(Although this article is indeed the most frequently viewed post on the blog, I realize it is a bit technical, but important for all insureds to understand completely how the claims process works. If your disability insurer determines the file direction, and then “stacks the deck against paying the claim” you should at least understand how it works. Again, this post is the number one most reviewed post on Lindanee’s blog.)
All group disability claims submitted to the insurance company for payment are investigated and reviewed to determine whether the claimant does or does not meet the conditions of eligibility written in policy provisions. If the insured is found to meet the conditions of the definition of disability as written, then monthly benefits are paid. If the disability insurer finds the insured does not meet any condition of the policy, benefits are denied.
This process requires the application of an objective and fair evaluation of the eligibility and medical circumstances of each claim at the time of the investigation. Unfortunately, since the disability insurer (Unum Group in this discussion) is the sole recipient of profits resulting from claim denials, management sponsored claims processes may be implemented which deprive the insured of a fair review of the facts of the claim for profit. In other words, the fox is in charge of the hen house and a majority of insureds are getting “plucked.”
In order to accomplish the desired corporate profits, all claims specialists must learn to manage, or strive to manage, blocks of LTD claims at a zero growth level. This means the number of new claims entering the block must equal the number of claims leaving the block on a weekly basis. Unum claim specialists receive anywhere from 2-6 new claims per week, therefore, the same number of claims must resolve from the block in order to maintain manageable numbers.
Therefore, the primary question for the claims specialist is then “How am I going to get these new claims off my desk and out of my block?” Under the Unum Provident claims organization the question “when” was added by assigning expected dates of recovery to each claim. (ERD) (ERDs are currently being used in the Unum Group organization.)
The answer to the first question is called the “File Plan” or “Primary Plan Direction”. All weekly new claims are required to have a written plan documenting the steps the claim specialist needs to take in order to deny or resolve claims, commonly referred to as a file plan.
Once devised, the file plan is expected to be followed without change unless the “change in file direction” is approved by a manager. Therefore, a great deal of thought and planning is needed in setting the primary plan direction in the first place.
Despite what many new trainees believe there are only 11 ways in which group LTD claims can be denied, or removed from a Unum claim block. Please consider the following:
|Primary Plan Objective(denying or removing LTD claims from any claim block)||How to Achieve the File Objective|
|Eligibility||EP, pre-existing, eligible class etc. This is the first rung of investigation. When claimants are found to “not be eligible” there is no further investigation and claims are denied.|
|Claim Withdrawn||Unexpected and generally unplanned.|
|Not Totally Disabled||Work the claim to deny based on not meeting the definition of disability in the policy.|
|Advance Pay & Close||Deny and pay in advance in anticipation of the claimant being able to return to work full-time.|
|RTW||DBS works the claim to obtain a medical release to return to work, or it is known the claimant intends to return to work full time. Part-time work is not a plan direction since the claim stays in the block and doesn’t do the DBS much good in terms of “resolutions.”|
|Reservation of Rights Status||End of the month or quarter is approaching and the DBS is within 90 days of denying the claim|
|Deny at Change in Definition||Denials are planned as the result of an any occupation investigation at the change in definition.|
|Settlements||Negotiation with claimant will probably result in closure of claim due to settlement.|
|SSDI Award/Extended Duration Unit||Refer claim to Extended Duration Unit for further investigation at periodic intervals.|
|Claimant Dies (does not generally count toward meeting financial goals.)||Technically, this shouldn’t happen if a claim has remained active in a block. These claims should be immediately referred to EDU.|
|Mental and Nervous Limitation (does not count toward targets)||Claim payments automatically end at the end of 12 or 24 months.|
The first step, then in creating a File Plan is to set the expected type of denial or resolution given the circumstance of the claim, and then determine how the claim specialist is going to bring it about and make it happen. Unum’s roundtable reviews are based on this concept of determining when the claim will be denied (set the ERD), then making a sequential file plan of how to make the denial look credible.
The above is perhaps overly simplified and currently changed, but the point I’m trying to make is that the overall denial direction is determined first, and then the DBS/claims specialist fills in the necessary internal strategies needed to be taken to achieve the desired result. And, the desired result is always removing the claim from the DBS’ claim block, or the assembly line as quickly as possible.
Remember, the disability claims review process is all about financial reserves, not people. New claims came into the units every week, and claims must go out every week. The type of denial is set first, and then the DBS determines what steps needed to be taken in order to actually deny the claim and make it look credible.
This is the first priority step in terminating legitimate payable group LTD benefits –first you determine what you are going to do, and then you figure out how you are going to do it using all of the internal resources available to you as a claims specialist.
It should be obvious how important the File Plan is in terms of claim documentation since it “lays out” how the claim specialist intends to deny the claim. I learned the hard way how critical this file document was when one of the managers happened by while I was preparing a copy of a claim to send to an attorney who had requested it.
“What are you doing?” the manager remarked, looming over my shoulder. “You aren’t going to send them the whole claim file are you?”
I wasn’t sure. The manager, one of the more senior ones I might add, pointed under my desk and said “Hand me that wastebasket.”
“Here, you don’t want them to have this do you?” she gasped, pulling documents out of the claim file copy.
I shrugged. In the can the document went.
“And what about this?” she said pulling out the File Plan.
“Never send these”, or this or this”, pointing to papers documenting conversations I’d had with my manager at roundtables.
“Got the idea? Go through the claim and pull out what you think is internal confidential information and give the rest to me for review before you send it out.”
Little did I realize at the time this was my first lesson in how to “sanitize” a claim file copy, but it did drive home how important the File Plan was. In addition, this was one of my first indoctrinations to the concept of “it’s ok to do what we’re doing, we just don’t want anyone else to know about it.”
So what is the first step in denying LTD claims that should be paid? You plan it. It’s deliberate, and willful, and diagramed. Disability insurance companies tell you “each claim is reviewed and determined on its own unique circumstances.” This statement may make for good marketing, but it isn’t truthful at all.
In today’s claim review environment disability insurers use any number of internal diary systems such as SOAP NOTEs or Navalink to keep track of how the claims handler is progressing toward the eventual goal of terminating benefits. Unum Group today uses Navalink as their diary system and upon recommendations of upper management actually documents less in the file, not more.
(Today, Unum encourages less claim documentation rather than more. Ten years ago there was a Unum manager saying, “If it isn’t documented, it didn’t happen. I suspect today the saying is closer to, “If it did happen, leave it out.”)
After the file plan is written and placed in the Administrative Record, the claim specialist “utilizes resources” to obtain what appears to be credible claim file documentation written by internal resources attesting to the fact the claimant has work capacity and therefore does not meet the conditions of disability as written in the policy.
In effect, all liability claim denials are the result of the accumulation of review documentation from internal and external resources rendering opinions favorable to the insurance company. There’s nothing unique, fair or equitable about it.
Although the claims handler may not deny benefits without written documentation obtained from qualified internal resources, it is believed the more documentation there is, the more credible the denial will be on appeal. LTD claim denials do not take place over night since it takes time to walk the claim through the predetermined steps in the file plan. The idea is to create the “illusion” of credibility by “stacking the deck” with what appears to be credible information supporting claim denials.
Unum Group resources available to the claims handlers includes physicians (OSP), nurses (RN), vocational experts(CRC), social security experts, special investigation unit representatives, and financial and settlement unit specialists. Claim specialists were instructed to use as many of the resources as possible to obtain written opinions from credentialed staff. Claims could be “walked-in” for review during certain hours, or referrals could be made for more formal reviews.
Unum Group employs a staff of medical resources with “board certified” credentials and psychiatric specialties as well as outsourcing other medical reviews to local physicians. Vocational specialists were required to have CRC, or Certified Rehabilitation Counselor credentials and Masters Degrees, while members of other specialized units consisted of experienced claims specialists with 15+ years experience in some cases. In fact Unum Group often boasts of predominately tenured employees, not just in the claims areas, but company wide. An experienced and well-trained claims personnel is Unum Group’s greatest and best resource which is why it wasn’t a good idea to fire tenured claims staff and replace it with new personnel.
Today, Unum employs a 3 or 4 step hierarchy of claim review whereby several of Unum’s doctors are asked to review information and agree with medical reviews that took place before it. Of course, no internal Unum physician will ever disagree with another, the message is loud and clear that Unum “stacks the deck” against its insureds and claimants.
As a general rule, the insurance industry was, and still is, really big on credentials. In documenting claim files, the best credentials the industry could buy are essential to the credibility of the entire claims review process. Internally acquired medical and vocational credentials are marketed to the general public as an assumed standard of review, but in reality both medical and vocational resources receive the same incentive bonuses (and, at higher levels) than anyone else, thereby giving these internal resources a clearly defined financial “vested interest” to tote the company line and implement management’s claims strategies. And, in order to keep one’s job you had to be a team player and buy-in to protocols set by company management.
After the claim specialist applies all of the resources or “steps” indicated in the file plan, the desired outcome, a claim denial or resolution, was achieved. A piece of cake. Once the specialist had sufficient documentation from the medical department indicating the claimant’s restrictions and limitations were not supported, as well as an opinion from the vocational specialist identifying an exertional standard related to work capacity, the claim is easily denied as not meeting the definition of disability in the policy. As indicated previously, given the time needed to obtain documented opinions from the department resources, any experienced claims specialist could obtain sufficient documentation to deny an LTD claim. It’s not that hard.
I am often sarcastically asked if Unum Group ever “approves” claims and the answer to that is, “Of course they do.” Approximately fifty percent or less of the group LTD claims are paid to duration and were eventually transferred to EDU where they receive minimal attention and no risk management activity is applied to them. The paid claims are those with critical and/or terminal disabilities such as end stage renal disease, blindness, loss of limbs, heart transplants, and so on. These approved impairments were generally serious enough such that Unum Group would appear to be ridiculous if benefits were denied.
In addition, when departmental block numbers grow to an unmanageable size, managers indiscriminately pull claim files for massive referrals to EDU. These were “the lucky” claimants. At differing times, claims are targeted for those over 50 years of age, lack of a high school credentials, multiple sclerosis diagnoses, and even lack of skills for transfer to EDU. Transfers to EDU remain the manager’s “ace in the hole” when the unit claim specialists fail to manage the claim blocks at 0 growth level. Keep in mind though, that transfers of claims to a permanently and totally disabled area produce no recognizable profit for Unum, and therefore are seen as” lost opportunities for resolution and profit.”
According to a terminated Unum employee, there is no longer any safety zone in Unum’s EDU. From 2012- present Unum has been denying claims awarded SSDI and paid 10, 15, 20 or more years. Unum’s ex-employee told DCS, Inc. she was in the process of being reassigned to EDU with the charge of “denying as many claims as she could.” Obviously, Unum made short order of claims in the EDU and continues to do so today.
I think it is extremely important for me to add information to this post. After reading Unum’s benefit manual in 2013, it is clear the company tightened its claims process in an extremely harsh way. Medical Directors and OSPs (internal docs) are monitored by the Quality Compliance Department which demands and corrects certain language in internal medical reports. In addition, the company increased the number of reviews received by LTD claims since it is better to deny group LTD at the initial application review rather than later on. In the end, it is reasonable to come to the conclusion that Unum denies claims unfairly and indiscriminately. It’s not really hard work anymore, but more the norm.
Off and on I hear or read about Unum’s “Rule of 3’s”. According to a few of Unum’s terminated employees, if the claims handler can obtain evidence of work capacity from 3 sources, the claim can be denied. Along with this Unum is thought to use IMT sheets targeting certain claims on a daily basis. If you name appears on one of these sheets, it’s likely you will receive the lion’s share of “risk management” until the claim is actually denied.
What is apparent from all of the above is that Unum DELIBERATELY plans and sets out to deny legitimate, payable claims for profit at the expense of insureds and claimants.
In my opinion, Unum Group’s claims process is perhaps worse than pre-multi-state settlement levels. The company now uses a hierarchal medical review process intended to substantiate its claim denials by numbers of medical reviews stacked against insureds and claimants. IME and patient information is misrepresented to favor Unum’s denial agenda.
The company also created specialized departments or “fixers” to prevent its dirty laundry from reaching regulators and therefore the company appears immune from prosecution. Of late, company executives have tried to influence the US government in a manner very similar to what transpired in the UK. Propaganda information communicated to the US government including SSA is likely to give Unum Group authority and power to direct US government policy in the future.
Insureds and claimants have an opportunity now to curb Unum’s influence in government affairs. Nevertheless, there is no indication that Unum Group will ever “walk the talk” of good faith and fair dealing.
So far there is no expectation that Unum Group’s operations and claims practices are changing for the better in 2016. The company has several regular employee “firings” during the year eliminating aging female personnel and those who have demonstrated the need to use medical insurance or be out on STD.
Unum continues with its multi-layered medical reviews that “stack the deck” against insureds and claimants in ways that appear credible. There is no evidence to indicate state regulators are “watching” either. It’s my understanding Unum’s “Settlement Area” has also transitioned from offering “alternative options” to just another “risk management” opportunity for the company to rid themselves of more claims.
This isn’t a great outlook for 2016.
Cody Allison & Associates, PLLC fights on behalf of individuals to obtain their long-term disability benefits. If you believe you have been wrongfully denied your ERISA, or non-ERISA, long-term disability benefits, give us a call for a free lawyer consultation. You can reach Cody Allison & Associates, PLLC at (615) 234-6000. We are based in Nashville, Tennessee; however, we represent clients in many states (Tennessee, Kentucky, Georgia, Alabama, Texas, Mississippi, Arkansas, North Carolina, South Carolina, Florida, Michigan, Ohio, Missouri, Louisiana, Virginia, West Virginia, New York, Indiana, Massachusetts, Washington DC (just to name a few). We will be happy to talk to you no matter where you live. You can also e-mail our office at firstname.lastname@example.org. Put our experience to work for you. For more information go to www.LTDanswers.com.