PART II

Are insurers fighting fraud, or denying claims unfairly?

What happened to Sidney Smith and Ronald Diamond wasn't unusual, says Art Fries, a disability claims consultant in Newport Beach, CA. After paying benefits for a while, a company may ask the claimant to submit to an independent medical exam and, soon afterward, stop payment, saying the person is no longer disabled. "This is a strategy to see if the claimant will meekly accept the conclusion and go away, or complain, or hire an attorney," Fries notes. "Many times it becomes a game to see who can move the most paper and whether the claimant can be worn down."

Insurers say, however, that they pay most claims without a problem. "We sell a promise to pay; we are here to pay claims," comments Todd Gish, a disability executive with Massachusetts Mutual Life.

UnumProvident strives to resolve claims "in a timely fashion," says Vice President Jeff McCall. Christopher Collins, another UnumProvident executive, notes that the company pays $3 billion annually in disability claims. Of that, $700 million a year goes to physicians. Currently UnumProvident has about 12,000 open physician claims and about 250,000 policies on doctors, says Collins. The insurer says Sidney Smith's case is an exception. "The number of cases that end up in litigation is a micropercentage of claims that are paid," notes Mark Davenport, a Dallas attorney who represents UnumProvident and many other insurers in claims litigation.

Whether insurers are just aggressively protecting themselves against fraud or are unfairly denying claims is debatable. But either way, for policyholders, the result is the same: If you become disabled, your right to receive benefits may be challenged. You might, for example, find yourself charged with making a claim not because you're truly disabled but because you're tired of long hours, stress, or managed care.

In fact, Robert Coddington, a physician who reviews claims for UnumProvident on a consulting basis, had raised the question of whether there was a managed care issue in Smith's case, because the doctor had resigned from his anesthesia position about a month before he injured his hand. "There are a lot of crazy things going on in medicine these days with hospitals opening and closing, managed care organizations starting, stopping, going bankrupt," Coddington said in a deposition for Smith's lawsuit.

So what's a doctor to do?

"When you file a claim, the burden is on you to prove your disability," says Bonny Rafel, a Florham Park, NJ, attorney. The key to making a claim stick is submitting the right medical, occupational, and financial information in a timely manner.

State regulations spell out time limits for approvals, denials, and paying benefits, and for levels of proof required. By the end of your policy's waiting period, typically 90 days, the insurer is required, based on the proof you've supplied, to start paying benefits immediately. Don't count on that happening, though. "I've seen claimants haggling for six months or longer before their checks start coming," Surrano says.

Delays aren't always the company's fault. "We often experience long waits for statements and medical records from attending physicians," says Ray Kowalczyk, a senior claims official at Union Central Life Insurance.

But even if your physicians send in all the paperwork promptly, you might experience roadblocks such as the ones that follow. Here's a game plan to help you get around them and collect what you're entitled to.

Two ways an insurer may disqualify your claim

Your disability policy contains more than one potential escape hatch for your insurer. For instance, when you file a claim, you may find yourself facing:

The dual-occupation charge. An insurer may try to nullify your own-occupation clause by claiming that when your disability began, you were doing something different or had two occupations. For example, if you were handling administrative aspects of your practice, the insurer might say that treating patients wasn't your only occupation.

That's what happened several years ago, when a New York dentist developed a progressive skeletal illness and was no longer able to treat patients. He filed a disability claim with Berkshire Life, which refused to pay full benefits because the dentist could still do administrative work. The dentist sued, and trial and appeal courts agreed that Berkshire was guilty of breach of contract, saying that in New York a claimant is totally disabled when he is no longer able to perform his job's "material" and "substantial" responsibilities. The dentist had spent most of his time treating patients. His gross revenues hadn't suffered severely, since he'd hired another dentist to take his place, but the court noted that disability policies in New York protect against "loss of capacity to work, not against loss of income."

How to protect yourself: Don't limit yourself to the claim form's small spaces, which imply that short answers such as "physician" or "back injury" will suffice. "Such answers become the sword of the carrier in defining your occupation and disability," says Rafel. She advises appending complete answers to the form, to demonstrate the seriousness of your case.

Include details of how you spent your average workday before the disability, then list what duties of your occupation the disability prevents you from performing. State how many hours a week you normally worked, and how the disability affects that. Advises Rafel: "Share this information, in writing, with your physician so that he's prepared to respond to the insurer's queries. Inform the insurance company that your staff runs your office. Describe the staff. Avoid the typical doctor's mistake of saying you 'run the practice.' Otherwise, the company may decide you have a dual occupation and don't qualify for benefits because you can still do administrative work at your practice. Remember, you got the insurance to protect your ability to perform medical procedures, not schedule patients, tally bills, or handle office politics."

Says Darras, "If you think you might be heading for a disability claim, give up your medical directorship well before you file. Or if you're shedding duties because of impairment, be careful you don't fall into the role of office administrator or business owner."

The pre-existing-condition charge. Typically, policies exclude coverage for a pre-existing condition if an incident related to that condition occurs within two years of the date you bought the policy. So expect the insurer to look for symptoms of your current condition that may have surfaced before the policy began. "If your injury or illness bears the slightest resemblance to, or shares even one symptom with, a condition you had before your policy began, the insurer may insist that your claim resulted from a pre-existing condition," says Darras.

How to protect yourself: Make sure the doctors treating you give detailed descriptions of your disability, treatments, and test results, and how the condition restricts your work. They should be clear about when the condition began.

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