How UNUM's Past Claims Handling Can Inform You Of The Tactics They Will Continue To Use In The Future

On this week's episode of Winning Isn't Easy  learn about How UNUM's Past Claims Handling Can Inform Your Future Disability Claim from Nationwide ERISA Long Term Disability Attorney Nancy L. Cavey.

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Transcript

ERISA Attorney Nancy L. Cavey: 0:16

Hey, I'm Nancy Cavey, National ERISA and Individual Disability Attorney. Welcome to Winning Isn't Easy. Before we get started, I've gotta give you a legal disclaimer. This podcast isn't legal advice. The Florida Bar Association says I have to say that. So I've said it, but nothing will ever prevent me from giving you an easy to understand overview with the disability insurance world, the games the carriers play, and what you need to know to get the disability benefits you deserve. So off we go. Now, I've done carrier specific episodes about every major disability carrier you'll find in the United States. That being said, disability carriers are always operating with a mindset of making a profit and not providing you with a disability benefits you deserve. Today, I'm going to cover more Unum specific cases, though if you're insured with another carrier, I think you're still gonna find useful information. Here I'm gonna talk about how disability carriers like Unum can't add eligibility requirements after the fact. Does Unum and Paul Revere life use quotas in denying claims? And I'll tell you the story of how one court upholds the denial of an immunocompromised union policy holder and lessons you can learn. First, let's take a quick break.

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ERISA Attorney Nancy L. Cavey: 1:57

Welcome back to Winning Isn't Easy. Disability Carriers like Unum can't add eligible requirements after the fact. Now, the terms of a disability plan or a policy can't be changed by a disability carrier or a plan after the fact. Let me give you an example of what Unum tried to do in the case of July versus Unum life. This is a case out of the Southern district of Ohio. The Unum long term disability policy defined, um, total disability as requiring the claimant to be unable to perform the material and substantial duties of their regular occupation due to sickness or injury. Then after 24 months, the definition of disability change from an inability to do one's own occupation to an inability to do any occupation. And the policy said to be entitled to those benefits, the claimant had to be unable to perform the duties of any gainful occupation for which the claimant was reasonably fitted by virtue of their education, training, or experience. Now, there was no reasonable accommodation provision in this definition yet Unum said, Oh, wait a second, we're gonna deny these benefits on the basis that she could perform work on a sit stand basis that would accommodate her restrictions and limitations. You didn't hear that word in either of those definitions, did you? So in determining the ability to do any gainful occupation, can a disability carrier consider reasonable accommodations? Well, I would say to you generally the answer is no unless there's a specific provision in, uh, the policy or the plan. Now, in this case, Dr. Lyle argued to the federal court that Unum had misinterpreted the plan when it determined she was no longer totally disabled because a hypothetical employer could accommodate a sit, stand and stand option. So sit, stand, alternate position, as I said, the definition of disability did not have a reasonable accommodation requirement. But what Unum said is, Look, we're gonna use a gainful occupation analysis and using that type of an analysis and an administrator could consider a reasonable accommodation even if the plan was silent. Now, the court fortunately ruled that the contractual terms of the plan or policy should be enforced as written. And once the plan is established or the policy is written, the administrator's duty is to see that the plan is maintained, pursue it to that instrument. To the degree that a disability plan or policy terms are ambiguous, then the any ambiguity is to be resolved in the policy holders, uh, favor. Now, as I've said, when we look at the definition of disability in this particular Unum, uh, plan, there was no reasonable accommodation language as part of the definition. And the court said, Look, this is really clear. The plan's silent and it doesn't allow for consideration of a reasonable accommodation and know can't unilaterally rewrite a plan and apply a standard of disability that doesn't exist. As a result, the judge awarded benefits and determined that Dr. Joelle met the plan's definition of disability. Now, that was a fantastic win, and in fact, this is the third time she's a beaten unum, uh, because it's the third time Unum has denied the claim. Hopefully Unum gets the message, but congratulations to Dr. Lyle and her lawyer for taking on Unum. Ready for a break? I'll be back in a second. Welcome back to Winning Isn't Easy. Does Unum and Paul Revere life use quotas in denying disability claims? Now, I'm often asked this question, Do disability carriers like Unum or Paul Revere life for Lincoln or Liberty, um, New York Life? Do these disability carriers use, uh, quotas for its disability claims team? Uh, and as a result, if they do use quotas, um, do they terminate claims just for the sake of meeting quotas or getting rewards? In fact, um, one disability carrier in infamously had pizza parties when the disability claims team met their quota or, or terminations or what they call claim savings. Now, Unum does have a history of using quotas first disability claim teams, and they communicate that goal along with the approximate value of the reserves for individual claims to the claims handling personnel. Now, what is a um, reserve? A insurance company is required to set aside a certain amount of money to pay a portion of a claim, and it's called a reserve. So the money's there if the money is needed to pay the claim. And of course, um, many times premiums are used or, or are set based on reserving criteria. So the reserves can impact not only a carrier's profit or losses and can also impact the premium. But there is evidence that Unum never corrected these wrongdoings after being penalized as part of a multi-state agreement that it entered into with a number of attorney generals. Based on my experience, I would tell you that they continue to use financial metrics including metrics in the claims department. In my experience and in my mind, the financial department does influence the decision to deny claims and d terminate claims that have been paid for years. And quite frankly, it doesn't matter what the carrier is. I will tell you again based on my experience, they use financial metrics to make disability decisions. Now, what will happen of course, is that the disability carrier or the plan will say, Look, there's a wall, a Chinese wall between the claims administration and the FI carrier's financial department. There is a clear conflict of interest when a claims administrator or a plan both determine whether the policyholder is eligible for benefits and then pays the benefits out of its pocket right hand and left hand. The courts are really clear that when a plan administrator or a insurance carrier is operating under a conflict of interest, that that conflict of interest has to be considered in determining if a denial should be overturned by the court. But I will tell you that courts have ruled that the conflict is less important when the administrator has taken active steps to reduce potential bias and to promote accuracy. For example, walling off claims administrators from those who are interested in the firm's finances, um, or imposing management checks that, uh, penalize inaccurate decision making, irrespective of whom the inaccuracy benefits. Now this is a clear question of bias and of course, generally don't take lightly the potential problems of having anyone in the benefit department knowing what the financial goals are. The reality is that that's exactly what happens. Many disability carriers, including Unum and Paul Revere, pretend that there's a wall between the claims administrator and the financial department and they'll make that representation to the court. In fact, discovery has shown that the claims management department is really well aware of the financial goals, including denials and terminations. Now, the individual adjuster may not know the specific goal, but the supervisor and the claims department manager knows, don't ya think knowing that information will influence how a claims manager or supervisor manages the adjuster and the claims handling process and making decisions as to whether to pay benefits or to continue benefits. There are some courts who unfortunately I think are naive about what actually happens in a disability insurance carrier and a disability, uh, plan administrator office. They buy the argument that there's a wall between the claims administrator and the financial department, but the reality is there isn't. And we all know that disability carriers are in the business of making money for themselves and their shareholders. You can just look at the quarterly reports issued by disability carriers like UN and Paul Revere crowing about their profitability. And one way to profitability is to deny claims and terminate benefits. That's disability carrier and a plan strategy for claims denial 1 0 1. Let's take a break.

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ERISA Attorney Nancy L. Cavey: 11:22

Welcome back to Winning Isn't Easy one. Court upholds the disability denial of an Immunocompromised Uni policy holder. Let me tell you this interesting story. We know that the risk of infections is an issue with immunocompromised policy holders and it has to be well developed in the medical records, employment records and vocational records. The failure to do so can result in a claims denial even in the world of covid and the world of long haul Covid suffers. Let me tell you the story of Ms. Marsai who was a consultant for Humana. Her occupation required computer work with periodic contact with others. She had multiple health issues including immunodeficiency. After a period of time working at home with a decreased caseload, she stopped working and she applied for her disability benefits through Unum. Now, Unum denied her claim, rejected her appeal, and we all end up in federal court. This is the case of Marsai versus Unum and it's a case out of Kentucky. One of the problems that we start with in any ERISA disability cases, the question what the standard of review is, this is nothing that we're taught in law school and a lot of lawyers don't understand the standard of review. Even the public doesn't understand it. Everybody understands. Like in the criminal world, the standard is you have to prove that person is guilty beyond a reasonable doubt. But ERISA has got its own unique standard of review and one of the forms of the standard of review is called arbitrary and caprice standard of of review as opposed to a Denovo standard of review. Now, under a Denovo standard of review, the judge is inbound by the carrier's wrongful denial or termination. They get to substitute their own judgment based on a review of the records for that of the disability insurance carrier, but not so in the arbitrary and capricious standard of review. It's a golden handcuff on a judge. Under this standard of review, the court will focus on whether the ultimate decision was arbitrary and capricious. Now of course, I think most denials are arbitrary and capricious, but that's a literal understanding of the terms arbitrary and capricious. US lawyers unfortunately, and the courts unfortunately, have created this standard of review that doesn't exist in the arisa statute. And what courts will say is, Look, we're gonna uphold this decision even if we disagree with it. If it's the result of a deliberate principle reasoning process and is supported by substantial evidence, even if the record is sufficient to support a finding of disability, the insurance denial is neither arbitrary or capricious, so long as there is a reasonable explanation for the administrator's decision. Now, what is a reasonable explanation? Disability carriers use what I call liar for hire peer review. Doctors who make a lot of money for the purposes of helping the disability carrier deny the claim. Are they really doing a fair and objective analysis of the medical records? Heck no. If they did, they wouldn't be hired to render an opinion in the next case. In this particular case, Unum determined, uh, that Marsai was able to perform the duties of her occupation based on these liar for higher peer reviews of her medical records. The evaluation was done by three different providers and obviously Unum is creating a basis for their argument that there's a reasonable explanation. Okay, so Marsai, of course, like any disability policy holder, uh, or plan beneficiary, is going to attack the disability carrier's reliance on its use of peer review providers. In this case, she attacked the use of UN zone employees or contract workers in reviewing and determining her entitlement to benefit. All three of these buyer for hires were Unum employees or contractors. And as a result, they gave opinions that were favorable to Union Unum. You wouldn't expect anything less, would you? Now each was qualified by virtue of their training and experience to review the medical records. One was a nurse, one was a family provider, and the third was an internist. Marsai argued, Look, these reviewers, even though they may be qualified, ignored medical opinions, provided my her doctors and the court notes that there's no treating physician rule in a narissa case. That means that the plant administrators and carriers are not required to give any special weight to the opinions of a treating provider. But when they can't arbitrarily refuse to credit reliable evidence, when a disability carrier's peer review providers come to a contrary conclusions, um, the disability carrier, you know, gets to pick who they wanna believe. Now in this case, Unum providers acknowledge that while she had an increased risk of infections, they opined that the risk couldn't translate into an impairing frequency or duration of infections based on a review of the medical records, which is gobbly good for basically justifying their opinion. Um, the records did document the rate and severity of that infections and, and shortly it had improved Bec but that was because of her limited environment. These doctors, of course, weren't willing to foresee how being exposed to the public or coworkers, uh, in the work setting would increase the risk of infection, the frequency of the infection of the duration of the infections. So Marsai also said, Look, the reviewers failed to consider that my employer no longer can accommodate my schedule working from home, and they're returning me to the office that's gonna create all sorts of significant health, health risk. Unfortunately for her, her employer records and her discussions with Unum indicated that Unum, that I'm sorry, that Humana could no longer accommodate part-time work and not remote work. So that's a big difference. Um, therefore, ultimately what happened was that the court concluded that Unum's physicians acknowledgement of a risk of infections and that her opinion that the level of contact in the non-medical evidence, uh, office would not impose excessive risks of infections was a reasonable conclusion. Now, as a result, the court upheld the denial, but I think there are a number of lessons that should be learned in these immunocompromised cases, post covid cases, cancer cases, um, and those lessons are this, You should be really documenting the frequency, nature, and duration of infections, not only in your medical records, but in your statement to the disability carrier. Two, the risk of infections in the workplace should be addressed in greater detail by the treating physicians with supporting medical literature. Three, the extended nature of employer provided accommodations should be explained and any appeal letter should contain the opinion of an experienced vocational expert to explain from a vocational standpoint the impact of risk of infection in the workplace and the capacity or capability of an employer to provide accommodations. The policy of the plan bed shape has the burden to prove they're unable to perform their duties of their regular occupation, both from a medical and a vocational standpoint. And if you're at the, uh, any occupation stage, you still have the burden to prove that you can't do any other occupation, uh, by virtue of your experience, training, or experience in view of whatever the risk of infection is. The rate of infection. The duration of infection. Got it. You've got the burden of proof. I hope you've enjoyed this week's episode of Winning Isn't Easy. If you enjoyed this episode, please like our page, leave a review and share it with your friends and family. Please subscribe to this podcast. That way you'll be notified every time a new episode comes out. I hope you tune in the next week's episode of Winning Isn't Easy. Thanks.