California Insurance Lawyer Blog

Kantor & Kantor, LLP achieved an important victory in the U.S. District Court in Los Angeles for a client suffering from the rare muscular disease Charcot-Marie-Tooth. Our client was denied disability benefits from Standard Insurance Company, which insured the disability plan of Countrywide Home Loans where she worked as a mortgage loan underwriter.

This case is significant because it is the first district court decision decided after the recent Ninth Circuit case of Montour v. Hartford Acc. & Life Ins. Co., 582 F.3d 933 (9th Cir., 2009), wherein the Ninth Circuit clarified how a trial court should review claims decision by an insurer.

In our client’s case, the district court found that Standard’s decision to deny benefits “was tainted by its financial interest” and cited the following as evidence:
• Standard neglected to advise the plaintiff of what type evidence to provide to support her claim. The federal law governing workplace disability plans, the Employee Retirement Income Security Act, mandates that plan administrators tell insureds what specific information they must submit. To request mere “medical evidence” or “information you believe is relevant” does not comply with the letter of the law. The administrator must tell the claimant what information the administrator considers relevant.
• Standard used the wrong occupational criteria. This is significant because our client’s plan language included the “own occupation” criteria rather than the “any sedentary occupation” criteria Standard relied on. In our client’s case, that means she is entitled to benefits because her illness prevented her from performing the requirements of a job she held for nearly a dozen years. Whether she could work at another job was irrelevant under the terms of her plan.
• Standard denied our client’s claim without full investigation, neglecting to wait for complete answers about our client’s disability from its own medical examiners and neglecting to ask its examining physicians the necessary questions to document our client’s illness. In particular, the court found that Dr. Elias Dickerman was not adequately trained by Standard – even though he received more that $200,000 annually from Standard since 2006 for his medical diagnoses – and that he made errors in his reading of our client’s medical records.

The court determined that our client’s policy should be reinstated and awarded her all her unpaid benefits.

If you have been denied insurance benefits for similar reasons or had benefits delayed with excuses that seem in error, contact us right away to find out how we can help you restore your benefits. Call (818) 886-2525 or log on to www.kantorlaw.net.

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Posted In: ERISA , LongTerm Disability (LTD) Insurance

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Photos on Social Media Sites May Give Insurance Adjustors Wrong Impressions

Canadian citizen Nathalie Blanchard was merely following her doctor’s suggestion that she spend time with friends and vacation in a sunny climate as a cure for depression when her sick-leave benefits from her employer-provided insurance were abruptly terminated. Nathalie made the fatal error of posting photos of herself having fun on Facebook. Her insurer discovered the photos, determined she was no longer depressed and told her to return to work. Although the insurer told the Associated Press that it did not solely rely on the Facebook photos in making its decision, it neglected to mention what other sources – such as sound medical evidence -- it did rely on. Nathalie is appealing the denial. See “Canadian Woman Loses Benefits Over Facebook Photo,” http://news.yahoo.com/s/ap/20091122/ap_on_re_ca/cn_canada_facebook_insurance.

This latest news article illustrates the level of scrutiny ill and injured people typically encounter from their insurers when they are unfortunate enough to actually need the benefits they’ve paid for. Their lives become open books where even the most innocent of activities become an insurance inspector’s evidence of suspected fraud.

Here’s our sad but true advice to Americans receiving disability benefits: What you post or print on social media sites will be discovered by your insurer and interpreted in the light most unfavorable to your disability claim – even if you are only following doctor’s orders.

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Posted In: LongTerm Disability (LTD) Insurance

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A new study published last week in Science magazine announced that a retrovirus called XMRV may cause Chronic Fatigue Syndrome (CFS). The virus' actual name is xenotropic murine leukemia virus-related virus,and it was found in nearly 98 percent of about 300 patients with the syndrome. See, NY Times, Virus Is Found in Many With Chronic Fatigue Syndrome by Denise Grady.

This discovery provides hope for researchers because if the retrovirus – part of the same family as the HIV virus that causes AIDS – definitively proves to cause chronic fatigue, the disease might be effectively treated with antiretroviral drugs. Currently, no treatment or cure is available for chronic fatigue syndrome. Researchers also believe that they can create a blood test to determine if a patient is infected with XMRV virus, much the same way a blood test can determine HIV.

Chronic fatigue patients are also hopeful that their symptoms – severe fatigue and body aches – will now be taken seriously by doctors and insurers. Because chronic fatigue can only be diagnosed by ruling out other illnesses, some in the medical community refuse to treat chronic fatigue as a legitimate disease or attribute it to a psychiatric disorder. As a result, most health and disability insurers are skeptical about providing benefits for chronic fatigue sufferers who are too ill to work. Many are accused of “malingering,” that is, lying about or exaggerating their symptoms. Now the medical community may have valid research to back up a diagnosis of chronic fatigue.

The study is considered significant for two other reasons: First, the XMRV virus has been linked to prostate cancer. Second, about 4 percent of healthy people studied were carriers of the XMRV virus. According to the Wall Street Journal, that means that “10 million people in the U.S. and hundreds of million people around the world are infected with a virus that is already strongly associated with two diseases.”

The National Cancer Institute has authorized more research to find out if the virus is linked to any other diseases.

Dr. Judy Mikovits, one of the lead authors of the XMRV paper, told the Wall Street Journal, “Just like you cannot have AIDS without HIV, I believe you won’t be able to find a case of chronic-fatigue syndrome without XMRV.”

We have seen it time and time again… insurers downplaying the symptoms of CFS and even accusing our clients of being untruthful about their inability to function normally, all because there was no “objective evidence” of their Chronic Fatigue. Hopefully, this will all change soon as more is learned about XMRV. Has your insurer refused to consider your diagnosis of chronic fatigue seriously? Kantor & Kantor can help.

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Posted In: ERISA , Health Insurance , Insurance Bad Faith , LongTerm Disability (LTD) Insurance

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"Tort Reform, Tort Reform, Tort Reform," the phrase has almost become a song. Nobody likes to see undeserving people win huge, unjustified damage awards, but the fact is, it doesn't really happen in California, except on maybe on TV. Los Angeles Times business columnist Michael Hiltzik couldn’t be more correct when he writes that one of the biggest fans of so-called tort reform is the insurance industry, “because the less money they pay out to plaintiffs, the more they get to keep.” See “Why Tort Reform Is a Frivolous Diversion.”

While that statement is enough to make sensible people wary of the deep pockets behind tort reform movements, Hiltzik clears the confusion and makes a very good case about why limiting an injured victim’s ability to use the legal system to be made whole is not the great fix for rising medical costs insurers and many politicians claim.

The argument for tort reform, as Hiltzik explains, is that plaintiff lawyers are filing too many “frivolous” lawsuits and claiming millions of undeserved dollars. Doctors are ordering unnecessary tests to ensure they don’t misdiagnose or fail to diagnose something that could end up in court. As a result, medical costs escalate.

“The truth is that medical liability isn’t a big driver of health costs overall,” Hiltzik writes. “[T]he cost of malpractice litigation, in court and through defensive medicine, [is] roughly 2% to 3% of all U.S. healthcare spending.”

In California, since 1975, the Medical Injury Compensation Reform Act (MICRA) has capped recovery for pain and suffering to $250,000. That’s next to nothing when to compared to what plaintiffs can receive in other types of cases. Lawyers’ fees are also limited.

But did MICRA help consumers? According to a 2004 Rand study, the MICRA caps don’t amount to a fair distribution of justice. Victims of medical errors who had small economic losses but suffered major damage to their quality of life are unfairly compensated. Women are disproportionately affected. The MICRA cap isn’t adjusted for inflation. In today’s dollars, the award has the same purchasing power as $62,000 did in 1975. And the most unsettling result of all is that may unjustly injured people won’t even pursue a case because the award may not even cover the litigation cost.

The big MICRA winners are insurers, who last year paid out only 17 cents of every dollar they collected on medical malpractice insurance. And carriers don’t even have the good sense to be humble about it.

“At American Physicians Capital,” writes Hiltzik, “claims were falling so fast in 2007 that its chief executive publicly compared his underemployed claims managers to ‘the Maytag repairman.’ The next time you find yourself nodding in assent while some politician carries on about tort reform, remember that its benefits will go to characters like this.”

Clearly, this only reinforces what we’ve been saying all along: If you want real reform, start with the perpetrators, not the victims.

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According to Medical News Today, fibromyalgia is no longer an “invisible” syndrome. Citing a study reporter in the Journal of Nuclear Medicine, the article reports that researchers in France were able to detect functional abnormalities in the brain after performing brain scans on 20 women diagnosed with fibromyalgia. Those scans were then compared with scans from 10 healthy women. See “Fibromyalgia Can No Longer Be Called an Invisible Syndrome.”

The diagnosed brain abnormalities directly correlated with the severity of the disease, as reported by the women on questionnaires they filled out in advance of the scan. The results of the study disprove the widely held belief that fibromyalgia is caused by depression. The study found that the brain abnormalities were “independent of anxiety and depression status.”

The study follows news earlier this year that a Stockton, Calif., surgeon patented a process to objectively determine the presence of chronic pain. See, “Surgeon’s Patent Removes the Subjectivity from Chronic Pain.”

Dr. Robert England uses an MRI image to compare the brain image of a person in chronic pain receiving stimulation such as a finger squeeze or mild electric shot to the brain image of a healthy person undergoing the same stimulation.

For people with fibromyalgia, England said his studies showed 13 areas of pain when the patient's thumb was squeezed. When a pain-free person's thumb was squeezed, only one area of pain appeared in the brain.

When these tests will be widely available – and whether insurance health plans will accept them as valid documentation – is still unknown. But they are encouraging developments for people with fibromyalgia who are often accused of fabricating the severity of their illnesses so that the insurer can deny disability or health benefits.

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The Long Island Business News reports that many people think they have enough insurance until they need the policy. Then they learn its limitations, find they have insufficient coverage, or discover “loopholes big enough to drive a truck through.” Laura Glasser, “With Insurance, the Fine Print Matters,” June 30, 2009. This is particularly true, the article reports, for health and long-term care policyholders because they aren’t reading their policies to understand coverage limitations.

“One reason many people get surprises is they don’t know much about their coverage to begin with. If you’ve read your policy lately, you’re in the minority. Most health policies, for instance, cover up to $1 million in lifetime benefits. But most people don’t know that,” writes Glasser. Here’s what two insurance industry executives had to say about the situation:
“The information’s there,” said Ian Laird, director of strategy, sales and programs for Empire Blue Cross Blue Shield. “It’s just in a document that I don’t think the average person bothers to read.”

“You expect people to read their benefits,” said William Golden, chief executive of UnitedHealthcare’s health plan for New York, of the source of many surprises. “I’m not sure that really happens all the time. It’s important to read the small print.”
Here are two insurance executives admitting in black and white that they are selling policies that people don’t read, filled with fine print that limits coverage, and they appear just fine with the situation. In fact, one wonders if they might be taking advantage of this information by filling policies with fine print loopholes that end up surprising many people.

We say it everyday…and we’ll say it again here: READ YOUR POLICY BEFORE YOU NEED IT. If you don’t understand something, ask someone who can help.

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The National Fibromyalgia Association, sponsor of Fibromyalgia Awareness Day, is using its 2009 campaign to focus on the far-reaching effects of the chronic pain disorder, including the financial, social and emotional repercussions. For information about May 12 events, log on to www.fmaware.org.

With so many chronic illnesses and so many organizations seeking to find cures and provide support for people suffering from them, it’s easy to lose a sense of urgency about why we draw attention to a particular syndrome. Fibromyalgia is one condition, however, that could benefit from increased awareness.

Many people, unless they have the illness or know someone who has it, have never even heard of fibromyalgia. If they have, it’s usually in the context of being labeled a “non-disease” or “all in your head.” This belief results from a number of factors.

First, fibromyalgia is difficult to diagnose. NFA research shows that it takes from three to five years to diagnose the syndrome. This could mean that many doctors don’t take the illness seriously and are not pursuing options that could lead to a speedy diagnosis. Because no lab test definitely proves a patient suffers from fibromyalgia, the doctor must rely on the patient’s description of symptoms. Doctors then diagnose by elimination.

Second, fibromyalgia is controversial. Some physicians don’t acknowledge that it is a real illness because in most cases the cause of the symptoms is an enigma. Medical science is reluctant to accept conditions for which there is no apparent cause. http://www.health.com/health/condition-article/0,,20188874,00.html.

Third, fibromyalgia affects women more often than men, and no one knows why. Add that to the fact that women have not historically been primary wage earners. Conditions that keep women from paid employment often don’t get the same level of respect as those that affect both genders equally.

Finally, insurance companies put up a fight to pay disability benefits for people unable to work because of fibromyalgia. They embrace the theory that it is not an illness and welcome medical assessment to reinforce that concept. The American Pain Foundation, in an informal study, found numerous barriers to the effective treatment of fibromyalgia, most notably the fear of losing insurance coverage once the syndrome was documented.

We support the National Fibromyalgia Association and its efforts to raise awareness of such a misunderstood syndrome.

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Posted In: ERISA , LongTerm Disability (LTD) Insurance

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On April 1, 2009, the New York Times ran an article about "hanky panky" with "Independent" Medical Exams (IME's) in the world of Workers' Compensation.

The bottom line is that the word "independent" is a misnomer. It turns out doctors sometimes don't even examine patients and are yet still miraculously able to write comprehensive reports. But wait, it also turns out that the doctors sometimes don't even write the reports...the consultants and insurance companies write them.

No big surprise to us. We think the very same thing happens in Long Term Disability insurance claims, which we handle every single day.

Read the article..and if you're a claimant...weep.

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Earlier this month, an Associated Press article renewed speculation about a debate many in the fibromyalgia community believed had been finally resolved. Is fibromyalgia a legitimate disease with recognizable symptoms, or is it a “murky ailment” drugmakers are promoting to increase sales of pharmaceuticals that offer pain relief? “Drugmakers’ Push Boosts Murky Ailment”

According the article’s author, reporter Matthew Perone, “Fibromyalgia draws skepticism for several reasons. The cause is unknown. There are no tests to confirm a diagnosis. Many patients also fit the criteria for chronic fatigue syndrome and other pain ailments.” Perone cites critics of fibromyalgia diagnoses accusing drug companies of unduly influencing doctors and patients to make a profit.

“I think the purpose of most pharmaceutical company efforts is to do a little disease-mongering and to have people use their drugs,” said Dr. Frederick Wolfe, who was lead author of the guidelines defining fibromyalgia in 1990 but has since become one of its leading skeptics.

The National Fibromyalgia Association is fighting back. Its president, Lynne Matallana, says the article “merely regurgitates the same arguments that have been published in the past and offers the opinions of the same two men who have built careers out of drawing attention away from the hundreds of scientists who continue to make amazing scientific strides toward understanding the underlying cause(s) and pathophysiology of what fibromyalgia patients experience.” Says Matallana:

This article misinforms readers in a way that undermines and victimizes innocent people. By telling only selective parts of the story the author is perpetuating misperceptions and making it difficult, if not impossible, for readers to grasp what is truly important: that we need to stop debating and pointing fingers and start asking why it is perceived as acceptable to stigmatize a patient population just because medical research hasn’t yet provided us with all the information needed to understand that particular illness. Every illness seems to go through a stage of having to prove its legitimacy, but why should the patients be suspect during that phase of research?

Perone’s article points out that Matallana’s group, as well as other disease organizations accept grant money from pharmaceutical companies that they use to lobby Congress and fund educational programs. I suppose he expects the reader to assume everyone is colluding to manufacture a disease so they can all get rich.

Kantor and Kantor has represented literally scores of individuals with Fibromyalgia. It only takes knowing one person suffering from that disease to understand how impossible it would be to invent the painful symptoms suffered by thousands of others.

Who is the real culprit here? We believe that if you scratch the surface slightly, you’ll find that the insurance industry has the most to gain from research attempting to cast doubt on the legitimacy of fibromyalgia. Insurers could save millions relying on such research to deny disability claims from people in constant, debilitating pain and then refuse to pay for the drugs proven to provide relief.

If you doubt this, keep reading the AP article, which quoted Dr. Nortin Hadler, a professor at the University of North Carolina who believes fibromyalgia is not a medical disease but a psychological condition. Until the recently passed federal mental health parity legislation, in most states (California is an exception) insurers had tremendously more leeway to deny or limit benefits for mental health treatment than they did for treatment of physical diseases. And it’s still unclear how strong the federal legislation will turn out to be. In other words, if fibromyalgia is a mental health condition, insurers may be better able to limit their exposure to pay benefits for treatment or drugs. Similarly, since most group disability policies have limitations on the amount of time benefits will be paid for mental disorders, insurers will benefits in this arena as well.

According to Perone, Hadler “has occasionally advised health insurers about how to deal with fibromyalgia.”

Need we say more?

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Earlier this month, an Associated Press article renewed speculation about a debate many in the fibromyalgia community believed had been finally resolved. Is fibromyalgia a legitimate disease with recognizable symptoms, or is it a “murky ailment” drugmakers are promoting to increase sales of pharmaceuticals that offer pain relief? “Drugmakers’ Push Boosts Murky Ailment”

According the article’s author, reporter Matthew Perone, “Fibromyalgia draws skepticism for several reasons. The cause is unknown. There are no tests to confirm a diagnosis. Many patients also fit the criteria for chronic fatigue syndrome and other pain ailments.” Perone cites critics of fibromyalgia diagnoses accusing drug companies of unduly influencing doctors and patients to make a profit.

“I think the purpose of most pharmaceutical company efforts is to do a little disease-mongering and to have people use their drugs,” said Dr. Frederick Wolfe, who was lead author of the guidelines defining fibromyalgia in 1990 but has since become one of its leading skeptics.

The National Fibromyalgia Association is fighting back. Its president, Lynne Matallana, says the article “merely regurgitates the same arguments that have been published in the past and offers the opinions of the same two men who have built careers out of drawing attention away from the hundreds of scientists who continue to make amazing scientific strides toward understanding the underlying cause(s) and pathophysiology of what fibromyalgia patients experience.” Says Matallana:

This article misinforms readers in a way that undermines and victimizes innocent people. By telling only selective parts of the story the author is perpetuating misperceptions and making it difficult, if not impossible, for readers to grasp what is truly important: that we need to stop debating and pointing fingers and start asking why it is perceived as acceptable to stigmatize a patient population just because medical research hasn’t yet provided us with all the information needed to understand that particular illness. Every illness seems to go through a stage of having to prove its legitimacy, but why should the patients be suspect during that phase of research?

Perone’s article points out that Matallana’s group, as well as other disease organizations accept grant money from pharmaceutical companies that they use to lobby Congress and fund educational programs. I suppose he expects the reader to assume everyone is colluding to manufacture a disease so they can all get rich.

Kantor and Kantor has represented literally scores of individuals with Fibromyalgia. It only takes knowing one person suffering from that disease to understand how impossible it would be to invent the painful symptoms suffered by thousands of others.

Who is the real culprit here? We believe that if you scratch the surface slightly, you’ll find that the insurance industry has the most to gain from research attempting to cast doubt on the legitimacy of fibromyalgia. Insurers could save millions relying on such research to deny disability claims from people in constant, debilitating pain and then refuse to pay for the drugs proven to provide relief.

If you doubt this, keep reading the AP article, which quoted Dr. Nortin Hadler, a professor at the University of North Carolina who believes fibromyalgia is not a medical disease but a psychological condition. Until the recently passed federal mental health parity legislation, in most states (California is an exception) insurers had tremendously more leeway to deny or limit benefits for mental health treatment than they did for treatment of physical diseases. And it’s still unclear how strong the federal legislation will turn out to be. In other words, if fibromyalgia is a mental health condition, insurers may be better able to limit their exposure to pay benefits for treatment or drugs. Similarly, since most group disability policies have limitations on the amount of time benefits will be paid for mental disorders, insurers will benefits in this arena as well.

According to Perone, Hadler “has occasionally advised health insurers about how to deal with fibromyalgia.”

Need we say more?

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An article published in the Utah Law Journal last September recently came to our attention. “ERISA: License to Cheat Lie and Steal for the Disability Insurance Industry,” authored by Loren M. Lambert, is an expose of the state of disability insurance coverage under the Employee Retirement Income Security Act. Lambert introduces his article with these words:

There is an increasingly popular notion that modern litigation is an evil that must be stamped out at all costs. This belief has not only been propounded by the uninformed, but has been championed by some of our leading legal scholars, judges and legislators. They have sought to rarefy litigation by creating unnecessary legal complexity, stripping litigation of its essential components, gutting administrative agencies of staff and money, limiting attorneys fees, and completely eliminating adjudication of some claims.

This trend is reminiscent of individuals who desire optimum physical health without exercise or moderate consumption. All that is needed is a bit of surgery, some electrical stimulation, copious amounts of cellulite reducing creams, and the latest magic pharmacopoeia. This same approach is applied to litigation. The power brokers propose that optimum justice can be obtained through radical surgery, intellectual sophistry, copious amounts of judicial neglect, and a magic statutory bullet here or there. …

[M]odern litigation is neither inefficient nor evil. Litigation is the machine of justice, exquisitely crafted, well oiled and highly refined through centuries of evolution and fine tuning. … To the other extreme, the dismantling and disfigurement of our modern system of litigation into some effete, feeble but seemingly more efficient administrative or arbitrary process controlled by insurance corporations or governmental agencies, is, in the long run, as inefficient, brutal, and arbitrary as was trial by ordeal except that the deepest pocket, and not the more cunning combatant, usually wins.

Lambert then eloquently and persuasively lays out his argument about why ERISA “has created a brutal, arbitrary, and inefficient administrative process controlled by the insurance industry.”

In the 9th Circuit of the Federal District Court where most of our cases are filed, things are not quite as bad as Lambert laments. Even still, in many instances the struggle to get disability benefits paid can be much as he explains. We wondered how the article may have affected attorney Lambert's legal practice and spoke with him last week. Lambert said the feedback has been mostly positive, from lawyers like us in the same war against the insurance industry. He received calls from as far away as New York (Lambert practices in Utah) and has been able to help people he otherwise would not have reached without the article.

And Lambert isn’t stopping there. He is finishing the final editing on a 25-minute documentary that follows one of his clients through the process of attempting to obtain her disability benefits, complete with all the denials, frustrations, double-talk and various players that make the ERISA process so “brutal, arbitrary and inefficient.” Lambert promised to send us a copy for review.

In the meantime, read Lambert’s article by following this link: http://webster.utahbar.org/barjournal/2008/09/erisa_license_to_cheat_lie_and.html. It’s for everyone who ever wondered why on earth they are forced to hire a lawyer to obtain their disability benefits.

Welcome to our world. And if it also happens to be your world, give us a call. We have a map.

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I recently had the privilege to speak to Associated Press reporter Steve Lawrence and alert him to some troubling California insurance regulation proposals that would weaken consumer protections, “California Insurance Commissioner Seeks Disability Changes,”

California Insurance Commission Steve Poizner, gearing up for his possible gubernatorial candidacy, is attempting to rescind important state rules about how disability insurers handle claims, rules that for the past several years prevented insurers from denying claims or using offsets from pensions, wages and other sources to deny coverage.

According to the article, former insurance commissioner Lt. Gov. John Garamendi, who instituted the consumer measures during his tenure, agrees with me. He says removing the regulations would be a “disaster for policyholders” and “provide no foundation for protection” of consumers from overly zealous insurance adjusters.

Garamendi, who also plans to run for governor, is understandably alarmed at Poizner’s blatant courting of insurance industry deep pockets prior to announcing his candidacy.

While this may all be politics as usual in California, I believe it’s nothing more trying to garner the support of the big insurance companies in anticipation of the need for future campaign support. It certainly is NOT looking out for the interests of consumers! People with legitimate disability claims already have to fight too long and too hard for insurance payouts, and rescinding these regulations will only make it more difficult to get benefits.
After all, no one plans to become disabled. Let’s not remove important safeguards from those who have a small measure of protection when they do.

Poizner’s poorly timed and ill-conceived proposals should have every California voter thinking twice when and if they see Mr. Poizner’s name on any future ballot. 1/23/09 GRK.

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One of the most misunderstood terms in insurance contracts is “pre-existing condition.” It’s one of the biggest factors insurance companies look at when they decide whether or not you’re eligible for coverage and how much you’re going to pay for that coverage. It’s also one of the biggest reasons I see people getting their claims denied. What most people don’t know is that having a pre-existing condition DOES NOT preclude you from getting coverage, even long-term disability (LTD) insurance.

Under an employer-provided group plan, every qualified employee is eligible for coverage -- regardless of his or her pre-existing conditions. That’s one of the (few) benefits of the ERISA law; everyone can get insured. Specific to LTD insurance, not only are you able to get coverage, you can even go out on disability for the pre-existing condition! There’s only one catch, and it’s pretty simple to understand. Yet I see hundreds of people fall victim to the fine print year after year.

Here’s a standard clause: “Pre-Existing Condition Limitation: We will not pay Disability Benefits for any period of Disability which is caused by, or contributed to, or results from a Pre-Existing Condition.” That seems pretty simple, and would probably discourage some people from getting coverage at first glance. But then, you move on a couple sentences and find, “This limitation will not apply to a period of Disability that begins more than 12 months after your most recent effective date of insurance.”

Quite simply, the policy provision is saying that if you have a pre-existing condition, you have to be covered under the plan for one full year before you can make a claim based on that pre-existing condition. If you have a completely unrelated illness or injury you can go out on disability in that first year, but to make a claim for your pre-existing injury you just have to make it past one year.

It is always devastating to have to tell someone with a perfectly legitimate disability that had they tried to stick it out a little bit longer, they would have been entitled to disability benefits. We have spoken to people who left work with less than two weeks to go before the year is up and had to tell them there was nothing that could be done for them. Don’t become one of those people. Read your policy, and make yourself aware of these types of restrictions and limitations. If you have a pre-existing condition, and it becomes clear that you’re going to have to go out on disability for it, do whatever you can to get through that year or you’ll be left out in the cold. MH, AK 12/08

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At Kantor & Kantor we hear from people every day about their troubles in trying to obtain benefits under Long Term Disability, Long Term Care, Health and Life insurance policies. We created our Blog as a way to try and share some of the stories we hear, as well as the news being made in these and other related insurance areas.

Well, it seems people are reading our Blog and getting a benefit out of our efforts, all of which makes it even more worthwhile. Our Blog was just recently named as one of the Top 50 Legal Blogsites by the LexisNexis Insurance Law Center. This is what they had to say: "These blogsites contain some of the best writing out there on insurance on coverage, catastrophic loss, regulatory compliance, life insurance, health care and insurance issues in general,...They contain a wealth of information for the insurance community with timely news items, practical information, expert analysis, frequent postings and helpful links to other sites. These blogsites also show us how insurance issues interact with politics and culture. Moreover, they demonstrate how bloggers can impact the world of insurance law and insurance industry issues.”

Thanks LexisNexis. We will keep on blogging!

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A report this month compiled by the American Association for Justice documents what most of us already know: Some of the county’s top insurance companies consistently place their own financial interest above the interests of their policyholders and raise premiums, delay claims and deny coverage. For "The Ten Worst Insurance Companies in America, see, www.justice.org/docs/TenWorstInsuranceCompanies.pdf.

Although Allstate stood out as number one because of its shameless mission statement “to earn a return for our shareholders,” our old nemesis Unum ranked number two. Conseco, another insurer we regularly battle on behalf of policyholders, ranked number five.

On page one of the report is this telling statement: “The insurance industry has so much excess cash, it may spark a downturn in the industry.” How did the industry amass such wealth? According to the report “the name of the game is deny, delay, defend – do anything, in fact, to avoid paying claims.”

Take disability insurer Unum, for example, which paid it CEO $7.3 million in 2007, raked in $679 million that same year, and has assets of $52.4 billion. Debra Potter sold Unum disability policies for many years as part of financial services packages. She bought one herself. She developed multiple sclerosis and filed a claim for benefits. Unum denied the claim, alleging the disease was “self-reported,” a euphemism for “fraudulent.” Potter’s physicians supplied letters and memos validating her illness. Unum continued to deny the claim for three more years. Potter hired a lawyer. Only then did Unum eventually pay Potter’s disability benefits.

We see this every day. It doesn’t matter the disease and, sadly, it’s beginning to infect the entire industry as more carriers realize what insurers such as Allstate and Unum are able to get away with until regulators step in and administer what many times is little more than a slap on the wrist.

The insurance industry is sitting on mountains of gold accumulated from policyholder premiums. Understandably, the carriers have a duty to their shareholder’s to protect assets from fraudulent claims. But, the carriers go way beyond that objective and deny valid claims every day knowing that the fewer claims they pay, the higher their profits will be. Nothing in the AAJ report shocked us. In fact, we would have been surprised had the report reached any other conclusion. But don’t expect the insurance industry to show any shame. They’ll deny and delay as always, and continue business as usual until laws are changed to prevent such conduct.

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This question comes up all the time, so we thought we'd discuss it.

Although it is a relatively straightforward question, the answer is not so straightforward. In short, it depends.

First, it is both to your benefit and to the benefit of the insurance company or employer paying your LTD claim that you receive SSDI Benefits. In every group policy I have ever seen, your LTD benefit will be reduced by the amount you originally receive from SSDI, so the insurance company is very happy to have Social Security pay what is often a high percentage of your claim. That is why it benefits the insurance carrier.

It also benefits you to obtain SSDI, in that after being receiving benefits for 24 months, you will be entitled to receive Medicare, which may be your only avenue to obtain health coverage. Also, the carriers will not offset any increases you receive from Social Security due to Cost of Living Allowances.

It is also to your benefit to have obtained SSDI, as the very recent U.S. Supreme Court decision in Glenn v. MetLife provides that insurance companies must consider the fact that Social Security has granted you benefits when they are considering whether or not to pay your claim.

So, getting SSDI is a good thing, but that doesn’t answer the question whether you should allow the insurance carrier to assist you.

First, having the insurance company obtain a representative for you, or hiring one yourself, will not save you money, or cost you money. Social Security lawyers can only charge you if they win, and if they do, the insurance companies almost universally offset only the amount you receive after the lawyer has been paid. So, the cost of the Social Security lawyer/representative is not relevant to your decision.

Second, you have to consider if the lawyer hired by the insurance company can help you get SSDI benefits, but at the same time harm your ability to continue to receive LTD benefits. The answer to this question may decide the issue for you. SSDI has no limitations on the time it will pay for disabling conditions, which is not the case with most group LTD Plans. The LTD Plans often have 24 month limitations for Mental & Nervous Conditions, and/or Substance Abuse. Suppose someone has Fibromyalgia with secondary depression. A representative hired by the insurance carrier may well push Social Security to award you benefits based on the depression, knowing that the insurance company will be able to turn around and use the award of SSDI benefits to limit your LTD claim to 24 months. Will the SSDI representative actually do that? No one knows for sure, but I have seen instances wherein I certainly believed it happened. Based on the foregoing, if there is any aspect to your disability which could be classified in such a way as to limit your ability to continue to receive LTD benefits, the safer approach is to retain your own representative who will be serving the interests of only one party, YOU!

In my opinion there is only one reason to even consider letting the insurance company retain someone to help you get SSDI. That reason is, if the insurance company is willing to hire someone to convince Social Security that you are totally disabled under the governments very strict standards, it will be more difficult for the same insurance company to turn around and deny your LTD claim. However, the mere offer by the insurance company to hire someone for you is probably strong enough evidence of your disability to outweigh the disadvantages of allowing the insurance company the ability to control your SSDI claim.

If you need assistance in getting your SSDI benefits, contact NOSSCR, which is the National Organization of Social Security Claimants Representatives. The organization, will, without charge, find someone in your geographic area qualified to help you.

Finally, if you think the advice offered in this blog is biased because I am looking for business, I am not a member of NOSSCR, and do not EVER represent claimants seeking to obtain SSDI benefits. However, I have seen scores of cases where the choice of a Social Security representative has impacted a client’s ongoing claim for LTD benefits. GK

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In case you missed it Good Morning America did a segment in April (2008) on Susan Kristoff, from West Palm Beach, Fla., who suffered from potentially deadly form of breast cancer. (We blogged it earlier.) She applied to CIGNA for payment of her long term disability insurance benefits and was repeatedly denied. Click to watch the original video.

After ABC started investigating for its segment on TV, CIGNA paid the claim. As a result of the Good Monring America show, dozens of other people called or wrote to ABC to report similar stories. You can read about this, and even watch the follow-up video on the ABC website by clicking here.

We deal with these denials every day. And, it's not just CIGNA we battle with. We have similar cases against MetLife, Unum, Standard, Hartford, Aetna, and others. Hopefully, this ABC report will cause these insurance companies to think twice before denying claims without a full and fair investigation of the facts. AK

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In case you missed it Good Morning America did a segment in April (2008) on Susan Kristoff, from West Palm Beach, Fla., who suffered from potentially deadly form of breast cancer. (We blogged it earlier.) She applied to CIGNA for payment of her long term disability insurance benefits and was repeatedly denied. Click to watch the original video.

After ABC started investigating for its segment on TV, CIGNA paid the claim. As a result of the Good Monring America show, dozens of other people called or wrote to ABC to report similar stories. You can read about this, and even watch the follow-up video on the ABC website by clicking here.

We deal with these denials every day. And, it's not just CIGNA we battle with. We have similar cases against MetLife, Unum, Standard, Hartford, Aetna, and others. Hopefully, this ABC report will cause these insurance companies to think twice before denying claims without a full and fair investigation of the facts. AK

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Last month we wrote how about MetLife v. Glenn had then recently been argued before the Supreme Court. Last week the decision was handed down. For the most part, it is a good step in the right direction...just not a very big step, at least as far as California and other insured’s (in the 9th Circuit) are concerned.

In Metropolitan Life Insurance Company v. Glenn, –U.S.–, 2008 WL 2444796 (June 19, 2008), the Supreme Court held that an insurance company which had the financial obligation to pay the claim, was not entitled to unfettered deference by the courts to its claim decision. This, even when the insurance policy gives the insurance company absolute discretion to make claims decisions. Rather, trial courts must factor in an insurer’s financial conflict of interest when reviewing the propriety of a claim decision.

For some time, the landscape in ERISA cases has been such that a trial court does not review the merits of the claim decision. Instead, when an employer granted “discretion” to an insurer, a trial court would only review whether the insurer acted “unreasonably” during the claim process. Oftentimes, the courts would never even get to the question of whether the claimant was disabled and entitled to benefits. Proving that an insurer acted “unreasonable” during the claim process was and is a very difficult burden for a claimant seeking to overturn a benefit denial.

In Ms. Glenn’s case, the Court was of the opinion that MetLife’s conflict of interest had influenced the claim decision and therefore, MetLife was not entitled to the full discretion it claimed. In its decision, the Court questioned claims practices we see all too often in benefit denials. For example, MetLife encouraged Ms. Glenn to apply for Social Security benefits, which would benefit MetLife financially since it could reduce its own liability by the amount of Ms. Glenn’s Social Security Award. Although MetLife took the financial benefit of the Award, it then virtually ignored the signficance of the Award and terminated Ms. Glenn’s disability benefits. The Court was also extremely critical of MetLife’s “selective review” of Ms. Glenn’s medical evidence. MetLife relied upon its own physician’s reports and discounted or ignored the evidence which supported Ms. Glenn’s disability.

Much of what the Glenn case represents had already been articulated by the 9th Circuit Court of Appeals in the matter of Alta Health v. Abatie. We believe the Glenn decision will reinforce Abatie, and help to further influence judges to more critically review insurer’s claim decisions on their merits, as opposed to abjectly deferring to the administrator’s decisions. All in all, we believe the Glenn decision will help us help our clients obtain the benefits to which they are entitled. CC & AK

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After more than two years of fighting, five months spent submitting claims forms, a protracted appeal, a lawsuit and a call from ABC News’ “Good Morning America,” Susan Kristoff, unable to work and being treated for stage 4 cancer, finally received her long-term disability benefits.
Cigna, her insurer, announced that its change of heart resulted from “additional information” uncovered during Susan’s appeal. Susan’s lawyer Alicia Grisham thinks differently. “The insurance companies understand that if they deny and deny claims, then many of the claimants will never pursue their claims,” Grisham said, describing a tactic known as “slow walking.”

We’ve seen this before: Bury the policyholder in mountains of claims forms, move your customer service department off-shore, keep your clients on hold, lose the paperwork, deny the claim, ask for more information, subject the sick or injured claimant to a confusing and prolonged appeal process, delay, deny, delay, deny, and perhaps the insured will give up or die.

The sad fact is that there are enough people in Susan Kristoff’s situation to keep “Good Morning America” on the air well into the next century.

Is the answer, as Grisham suggests, penalizing insurance companies for slow walking by allowing punitive damages in consumer lawsuits? Right now, the federal law known as ERISA protects disability insurers from such punitive damages in employee welfare benefit cases, and that give insurers little incentive to speed up claims processing and appeals.

At the moment, a policyholder’s best protection against slow walking is speed dialing an experienced disability insurance lawyer the moment a claim is denied. Two years without income is too long to wait, even if it means you end up featured on “Good Morning America.”

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Last week, the U.S. Supreme Court heard oral arguments about what standard to use when reviewing an insurance company denial of ERISA welfare benefits (employer provided long term disability insurance). MetLife v. Glenn, 06-923. Under current law, an insurance company can make a terribly unfair decision to deny employee welfare benefits, and if the benefit plan contains some “magic words” a court can be prevented from reviewing such a decision on the merits, and instead, forced to let the unfair denial stand. Those magic words, notoriously known as “discretionary clauses” give the insurance company full discretion to interpret policy language and make claims decisions. Some federal districts have developed case law which requires a reviewing court to give consideration to the fact that an insurance company in the position to both pay the claim, and grant or deny benefits, stands in an inherently conflicted position. If it can be shown that such conflict tainted the claim decision making, then some lesser degree of discretion should be given, and the insurance company’s decision given more scrutiny. The problem lies in the reality that different courts look upon these circumstances differently, and there is no one general rule to be easily and consistently applied when an insurance company plays a dual and conflicted role.

In Wanda Glenn’s case, and as in so many other disability benefits cases that pass through our offices – the only entity determining the employee isn’t disabled is the insurance company acting as a plan administrator. For Ms. Glenn, her doctor diagnosed that if she returned to work she could die. The Social Security Administration determined that she was disabled and paid her government benefits. Incredibly, MetLife alone, decided there must be a job somewhere for her, so it denied her claim, and also thereby avoided having to pay her benefits. For additional detail on the facts in Glenn, click here.

For the actual Supreme Court transcript of the hearing, which can give you a sense of how unclear (even for the Supreme Court), and frustrating this system is click here.

The bottom line is that it just isn’t fair for insurance companies to be making claims decisions that are insulated from full scrutiny or “de novo” review by the courts. Hopefully, the Supreme Court will establish a rule that recognizes, and prevents this egregious conduct in the future.

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We have been helping people with claims against insurance companies for over 18 years. Obviously, there is a lot to know about this process. From the countless claim appeals and lawsuits we have handled over the years, three basic, yet critical considerations rise to the top of our list of things to keep in mind when making a health related insurance claim:

1) ALWAYS GET A COPY OF THE POLICY, AND READ IT, BEFORE MAKING YOUR CLAIM.

It may seem obvious to suggest a careful read of the policy, but we have encountered countless people who forget about this critical step. Almost every insurance policy is written with subtle (and not so subtle) limitations on or exceptions to coverage. Look for things such as “mental and nervous” or “own occupation vs. any occupation” in exceptions in Long Term Disability policies. In health policies, look for limitations on “experimental” or therapeutic treatments, brand name pharmaceuticals, eating or psychiatric disorders. Long term care policies might require lengthy periods of hospitalization, or skilled nursing as prerequisites to coverage, or may condition coverage on an unreasonable definition of incapacity. Insurance companies are notorious for trying to characterize a claim so that it falls within one of the limitations or exceptions, and oftentimes mischaracterize an unwary claimant’s own words or writings to try and support a denial.

Often, policies are governed by ERISA (Employee Retirement Income Security Act) which is a Federal Law with very specific mandates about insurance claims, and can severely limit the available remedies.

2) PAY CAREFUL ATTENTION TO THE TIME LIMITATIONS SET FORTH IN THE PLAN.

Almost every policy has specific time limitations relating to things such as when a claim must be made, how much time the insurance company has to respond to a claim, and/or how long a claimant has to file a lawsuit if the claim is denied. The time limits are one of the very first things to look at, and calendar, when reviewing your policy. You might be able to make some legal arguments to avoid the harsh consequences of failing to comply with these deadlines insofar as they pertain to pursuing your claim, but it is always wise to act as though the deadlines are absolute.

3) ALWAYS COMMUNICATE WITH THE INSURANCE COMPANY IN WRITING, KEEP COPIES, AND USE CERTIFIED MAIL.

Insurance companies are in the practice of making copious notes about the substance of every phone conversation they have with an insured. The problem is, those notes may not always accurately reflect what you communicated, or even how the company representative communicated with you. The best solution to this is for you to send your questions in writing, AND to always confirm the substance of important conversations with a follow-up letter. If you can, try to get an email address for your representative, as email can serve as a very good substitute when sending letters via certified mail might be difficult.

Paying attention to these three simple rules related to insurance claims can greatly increase the probability of a successful claim, or if necessary, a successful lawsuit to force claim payment.

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A court ruling that actually favors the insured and hurts insurance companies?!? As far-fetched as that sounds, particularly in California, that’s exactly what happened recently when a state appellate court questioned California health insurers’ practice of waiting until policyholders incurred medical expenses before scrutinizing individual policies for misstatements, and then canceling coverage for omissions and errors.
This long-standing practice called “post-claim underwriting” occurs when the insurer examines representations made on the policy application only AFTER medical claims have been submitted. If ANY inaccuracies are uncovered, the company CANCELS THE COVERAGE ALTOGETHER. The insured is left with the medical bills and no insurance at a time he or she needs it more than ever.
Post-claim underwriting has been illegal in California since 1993. But that hasn’t stopped insurers from attempting to circumvent the law by using the practice against unsuspecting policyholders such as Augusto Ticconi, who sued Blue Shield for denying coverage after he incurred more than $100,000 in medical expenses. Post-claim underwriting cases don’t usually make it to trial, because insurance companies quietly settle before courts have a chance to rule against them.
Ticconi didn’t go away. He asked the trial court to certify a class action, which would allow other policyholders denied coverage to benefit from a ruling against Blue Shield. The trial court denied class certification. The 2nd District California Court of Appeals overruled the trial court and ordered it to reconsider class certification.
This paves the way for a class-action lawsuit against Blue Shield and other major health insurers. The thousands of individuals taken advantage of by their insurance providers over the years may finally get a chance to win restitution for the loss of their health coverage at the worst time possible.
In Ticconi v. Blue Shield, the California Court of Appeal sent two clear messages. To insurers, the court said post-claim underwriting won’t be tolerated. And the court assured consumers they can fight insurers and win.
This is a message of hope to policyholders of life, health, disability, long-term care and every other type of insurance who have been treated unfairly by an insurance company.

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December 10, 2007
755,000 reasons why you can’t rely on Uncle Sam.....
755,000! No, that’s not the amount of money Alex Rodriguez makes per home run. It’s actually the number of backlogged cases in the U.S. Social Security Disability system. A recent article by the New York Times reports that it can take as long as three years for an appellate decision in a Social Security Disability Income (SSDI) case.
Why this unconscionable backlog? Every year, more appeals are filed than the country's 1,025 appellate judges have the capacity to handle, even working overtime. When Congress proposed a budget item seeking $100 million to add more judges to issue more timely rulings, President Bush vetoed the bill calling it "profligate."
Every American with a disability waiting for an SSDI appellate decision (and likely anyone else who can reason) could tell the President the real meaning of "profligate": Spending $177 MILLION A DAY on the war in Iraq.
How does the President's veto affect you? It means that having your long-term disability insurance claim handled quickly and effectively is more important than ever. All too often, I get a call about an LTD claim from someone who has waited a year or more to take action. In the typical call, the policyholder denied insurance coverage was confident he or she would receive SSDI, only to find that Social Security denied them as well and their day in court won’t be coming for a LONG, LONG time. That's when I have to break the sad news that the deadline for appeal has already passed or the statute of limitations (the amount of time you have to take legal action) has already run out. Unlike SSDI, which has no statute of limitations, LTD policies must be litigated within four years of the date proof of loss is required, and in some cases it can be as short as one year.
The time to take action against your insurance company is immediately after coverage is denied! Delay and you could find yourself standing behind 755,000 other claimants in a line not going anywhere fast.
--- MH

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