New Jersey Disability Lawyer Blog

The recent Good Morning America November 11, 2009 expose on Hartford's abusive use of video surveillance of its disabled policyholders is just a sample of the rampant use of video as a way to trap insureds and deny claims. Chris Cuomo reported that Jack Whitten, who suffers from a broken neck from a fall, pain and memory loss was captured on videotape reading a magazine, getting into a car and eating taco chips, which formed the basis of Hartford Insurance Company terminating his disability benefits. His doctors assured Hartford that Whitten has severe headaches, short term memory problems and cannot work at his prior job with Walmart. Hartford denied benefits anyway. Fortunately for Mr. Whitten, once the GMA story ran, his benefits were reinstated.
Other disabled people who are surveilled are not so fortunate. Some examples of Hartford's misuse of Video surveillance include Montour v. Hartford Life &Accident Ins. Co., 2009 WL 2914516 (9th Cir.)The 9th Circuit found that Hartford relied on surveillance which did not represent Montour's ability to engage in full time work.
Recently, in Finley v. Hartford, 2009 U.S. Dist. LEXIS 105516 (N.D.Cal. Oct. 26, 2009), Hartford was again admonished for shoddy surveillance. Hartford relied on three doctors who only reviewed medical records and did not examine Mr. Finley The court noted that the activity shown on the video did not prove that Finley can work full time.
The abuses are not limited to Hartford insurance company.
In fact, surveillance companies, hungry for the business send emails to clients offering reduced rates for special all day surveillance over holidays! We recently received an unsolicited offer from such a company, (confusing us with an insurance company), offering their services on Thanksgiving at a reduced rate of $499.00 for the day, since many people are more active on holidays and least suspecting of being followed. This gamesmanship being directed at the disabled is deplorable.

Three recent New Jersey District Court Decisions threaten to undo years of progress in the growing body of law pertaining to long term disability cases in New Jersey. In the aftermath of MetLife v. Glenn, 128 S.Ct. 2343 (2008), we expected that more, not less judicial scrutiny of the acts of claims administrators would occur. The closer the courts inspect the procedures utilized to decide disability claims, the better chance our disabled clients have for a full and fair review of their claim.
New Jersey has unfortunately been moving against this tide. The first case, Scotti v. The Prudential Welfare Benefits Plan, 2009 U.S.Dist LEXIS 64559 (D.N.J.July 23, 2009) involves a man disabled by depression, pseudodementia and cognitive impairments. All of Mr. Scotti's treating and examining physicians confirmed the diagnoses and the functional impairments. The court limited its review to whether Prudential abused its discretion, which means that Scotti carried the burden of proving that the administrative record did not contain substantial evidence to support Prudential's denial. The court found that Prudential had enacted sufficient safeguards to minimize the chance that its decision was tainted by its own self interest to promote its financial interests. The court denied summary judgment for each party, finding that whether Scott's impairments can be validly diagnosed by personal examination is a genuine issue of material fact.
RAFEL COMMENTARY: The Court accepted the opinions of the medical consultants hired by Prudential's captive third party without evaluating their credibility. In other circuits, the courts recognize that these doctors could be "doctors for hire", and their opinions far less than independent. See, for example the evidence discovered in Soloman v. MetLife, 2009 U.S.Dist. LEXIS 51507 (S.D.N.Y. June 18, 2009), showing that the reviewing doctors derived 90% of their income from paper medical reviews for third parties. We can learn alot from our neighbors across the Hudson River. BGRafel

In this New Jersey disability claim based on a back condition including disc herniations, the Court affirmed the District Court's opinion and outlines some important pointers to keep in mind when proving in an ERISA case that the insurer's procedural irregularities require the denial to be overturned.
The Court faulted Liberty who was acting under a conflict of interest {pursuant to Glenn v. MetLife} for its "decisions that disfavored the employee at each crossroads and reliance on experts who merely reviewed incomplete medical records."

Interestingly the peer reviewer suggested that Liberty undertake surveillance of its insured to check her functionality,which Liberty declined to do, noting "surveillance is an aggressive tactic" that itself may constitute procedural irregularity." How can Liberty then, in other cases rush to surveil our clients who have confirmed, significant medical problems which cause functional limitations and restrictions?

Liberty used a Nurse Case Manager to review the appeal, who acknowledged an inconsistency in the views of their hired medical reviewer and the treating physician but then failed to pursue further medical consult to clarify which view to accept. The court reasoned that Liberty cannot turn a "blind eye" to faults in the evidence supporting its consultant's opinions and then use that opinion to support a denial.

The New Jersey Supreme Court recently issued a disappointing decision in Shore Orthopedic Group, LLC v. The Equitable Life Assurance Society of the United States, 972 A. 2d 381 (NJ 2009) with regard to the payment of counsel fees in insurance disputes. Shore Orthopedic had purchased a disability policy to cover some of the expenses of the practice, if their associate orthopedist became disabled.
When the time came to pay on the policy, Equitable denied coverage, claiming the disabled doctor had not revealed a medical condition that had become apparent between the initial application for coverage and the payment of the first premium.
In litigation The Equitable failed to produce its own claim handling guidelines. In the lower court proceeding Shore Orthopedic obtained a court order requiring Equitable to produce its claims manual and awarded Shore Orthopedic $50,000 as a sanction against Equitable's improper conduct in intentionally misrepresenting that such a manual did not exist. However, the court denied plaintiff's counsel's motions for counsel fees.

In a disappointing decision, the New Jersey Supreme Court upheld the lower courts' decision to deny an award of counsel fees. Thus the insured remains saddled with both fighting the unjust denial of his case, and paying his own counsel fees. The Supreme Court refused to consider this a "third party claim" for insurance coverage, although the policy insured a doctor and the beneficiary of the policy proceeds was the entire orthopedic practice.
My concern is that our New Jersey Supreme Court overlooks the extreme financial distress experienced by insureds in New Jersey when their insurance company, who readily accepts the premium payments refuses to pay a legitimate claim without justifiable reason. When the insured is forced to litigate the action, he is faced with an additional expense, that of competent counsel to represent him. Experienced counsel will typically spend hundreds of hours fighting for their client's legal rights to insurance money. But when New Jersey counsel wins the case, the client has to pay their fee, often from the proceeds of the insurance claim. Therefore the insured is not "made whole" by the successful litigation. Until our Supreme Court and Legislature take a closer look at this issue, unfortunately insureds will continue to suffer financially even when they win the battle.

Ms. Rafel recently won an administrative appeal filed on behalf of her client suffering from Parkinson's Disease. Prudential Insurance Company had denied benefits claiming that there was no proof that the physical symptoms were so disabling as to render him unable to work as a retail stock broker. Prudential relied solely on its own medical consultant and nurse to support their case. Rafel pointed out her client's problems controlling his movement as well as the cognitive deficits that have affected his critical judgment skills and ability to recall. Rafel documented that medications for the Parkinson's Disease symptoms caused side effects that contribute to his inability to work. She elicited the cooperation of her clients' treating doctors, including Susan B. Bressman, MD a board certified Neurologist who specializes in movement disorders at the Department of Neurology at Beth Israel Hospital in New York City. Each doctor completed comprehensive questionnaires that Rafel staff formulated to respond to Prudential's review. Thankfully, benefits will now resume and hopefully continue until this client reaches the age of 70.

Bonny G. Rafel announces that she recently convinced US Life to reinstate the Business Overhead Insurance benefits to her client, an orthopedic surgeon, after denying benefits on the basis that he can still perform the duties of an orthopedist in an office based setting. The insurance policy was issued through the American Medical Association, and provides important business overhead expense insurance coverage to doctors who become unable to perform the material and substantial duties of their occupation due to disability. The company determined that the doctor was not totally disabled but only residually disabled, which did not obligate them to pay the benefits. Ms. Rafel argued that the specialty practice of her orthopedic surgeon client was conducting surgery and his inability to perform this crucial task qualified him for benefits, even though he could continue with his office practice and his income may not be affected.

Bonny Rafel was invited by the president of the New Jersey Dental Association to present a lecture on disability insurance for the dentist at the recent annual conference in Atlantic City, NJ, June 4, 2009. She presented an overview of the types of insurance, including business overhead insurance, which provides for the payment of your expenses while disabled, buy out insurance, which insures for the potential that you may become disabled and your dental practice may have to buy out your ownership interest in the business, and individual disability insurance providing income benefits should you become unable to perform the material duties of your occupation. She warned against a common tactic by insurance companies to seek out a "dual occupation" scenario.

Dual occupations in the disability context most often arise when the insurer claims its policyholder is not disabled since he can still perform important aspects of his other occupation. The insurer argues that the insured had two or more occupations at the time the insured claims to be disabled, and because the insured remains able to work full time in one of those occupations, the claimant is not entitled to benefits. This is often a fabrication of fancy wordsmithing the occupational duties of a single occupation into another.

An insurance company may claim the dentist or doctor really had two occupations, one working as a surgeon or dentist, and another, keeping office hours, and running his medical practice.

Here, the submission of detailed records and an overview of the duties of the occupation which cannot be performed is key to a successful claim. However, she cautioned that often the insurance company sends authorizations for the unwary claimant to sign which then entitles the company to investigate his entire financial status, including obtaining credit card records, personal investment details and other data that is not relevant to the claim and invasive of the claimant's privacy.

"As long as the information is relevant to the claim, you should provide it, but when it crosses the threshold into private matters," she suggested, "do not provide this data because once in the insurance company's file, it is no longer protected under HIPPA or from disclosure to the public."

She offered her services to dentists in attendance, who then sent their disability policies for her to review to examine the level of income protection the dentist has purchased and whether this "investment" is "likely to pay off" should disability strike.

For the ninth year in a row, on June 15, 2009, Bonny Rafel was an invited speaker for the American Conference Institute, who sponsored its annual conference focused on Disability Insurance Claims to an audience filled with insurance industry folk and claimants counsel. She presented a lecture on "IMEs, FCEs and Medical and Vocational Experts: Interpreting and Utilizing Testimony and Exam Results to Prove or Refute Disability". Her central focus was to refute an outdated trend in the law and explain why disability insurance companies must adhere to their fiduciary duty to fairly handle claims.

For the past five years, insurers have repeatedly attempted to rely on their own in-house medical reviewers, vocational assessors, and peer reviewers to rebut the opinions of the treating physicians. Comfortable under the blanket of the US Supreme Court case of Black & Decker Disability Plan v. Nord, 538 U.S. 822; (2003), companies concluded that as long as there was some support for their conclusions, the court would not give the treating doctors' views overwhelming weight. However, the need to present concrete evidence to rebut the conclusions of treating doctors remains a theme which continues to undermine any lasting impact of Nord. Courts almost universally recognize that a physician who has developed a long-term clinical analysis of the claimant should have the most insight to the claimant's condition.

Who has the final say as to a claimant's functional limitations? Is it the treating doctor, the insurance employee medical consultant or the physician who performs a single examination? How much weight will the court apply to a vocational assessment? Suspected company or examiner bias against finding a claimant disabled has become a key factor when reviewing support for a denial and is greatly influenced by a recent US Supreme Court case of MetLife Ins. Co. v. Glenn, 128 S. Ct. 2343 (2008).
As long as the treating doctor keeps detailed records of his patient's condition, notes restrictions and limitations and bases his opinions on an accumulation of medical data and clinical evaluations, his views on functionality should carry great weight.

Another topic worth mentioning is whether an IME should have been performed before a claim is denied. Lately, many courts have concluded that IMEs should have been performed either due to the complexity of the medical condition, or in light of strong disagreement between the paper reviewers and the treating doctors. There are many cases in which the court faults the companies for not having an IME when there are conflicting opinions regarding the functionality of the claimant. A recent case demonstrates that an IME was needed. In Schwarzwaelder v. Merrill Lynch & Co., Inc., 2009 U.S. Dist. LEXIS 19451 at *36 (W.D. Pa. Mar. 9, 2009) MetLife selectively considered the available evidence, relying upon the paper-reviewers over more detailed and consistent reports from the claimant's three treating/evaluating physicians. The court noted that this practice was troubling, particularly as Metlife had discretion to supplement the medical evidence with an independent medical evaluation ("IME"), but elected to forego other personal evaluation of Plaintiff's mental health.

You can learn more about long term disability denials and how to succeed with appeals of insurance company decisions by going to her website.

New Jersey Disability lawyer Bonny Rafel was a featured speaker and moderator at the American Law Institutes' ABA Web Seminar on Disability in a Down Economy. A group of experienced attorneys recognized as the top in their field of long term disability, discussed vocational, occupational issues and medical problems that commonly arise in disability claims to an audience of 60 listeners. Highlights included analysis of current case law, trends in the industry, how to prepare a claim based on medical conditions related to illnesses such as chronic fatigue syndrome, fibromyalgia, multiple sclerosis, parkinson's disease and other maladies.

Ms. Rafel discussed how disability insurance companies deny claims by ignoring valid, reliable evidence provided by the disabled and under valuing statements of friends, family and treating doctors. Ms. Rafels' focus on insurance company misleading medical examinations and the limits of "functional capacity examinations" were discussed and court battles analyzed.

Continue reading "Disability Claims in a Down Economy, ALI ABA Web Seminar May 22, 2009" »