Archive for the ‘Claims Process’ Category

FriendIn some respects I hesitated to write this article for fear that someone would think I’m making fun. In my mind the subject is much more serious, so I’m writing about it anyway.

I received a phone call this week from someone who told me, “I don’t want to make my Unum claims handler angry at me. We’ve become friends and I wouldn’t want her to get mad and deny my claim.”

“Oh boy, here we go again”, I thought. “Another insured, persuaded into thinking a Unum claims handler (or any claims specialist) is a friend.” What I usually do in these situations is ask the insured to sit quietly for a moment and consider logically under what circumstances an insurance company who makes money from NOT paying claims could ever be characterized as “a friend.”

To make matters worse, this particular insured actually called because her “friend” at Unum is now asking she submit to a Field Visit. Some friend……

All claims handlers are trained to some extent in “playing the part.” But, in reality, most employees who touch claims are actually hired only if they are determined to be “A” type personalities who, according to one of my old managers, “won’t give away the farm.”

In addition, insureds are unaware of what’s happening behind the scenes to deny claims, regardless of what’s taking place on the telephone. This insured also told me she had not obtained a copy of her policy, nor had she read it. I asked her, “Well, how do you know you have to do a field interview?” She answered, “Because Unum cited my policy in the letter and told me I had to.” Oh boy, oh boy, oh boy………..

And, by the way, many people tell me, “I don’t want to make Unum mad at me.” Really? Unum isn’t human, it’s a corporation and can’t get mad at anyone. Even Unum can’t deny claims because it’s mad, and neither can claims handlers, who actually ARE human.

Finally, this same insured told me, “I read on your Blog that you don’t recommend using any of the website portals, but I’m going to use it anyway. I don’t want to cause any problems.”

I have to admit I don’t understand the logic of doing something you know is not in your own best interests, like speaking to an insurance rep on the phone. But, as I am frequently known to say, ” I can only tell you what I think is a “best practice”, and you will either do it, or not. The result may be that you fall into a black hole that you can or cannot pull yourself out of.” Not listening to those who know can be costly.

However, this notion that insurance reps are “friends” has got to go. Unum’s (and other insurers’) specialists are paid to deny claims, not pay them, mind you, but deny them. That doesn’t sound very friendly to me.

I also know some insureds try to “sweet talk” their way into a claim approval by sharing every family, claim, health, life, and childhood detail they can. This tactic will certainly come back to bite you.

And finally, you can’t make a sterile business entity “mad at you.” Best advice is to think logically about your relationship to the insurer which is only represented in your Plan or policy contract. This is why it is so important to read your policy and understand it.

And if what you’re thinking doesn’t make sense, it probably isn’t in your best interests. Claims handlers just want you to be cooperative so eventually you say something that can be used against you.

Of course this makes more sense than thinking Unum’s reps are your “friends.” I’d be very careful about trying to shake hands with the hyenas.


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The TruthMost insureds and claimants view disability insurance as “the benefits they love to hate.”  At first glance, disability Plans and policies appear innocent enough to the point that the public still puts trust in insurers to pay benefits they applied for.

However, the claims process surrounding determinations as to who gets paid and who doesn’t is a financial manipulation that entirely ignores any rational personal, or even human consideration of what medical impairment really is. Basically, disability insurance is more of a financial matter and has nothing to do with you as a person, or the fact that you are suffering from one or more medical impairments.

From my other articles, you should know that when claims are opened a financial reserve is created. The larger the monthly benefit, and longer to maximum duration, the higher the claim financial reserve is. Most claims managers and Vice Presidents have access to financial reserves and have various systems within their units that basically targets claims looking for the “biggest bang for the buck.”

The smallest working division in any insurance company is the “unit”, or “team” headed by a claims manager who is performance managed as to his/her ability to consistently meet executive financial targets. Claims managers who can’t “put up” are “pushed out” of the company. Therefore, it is very important for any claims manager to be able to meet executive financial goals. If they don’t…they’re out!

In fact, the primary goal of any unit claims manager is to meet the company’s financial profitability targets. Claims handlers who work under the unit manager are pushed, harassed, and manipulated to do whatever is necessary to “help” the managers achieve financial reserve goals. Claims handlers do not have the autonomy to make decisions on their own and must have decisions “validated” by their managers who are checking financial reserves and how badly a large reserve hit will affect profitability.

“Validation” gives managers a “look-see” and time to place claims in a pecking order of decision-making that balances approval claim reserves against denial claim reserves so that the bottom line produces profitability. More simply, managers must manipulate decisions within a specific time period so that more denials (or, reductions in reserves) takes place than approval decisions.

Therefore, from the claims manager’s perspective, it is necessary to “manipulate”, and I stress the word “manipulate”, claims approvals and denials based on financial reserves and which combinations of approvals/denials will produce target profits. We all know that at least some claims are approvable claims, but IF managers can hold up those approvals, or slide a few in once in a while amidst a rack of denials, an illusion of profitability can be created. Quite clever isn’t it? It’s frequently all about the timing.

Insureds often ask, “Why is it taking so long for Unum, for example, to make a decision on my claim?” Well, now you know. Even though Unum fully intends to pay the claim, the time manipulation has to be played out before the approval decision is actually coded into the BAS or payment system. If there have been a lot of denials coded recently, an approval wouldn’t hurt too bad, but if there have been no denials, an approval could bump a manager into a very poor performance position. All of the claims managers protect their own behinds first and foremost.

Therefore, we now know there is a great deal of manipulation taking place at the managerial levels to produce what looks like meeting targeted profitability. What this means for insureds is that decisions, even when previously made, are not timely and are often held up in the manager’s office to manipulate financial reserve profitability and show a big win for the managers.

In addition, executive management goes absolutely ballistic when the LARs are above 60%. LAR is an acronym for Liability Acceptance Rate. Premium for disability insurance is underwritten at a 60% payout rate, therefore, when claim approvals exceed 60%, it means the company is in a loss situation. Claims managers are given the word from executive management “to deny more claims”, as Cathy Liston once told her management in CBA (Claims Benefit Administration).

And, by the way, you can’t have both an approval and denial in the same  month – it’s considered a wash. If the claim is approved on January 8th, it can’t be denied until February and vice versa.

So, does it appear that there is anything about the claims process that has anything to do with medical impairment and the inability to work? What I’ve described above takes place AFTER the claim has been subjected to various reviews, meetings etc., which we also know are “stack the deck” strategies determined at “off sites” managers go to think up. In fact, these “off sites” should really be thought of as executive “think tanks” to devise more and more strategies that produce denials.

If you think about this, there are very few people who have worked inside a major insurance company who will disclose any connection between claims decisions and manipulation of financial reserves. Even when former employees are no longer employed they rarely reveal the “secrets” behind the claim manipulation.

Unum got into a lot of trouble over reserve tampering, so its response is, “We don’t do that anymore.” Yet, Unum employees who are terminated still report to me that financial reserves are well-known within the units and managers still target “the biggest bang for the buck.” Other insurers allege, “We never did that.” In my opinion, other insurers probably do manipulate reserves, they just do it in different ways; perhaps its done further up on the food chain.

When an insurer tells you in a letter, ” We want to make sure your claim receives every possible consideration”, or, “We will make a decision on your claim within 45 days”, or we have forwarded your claim for medical review (that takes 6 weeks)”, you are not being told the truth. The real truth is that the claim is probably electronically being held on some manager’s desk until the financial reserve profitability can be worked out.

The management of disability claims is much more complex than you think since I’ve only touched the surface of lack of fiduciary duty, and fair and objective claim review. Any insurance company that tells you it reviews claims fairly is not telling you the truth.






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Time LimitsMost insureds seem to think they are entitled to high levels of customer service and communication from their insurance companies.  Even a modicum of respectful response would be nice at times wouldn’t it? But alas, don’t hold your breath waiting!

Insurers do not as a general rule provide insureds with letters, answers, decisions when THEY think they should receive them. Frankly, insurance companies do not operate on our time line, but do things “when they get around to it”, or when the “flup (follow-up)” happens to appear. (Sometimes, they don’t even process on ERISA’s timeline.)

Every claims handler has a diary system that reminds them when to do things and generally, management insists that claims activities should be completed when scheduled. So, many people tell me, “I’ve been sitting around waiting for Unum’s approval letter, but it never comes”, or, “I never received a letter from my insurer telling me the status of my claim”, and finally, “I haven’t heard from my insurance company in months, is everything OK?” Believe me,  if it wasn’t OK, you’d hear about it.

The solution is to have patience and realize that “no news is generally good news” from any insurance company. There is no point sitting on the edge of your chair waiting to receive news from an insurer when your response is probably much further down the backlog list. Processing denials is the top priority, so if you’re expecting good news your letters are much further down on some claims handler’s “pay no mind” list.

Most of the time insureds expect insurers to provide them with benefit money when THEY need it. Again, don’t hold your breath. Insurers do not have a two-way looking-glass into your finances to know that you’re broke and need the benefit check.

If you’ve been waiting a long time for something it is appropriate to contact your claims handler and ask, “when can I expect to receive…..whatever it is.” (In writing, of course.) But, sitting around waiting for an insurance company to do something is a waste of time and energy. They work on their own time line, not yours.

It’s so much better to use your energy to supplement the claim file, obtain patient notes, etc. than to endlessly wait for something that may be a while in coming.


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true falseAfter managing disability claims for nearly 25 years I’ve listened to thousands of callers, clients, attorneys and physicians who are misguided about both ERISA Plans and IDI disability insurance. Although I try my best to respectfully “set them straight”, whether or not insureds act on my recommendations is another story. I sure hope they do.

Here are a few of the most common misconceptions about disability insurance in general.

“Once my claim is approved I will continue to receive benefits.”

No way, my friend. I just spoke with someone this week who told me this very thing. Insurance companies can deny claims anytime just by sending patient notes and other medical information to third-party reviewers who are paid to support business claim denial objectives. ERISA Plans allow for “discretionary authority” giving insurers the complete “discretion” to decide who does and who doesn’t get paid. Although this is a clearly defined “conflict of interest” it is only somewhat supported by the courts.

IDI benefits are NOT entitlements. For some reason IDI insureds think that because “I’ve paid premium for many years”, I should get paid.” Forget it. There are conditions and definitions that must be met in order to receive benefits. In general, both ERISA and IDI private disability is wholly at the “discretion” of insurers. Although IDI policies are generally not subject to “discretionary authority” as are ERISA claims, they do contain the wording “Proof acceptable to Us.” If that isn’t a form of discretion, I don’t know what is. Disability claims are “risk managed” right up to maximum duration and there is no safety zone when liability is totally accepted for duration.

“I have an own occupation policy so I can work in another occupation and get paid total disability benefits.”

Uh….unfortunately, maybe not. Agents used to sell these polices as “better than sliced bread”, but alas, if the policy contains “Residual” or a “Residual Disability Rider”, insureds working part-time are subjected to a second definition of disability that pays reduced, or Proportional benefits.

In addition, it’s really sad that insureds do not read, do not understand, or listen to their agents, because insurers will invariably find reason to pay under Residual provisions because there are other adverse actions that take place elsewhere in the policy when claims are considered to be “Residual.”

For example, I just read a Connecticut Mutual policy, now managed by Mass Mutual, that contains a provision stating that if a claim is determined to be Residually payable benefits won’t begin until the 13th month following the Elimination Period and will only be half of the total disability benefit. If insureds really understood this particular provision I would hope they wouldn’t have purchased the policy. There is no waiting period for total disability so which provisions do you think the insurance company will enforce?

This subject is inherently more complicated and is unique to individual claim circumstances, but the beliefs held by many insureds that “own occupation” policies allow them to work in other occupations AND receive 100% total disability is, well, an old wives tale created by agents looking to sell policies, and residual riders, when even THEY were unaware that Residual provisions could all but eliminate the advantage of “own occupation” provisions.

“Surveillance can’t hurt me because I ‘ve told my insurer everything and I don’t do anything wrong.”

Boy, these insureds really miss the point. “Telling an insurance company everything” isn’t a good idea. The rule for insureds should be, “Provide your insurance company with truthful answers to questions asked.” Volunteering information NOT asked is a recipe for disaster. Insureds who have “talkative personalities”, or who engage in dialog with an insurance company as a way of “defending” claims, should put a halt to that practice. Truthful answers to questions asked” is the best way. (And, in writing of course.)

In addition, surveillance can be interpreted in many different ways, and it is the misrepresentation of surveillance info that is often used to deny claims. “Not doing anything wrong” isn’t the point, it’s the fact that insurance companies are literal experts at misrepresenting information, using their own opinions about things to support denials. Surveillance can be managed in other ways than just accepting the wrong idea that because you don’t do anything wrong, surveillance can’t hurt you. It can, and does – not because you’ve done anything wrong, but because it is deliberately misrepresented.

“My doctors have the final say as to whether I’m disabled or not.

Actually, they don’t. Insurance companies are the final determiners of whether claims are paid or not. Insurers also have elaborate medical departments and third-party reviewers that weigh in on the side of insurers. All it takes to deny claims are walk-ins with medical reviewers who document insureds have work capacity, or that medical restrictions and limitations are too severe. This is why some treating physicians become frustrated because it appears insurers ignore their opinions and decide what they want anyway.

Although multi-state regulators have tried to force insurers to “consider the opinions of treating physicians” there is no oversight as to whether they actually do or not. Many courts have ruled that insurers are NOT obligated to accept the conclusions of treating physicians. Therefore, all considered, treating physicians are “consulted”, but their opinions do not dictate claims decisions. In fact, claims decision are “business decisions”, made by claims managers, VPs, and medical reviewers who leave their ethics at the door to receive money for supporting insurers’ agenda. It’s all about the money, not the medical.

I have to speak with the claims handlers on the phone. If I don’t they will deny my claim.”

No, you don’t. And no, they can’t deny your claim. If you check your Plan or policy it does NOT say that you must communicate with any insurer verbally as proof of claim. It just doesn’t say that. You may choose to provide your insurer with information in writing only so that you have a complete written record of all of your dealings with your insurer.

Most insureds communicate verbally for two reasons:

  1. they are too scared not to, and
  2. they want the opportunity to defend their claim.

No insurance company can deny a claim when the insured is providing all that’s requested, even if it is in writing.

Insureds who speak on the phone to claims handlers are risking the claim. The probability of over speaking claims is just too great particularly if the insured is taking opiates, pain medications and antidepressants. Besides, insureds cannot “defend” their claims verbally – no one is believing you…..and no one is documenting the conversation accurately. The only reason why insureds speak to claims handlers on the phone is because they are too afraid not to even when best practices dictate it’s not in the best interests of insureds.

“I have to disclose my SSDI file.”

No way. SSDI recipients may choose to keep SSDI files private and refuse to sign SSDI Authorizations allowing disclosure. The only information SSDI insureds should disclose is the actual SSDI award letter with the amount and date of the award, and attorneys fees paid. Although insureds harass and threaten when it comes to SSDI files, there is no authority anywhere requiring disclosure.

Insurers are looking for mental and nervous SSA listing information and other financial increases in awards. Claimants are NOT required to sign SSDI Authorizations from Lucens either. Claimants may always choose to keep their SSDI file information proprietary only to them.



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Insurance claimsAlthough in recent years I’ve ignored writing about various impairments I’ve gained an expertise with, I think it is a good idea on the cusp of a new year to mention the dedicated areas of expertise that has taken me 25 years to gain and pass on in the form of successfully paid claims.

HIV claims management has always been at the top of my list as an impairment that requires detailed claims management skills. As modern advances have progressed in the last 20 years, insurers are more inclined to allege that a diagnosis of HIV does not necessarily signal total disability.

While insurers such as Unum, MetLife and The Hartford have traditionally targeted those diagnosed with HIV/AIDS due to advances in medications, most HIV patients are still unable to return to work due to residual side-effects and/or continued symptoms. Insurers don’t want to hear it!

Although improved medication trials keep lab report numbers normal, it is likely that HIV patients continue to suffer from symptoms such as chronic diarrhea, peripheral neuropathy, dizziness, and susceptibility to bacterial infection. Therefore, HIV patients with normal T-cell counts, but suffering continued symptoms, may file for total disability, but the application requires specialized medical management. HIV is no longer considered a disabling impairment even when patients continue to suffer symptoms severe enough to preclude work.

While in the past rheumatologists prescribed morphine pumps for Fibromyalgia patients it is no longer true today. Fibromyalgia and Chronic Fatigue have transitioned via the new DSM-5 into somatoform mental illness. Although most rheumatologists continue to treat FMS and CFS, the percentages of treating physicians who actually accept that FMS is permanently disabling is estimated to be less than 50%.

Therefore, patients diagnosed with FMS and CFS are often labeled by insurers as having “self-reported” and/or mental illness rather than physical disease. Benefits are limited to 24 months. A few insurers have closed the loopholes in both ERISA Plans and IDI policies by specifically excluding “connective tissue disease” or Fibromyalgia specifically in policy provisions. Or, various Plans often cite Fibromyalgia as an impairment that is only paid for 24 months.

Although most physicians continue to cite FMS as a “physical” syndrome, most insurers now follow the DSM-5 in identifying the impairment as “all in your head.” Again, FMS and CFS claims generally require some degree of claims expertise to manage.

(By the way, any disease that is classified as a “syndrome” is assumed to be subjective because there is no objective evidence to prove what patients and doctors claim they have. Examples are of course, Fibromyalgia Syndrome, Chronic Fatigue Syndrome, Postural Orthostatic Syndrome (POTS), Chronic Pain Syndrome, and Complex Regional Pain Syndrome (CRPS) etc. These are most notably the impairments disability insurers target and often refuse to pay, and are the areas of my expertise.)

Chronic pain also requires a “positioning” with most disability insurers in that the impairment is most often immediately classified as “subjective”. Most insurers will immediately classify “chronic pain” as mental and nervous, limited to 24 months, if the primary diagnosis is just listed as “chronic pain.”

For the most part chronic pain is the result of other diagnoses such as lumbar radiculopathy, disc herniation, cervical issues and so on. Physician documentation of the primary disability as “chronic pain” often brings on insurer hellfire listing the cause of disability as “subjective” and subject to 24 months. The real primary diagnosis, such as disc herniation with nerve involvement is left out of the documentation and insureds suddenly find themselves facing termination of benefits in 24 months.

Chronic pain, in my opinion should most often be listed as a “symptom”, not a primary diagnosis. Interestingly, there is objective evidence for sources of pain while ” chronic pain” listed as a primary diagnosis is subjective. Still, not knowing the significance of a symptom vs. diagnosis, most insureds will allow this situation to get out of hand for quite some time before trying to do something about it. Again, this type of claim requires some specialized knowledge to manage successfully.

Admittedly, there are some claim situations that require expert claims management – not legal expertise mind you, but real claims management know-how. As we transition into 2019 tomorrow, please keep in mind that there are some claims with unique circumstances that require real hands on claims experience and expertise management.

I wish all of you a very Happy New Year. Please stay safe in your celebrations, and I’ll be here on the other side.



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Silly MeIn 2015 CIGNA was slapped with a Multi-State Settlement Agreement very similar to that of Unum Life Insurance. The CIGNA investigation resulted in discovery indicating the company engages in unfair claims tactics, and it was fined.

Here we are three years later, and the company is still engaging in unfair tactics to deny payable claims. Case in point is CIGNA’s denial of a Life Waiver of Premium based on its own IME wherein the examining physician said the insured was unable to work. From the IME report CIGNA alleges it was able to abstract restrictions and limitations that lead to the finding of alternative occupations, and the Life Waiver was denied.

Next step is to deny the disability claim at the change in definition. Without allowing the insured’s physician to write a rebuttal, CIGNA denied the claim most assuredly to recapture a $2M financial reserve prior to year-end. It’s mind-boggling!

I also begin to wonder about the CIGNA people, who by the way, are so paranoid they don’t include their last names to identify themselves on letters. Claims handlers know exactly what’s going on, but usually choose to hurt people in order to protect their jobs.

Because of the very large monthly benefit, this case may very well wind up in court. In my book CIGNA remains one of the “bottom feeders” in the disability world of unfair insurance companies. Disbelieving its own IME is a new low even for CIGNA.

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deceptionYesterday, one of my callers said, “I don’t know if you know this or not but most of the attorneys in Illinois read your blog!” Well, I sincerely hope so. I’ve been writing blog posts since 2001, as I said back then, “to provide information at least equal to that of the insurance companies making decisions to pay/deny claims.”

In the last 17 years or so I’ve posted many articles attempting to convince and persuade private disability insureds that private disability products should NOT be trusted or relied upon for long-term financial security. And yet, everyday I have a new caller say to me, “If my insurer denies my claim I don’t know what I’m going to do.” Unfortunately, these are mostly ERISA folks relying on employer-provided benefits that provide the least protection of any insurance product out there.

I think the word “skulduggery” perfectly describes the business of private disability and here’s why.

  • Employer Plans and policies are contracts of adhesion meaning the insured or claimant has no say in what the policy says or means.
  • There are provisions limiting maximum duration payouts and benefits for mental health and “self-reported illnesses.”
  • Disability insurers target and devise strategies to “stack the deck” against insureds to limit their overall liability for claims. (In other words, they deliberately reduce their risk and liability acceptance rates.)
  • The overall profitability focus is to identify legitimately payable claims and deny them in order to increase profitability. This is done via internal strategies that focus on various elements of the claims process.
  • Insurers spend very little for training of claims management staff.
  • Claims handlers are forced to sign template letters they do not write and/or do not agree with.
  • Employer Plans “offset” other income to help finance their overall liability for claims, therefore, there is always a threat to estimate SSDI if claimants do not immediately apply.
  • Claims handlers do not have the autonomy to make claims decisions. They are the lowest rung of administrative review and act as a buffer to protect managers who DO make claims decisions, but do not present to the general public.
  • Insurers manage claims to deny rather than to pay. This is a direct indication of a “conflict of interest” as both payers and reviewers of claims.
  • Insurer strategies include deception, trickery and invasions of privacy to document work capacity when no work capacity exists.
  • Insurers deliberately encourage fear and anxiety to convince insureds they should do whatever the insurance company requests even when it is an out of contract demand.
  • Insurers place frequent unexpected phone calls in an effort to require insureds to respond spontaneously rather than providing questions in writing and allowing them time to actually think about their responses.
  • Insurance physicians contact treating physicians by phone to convince and persuade treating docs that patients can return to work.  There is always a deceptive element in documenting doc-to-doc calls.
  • Insurers always offer low lump sum settlements representing only a percentage of net present value. At least a 20% profit is realized on settlement claims.
  • Insurers “target” various impairments for denial, such as CFS, FMS, chronic pain, HIV, depression, Lupus and MS.
  • Insurers “target” various occupations for denial such as RNs, Attorneys, Physicians,  Anesthesiologists, and others where the occupation is defined in the national economy.
  • Insurers often recalculate claims and arrive at outrageous overpayments in order to curb cash flow problems.
  • Insures use “reservation of rights status” to engage in “off-Balance Sheet financing” to reduce liabilities and maximize profits.
  • Insurers do not know much about actual “disability”, but center only on removing the financial reserve for profit at the expense of insured or claimant.

While I could go on and on about how the internal review process really works, I think you get the idea. None of the disability insurance products sold today are reviewed fairly and objectively which is why those who have these policies should never put all of their eggs in the private disability basket that’s likely to remain empty.

The private disability industry operates as a fear instilled means of selling disability policies insurers have no intention of paying, if they can help it. Nearly all group employers today hire third-party medical providers who are paid to discredit claims. These organizations consist of highly qualified medical doctors who are able to act as expert witnesses in matters of litigation. This is just another layer of “stacking the deck” against insureds and claimants.

I realize when I write articles such as this one, I generally scare the heck out of people. However, the reality of private disability insurance is that it should be realistically viewed as short-term compensation supplemented by your own Plan B, or other sources of future income. To rely on, or trust the “skulduggery” of the disability insurance industry guarantees a very complex and frustration-filled claims process that never ends.

Those who rely on the long-term income from private disability will be disappointed when the insurance company gets around to targeting them. Although I am well-known for my frank and accurate reporting of private disability, DCS, Inc. dedicates itself to a more positive perspective of managing claims successfully rather than continuously focusing on the “skulduggery” of insurers. It is far more important to know how to identify the deceptions and how to manage them.

In my view, it is always better to have a realistic picture of your financial future rather than a sudden fire bell in the night you can’t manage or put out. Furthermore, the future of private disability in the age of merger and consolidation appears to be disadvantageous to those who invest and trust in the products sold to them. Insurance in general can no longer be trusted to provide what it is that was promised and paid for.

And, by the way, Lindanee’s Blog is open to everyone with an interest in private disability, in particular attorneys searching for accurate information to the hard questions about private disability claims. You’ve certainly come to the right place!








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