Articles Posted in Insurance claims and lawsuits

One of the most crucial pieces of evidence in supporting a long term disability claim is the opinion of the claimant’s treating physician that he or she is disabled.

Many physicians are more than happy to assist their patients with forms required by the LTD provider and in some cases, narrative accounts of their patient’s disabling condition.

Sometimes, though, even with the support of your physician, problems can still arise. Often, this is because of the office visit notes your physician makes with each of your visits. Phrases such as, “doing well,” “symptoms improved,” “responding well to medication,” while meant as shorthand by the doctor that her treatment plan is working, are often used by the insurance company to conclude that you are no longer disabled.

If an ERISA appeal for long term disability benefits is denied and the claimant pursues litigation, the appeal is likely to be mediated before going to trial with a judge. Indeed, most ERISA cases settle in mediation.

Here are some fundamental points to understand about mediation of long-term disability cases:

  • Mediation discussions are confidential. What you say in mediation cannot be used against you in court.

When you start a new job that provides disability insurance, or accidental death and dismemberment insurance, most policies include language that states you will not have coverage for claims you make in the first 12 months if the claim is for an injury or illness that is a “pre-existing condition.” But what is a pre-existing condition, and how will insurance companies determine if you have one?

A pre-existing condition is generally defined as any medical condition for which you received treatment, care, advice, or a prescription from a medical professional in the 90 days before you started your new job. The precise language will differ from policy to policy, but that is the general idea. For some medical conditions, the application will be obvious. If you were in treatment for breast cancer in the three months before you started your new job, started a new job believing you were in remission, and then 8 months later found out that your cancer had returned, that would be a pre-existing condition and you would not have coverage. If you were in a car accident before you started a new job and treated with a chiropractor or in physical therapy for injuries, and eventually could not work because of those injuries and so went on leave within the first year of work, that would be a pre-existing condition. It’s also reasonably clear that if you treated with a doctor for a broken leg, or with a psychiatrist for anxiety before starting your new job and six months later you were hit by a car and went out on disability for internal injuries, your prior medical care would not be a pre-existing condition that would bar coverage for the accident.

There are other situations that are not so clear cut. If you were treating for back problems due to a slipped disc prior to starting work, and then were in a car accident six months into your new job and further injured your back, will coverage for that injury be barred by the pre-existing condition limitation? Your insurance company will almost surely argue that there is no coverage because the injury was a pre-existing condition. What if you had diabetes, and after a car accident lost a leg, in part because of complications related to your diabetes? Or what if you had been fully released to work after a prior injury and were not treating for it, but were titrating down on your pain medication during the 90-day period before you started work, and then your injury flared and you needed to go on disability?

Chronic pain can be related to a variety of conductions including joint issues, nerve damage, fibromyalgia, Multiple Sclerosis (MS), spinal problems, post-surgical complications, and cancer. While certain diagnoses can be more clearly associated with a disabling level of pain, pain is usually a subjective symptom. For example, a person with degenerative disc disease will be able to show evidence of their diagnosis through an MRI or X-ray; however, this kind of imaging cannot necessarily measure what level of pain a particular individual is experiencing.  In some cases, people may experience a more severe level of pain than others with the same diagnosis. Pain may also not be clearly associated with a particular condition or diagnosis. Pain can be due to tangled combination of factors that may not be very well understood.

Consequently, although many disability insurance policies seek “objective” proof of disability, in some cases objective medical evidence simply is not available due to the nature of the condition. Even without the type of documentation that is typically considered objective medical evidence of disability (like lab tests and imaging scans), a person with chronic pain may very well still qualify for disability insurance benefits.

In fact, in a recent Kantor and Kantor victory in the case of Hamid v. Metropolitan Life Insurance Company in the Northern District of California, the court reaffirmed that objective evidence is not required to prove disability. The court cited to prior case precedents to explain that, for medical conditions that are difficult to quantify through labs or imaging scans, benefits cannot be denied simply because quantifiable documentation is not available.

Unum is one of the biggest disability and life insurers in the United States, owning subsidiaries including Provident Life and Accident Insurance Company and The Paul Revere Life Insurance Company. Unum generates billions of dollars in revenue and has boasted high rates of growth over the past few decades. Unum has also built a bad reputation for unfair handling of disability benefits claims over the years. Their aggressive and unfair tactics to avoid paying benefits to insured individuals resulted in numerous lawsuits and class actions for insurance bad faith practices, with trial losses totaling well over $100 million.

On top of individual lawsuits and class actions, in the early 2000’s, insurance regulators undertook a multistate market conduct examination to investigate reports of wrongful practices related to delaying and denying legitimate disability insurance claims.  As a result, Unum entered into a multi-state settlement agreement in 2004 in which Unum agreed to review denied claims, implement new claims handling procedures, and pay a $15 million civil penalty. On top of the multi-state settlement agreement, California regulators undertook their own investigation and Unum’s California settlement agreement entailed an additional $8 million penalty as well as changes to policy provisions and claims handling procedures.

Some of the most striking problems with Unum’s handling of disability claims that insurance regulators identified included the following:

Most insurance companies unveiled national advertising campaigns in March 2020, promising to “pause” all policy cancellations or expirations for at least a month due to non-payment of premiums. Many continued this policy, stating that insureds simply had to ask to have their insurance payment plan extended during COVID-19.

Insurance companies did not do this out of the goodness of their hearts. In most states, the state insurance commissioner issued directives asking or requiring insurance companies to do exactly this. The federal government similarly issued regulations for policies governed by ERISA, extending the deadlines for appeals until after the pandemic ends.

Despite the state and federal mandates, and their own advertising, insurers have not all followed these requirements.  Many insurance companies did in fact still cancel or allow policies to lapse in the first month of the pandemic.  Many more put the onus on their insureds to reach out and request help, despite promises that all such extensions would be “automatic.”  Here is a summary of the positions taken by some of the major insurance companies:

Did your insurance company cancel your insurance due to nonpayment of premium during COVID? Be aware that most states have either requested, or required, insurers to institute a moratorium on cancellations due to nonpayment during at least part of the pandemic.  If your insurance company cancelled your insurance during COVID, remind them of this fact and ask them to reinstate your policy.  If they refuse, you may want to talk to a lawyer.

The entire West Coast has seen their Departments of Insurance issue requirements on this subject:

California:  On March 18, 2020, California issued a “request” to all insurance companies on March 18, 2020 to provide insureds “at least” a 60 day grace period to pay insurance premiums, and to ensure that policies are not cancelled for nonpayment of premiums due to coronavirus. http://www.insurance.ca.gov/0400-news/0100-press-releases/2020/release030-2020.cfm

Our firm is involved in litigating a proton beam cancer treatment denial case in Georgia, Ghattas v. Blue Cross Blue Shield Health Care Plan of Georgia, Inc., Case No. 1:20-CV-03157-ELR, 2020 WL 6867155 (N.D. Ga. Nov. 18, 2020). Defendants Blue Cross Blue Shield Health Care Plan of Georgia (BCBSGA) answered Plaintiff Christopher Ghattas’ Complaint alleging the wrongful denial of his life-saving proton beam radiation therapy at Emory University Proton Therapy Center for a diagnosis of brain cancer. Following Defendant’s answering of the Complaint, counsel began preparing to conduct a Rule 26(f) Conference per the Court’s Order. Prior to the setting of this conference call, counsel for BCBSGA articulated to Plaintiff’s counsel two positions: (1) that ERISA matters were exempt from the initial disclosures requirements of FRCP Rule 26 and (2) that Plaintiff—although never having received a page of the administrative record in this case nor counsel ever discussing the standard of review to be applied to this benefits denial—was not entitled to any discovery in an ERISA matter. The Court resolved these two issues as addressed in the parties’ Joint Preliminary Report to the Court.

First, the Court agreed with Plaintiff’s position that Defendant would be required to produce initial disclosures in this matter pursuant to Rule 26. Citing Golden v. Sun Life Fin., Inc., 2:08-CV-070-WKW, 2008 WL 2782736 (M.D. Ala. July 15, 2008), the Court held that “[b]ecause this [ERISA] case involves more than just the administrative  record and because the parties will be engaging in discovery, [defendant is] required to provide initial disclosures in accordance with Rule 26(a).”

Second, Plaintiff had taken the position that he was not foreclosed on any grounds from conducting targeted and limited discovery depending upon the standard of review that would apply to BCBSGA’s benefits denial. Without having produced a single page of the administrative record, BCBSGA took the position that Plaintiff was entitled to no discovery in an ERISA matter. Here, the Court agreed with Plaintiff. Citing Adams v. Hartford Life and Acc. Ins. Co., 589 F. Supp. 2d 1366 (N.D. Ga. 2008), the Court stated that it did “not agree that discovery is inappropriate here.” “In matters such as the one at hand, ‘the body of case law developed under ERISA’ requires ‘the [C]ourt, at the very least, [to] examine the facts as known to the administrator at the time the decision to deny benefits was made to determine whether the administrator’s decision was reasonable.’” Adams, 589 F. Supp. 2d at 1367. The Court held that Plaintiff was entitled to narrowly tailored discovery regarding what evidence the Plan (who claimed it was vested with discretionary authority) was aware of at the time of its decision to deny Plaintiff’s claim for proton therapy.

As many healthcare providers have experienced, anti-assignment provisions in ERISA health plans can be a full-stop to recovering unpaid claims. In good news, the Ninth Circuit Court of Appeals recently decided Martin Luther King, Jr. Community Hospital v. Community Insurance Company dba Anthem Blue Cross Blue Shield, et al., No. 19-55053, __F.App’x__, 2020 WL 5870513 (9th Cir. Oct. 2, 2020), which is a decided win for providers.

In this case, the Ninth Court considered a trial court’s award of damages in favor of Martin Luther King, Jr. Community Hospital (“MLK”), for services rendered to employees of Budco— the sponsor of the ERISA plan (the “Plan”). Budco’s employees made covered visits to MLK. Although the employees had assigned their benefit payments to MLK, Anthem—the Plan administrator—ignored the assignments, and made payments directly to the employees, who were beneficiaries under the Plan. The employees retained these payments. When MLK sought payment, Anthem ignored the request. Anthem, in refusing to pay MLK, asserted that an “anti-assignment” provision was part of the Plan and justified its payments directly to the employees.

To recover the assigned payments, MLK asserted two grounds in support of its claims. First, MLK asserted that the language of the anti-assignment provision did not prohibit the assignments. The district court did not rule on this contention. Second, MLK asserted that the district court should ignore the anti-assignment provision because it was not part of the Plan.

The coronavirus epidemic has obviously made all our lives more complicated. Unfortunately, this headache-inducing complexity extends to our health insurance as well. Millions of Americans do not know what kind of coverage they have for coronavirus testing, how much they should have to pay for that testing, or whether there are any hidden “gotchas” that insurers might use to deny their claims or reduce payment for testing.

Fortunately, the California Department of Insurance (CDI) recently issued a COVID-19 Testing and Coverage Frequently Asked Questions (FAQ) notice which helps answer some of these questions. (Much of the information is derived from federal law, so even if you don’t live in California, this FAQ may still help you.)

The FAQ addresses numerous issues, but the most important takeaways are:

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