When Carriers Weaponize Diagnoses

Welcome to Season 6, Episode 11 of Winning Isn't Easy. In this episode, we'll dive into When Carriers Weaponize Diagnoses.

ERISA disability claims often hinge on technical definitions that determine whether benefits continue or disappear. Insurance carriers frequently focus less on whether someone is truly unable to work and more on how a diagnosis, treatment provider, or policy term can be interpreted to limit coverage. Neurological conditions may be reclassified as mental illnesses to trigger stricter benefit caps, treating physicians can be discounted if they do not meet narrow policy definitions, and critical evidence - such as medication side effects that make working unsafe - may be minimized or ignored. Even financial definitions buried in policy language, like how “earnings” are calculated, can drastically change the outcome of a claim and sometimes lead to massive repayment demands. In this episode, we examine three issues that frequently shape ERISA disability disputes: how insurers use diagnostic classifications to impose mental-illness limitations, how policy definitions of acceptable medical providers and “time-relevant” evidence can be used to dismiss supporting documentation, and how technical income calculations can trigger benefit reductions or overpayment claims. If you’re navigating an ERISA disability claim, this episode explains why understanding the policy language and legal framework can be just as critical as proving the medical reality of your disability.

In this episode, we'll cover the following topics:

One - Functional Neurological Disorders and Your ERISA Disability Case

Two - Must a Disability Carrier or Plan Take Into Consideration the Sedating Effects of Medication in Deciding if You Are Entitled to Your ERISA Disability Benefits?

Three - The Earnings Definition Can Make All the Difference in How Much You Get in Your Long-Term Disability Benefits

Four - How Courts View Unum’s Game of Rejecting Evidence Submitted as Part of an Appeal as Not Being Time-Relevant

Whether you're a claimant, or simply seeking valuable insights into the disability claims landscape, this episode provides essential guidance to help you succeed in your journey. Don't miss it.


Listen to Our Sister Podcast:

We have a sister podcast - Winning Isn't Easy: Navigating Your Social Security Disability Claim. Give it a listen: https://wiessdpodcast.buzzsprout.com/


Resources Mentioned in This Episode:

LINK TO ROBBED OF YOUR PEACE OF MIND: https://mailchi.mp/caveylaw/ltd-robbed-of-your-piece-of-mind

LINK TO THE DISABILITY INSURANCE CLAIM SURVIVAL GUIDE FOR PROFESSIONALS: https://mailchi.mp/caveylaw/professionals-guide-to-ltd-benefits

FREE CONSULT LINK: https://caveylaw.com/contact-us/


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Please remember that the content shared is for informational purposes only, and should not replace personalized legal advice or guidance from qualified professionals.

Transcript

Nancy Cavey [00:00:15]:
 Imagine having a legitimate neurological condition only to watch the disability insurance company or plan rebrand it as mental illness to cut off your benefits or losing your claim not because you aren't disabled, but because the doctor treating you doesn't write your medical records in a fashion that will establish that you have a disabling condition that's consistent with the disability policy or plan. In other words, it doesn't fit a policy definition that's buried in the fine print of this disability policy or plan. And I will tell you that this is how disability insurance carriers or plans weaponize diagnoses. Hey, I'm Nancy Cavey. I'm a national ERISA disability attorney. I also do individual disability work and I want to welcome you to Winning Isn't Easy. Before we get started, I have to give you a legal disclaimer. This podcast is not legal advice.
 
 Nancy Cavey [00:01:13]:
 And now that I have told you that, I wanted to give you an easy to understand overview of the disability insurance world and the games that disability carriers play and what you need to know to get the disability benefits you deserve. So off we go. Now I will tell you that ERISA disability claims often turn less on whether you can work and more on how disability carriers classify your occupation and how they will classify your medical condition, who your providers might be, and even your income. I will tell you that diagnoses like functional neurological disorder can be used to impose mental illness limitations. Medication side effects that can make work unsafe are routinely ignored, and a single definition of how earnings are calculated can mean the difference between full benefits and a demand to repay hundreds of thousands of benefits. In this episode, I'm going to look at how courts have addressed these tactics, why policy language matters more than most claimants realize, and how evidence can be dismissed as not being time relevant. So if you're navigating an ERISA disability claim, this episode is going to explain why understanding the rules of the game are just as important as proving that you are disabled. So let's dive in here.
 
 Nancy Cavey [00:02:35]:
 I'm going to talk about functional neurological disorders and your ERISA disability claims. Two Must the disability carrier plan take into consideration the sedating effects of medication in deciding if you're entitled to your benefits 3 how earnings definitions can make all the difference in how much you get in benefits and 4 how disability carriers view Unum's game of rejecting evidence submitted as part of an appeal as not being time relevant, which is a new common defense that we're beginning to see. But before we get started, let's take a quick break. Welcome back to Winning isn't easy. Let's first talk about functional neurological disorders and your ERISA disability claim. Now, according to FND Hope, a functional neurological disorder is one where there are problems with the functioning of the nervous system and how the brain and the body send and receive signals. It's an umbrella term for a variety of symptoms that are difficult to explain physiologically or organically, but seem to be neurologically based. And these symptoms can include things like bowel and bladder.
 
 Nancy Cavey [00:04:02]:
 The changes, chronic pain, cognitive changes, gait and balance issues, headaches and migraines, involuntarily, involuntary movements, paralysis and weakness, functional seizures, sensory changes, sleep disturbances, speech problems and visual changes. These symptoms are real, and physicians have not necessarily recognized that they are, in fact, real. They placed a lot of emphasis on psychological trauma or stress and as triggering factors not only for the cause of fnd, but the continued symptomatology. In fact, I will tell you there are some physicians who believe that FND is a mental health condition that will involve neurological symptoms, but there's no clear medical cause. Other physicians believe that it is a condition that's both biologically based and involves psychological factors, because psychological factors can be involved. That plays right into the hands of many disability insurance carriers or plans. Why, in many of these policies or plans, there is an attempt to limit the payment of benefits to just two years on the basis that the disability is caused or contributed to by a mental nervous limitation or condition or because of a subjective medical condition limitation found in a disability policy. And that, my friends, is exactly what happened in the case of McDermott vs Sun Life Insurance of Canada.
 
 Nancy Cavey [00:05:32]:
 This is a case out of the Western district of Washington. McDermott was a clinical pharmacist who began experiencing unpredictable seizures, facial spasms, sweating, and even hallucinations. She was evaluated at the Cleveland Clinic by four different neurologists, underwent numerous diagnostic studies and scans. Some of the physicians thought she had fm, others thought it was autoimmune related, and others maintained that they couldn't rule out a neurological etiology. She applied for her disability benefits, and Sun Life did what most disability carriers or plans do. They cherry picked the medical records, and they seized on the FND diagnosis. Well, why would they do that? Well, it's listed as a mental illness under the DSM 5, the TR. So guess what? The policy defied mental illness as a disease or disorder that can result in any way and in any matter of a psychological condition.
 
 Nancy Cavey [00:06:29]:
 So that required also that the insured be under the care of a physician who specialized in psychiatric care. They didn't recognize it as a neurologically based condition. And nor did they recognize that a neurologist should be treating this condition. So where are we at? Well, the claim gets denied. We end up in a federal court, and the judge has to decide if FND is a mental disorder and whether she was being treated by the appropriate specialist. Now, the court noted that this was a complex case because her seizures were real and debilitating. As always, disability carriers or plans like sun Life have their medical records reviewed by physicians. I call them liar for hire doctors who concluded that she had fnd.
 
 Nancy Cavey [00:07:16]:
 Well, of course, why wouldn't they? Because it benefits the carrier. And they also said, hey, you know, she's treating with a naturopath, and that's not an appropriate provider, even though she had been seen by neurologists. So there is a back and forth between her treating physician and the peer review doctors about the nature of her disorder. Is it physical? Is it neurologically based? Is it psychological? And she asserted that the older idea that FND was a psychological nature had changed in the mid 2000s and noted that some people with FMD had psychological factors and some didn't. And her physicians explained in multiple documents that her symptoms, her unique personal symptoms, could be easily explained on a neurological basis and other physical conditions, and therefore her FMD was not mental illness. Of course, Sun Life disagreed. They argued that she couldn't work because of fnd. Her FND was a mental illness under the dsm, and that the policy required one who was unable to work in part because of a psychological condition, be under the continuing care of a psychologist to get their benefits.
 
 Nancy Cavey [00:08:31]:
 And she was seeing a naturopath and a mental health counselor. And Sun Life said, hey, hey, that's not appropriate care. Of course, again, remember, she's arguing that she was getting appropriate treatment because FMD was not, in her case, a mental illness. Now, the court unfortunately agreed with Sun Life because the policy clearly stated that if the condition was even partially psychological, it would be a mental illness under the terms of the policy. And they, of course, noted that she had been seeing a mental health counselor. The judge agreed with Sun Life's argument that she wasn't getting continuing care was an appropriate specialty, since the policy defined the term physician to mean MD or medical practitioner deemed by the state to have the same authority as a qualified medical doctor. Well, neither the naturopath or the therapist met the definition of a medical provider under the terms of the policy. And unfortunately, the court ruled against her.
 
 Nancy Cavey [00:09:32]:
 So you can see horrible result. But unfortunately, if the court agreed that the FMD was psychologically based, even in a small part, that the whole case was going to fall apart because of the way the policy was written. Looking at the terms of your policy before you stop work and apply for your benefits is key. And if your claim's been denied, you're going to have 120 days in which to file an appeal. And that appeal is going to have to in a case like this, deal with the policy or plan instruction and interpretation of terms such as mental illness. Got it? Let's take a break.
 
 Speaker B [00:10:17]:
 Have you been robbed of your peace of mind by your disability insurance carrier? You owe it to yourself to get a copy of Robbed of your peace of Mind, which provides you with everything you need to know about the long term disability claims process. Request your free copy of the book@kvlaw.com today.
 
 Nancy Cavey [00:11:06]:
 Welcome back to Winning isn't Easy. Now, should a disability carrier or plan take into consideration the sedating effects of medication in deciding your entitlement to benefits? The disability carrier is going to be looking at your medical records and they're going to be reading them closely and they're going to be looking at things like what are your symptoms, what are your physical exam findings, what are the diagnostic study results, what treatment is being recommended, and are there side effects of medication? I will tell you, in my experience, disability carriers or plans will often ignore important side effects of medication like the sedating effects of the medication or the need to urinate or problems with dizziness or cognition. So let me tell you the story of Jeffrey Wallace, who was a mining engineer who had to stop work in part because of fibromyalgia. He was taking medication that caused sedation until his employer changed their policy about taking controlled substances, including prescription medication. So after the mining company put that policy into place, he stopped working and he applied for his benefits. His claim for own occupation benefits was denied and ultimately he prevailed. But when the definition of disability changed from an inability to do his own occupation to an inability to do any occupation, his claim was denied. And this time the court upheld the denial, indicating that they really didn't see either the impact of the sedating effects of the medication or that it was not significant enough to prevent him from doing any other occupation.
 
 Nancy Cavey [00:12:54]:
 So I will tell you that it isn't going to be just the side effects of medication that are going to win the case. Often we are trying to develop not only the disabling symptoms, pain, tingling, numbness, the ability to sit, stand, walk, super bend, and then add in the combination of the impact of that Medication. For example, if you have neuropathic pain, you're probably taking gabapentin and that is sedating. But it isn't going to be the sedating impacts of the medication in and of itself that will win the benefits. It is the combination of the sedating effects and the underlying symptoms caused by the medical problem, be it a herniated disc, that's causing the radicular pain. So it's just not one thing here, but certainly that's a factor. And we do try to document in our appeal letters the impact of medication, including the combination of medications, and suggest to the carrier that they're making a mistake by not failing, rather by failing to consider the impacts of not only the underlying medical condition, but the side effects of medication. Got it, Sam.
 
 Nancy Cavey [00:14:45]:
 Welcome back to Winning isn't Easy. Let's talk about the earnings definition and how it can make a difference in whether you get your benefits and how much you're going to get. This is all about money, isn't it? Disability carriers are more than happy to take your gold in the form of your premium payment and very happy to rule that you're not entitled to your benefits. Why? Because at the end of the day, they're not answering to you, they're answering to their stockholders and who are looking at the bottom line and their profitability. So do you know what you bought when you bought your disability policy? How much you were going to get? How benefits were calculated? Let me tell you the story of Mr. Rapoport, who was the co founder of a mortgage banking company. He was also a 50% co owner of a company called ICC. That company bought a long term disability policy for its employees through Guardian and there was some confusion about whether the policy included or excluded bonuses in the definition of earnings.
 
 Nancy Cavey [00:15:46]:
 ICC wanted to include them and when Guardian issued, the policy didn't include bonuses or commissions. Now why is that important? Because in this particular instance, a significant portion of their income came from bonuses or commissions. So that was a motivating factor in them purchasing a policy that would include bonuses and commissions in the definition of earnings to calculate the amount of benefits that would be owed a disabled employee. So some 10 years after purchasing the policy, Mr. Rappaport files a claim for his disability benefits and Guardian of course asks, well, how are you paid? Are you paid by ICC on a W2? Are you a shareholder or and are you paid based on the company's earnings or profits through a K1 earnings? What's the method of payment here? Well, Mr. Rapoport's attorney confirmed that prior to his disability, his salary was calculated both on salary and profits, including his K1. Ultimately, Guardian approved the claim and paid him the maximum benefit of $10,000 a month and he was paid for five months. But they then his benefits were terminated on the basis that there was a lack of proof.
 
 Nancy Cavey [00:17:00]:
 Guardian's position was that he could earn more than the maximum allowed while disabled and that was more than his indexed earnings. So they did two things. They denied his claim on an ongoing basis for the lack of proof and said, huh, we've overpaid you because we think now that you could have earned more than the maximum allowed while disabled and we want hundreds of thousand dollars back based on its recalculation of benefits. In fact, it asks for $326,889.05 to be precise. Obviously, the fireworks started. Rappaport claimed a wrongful denial of its benefits as well as an equitable claim for reformation of the plan so that the earnings included bonuses and commissions. As ICC had always attended Guardian countersuit and said, we want our money back now. The issue before the court was whether the term insured earnings as used in the plan included its K1 earnings.
 
 Nancy Cavey [00:18:01]:
 The court found that the K1 earnings were not bonuses or commissions because this income is indiscretionary, like a bonus, and or is not dependent, of course, on a particular sale as a commission would be. The K1 earnings were not extra compensation but regular income. And based on the plan's plain language, the court found that the K1 income fell within the ambit of the insured earnings definition. But the court even went further. They said, look, if the plan language was ambiguous, which we don't think it is, the extrinsic evidence supported his position that both ICC and Guardian had intended that the insured earnings encompass his K1 income, and that included Guardian's own documents and Mr. Rapoport's financial submissions when he applied for benefits. Therefore, the plan's definition of insured earnings encompassed his K1 earnings in addition to his W2 salary earnings. The court went further.
 
 Nancy Cavey [00:19:00]:
 They said, look, Even though the K1 earnings weren't bonuses and commissions and other form of incentive compensation, those earnings still should have been included in the definition of insured earnings. And as a result, the court reformed the policy to reflect the most expansive definition of insured earnings. As the parties had attended, Guardian couldn't produce any evidence that the parties had agreed to have a limited definition of earnings that excluded bonuses and commissions. All the evidence that was submitted demonstrated that ICC had consistently expressed an intent to ensure a policy that had a definition of earnings that included bonuses and commissions. So as a result, this case got remanded back to guardian to calculate the benefits that were due based on his income, which there was probably money owed, and to determine whether in fact there was any overpayment, when in fact there probably wasn't. What was crucial here was the proof that ICC was able to submit that documented that it had been their intent all along to have a policy that had included bonuses and commissions as part of the methodology for calculating benefits. And you can see this was about a lot of money. Fortunately, the court did the right thing.
 
 Nancy Cavey [00:20:26]:
 And if there's an issue in your policy about the definition of earnings and the calculation of benefits, you're probably going to need an experienced risk and disability attorney to help you address that. And if your claim is one in which you're fighting about it, that's the time to hire someone. But certainly if the carrier or plan is denied the benefits on the basis that you're not to say that's the basis of an appeal. But if they're challenging what they paid you in the method of calculation, you can be sure they're going to ask for money back. You'll only have 180 days in which to file a response, an appeal to that particular argument. And it's time, if that's happening to you, to hire an attorney. It's about a lot of money and a lot of peace of mind. Got it? Let's take a break.
 
 Speaker B [00:21:16]:
 Are you a professional with questions about your individual disability policy? You need the Disability Insurance Claim Survival Guide for Professionals. This book gives you a comprehensive understanding of your disability policy with tips and to dos that will assist you in submitting a winning disability application. This is one you don't want to miss. For the next 24 hours, we are giving away free copies of the Disability Insurance Claim Survival Guide for Professionals. Order yours today@disabilityclaimsforprofessionals.com.
 
 Nancy Cavey [00:22:20]:
 Welcome back to Winning Isn't Easy. Let's talk about how a court views unum's new game of rejecting evidence submitted as part of of an appeal is not being time relevant and therefore we're not going to consider it now. Many times disability carriers like Union will deny a claim after their liar for hire peer reviewed doctors have criticized and cherry picked the policyholder or plan beneficiary's medical records. And as a part of a good appeal, an ERISA disability attorney may want to obtain an independent medical evaluation, a functional capacity evaluation, or A vocational report to rebut the opinions of the disability carrier or plans providers or vocational evaluators. So what has Unum been doing with this? Well, one of unum's new games is to reject crucial pieces of evidence submitted as part of an appeal as not being time relevant, even though the evidence can relate back to the claim and the issues that are raised as part of the denial. And so long as there is no intervening event, I think, and I think most courts agree that they should be considering this additional evidence. Now, the disability carriers under the ERISA statute, as do the plans, have an obligation to conduct a fair and comprehensive review of the disability claim. And often they're cherry picking the medical records and criticizing what didn't go on or what did go on, or drawing different conclusions.
 
 Nancy Cavey [00:23:45]:
 And if you cannot submit evidence to rebut that, that's a problem. And you know, let's give a common example. Disability carriers will say, look, we disagree with a doctor treating doctors opinions about restrictions and limitations. Our liar for hire doctors say, you know, they can only do X, Y or z. Well, there are a number of ways to rebut that. Certainly you can go back to the doctor who, if they're willing to have them write a report disagreeing. But courts have recognized that a functional capacity evaluation is objective evidence. So what we do, and many ERISA disability lawyers do, is we go get functional capacity evaluations to address the person's restrictions and limitations.
 
 Nancy Cavey [00:24:29]:
 We then send that in, or we take it back to the treating physician and ask them to endorse it as being evidence of what in fact the person's restrictions and limitations have been during the relevant period of time. If the disability carrier plan and reject that evidence, it's a clear, in my view, violation of the ERISA regulations which require them to conduct a fair and comprehensive review of a disability claim. And similarly, they will have their liar for hire vocational rehabilitation counselors who in certain cases will do labor market surveys and determine if there are certain types of occupations that are available in the, in the labor market that allegedly the claimant or policyholder can do. Or they will do a survey of the salaries and say, look, here's the occupation. We think the person can do this and this is the wages that they can earn. And by the way, those wages are such that no disability benefits are due. Obviously, if you can't rebut that, you're going to again lose. And that is relevant information that is consistent with the disability carrier's attempt to create evidence that a person isn't entitled to their benefits.
 
 Nancy Cavey [00:25:45]:
 They've gone out and done a labor market survey, they've done a wage survey. And there isn't any reason why a vocational rehabilitation counselor can not only address that as of the time the Liar for Higher Vocational Counselor did their review, but moving forward so we again, in our practice will routinely use vocational rehabilitation counselors to attack the disability carrier plan's vocational provider's opinion that there's work available within restrictions and limitations, that the occupations exist in appropriate numbers, and that the occupations that they're siting aren't going to pay the kind of wages that the carrier or plan claims that they are. So we want to attack the restrictions limitations, we want to attack the basis of the vocational opinion, we want to attack the job numbers, we want to attack the wages as part of our appeal. And I believe that the disability carrier refusing to consider that information is once again a violation of the ERISA regulations. These are just some of the games that disability carriers play or plans play, because remember, they're not in the business of keeping the promises that they made to you when you were sold this policy or enrolled in the plan. Got it? Well, that wraps up today's episode of Winning Isn't Easy. Thanks for tuning in, and if you found this episode helpful, please like our page, leave a review, share it with your family or friends, and subscribe to this podcast. Join us next week for another insightful episode of Winning Isn't Easy.
 
 Nancy Cavey [00:27:24]:
 Thanks.