Disability insurance claims in the COVID-19 world

A look at how the largest disability insurer, Unum, is managing its claim decisions and the effect COVID may be having on them

2020 September

After the World Health Organization finally declared COVID-19 a global pandemic, and local and state authorities throughout the United States issued public health orders shuttering most businesses, I thought, “Man, I’d hate to have to be filing a disability insurance claim at this time.” My concern then – that disability claims will be met with even greater scrutiny and skepticism by insurers – has unfortunately come to pass.

Claims data, together with recent denials we have seen, bear this out. The nation’s largest disability insurer, Unum, reported a “surge” in new disability claims beginning in March of this year. From March to July, 20% of new claims were “COVID-19-related,” meaning claims arising either from direct infection or, more commonly, based on a treating physician’s recommendation to shelter in place in light of the patient’s underlying health condition. (Unum Leave and Claim Trends Report, available at .)

This doesn’t bode well for the sick and disabled looking to their disability insurer to provide benefits in their time of need. The simple fact is that, pre-COVID, disability insurers like Unum already had a pre-existing disease themselves infecting their claims departments. They “managed to the numbers” through a system of claim denial targets, and this is likely to get worse.

Deposition testimony in multiple cases has revealed that senior executives at Unum distribute monthly goals to the claims adjusters they supervise. The adjusters are provided the number and dollar amount of claims they are expected to deny over the course of the coming month based on, supposedly, “historical experience.” The senior executives impress upon the claims adjusters the importance of meeting the numbers, track the “actual” number of denials compared to the “plan,” and base the amount of performance bonuses that the employees receive, at least in part, on whether the “plan” numbers have been met.

Unum: Keeping it oral

Take for example the following document uncovered in recent litigation against Unum, called a “Weekly Tracking” report, which may now be shared publicly for the benefit of others who have also had claims wrongfully denied by Unum. It shows the company’s tracking of a particular claim unit – the Northeast 4 claim unit – and how the unit’s “actual” monthly denials (referred to in Unum- speak as “recoveries”) compared with the monthly “plan” that had been set for the unit (See Figure, next page).

In a fine print footer on the document, Unum claims the report does “not constitute any form of denial or closure targets,” but it is just that. In this regard, the deposition testimony of a former Unum Assistant Vice President, Paul Peter, is particularly damning, as it revealed a practice of communicating claim denial targets by word of mouth (obviously for the purpose of not leaving a paper trail of the practice):

Q:   Did you communicate a recovery expectation to your directors? (“Directors” at Unum are the individuals at the company with the responsibility of paying or denying claims.)

A:    I would tell them at the beginning of each month what the – what the recovery plan or expectations were for their teams.

Q:   And it’s my understanding that [Vice President of Claims] Ms. Griffin would give you this recovery number. That’s a dollar number, correct?

A:    There were two numbers that we were given on a monthly basis: One was a number, a count of recoveries; and the second was a dollar figure as you said.

Q:   All right. And the dollar figure represented the claim reserves for the claims; is that right?

A:    My understanding is it represented a – what the release of reserves would be on a given claim or at least an approximation of it if that claim were to resolve.

Q:   She would give those two numbers orally every month?

A:    Yes.

Q:   Did you ever ask Ms. Griffin why she always gave the information to you orally?

A:    I did not. Not that I recall.

Q:   And so you then communicated that information to the directors?

A:    Yes.

Q:   And so did you e-mail them the information?

A:    No. I did that orally as well.

Q:   Why did you give it to them orally?

A:    It just seemed to always be the way we had done it, the way I learned when I first joined the claims organization.

Q:   How did you impress upon them the importance of achieving the recovery plan?

A:    I mean, it’s hard to say, you know, exactly, but we would have discussions about the importance of, you know, different aspects of their job. And we would talk about, you know, primarily the three areas of the quality of the decision, the timeliness and the accuracy of the decision, and the plan metrics that we’ve been talking about…And, again, yes, we would have spoken about how their respective teams were doing in relation to the plan expectation.

Given that this was the claims environment that existed before carriers received the crush of COVID-19-related claims, are insured’s who now submit disability claims destined for denial? Not necessarily, if they – and the attorneys who may be called upon to guide them through the claim submission process – are mindful of the manner in which the insurer will intensively scrutinize the claim.

Contemporaneous medical records

The type of scrutiny to be expected is illustrated by what occurred a few years ago to an attorney whose disability insurance claim was denied. For years, the attorney struggled with progressively worsening spinal stenosis throughout much of his lumbar and thoracic spine. There were too many spine levels involved to allow for surgery, so his treatment included epidurals, physical therapy, steroids, non-steroidal anti-inflammatories, and narcotics. Ultimately, his pain levels, and his increasing levels of narcotic pain relievers, progressed to the point that he simply could not sit for prolonged periods of time or have the focus and concentration necessary to successfully and ethically represent his clients. With the full support of his long-time treating physiatrist, he sold his practice and submitted a claim for benefits to his disability insurer.

But his treating doctor’s contemporaneous medical records did not document increasing complaints of pain and the additional problems that he was having. Although the records showed increased dosages of pain medications, there was no notation in the doctor’s records, right before he went out on disability, that said something to the effect of, “Doctor, I’m in too much pain, what, if anything, can you do for me so that I don’t have to go out on disability?” Instead, the doctor’s records reflected essentially the same level of subjective symptoms, which the attorney had been able to work through for years.

The insurer’s in-house doctor seized upon the absence of contemporaneous medical records documenting a worsening of the attorney’s condition. He accordingly concluded that the disability was not supported, and the insurer denied benefits. In deposition, the in-house doctor explained that his role was to review “the whole picture” to find mismatches between the contemporaneous records and the claim for disability:

Q:   How do you go about looking at the whole picture?

A:    So if it was significant, what we would expect is, the most important thing – you’ve got three things, and these are the three things you have to remember. I bet we’ll talk about them all today. We’re going to have a patient’s history. We’re going to have the radiographic findings, which we spoke about. We’re going to have their physical examination. And then any other data we can get about what’s happening in their world that can be helpful.

Those are the three. We have the – that’s what they tell you. And to make it a match, you’ve got to have those two or three of those things, best, need to match. They all should be about roughly the same. In other words, somebody who says I’ve got a sore elbow, you might expect some movement – pain when they move their elbow. That’s expected. So they report pain with movement of elbow.

You look at it, the elbow is big and swollen, physical examination confirms that. You take an X-ray, you’ve got a little chip fracture there. It all fits together. When you have pieces that don’t match, that’s when you have to pay attention. Something is wrong here.

Q:   You’re looking for possibilities of mismatch?

A:    Absolutely.

So usually what happens, because I’ve been in practice 40 years plus, and when somebody has an increase in pain, they’re thinking it’s disabling their life, what do they do, they say to me, doctor, what else can I do? Should I get a second opinion? Should I have someone else take a look because I really want to feel better? I don’t remember anyone walking in the office and saying I want to be disabled. They say I want to get better.

A disability of “choice or convenience”?

The reason this testimony is revealing is that it underscores what carriers will point to in order to discredit a claim for disability. They will restrict their medical review to the contemporaneous medical records to find any discrepancy – a “mismatch” – with the claimed inability to work. They will investigate “what’s happening in their world” to find some other motivation, such as a financial motivation, for submitting a disability claim. They will inquire whether this is a disability of choice or convenience, in which case the claim will surely be denied.

There are some simple and practical steps that can be taken before claim submission that will improve the chances a disability claim will be approved, even in the post-COVID-19 world.

First, never submit a disability claim without having obtained and reviewed all medical records. It is amazing to me how frequently that sophisticated and highly educated claimants will submit a claim without having obtained and reviewed their own medical records. The first thing a carrier will do after it receives a claim will be to request all records and have them reviewed by an in-house doctor who has been trained to look for inconsistencies. Often, those records are incomplete and do not accurately portray the difficulties the claimant has. Particularly for those struggling with long-standing illnesses, they are reluctant to repeat a laundry-list of symptoms they are experiencing at every doctor visit. Who wants to be viewed as a whiner and complainer? But this very human reaction can work against people after they submit a disability insurance claim because, in the eyes of the insurance company, if the symptom is not documented in the contemporaneous medical record, it doesn’t exist.

Second, be prepared for the “why now?” question. Few disabilities start as a result of an acute injury or sudden onset of an immediately disabling sickness. Far more commonly, insureds only submit a claim after attempting to cope with an illness for an extended period of time. They will be asked, for example, “What happened? Why could you work before in spite of your Multiple Sclerosis, but now you can’t?” Hopefully, this is answered in the medical records themselves, but the claimant will also be asked this in one of the first calls from the adjuster. A clear and concise answer is imperative.

Should you wait to submit the claim?

Third, sometimes the best thing to do is to wait on submitting a claim. One of the most challenging questions facing an insured who has been struggling with a progressive illness is when to call it quits and submit a claim. As lawyers, we obviously do not offer medical advice. But we can offer guidance as to what can be expected based on the state of the medical records and other information that currently exists. Is there a good track record of visits with the treating physician, leading up to a work cessation?

Are the insured’s symptoms and difficulties adequately documented in the contemporaneous medical records? Are there documented unsuccessful attempts to keep working?

Now more than ever, an insured who doesn’t have such a good track record, whose symptoms and difficulties are not documented with clarity in the records, and who hasn’t tried and failed to keep working, stands a far greater chance of denial. The claim will be viewed with suspicion as a disability of convenience because of the bad economy. The in-house doctor will pick it apart, even if objective evidence documents existence of a significant diagnosis.

Often, all that is required in order to significantly increase the chances of a claim approval is a further visit with the treating physician in order to allow the physician the opportunity to properly document an accurate portrayal of the insured’s symptoms and difficulties.