I don’t think it would be unfair for me to say that most disability insurers have failed miserably in finding ways to pay claims fairly AND make a profit. In my opinion, the top four worst insurers in America – Unum, Prudential, CIGNA, and Aetna all strategize internal procedures designed to terminate legitimate, payable claims in order to show profits. This means that while it is nearly impossible for insurers to do the right thing, profits are made by doing the wrong thing every time.
If this were not so, there wouldn’t be so many claimants left without benefits after insurance internal medical reviews, IMEs, field visits, round tables, vocational reviews, and surveillance. In fact, very few insureds and claimants are happy with the disability claims process the way it is, and most employers regard disability insurance as an employee benefit’s worst evil.
Like all American publicly traded corporations, disability insurers are in the business of providing profits to stockholders looking to make money on their investment portfolios. Disability corporations won’t stay solvent very long without strong shows of solid growth and increasing profitability.
What stockholders often do not realize is that thousands of American workers are thrown under the train so that cents on the dollar per share can be paid to stockholders of record. Like the corporations they buy into, perhaps stockholders DO know, but don’t give a damn.
The inability of insurance management to come up with internal protocols that pay legitimate claims but denies claims that should be denied is an economic problem for us all since thousands of Americans are left financially broken, but medically unable to return to work in some capacity.
In today’s claim environment any insurer can “stack the deck” against claimants and create the illusion they are not disabled when in fact they really are. What happens to former insureds and claimants who now must rely on their respective states for Medicaid, food stamps, and welfare?
Clearly, the system of disability claims review is broken and should be fixed by a new generation of creative executive management with innovative perspectives. Although I’m definitely not a fan of Ralph Mahoney’s, I concede he adopted one of Unum’s most successful “return to work programs” that met both Unum’s profitability targets and assisted claimants to return to productive work.
Unum, for example, is missing the profitability boat by not focusing return to work efforts immediately when claims are initially submitted for STD. Instead of forcing claims handlers to update patient notes every two weeks in a stop-start, stop-start payment process, these same reps can be retrained to work with employers to place claimants back on the job using Unum’s group rehab and work accommodation contract provisions.
If I were a member of Unum’s executive management, I’d begin by creating a detailed marketing plan whereby the company’s group products in STD/LTD can be marketed to employers as a “work benefit program” whereby the company coordinates occupational and medical needs to return workers to their jobs within reasonable recovery periods. Since nearly all Unum group policies contain rehab, work accommodations and work incentive benefit programs, capitalizing on these efforts could prove profitable.
In fact, I can’t think of a single claim in the last 5 years (any insurer) that documents any effort whatsoever on the part of insurers to assist, and/or work with insureds and claimants to return them to accommodated work schedules. With some negotiation with employers, “work hardening programs” combined with the payment of work incentive benefits could return up to 30% of claimants to work both part or full-time.
It has always been my experience that those claimants who request rehab assistance are turned down and claims are denied once a medical release is obtained to participate in the programs designed to help them. Obviously, insurers are more inclined to deny claims outright than to put time and money into rehabilitation programs.
Disability insurers like Unum, Prudential, CIGNA, Aetna, The Hartford, and Reliance Standard actually shoot themselves in the foot by pushing all claimants toward SSDI, a more permanent disability arrangement. Assuming nearly every insured who tells me, “I’d go back to work if I could” is not just giving lip service to return to work optimism, it seems reasonable to me that with a little help and negotiation with physicians and employers, it may be possible for insureds to do just that.
Still, disability insurers completely ignore the more obvious claim review strategy of “return to work programs” allowing proven profitable claim strategies to remain untapped. Unfortunately, instead of putting money into training, and work incentive negotiation skills insurers take the more egregious route to devise strategies proving claimants are able to work when they cannot.
Return to work programs and incentives can also prove to be profitable to claimants who medically might be able to return to work with workplace and job accommodations. Work incentive benefit programs allow claimants (under certain circumstances) to keep both RTW earnings and disability benefits for a period of 12 months. In combination with formal rehab programs and work hardening over time, some claimants could be paid “residual disability benefits” indefinitely while working part-time.
The important information insureds and claimants need to know is that more often than not positive provisions of group disability are often ignored by insurers who are looking to deny claims outright. Claimants looking to return to work always have the right to request return to work assistance particularly involving provisions written into group Plans whether insurers are interested or not.
Therefore, while disability management continues to take the easy and unprofitable route to compensate stockholders a few cents on the dollar, new generations of innovative management lie in the wings waiting to redesign claims review processes into a more profitable means of returning insureds and claimants to work.
Although official return to work programs and initiatives created by new generations of talented management are not rocket science, they may very well be way ahead of their time.