It may seem like a simple process: Your doctor diagnoses you with a condition. The physical restrictions and limitations that are caused by that condition or required to heal and care for it prevent you from doing your job.
Your physician then informs the insurance company, which determines that you are disabled and entitled to your short-term disability benefit or long-term disability benefit. In other words, you become disabled, you submit proof that you are and you get your disability benefit. Easy enough, right?
Well, it could be – if the world was perfect.
Wrongful Denial of Benefits: What Really Often Happens
Almost without fail, insurance companies such as Cigna, New York Life, The Hartford and Unum will retain a physician to perform an independent medical exam (IME) or, even more commonly, a medical records review to determine whether the restrictions and limitations prescribed by your physician are supported by the medical records.
It should surprise few people that the physician retained by companies such as Cigna or New York Life hardly ever finds that the medical records support the prescribed restrictions and limitations. This allows the adjuster handling the benefits claim to determine that you are not in fact disabled.
Wrongful Denial of Benefits: Why the Choice of Review Doctor Matters
Physicians retained by insurance carriers play a central role in the companies’ denial of benefits. They also become a major factor in successful litigation against the insurance companies for the wrongful denial of benefits.
The insurance company, which often both decides benefits eligibility and then pays those benefits under ERISA long-term disability insurance plans, has an inherent conflict of interest (Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 112: 2008). In effect, the payment of benefits under a policy takes money out of the insurance companies’ pockets. This conflict of interest must be considered as a factor when a court in the 8th Circuit reviews a carrier’s decision for an employee benefit denial (McIntyre v. Reliance Std. Life Ins. Co., 972 F.3d 955: 8th Cir. 2020).
One way insurance companies can reduce the relevance a court will give to the inherent conflict of interest when determining the reasonableness of an insurance denial is to hire a third-party physician to review the medical records. However, these third-party reviewers and the companies that hire them still retain conflicts of interest in that the reviewers can tend to return opinions favoring the insurance company so they can be hired again.
Concerning plan administrators – in most cases, the insurance company/adjuster – federal regulations specify that:
decisions regarding hiring, compensation, termination, promotion, or other similar matters with respect to any individual (such as a claims adjudicator or medical or vocational expert) must not be made based upon the likelihood that the individual will support the denial of benefits.
While insurance companies may implement “policies and procedures” that relate to the retention of medical review vendors such as Advanced Medical Reviews, Dane Street, Exam Coordinators Network or Disability Insurance Specialists in order to comply with the regulation mentioned above, the Cignas and Unums of the world have little to no control of how the third-party vendor then finds physicians to hire for the review.
This creates a situation where the insurance company has reduced its inherent conflict by outsourcing the medical record review, but the company hired to obtain the review still has an intrinsic interest in returning an opinion favorable to the insurance company. This results in the insurance company obtaining sufficient grounds for denial of long-term disability or short-term disability benefits.
A pivotal way of proving that the insurance company’s relying on such an opinion was unreasonable and the denial of long-term disability benefits was biased is demonstrating to the court that the retained physician was not credible in its review.
A good example of what this looks like occurred in Duncan v. Anthem Life Ins. Co., 2021 U.S. Dist. Lexis 64609 (S.D.Il. 2021). In that case, the disability attorneys demonstrated to the court that the doctor retained by the third-party medical review vendor copied and pasted opinions from one report to another.
Based on this, the court found it likely that either Anthem or Dane Street (the third-party vendor) retained the physician at issue not according to her expertise, but rather because of the likelihood she would return an opinion favorable to Anthem. The court approved discovery, which helped lead to a favorable resolution for the insured.
Such examples demonstrate the importance of the medical expert retained by the insurance company to both the carrier’s denial of benefits and the successful litigation of that insurance denial under ERISA laws and regulations.
ERISA Lawyers & Litigation for Insurance Denial: Contact Us Today
Long- and short-term disability benefits can be impeded by systemic factors that discourage those who file a claim. If you have questions about a denial of insurance benefits, or if you believe you have encountered a wrongful denial, contact the ERISA lawyers at Gallagher Davis at (314) 725-1780. In addition to reviewing the details of your case, we can discuss whether you have a cause of action or if we can help you file an internal appeal of the insurance denial.
With experience in all state and federal trial and appellate courts in the St. Louis metropolitan area, as well as throughout Missouri and the Midwest, our attorneys provide vigorous advocacy and representation in justly receiving benefits to which you are entitled.