COVID-19 Update: Impact on Long Term Disability/ERISA Claims

Articles Posted in New and Newsworthy

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Medical providers often serve as intermediaries between their patients and insurance carriers in order to secure payment for their services. This spares the patient the burden of negotiating the waters of insurer red-tape. The recent District of New Jersey case of Cohen v. Independence Blue Cross makes clear that, in the case of an out-of- network provider, the language in an insurance policy can make all the difference in determining the efficacy of this intermediary role.

In Cohen, the insured underwent spinal surgery by an out-of-network physician, and then issued the surgeon an assignment of benefits under his health insurance plan. The defendants (the insurer, the plan and the plan administrator) paid a fraction of the doctor’s bill directly to the insured, but refused to pay the rest of the doctor’s bill, which was $143,626.00. This fractional amount represented a substantially higher patient obligation for out-of-network services. The defendants grounded their non-payment on an anti-assignment clause in the insured’s policy, which read, in pertinent part, “The right of a Covered Person to receive benefit payments under this coverage is personal to the Covered Person and is not assignable in whole or in part to any person, Hospital, or other entity nor may benefits of this coverage be transferred.”

The Court found that the clause was not preempted by ERISA, and distinguished Neuner v. Horizon Blue Cross Blue Shield of New Jersey, 301 B.R. 662 (Bankr D.N.J. 2003) (providers have standing to demand payment in the absence of an anti-assignment clause), and Ambulatory Surgical Center of New Jersey v. Horizon Healthcare Services, 2008 U.S. Dist. LEXIS 13370 (D.N.J. Feb. 21, 2008) (finding that providers could be valid assignees, without addressing whether ERISA permits anti-assignment clauses in insurance contracts). Additionally, the defendants had not waived their right to enforce the anti-assignment clause by corresponding with the doctor directly during the claim process, because Pennsylvania State law, which governed that issue, required a “clear, unequivocal and decisive act” of waiver, which the defendants had not shown.

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The Third Circuit is finally catching up to other Circuits in recognizing the importance that a conflict of interest plays in an insurer’s decision to accept or deny a disability claim. The Third Circuit in Miller v. American Airlines noted that the claim administrator acted unreasonably by imposing additional requirements under the Plan; failing to include in its denial letter exactly what the claimant needed to provide in order to satisfy the plan requirements, failing to adequately consider all medical diagnoses and even the occupation in evaluating the case.

On the heels of Miller, our New Jersey Courts have issued another well considered opinion. Connor v. Sedgwick Claims Mgmt. Servs., 2011 U.S. Dist. LEXIS 67988 (D.N.J. June 24, 2011) The court in Connor embraced the reasoning of Miller, requiring that the termination letter provide the “precise information necessary to advise” a plaintiff “how to perfect his claim.”

The denial letter must detail how the claimant “could achieve a favorable disability determination.”

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A report from The American Medical Association released in June found an increased inaccuracy in the payment of health claims. This means an astounding 3.6 million claims are being handled incorrectly.

The error rate is 19.3%, an increase of 2% over the last year. The one in five claims is being handled erroneously leads to waste in money spent on health care and administrative costs, as well as frustration for patients and health care providers. AMA Board Member Barbara McAneny, MD stated that these errors wasted an stonishing $17 billion. McAneny goes on to say that “Health insurers must put more effort into paying claims correctly the first time to save precious health care dollars and reduce unnecessary administrative tasks that take time and resources away from patient care.”

At Bonny G. Rafel LLC we can help you fight these erroneous denials.

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Lower back pain should never be overlooked and can result in disability, especially if surgery fails to permit you to return to full function. We at Bonny G. Rafel review many claims associated with lower back conditions because if you cannot sit for many hours in a day performing your work related duties, you will eventually seek disability benefits.

In a recent article in the Herald Tribune, the author elaborates on the source of lower back pain and the severity of the disorder. The National Institute of Health has stated that lower back pain is their No. 2 neurological disorder, trailing behind headaches.

There are many factors that can increase your risk of developing lower back pain. These factors include being overweight, being in poor physical condition, your age, and even your job. If you have a job that requires constant lifting, bending, or putting any stress on your spine you are more likely to develop back pain. You can also develop this pain by working at a desk and not sitting properly with your back up and straight

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Whether you have a desk job or perform manual labor, its vital to consider protecting your income with a disability insurance policy in case you become disabled from working. This is different from worker’s compensation coverage.

In a recent article published in the Times Free Press, the author examines the “public-private partnership” between insurers and the government. Tom Watjen, the CEO of Unum estimated that in roughly 70% of the households, if the breadwinner were to become injured and not able to work, he would not be able to meet all his household expenses.

That is a very scary idea to think that more than 2/3 of America’s workers are not protected. The author of the article notes that more people have fire insurance on their homes and auto insurance on their cars compared to disability insurance even though the odds of getting injured are greater than a house going on fire or a car crash.

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Many of our clients file for Social Security Disability benefits in addition to filing for employer sponsored private or group disability benefits. It remains unclear why some of our clients receive immediate approval of their claims, while others have to struggle through the appeals process. We have Social Security attorneys to refer our clients to since we do not handle such cases.

Unfortunately, some SSA decisions seem to depend on what Administrative Law Judge is assigned to your case. In April 2011, a class action lawsuit was filed in Federal District Court alleging that five of the eight Queen’s County Administrative Law Judges are biased against the applicants appealing their adverse Social Security disability decision.

The suit seeks to bar the five judges from hearing any more claims, and to annul all their decisions since 2005 to deny any benefits. Together the five judges have rejected an average of 63% of the cases they have heard since September, a huge discrepancy from the 36% average held nationwide.

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Over the course of your working career, statistically, you may become disabled at some point before you retire. It is better to be prepared for this possibility rather than face financial ruin if your income evaporates.

Recently in the New York Daily News article, the Social Security Administration states that there is a 25% chance that a 20-something year-old will become disabled before he or she retires. This 25% needs to be able to pay for their household expenses while disabled.

Employees need to be aware if their employer is sponsoring disability coverage and whether it’s a long term or short term policy. Another important fact to find out is whether you or the employer pays the premium for this dictates whether the benefits are taxable to you. If the employee pays the premiums on a policy out of their pocket, the benefits will be tax free. If the employer pays the premiums, then the benefits are taxable.

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Each of us knows at least one person who suffers from migraines which often can be managed with medication. For those of you who do not know what it is like to experience a migraine, it is difficult to describe. In a New York Times article titled Migraine Miseries Push Patients to Ways of Coping, the author states that migraines can cause such severe throbbing pain in the head and nausea that the victim may have to retreat to a dark room for a day or more.

Craig Partridge, the chief scientist for a high tech research company, describes a migraine as imagining “someone having driven a nail straight through your head.”

The Migraine Research Foundation reported that nearly a quarter of all households are affected by migraines and that migraines are three times more likely to occur with women compared to men. The Foundation also found that more than 10% of adults and children suffer from migraines.

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New Jersey joins Pennsylvania as a state in the Third Circuit and benefits when a PA case is successful before the Third Circuit. A case in point is Kosiba v. Merck & Co. which found that Unum acted arbitrarily and capriciously in denying benefits to a claimant suffering from fibromyalgia and sarcoidosis. Kosiba v. Merck & Co., 2011 U.S. Dist. LEXIS 23247 (D.N.J. Mar. 7, 2011).

Kosiba addressed the Third Circuit’s stance on issues such as scope of review, structural conflict, procedural conflict, selective consideration of medical history, financial conflict of interest, and remedy.

Following our Supreme Court’s decision in Metropolitan Life Insurance Co. v. Glenn, the Court gave significant weight to Defendants’ “reversal of position”, “failure to address one or more of the diagnosis(es) and Defendants’ failure to consider the claimant’s objective functional capabilities.

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We often are retained once a claim has been denied. All too often, the denial is based on a breakdown in communication between the patient’s doctors and the administrator evaluating the claim because the nature and extent of a patient’s disability is not communicated clearly by the claimant’s treating physicians to the insurance company.

Insurance companies periodically request treatment notes or claim forms to be completed by the claimant’s physicians. Even seemingly straightforward questions by the insurance company can be construed to raise questions about the patient’s disability. Oftentimes, with limited time to spend per patient, a physician will not list all the symptoms present in the diagnosis, or fails to mention the significance pain has on a patient’s abilities.

Physicians constantly express their frustration — that their priority is spending time treating the patient– not gearing their notes to please the insurance companies. Unfortunately, insurance companies latch onto any small indication by treating physicians that the patient is doing well enough to return-to-work, or is no longer disabled. A recent New York Times article states, “A doctor’s note turns into a cut-and-paste collage instead of an accurate and personalized narrative of illness; and documentation becomes an electronic and potentially dangerous version of the game ‘Telephone.'”

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