Whose best interests is Fluegel contemplating? Certainly not his policyholders’ interests.

“It is clearly time for stricter oversight of the methods health insurance companies use to calculate premium rate increases,” U.S. Sen. Dianne Feinstein said.

We agree, and that’s why we are endorsing Dave Jones for California Insurance Commissioner. As a California Assemblymember Jones introduced legislation designed to help consumers fight insurers who delay and deny benefits or unlawfully rescind coverage. As Insurance Commissioner, Jones will be the advocate policyholders need to keep insurers accountable to their customers. For more information about Dave Jones, log on to www.davejones2010.com.

The review is also the second time around for Anthem this year. The company’s earlier attempt at a rate increase – as much as 39 percent for some customers – caused so much controversy that the DOI hired an independent actuary to examine the proposed increase. The actuary found that Anthem’s plan not only failed to meet the state requirement that 70 percent of premiums be spent on medical claims (as opposed to administrative costs) but also that the insurer erred in the way it calculated its rates. Anthem apologized -- and then promptly proposed another, slightly more modest, rate hike.

Spokespeople for the health insurers all told the Times that they’ve learned from Anthem’s mistakes and that they are confident their rates will pass muster. Several even conducted “mock” reviews before submitting their requests to be particularly diligent, they said.

We applaud the DOI for taking rate increases seriously and not merely rubber-stamping proposals, even and especially when the carriers assure the department they’ve complied with state law. The cost of independent review is entirely justified, and consumers have the reassurance the DOI is working in their best interests.

The report also provide tips about how to further reduce the cost of premiums, including trying to qualify for a preferred health discount, selecting a 90-day elimination period, chooses a spousal “share-care” option, and shopping around among carriers for the best coverage at the most affordable rate.

It might be easy to dismiss this study as self-interested, since the AALTCI, according to its web site serves “those who offer long-term care insurance and other planning solutions.” In addition, the timing is suspicious, the report arriving just months after passage of the CLASS Act, the part of the federal government’s healthcare reform package that will create a voluntary government-run long-term care insurance program. Average premiums under that program are estimated to start at $100 to $240 a month ($1200 to $2880 a year) and pay out a mere $50 to $75 a day – too much for too little, some critics have said.

Nevertheless, this report may be an indication that the LTC industry is working swiftly to get ahead of the government program by creating highly competitive long-term care products. And if there is going to be an LTC price war, now might be the time – no matter what your age – to purchase coverage.

As we frequently note in this blog, LTC coverage is about the only option for people who must pay for in-home or assisted living care when they are ill or aged. Work with a reputable agent who can find you the right policy with a well-capitalized carrier. Research what care cost will be by the time you could need it, and plan accordingly. Although in the end you may have to fight with your carrier to receive benefits, it’s better to have that option than none at all.

To examine the report go to http://www.aaltci.org/news/long-term-care-association-news/report-what-people-pay-for-ltc-health-insurance.

The insurance companies twist the language of these policies so as to argue that care providers must be licensed by the State of California. The fact is, however, California does not require licensing for certain classes of care providers, and they couldn't get licensed by the state even if they wanted to! Most of these policies contain provisions which pay for "Home Health Care Services," or services from a "Home Health Care Agency." Sometimes, the benefits are characterized as "Personal Care Services" or "Instrumental Activities of Daily Living."

Companies we've seen denying benefits on grounds the agency is not licensed include Conseco Senior Health, Senior Health Insurance Company (SHIP), Transport Life, American Travelers Life and others.

Don't let these companies get away with not paying you benefits! Call us. We don't charge for an initial interview, and if we take the case, it will be on a contingency, so you won't have to pay attorneys fees on an hourly basis.

800-446-7529

As many as five research teams attempting to confirm the finding say they have been unable to locate the XMRV virus in people suffering from chronic fatigue, reports the Los Angeles Times, “The Push and Pull Over a Chronic Fatigue Syndrome Study.” http://www.latimes.com/news/health/la-he-chronic-fatigue-20100614,0,6928481.story.

The U.S. Centers for Disease Control and Prevention has estimated that as many as 4 million people in the U.S. – most of them women -- have the disease. Chronic fatigue cannot be diagnosed with any known lab test and no FDA-approved drug has been developed to treat it. That’s why the isolation of a possible cause and treatment caused such high hopes for people with the disorder.

Immunologist Judy Mikovits, lead author of the paper about the XMRV virus published in Science, says the research teams are biased. She calls the XMRV infection possibly “the worst epidemic in U.S history.” She told the Times her finding is “being ignored by a dithering, even hostile scientific world.”

“Even the best scientists can be wrong,” writes reporter Trine Tsouderos. “Findings must be tested and confirmed by other researchers before they can be trusted. And that has yet to happen for XMRV and chronic fatigue syndrome.”

Disability insurers will likely use this debate over the cause of chronic fatigue to delay and deny claims from people with the disorder, some who have been fighting for years to get their physical suffering acknowledged. Still, the fact that so many researchers are now attempting to prove Dr. Mikovits either right or wrong could lead to scientifically tested and approved ways to diagnose and treat chronic fatigue.

If you suffer from chronic fatigue syndrome and have been denied health or disability insurance benefits, call us at (800) 446-7529. We have years of experience helping people with chronic fatigue and similar conditions appeal benefit denials or challenge insurers or health plans in court, particularly when insurers refuse to acknowledge the seriousness of their disease.

“How a Medical Reviewer Helped Reliance Standard Deny Disability Claims,” The Insurance Forum (June 2010), highlights William S. Hauptman, a Philadelphia gastroenterologist who worked as a medical reviewer for Reliance Standard Life Insurance Company on disability claims. Dr. Hauptman’s support of adverse claims decisions was mentioned in several lawsuits filed against Reliance, including a case our firm successfully appealed, Gunn v. Reliance, No. 04-01852 (U.S. District Court, Central District of California).

Igor Gunn, a UBS/PaineWebber financial advisor, was diagnosed with symptoms of multiple sclerosis, including fainting spells, constant dizziness, fatigue, balance problems, cognitive difficulty and depression. His long-term disability plan administered by Reliance paid Mr. Gunn benefits for two years while the plan investigated his claim. Mr. Gunn submitted medical evaluations from his psychiatrist and three physicians. Two concluded Mr. Gunn was totally disabled; the other two submitted treatment notes. Mr. Gunn’s psychologist concluded he was completely disabled on “both medical and psychological grounds.”

Mr. Gunn’s plan would pay benefits for physical conditions, but not for mental or nervous disorders after two years unless Mr. Gunn was in a hospital or institution. This policy language becomes important because of what happened next.

Although five of Mr. Gunn’s physicians were clearly treating him for physical as well as psychological symptoms, the physician from whom Reliance sought an independent evaluation, Dr. Carl Orfuss, concluded that 99 percent of Mr. Gunn’s disability stemmed from “psychiatric problems.” As a result, Reliance informed Mr. Gunn that he was not physically impaired, benefits would terminate and he must return to work. Mr. Gunn appealed he decision, including in his appeal a doctor’s diagnosis of physical disability from multiple sclerosis.

Reliance asked Dr. Hauptman to review the medical file, and he agreed with Dr. Orfuss that “consistent with the entirety of the medical records” 99 percent of Mr. Gunn’s disability resulted from depression. Reliance denied the appeal and Mr. Gunn sued in federal court.

The District Court, ruling that Mr. Gunn was entitled to benefits, had a very decided opinion about Dr. Hauptman: “Reliance is the only insurance company for which Dr. Hauptman works, and he derived approximately one-third of his income from his work with Reliance. Reliance prohibits Dr. Hauptman from contacting a beneficiary’s treating physicians to discuss those physician’s opinions unless he first receives permission from Reliance.”

Joseph M. Belth,editor of The Insurance Forum, sums up the situation in the June 2010 issue of his newsletter this way:

"I believe that Reliance and other disability insurers use many physicians to help the companies deny claims. Using a physician in that way creates a serious conflict of interest for the physician. The physician knows that the company wants his or her support for adverse claims decisions, that he or she will be paid generously for providing that support, and that failing to provide that support will discourage the company from using the physician.

Ideally, disability insurers should be looking for ways to honor claims rather than looking for ways to deny claims. In the absence of that ideal situation, it is difficult to address the above conflict of interest. One possibility would be to disclose publicly the number and percentage of cases handled by a physician where he or she recommended denial of a claim."

We find it highly unlikely that insurance carriers will choose to address this conflict of interest the way Mr. Belth suggests because that would make it too easy for courts to throw out biased testimony. Rather, they will continue to look for ways to deny claims and make you fight to prove their examining physician has a serious conflict of interest.

If your claim has been denied because your health plan relied on the report of their hired doctor who made an analysis that contradicts your own physician’s diagnosis, please contact us at (800) 446-7529 and let us help you fight for the benefits you deserve.

Diagnosing fibromyalgia has long been a problem within the medical community. Fibromyalgia is usually determined by administering “tender point” exams that document pain or tenderness on at least 11of 18 specified points during a three month period. But doctors who are not rheumatologists are uncomfortable with exam, which isn’t fail-safe, said Robert Katz, MD, a rheumatologist and professor of medicine at Rush University Medical Center in Chicago and author of the study. As a result, people with symptoms commonly associated with the fibromyalgia were often told by their doctors that the problem was “all in their heads.”

All that is not lost on disability insurers, who tend to deny claims from people suffering with fibromyalgia, particularly when policyholders cannot get a clear diagnosis of their condition.

The new diagnosing criteria, already approved by American College of Rheumatology, avoid the tender point exams. Instead, a 19-point pain index and severity scale is administered. A patient marks the number of body parts where she has experienced pain during the last week. Typical fibromyalgia symptoms such as unrefreshing sleep, fatigue, and cognition are rated on a scale of severity from 0 to 3. The physician completes the diagnosis based on the number of painful areas and number of symptoms and their severity.

Dr. Katz predicts that once the new diagnosis criteria are in use, the number of recognized cases of fibromyalgia could double or even triple.

All this is good news for people who believe they are suffering from the painful symptoms of fibromyalgia but have never been officially diagnosed with the disease. On the other hand, they may be in for a shock if and when they file disability claims. We predict that carriers won’t readily agree that this new way to diagnose fibromyalgia is superior to previous methods and will still make Firbo sufferers fight to get the benefits they deserve.

In addition to new authority under federal law, the insurance commissioner may gain the regulatory powers currently under the charge of the California Department of Managed Healthcare, which oversees health maintenance organizations, if the Legislature approves and the governor signs a bill that would shift all regulatory power to the commissioner.

This year’s insurance commissioner race is one of the most important in the state’s history.

We support Democrat Dave Jones, who proved a strong consumer advocate while serving as a California Assemblymember. In addition to supporting the regulatory shift from the Department of Managed Healthcare, Jones wants California lawmakers to give the commissioner the power to approve or reject insurer requests for rate increases, subjecting health insurance rates to the same detailed approval process that applies to automobile, home and other types of property and casualty insurance.

“I’ll be working to impose rate regulation on health insurance and healthcare plans to rein in the excessive rate increases that have afflicted California consumers year after year for the past 10 years,” Jones told the Times.

We believe Jones has the experience, leadership skills and ability to protect consumers as insurance commissioner, as well as hold insurance companies accountable when they break the law or deny benefits their customers rightfully deserve. From what we have seen thus far, he is fully capable of fulfilling the challenges facing the state and the insurance industry during the next four years and of building a bureaucracy that works in the consumers’ interests.

One thing IS clear, however: This is really good news for disability insurers. For example, Unum has posted increased profits for five straight quarters, boosted its dividend and approved a $500 million share repurchase program.
“You can’t make a windfall on these products,” Unum Group Chief Executive Officer Thomas Watjen told Businesweek. “It’s not like you can go on claim and make an enormous amount of money.”
In one sentence, Mr. Watjen confirms the argument we make every day for our clients suffering from disabling conditions: If they weren’t sick, they’d be at work. It pays better. That is something we’ll be sure to remind Mr. Watjen’s representatives each time they make a policyholder fight for his or her benefits.

The federal health reform legislation mandates that by 2011 health insurers must spend 80 to 85 percent of premiums on medical services or activities that improve the quality of care. The legislation, however, doesn’t specifically define what activity will qualify as an improvement in the "quality of care." That leaves plenty of room for carriers to manipulate the process and circumvent the true intent of the legislation.

According to the article, Sen. Jay Rockefeller, a democrat from West Virginia, has found insurers are already classifying many administrative costs as medical expenses. He wants Congress to impose a rigorous standard. The New York Times is advocating sensible boundaries that exclude technologies and programs that merely streamline operations.

For example, insurers want to include the cost of setting up provider networks and programs that deter fraud and overbilling in the patient care ratio. Most people, however, would consider those administrative activities.

It’s clear to us that someone at the federal or state level must monitor carrier decisions to blur the lines between patient care and administrative costs so health care reform can remain the true reform Americans counted on.

-CC

Among other things, the book has a brief ERISA discussion. While its focus is on retirement more so than disability, the principles the authors raise are virtually the same. The authors write:

“ERISA sets forth three fiduciary principles for retirement-plan investments: the exclusive benefit rule, requiring that plans be managed exclusively for the benefit of participants; the prudence rule, requiring that plan assets be invested according to a ‘prudent investor’ standard; and the diversification rule, requiring that plan assets be diversified so as to minimize the risk of large losses. Most notably, company stock is exempted from the diversification requirement in defined-contribution plans—largely because, at the time ERISA was passed, large employers with profit-sharing plans lobbied Congress to exempt them from the diversification requirements imposed on defined-benefits plans. Employers are still expected to act prudently, however, in determining whether company stock is a suitable investment.”

The authors go on to explain how perverse this is from a workers’ welfare perspective. Diversification is key to a healthy investment portfolio, yet employers have an interest in seeing that their companies’ stock performs well and those profits are shared, even when this may hurt employees’ retirement funds.

Sunstein and Thaler explain: “The primary incentive problems in this context are possible conflicts of interest between the employer and the employee. The issues regarding company stock are a good example. The ERISA laws already require firms to act in the best interest of the employees. These laws should be enforced.”

Similarly, ERISA requires disability and health plan administrators and/or insurance companies to operate in the best interest of employees. However, often there is a conflict between paying claims for disabled or sick employees, and maximizing profits for shareholders of the insurance companies, which will be affected by payouts on insurance claims. This conflicted fiduciary problem continuously arises in the field of ERISA law. Kantor and Kantor works to enforce ERISA laws on behalf of employees/ consumers generally, by holding insurance companies responsible for their fiduciary duties to their insureds.

You can purchase Nudge online and at major booksellers. It has plenty of worthwhile reading!

-ND

States like Massachusetts and New York, known for their outstanding medical care, and driven by broader social concerns of non-profit advancement of health care and protecting those suffering from wide-spread illnesses like cancer and AIDS (as well as the reality of high costs of medical care), have been trailblazers in taking closer steps toward universal health insurance coverage for their citizens, including those with pre-existing conditions. By doing so, they’ve begun to address the problem of the “death spiral,” where costs of insurance get so high that healthier people opt out of insurance, leaving a smaller pool of sick, more desperate people who must keep their insurance, but are forced to pay ever-increasing, often prohibitive premiums. The healthier people don’t want to pay high premiums to subsidize the sicker people, so they drop their coverage. The insurance companies in turn lose premium revenue from these healthier consumers, and hike up the premiums to those left in the customer pool. See “New York Offers Costly Lessons on Insurance,” http://www.nytimes.com/2010/04/18/nyregion/18insure.html?src=mv.

Recognizing the successes in Massachusetts and New York, the Federal government’s new health law widens the consumer pool and requires everyone to get insurance coverage. If people refuse, they’ll be fined. Though we won’t see this penalty phased in until 2014-16, the threat of a fine (ranging from $695 for an individual to over $2000 for a family), will nudge people into obtaining insurance coverage. The more people who purchase health insurance, the more diverse the pool of insureds, making for a broader, generally healthier pool, with shared risk, lower incidences of sickness, and lower overall costs (per head).

States and the federal government are also considering the need for governmental regulation of premium rates insurers set. This regulation would likely enforce limits on rate increases, based on profits and administrative costs. (For example, any increase must reflect only a 25% profit increase, the other 75% must be due to true health costs). The insurance industry is vehemently opposed to such regulation, which in the end benefits consumers. Even though traditionally insurers may issue refunds to insureds based on larger-than-expected end-of year profits, the likelihood of great surplusage may be nipped in the bud by governmental regulations limiting rates/profits earlier on – a true benefit to consumers. See “Democrats Seek More Control Over Health Insurance Rates,” http://www.ctnow.com/health/sns-health-reform-democrats-premiums,0,60356.story.
-- ND

In most cases, it is hard to convince a Circuit Court of Appeals that the district court made a mistake. Here in California, the reversal rate of the Ninth Circuit Court of Appeals in civil cases – i.e., the percentage of cases in which the Ninth Circuit finds that a mistake has been made – is only about 15%. Because the odds are stacked against appeals at the outset, it takes the diligence and expertise of experienced attorneys to obtain a reversal.

At Kantor & Kantor, we have extensive experience at the federal appellate level and have won several significant victories. Most recently, in a case we took over from another attorney, we convinced the Ninth Circuit in Ford v. Hartford Life & Acc. Ins. Co. that the district court applied the wrong standard of review to the claim of a man with a serious spinal condition whose disability benefits were terminated after they had been paid for five years. [link to decision]. The Ninth Circuit ruled that the district court used out-of-date cases to support its decision, and should have relied on newer cases such as Montour v. Hartford Life & Acc. Ins. Co. [link to 12/10/09 blog entry].

As a result, our client has a fresh chance to have his claim considered under more modern law, which is more favorable to him and tougher on insurance companies. We hope to demonstrate that the same errors made by Hartford in the Montour case were made in our client’s case as well, resulting in a different verdict the second time around.

If you have been denied insurance benefits, please consider successes like these in deciding who should represent you in your efforts to get your benefits back. Call us at (818) 886-2525 or log on to www.kantorlaw.net.

-PS

Ana Martinez is employed by Beverly Hills Hotel and Bungalows and is a covered participant in Beverly Hills Hotel and Bungalows’ (“BHH”) self-funded employee benefits plan, which refused to cover medical and nursing care for her son in a “persistent vegetative state” from injuries incurred while he was at school. His care averages $13,000 a month. A special needs trust was created following a settlement with the school.

BHH’s employee benefits plan was previously funded through an insurance policy with Blue Cross. Blue Cross paid for medical care for Ana’s son and never sought reimbursement from the special needs trust.

BHH ended its contract with Blue Cross and went self-funded on Jan. 1, 2008. Immediately upon becoming self-funded, the plan requested that Ana sign a “Right to Reimbursement” agreement that would permit the plan to seek reimbursement for any of her son’s care from his special needs trust. BHH refused to even “process” any of Steve’s claims without the reimbursement agreement signed. The court found no basis for the plan’s request that Ana sign the reimbursement agreement before the plan would process medical claims.

In addition, when BHH went self-funded, the plan asserted for the first time subrogation rights. The plan alleged that theAna’s son’s special needs trust must pay for the medical care and only when the trust funds were depleted would the plan agree to provide medical benefits. The court found that the plan’s language was clear: the hotel was not entitled to subrogation rights from special needs trusts.

The court also found that the plan had a conflict of interest in that the administrator responsible for the plan finances was also the responsible for making benefit determinations. At trial, the plan administrator testified that “she put the plans interests ahead of the participants’ interests,” a violation of ERISA law. Plan administrators are charged with a standard of care that mandates discharge of their duties solely in the interests of plan beneficiaries.

This lawsuit is only one example of the ways benefits plans attempt to deny coverage for legitimate claims. As health insurance premiums rise, more and more employers are self-funding plans with provisions that could interrupt your benefits under previous plans or deny ongoing coverage. If you are involved in a disability benefits dispute with your employer’s self-funded plan, we can help.