard terminated her benefits based on the paper review of a single nurse.

On appeal, Reliance Standard sent our Client to an Independent Medical Examination (“IME”), and based on that exam, upheld the termination. It appears, Reliance Standard did not provide the IME doctor with the medical evidence which objectively showed our Client’s spinal degeneration and impaired functional capacity. Without the necessary records, the IME was defective, and worse, unfair. The IME doctor found “no objective findings that corroborate functional impairment physically.” Reliance Standard fully adopted this defective opinion in upholding the termination of benefits.

Kantor & Kantor sued First Reliance Standard on behalf of our Client. We then set out to depose the nurse, the IME doctor, and the two claims representatives who had wrongfully terminated her disability benefits. Reliance Standard tried to prevent the depositions from taking place. Kantor & Kantor convinced the Judge that the depositions were proper. Reliance Standard refused to accept the Judge’s determination, and filed a Motion for Protective Order, asking to prevent the depositions from taking place. Following oral argument, the Court sided with our Client in a decision that was published electronically on a national basis by Westlaw (2011 WL 2003228) and LexisNexis (2011 U.S. Dist LEXIS 54866). The Court’s decision can be found here. The Court found it important to get sworn testimony regarding Reliance Standard’s alleged “neutral review process,” what Reliance Standard’s doctors actually reviewed in making their disability determinations, and Reliance Standard’s “rate of claims denials.” Kantor & Kantor will now take the depositions Reliance Standard worked so hard to prevent from happening.

Our client is a 43 year old Court Reporter who was diagnosed with MS in August 2009. She had been experiencing progressing tingling and numbness through her lower extremities and up to her pelvic area. She was hospitalized in August 2009 where she underwent a battery of tests including an MRI which revealed scattered white matter signal alteration, with differential considerations. Although the third party administrator, Sedgwick acknowledged that the MRI confirmed the diagnosis of MS, it ignored the restrictions and limitations set forth by our client’s treating physicians based on objective evidence. In its denial letter, Sedgwick focused only on the very brief period in which the MS was quiescent and conveniently ignored the periods of paralysis, fatigue, numbness, weakness, confusion, and inability to perform the duties of the job. Sedgwick refused to pay our client the Long Term Disability benefits to which she was entitled.

We arranged for our client to undergo a comprehensive neuro-psychological examination. On appeal, we submitted evidence from the neuropsych examiner who concluded that it was unlikely our client would ever return to her usual and customary occupation. He opined that her motor slowing, psychomotor slowing, and fine motor coordination deficits alone would preclude her from performing the duties of a Court Reporter. He also found that our client’s cognitive deficits were due to central nervous system demyelinating disorder.

Our appeal was successful and our client was reinstated to her Plan, with payment of full back and future benefits.

We help people with health related insurance claim problems, and initial consultation are free. Call us. 800-446-7529.

Our client was a Manager of the Creative Services Department at an international marketing company. Her job required her to travel extensively, direct employees and perform a range of management tasks. In 2001, she was rendered totally disabled from her job, due to failed back syndrome, extreme pain, and the need for heavy narcotic medication. Her doctors found her totally disabled from her job, and CIGNA paid her disability benefits for 8 years, until they abruptly terminated her benefits, on the basis of limited surveillance. Although the surveillance did not depict our client performing any tasks inconsistent with her disability, CIGNA relied upon the surveillance to terminate benefits.

We appealed this decision on behalf of our client and after prosecuting this appeal for over two years, CIGNA finally overturned its benefit termination. Fortunately for our client, she has an “own occupation” policy, such that CIGNA is obligated to pay her disability benefits unless she is capable of returning to her “own occupation” of a Creative Services Department Manager, an impossibility, according to her doctors.

Most insureds are not aware of the fact that most group Long Term Disability Policies have different definitions of disability at different time periods. Often during the first 24 months of a disability, one need only show the inability to perform the material duties of his or her "own occupation." After that initial 24 months, the standard of proof becomes more difficult and the burden then becomes proving that you cannot perform the material duties of "any occupation." This is just one of the quagmires to deal with when making a disability claim.

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Our client, Mrs. Kay, was a customer service representative for a large payroll company and enjoyed excellent performance reviews for several years. Unfortunately, she developed carcinoid cancer and the disease and strong medications she was prescribed prevented her from performing her occupation. Her disease and pain rendered her totally disabled form her job. Mrs. Kay submitted a disability claim to Prudential, which was initially approved, but later terminated.
We prepared an appeal and submitted evidence to Prudential in the form of MRIs, x-rays, and medical records from her doctors, regarding her complex physical condition. We also provided information on the effects of the heavy narcotic medication and how that medication interfered with our client’s ability to perform her occupation.

Prudential engaged in lengthy requests for evidence. We gathered and provided that evidence, and argued Prudential must reverse their denial of benefits. Ultimately, Prudential determined that while her doctors may not have described in detail the effects of her medication, Mrs. Kay was in fact disabled and entitled to disability benefits, as well as a waiver of premium payments on her life insurance during her period of disability.

On May 11, Lisa Kantor argued before the 9th U.S. Circuit Court of Appeals in San Francisco, on behalf of client Jeanene Harlick, who has suffered from anorexia for more than 20 years. Ms. Harlick entered a residential treatment facility on the advice of her doctor. After initially approving coverage for the treatment, Ms. Harlick’s insurer Blue Shield denied coverage after only 10 days, even though the insurer agreed that such treatment was medically necessary.
Ms. Kantor contends that Blue Shield abused its discretion in denying coverage and that its actions violate California’s Mental Health Parity Act, which mandates that health plans provide the same coverage for severe mental illness as they provide for physical disease. In Harlick’s case, Blue Shield covers sub-acute treatment for physical conditions at skilled nursing facilities. At the same time, Blue Shield denies responsibility for the cost of sub-acute treatment for severe mental illness at residential treatment facilities.

“For the act to have any real meaning,” argues Ms. Kantor, “Blue Shield must provide the same levels of health services for severe mental illness as it does for physical illness. Otherwise the purpose and plain language of the statute is violated, and the discrimination against those with severe mental illness, which the statute was designed to correct, will be allowed to continue.”
Ms. Kantor is among only a few lawyers in the country who include as part of their practices representation of people with eating disorders who have been denied benefits for residential treatment. The fight has occupied two fronts: while regularly scoffing at both state and federal mental health laws to deny coverage, some insurers – including Blue Shield – rewrote policies effective Jan. 1, 2011, to specifically deny benefits for the 24-hour supervised care many people with eating disorders require for recovery. Instead, these insurers only pay for 9-hour day treatment outside of residential facilities. This new policy has already begun to erode the gains made by many people who have fought to have residential treatment care paid for by their insurance companies.

The International Association of Eating Disorder Professionals filed an amicus brief in support of Ms. Harlick and the contention that California Mental Health Parity Law applies to her case, Harlick v. Blue Shield of California, 10-15595. You can listen to the oral argument before the court by clicking here: http://www.ca9.uscourts.gov/media/view_subpage.php?pk_id=0000007519

For more information about Lisa Kantor and legal assistance for eating disorders, follow this link: http://www.kantorlaw.net/Areas_of_Practice/Eating_Disorders.aspx.

It’s time healthcare premiums are regulated by the state, writes Los Angeles Times columnist George Skelton, referring to AB52, legislation proposed by Insurance Commissioner Dave Jones and Assemblyman Mike Feuer that would require insurers to obtain regulatory approval before hiking health insurance rates. Health care cost rose 3.4 percent last year while proposed premium increases in California were up to 39 percent, notes Skelton. See “A Case for State Regulation,” http://www.latimes.com/news/local/la-me-cap-insurance-20110502,0,3407855.column

The idea that California’s Department of Insurance should regulate health insurance premiums the same way it regulates auto and homeowner policies isn’t new. In fact, similar legislation sponsored by Jones last year when he was in the Assembly almost made it to the governor’s desk. Now, increased regulation is receiving renewed attention as insurers such as Anthem Blue Cross proceed with rate hikes that agencies such as the state’s Department of Managed Health Care determined are unreasonable.

Sate and federal officials up to and including President Obama can continue to denounce premium increases to no avail. Insurers aren’t listening. We agree with Skelton that it is time for the California Legislature to pass AB52.

The New York Times reported this week on a new study that confirms that “Chemo brain” is s a lingering cognitive side effect of cancer chemotherapy treatment. What is often brushed off by physicians as symptoms of normal aging or attributed to fatigue from illness, is now recognized as a pronounced and long lasting cognitive impairment. This foggy thinking, forgetfulness, difficulty finding words, and changes in memory, motor skills, and dexterity can be attributed not only to the compromises that the body’s cells have experienced from cancer, but also the body’s reaction from treatment.

The study found that recovery from cancer is not a simple fix. It takes time and patience, and the effects of treatment can linger for the duration of five years or more, depending on the individual. Cancer survivors must be mindful of these circumstances when attempting to return to their regular activities or work responsibilities. With memory, information processing, multi-tasking, and executive function skills impaired, recovering cancer patients may not be able to perform job responsibilities at the same functional level as before treatment.

Kantor & Kantor has been successful in obtaining disability benefits for clients suffering from “chemo brain” who were not cognitively capable of returning to work.

You can read the NY Times article here: http://well.blogs.nytimes.com/2011/05/04/chemo-brain-may-last-5-years-or-more/?ref=health

From 2009, to 2010, United Healthcare cut in half the compensation of its Chief Operating Officer, Stephen J. Hemsley. At first blush, it would appear United Healthcare is recognizing the ballooning costs to consumers of healthcare, and it acting responsibly. First looks can be deceiving. See http://blogs.courant.com/connecticut_insurance/2011/04/unitedhealth-ceos-pay-dropped.html

In 2009, Hemsley received $102 million in total compensation from United Healthcare. In 2010, his pay was cut in half, but even after a 50% reduction, he still received an exorbitant $48.8 million dollars in compensation. The majority of this pay was in the form of stocks and stock options ($ 44 million), in addition to the $4.8 million in he was paid in salary, incentive pay, and other compensation. Putting his compensation into perspective, his 2010 compensation is equal to the sum total of the average annual household income of 2,000 American households. It would also be enough to pay a $500 monthly health insurance premium for 8,500 families. See http://www.moneytalksnews.com/2010/04/17/insurance-outrage-hike-prices-pay-ceo-100000000/

How can United Healthcare justify its continued premium increases, based on rising healthcare costs, while at the same time paying its Chief Executive $48,800,000? Shouldn’t the Board of Directors of United Healthcare be more concerned with its policyholders’ ability to access and receive quality care rather than compensating its officers in such an outrageous manner?
Andrew Goldstein of corporate compensation adviser Towers Watson says, “We all kind of scratch our heads when executives are making millions, and (corporate) directors feel obligated to give them $10,000 for financial planning, It’s not like directors haven’t thought about getting rid of perks. They’re still a sticking point for a lot of executives. They feel it’s part of their compensation package. And it’s a stature thing.” So it seems that despite these tremendous salaries, CEO’s continue to cling to these perks at the health expense and financial burden of those less fortunate. Simply because directors feel obligated, and executives feel entitled. See http://www.usatoday.com/money/companies/management/2011-04-11-CEO-perks.htm

While families struggle to afford the soaring increases in insurance rates and battle the stresses of paying for prescriptions, doctor visits, and various health issues, United Healthcare remains “America’s largest commercial health insurer based upon revenue”, seemingly profiting from our medical woes. If it wasn’t so sad, and if so many Americans were not suffering from the consequences of being uninsured, classifying compensation of $49 million dollars as “pay cut,” would be comical. Perhaps the various departments of insurance, and our legislature, should look a lot more closely at insurance executive compensation when considering how to regulate insurance costs and fix our insurance crises.

Our client, Mr. D, was a technician for a large energy company, wherein his job duties involved heavy maintenance duties. He suffered a stroke in March 2007, was hospitalized, and underwent extensive rehabilitation and physical therapy to learn to walk and function again. CIGNA paid disability benefits for just over 2 years, until it wrongfully terminated benefits, claiming that Mr. D was again capable of working. In support of its decision, CIGNA relied upon a two and a half hour Functional Capacity Evaluation (FCE), which reported that Mr. D could return to full time work. Despite the fact that FCE confirmed his dizziness, vertigo and continuing symptoms, CIGNA determined that he could return to work as a customer service clerk or a telephone clerk.
Mr. D advised Cigna that he was unable to perform these occupations because, among other things, the stroke had impaired his vocal cords. However, Cigna ignored this impairment. Finally, we filmed a video of our client attempting to perform some of the tasks which Cigna claimed he could do. Based upon this film and the medical evidence we submitted in support of the claim, Cigna reversed its claim decision and approved Mr. D’s continuing benefits.

The New York Times reported this morning on a very disturbing trend. It seems various states are relaxing their laws which require insurance companies to maintain adequate reserves to pay claims, and to keep their finances transparent to the public. Why in the world would state governments do such a thing? Well, it seems there is money to be made in the form of taxing these insurance entitles...a lot of money. So, "shady" business that was mainly being conducted offshore in countries like Bermuda or the Cayman Islands, is now permissible in states like Vermont, Utah, South Carolina, Delaware and Hawaii. Those states are "aggressively remaking themselves as destinations of choice for the kind of complex private insurance transactions once done almost exclusively offshore. Roughly 30 states have passed some type of law to allow companies to set up special insurance subsidiaries called captives, which can conduct Bermuda-style financial wizardry right in a policyholder’s own backyard."

Aetna, MetLife, the Hartford Financial Services Group, Swiss Reinsurance, Genworth Financial and the American International Group (A.I.G.), among others, taken advantage of these laws and the concept of "captives" in order to refinance life, disability and long-term-care insurance policies.

One of the major concerns of these financial maneuverings is that is that some states are offering a more lenient, and less protective scheme of laws than other states and thus lure companies away from the protective states. This game may allow insurance companies to escape some of the consumer protective rules that have been put in place over the course of many years, all to the detriment of insurance consumers.

Fortunately, our California Insurance Commissioner, Dave Jones, is taking a cautious and sensible approach to all of this as can be seen from his comments. Mr. Jones remarks “we need to ensure that innovative transactions are not a strategy to drain value away from policyholders only to provide short-term enrichment to shareholders and investment bankers.”

Read the original article. It's a bit scary. http://www.nytimes.com/2011/05/09/business/economy/09insure.html?pagewanted=1&_r=1&nl=todaysheadlines&emc=tha2

Our client, let's call him Mr. P, was an electrical engineer. His job required not only that he sit at a desk most of the day, but also that he spend a substantial amount of his time examining circuits through a microscope. As a result of a serious car accident Mr. P suffered a debilitating back injury which was never fully resolved even after spinal surgery. Moreover, Mr. P had a serious case of diabetes which was causing or exacerbating glaucoma and vitreous hemorrhaging. Chronic back pain and impaired vision rendered Mr. P unable to function at his job. UNUM paid Mr. P long term disability benefits for a short while but then, after having him examined by an eye doctor, decided he was capable of performing the duties of his occupation. UNUM then cut off his LTD benefits.

We decided to have an "Independent Medical Exam (IME) conducted by an ophthalmologist for his diabetic retinopathy. The ophthalmologist conducted a thorough examination and analyzed the nature of Mr. P's daily work activities, and ultimately agreed that there was no way Mr. P could perform the duties of his occupation. Moreover, she even questioned his ability to perform any reasonably similar occupation on a full time, consistent basis given his training, education and experience. We sent the IME Report to UNUM with a comprehensive summary of all of the medical evidence and argument about why UNUM had made an improper decision in denying benefits. Approximately 60 days later, UNUM reversed its denial and agreed to commence paying benefits to Mr. P.

We see cases like this every day. Sometimes insurance companies will reverse themselves and start to pay benefits once they are challenged. More often, however, they don't change their decisions, and we have to file a lawsuit. The point is, we will do whatever we have to to fight for the rights of our clients to try and force their insurance companies to do the right thing, or to have a court of law force them to do the right thing.

Whether you do it yourself or hire a lawyer, the important message here is to not let your insurance company take advantage of you. They frequently deny claims which are absolutely legitimate and justified, and they do so because too many people fail to push back. Challenge them any reasonable way you are able.