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After you submit a claim, how do you handle the disability appeals process? Here are some tips to help you navigate the litigation of a disability claim denial.
The clock starts ticking on your time to appeal once the denial is issued —whether you open the envelope or not.
Editor's Note: This is the third in a series of four articles prepared by Jason Newfield and Justin Frankel of Frankel & Newfield law firm on disability claims and what the practicing dentist can expect when filing a claim. Their goal is to educate dentists, so they are better prepared to file and address the outcomes of their disability claims.
An educated claimant who understands the disability claims process and the potential pitfalls will be more likely to succeed than one who treats a disability insurance claim like any other insurance claim. The disability claim is very different and requires detailed preparation at every stage to increase the insured’s chances of success.
Does the dentist who files a long-term disability insurance claim need to become a disability insurance expert?
Dentists, like many other medical professionals, often consider themselves knowledgeable about insurance claims, as they or their office staff handle them routinely for patients. Unfortunately, dental insurance and disability insurance claims are completely different, with one common feature — the desire to delay or deny claims.
Our first recommendation is that claimants speak with us before filing a claim. That way we can carefully plan the issues out while assessing the likelihood of the claim being challenged, and when possible eliminate any potential issues in advance, so they do not become claim landmines. Once the claim has been filed and has been unfortunately denied, time becomes an essential concern.
If the long-term disability policy is through the employer and governed by ERISA, the dentist has a limited amount of time to respond. There have been cases brought to Federal Court over interpretations of these strict time limits. Since the last thing you want is to give the insurance company a reason to deny your appeal, be mindful of this time frame. The clock starts ticking on your time to appeal once the denial is issued —whether you open the envelope or not.
Why would your claim be denied? Do the math. Let’s say your benefits are $6,000 a month, and you are a relatively young 45-year-old, with a disability policy that promises coverage until age 65. That’s twenty years of paying $72,000 a year. It costs less for the disability insurance company to push back against a claim than to pay it. With in-house counsel, outside attorneys and third-party claims administrators, there is a virtual army of people engaged in a battle to avoid paying claims.
Thus, ensuring that the issues are developed IN ADVANCE is of paramount significance to developing your best likelihood of a successful claim.
A common tactic we see in our disability practice is the claim by the insurer to cancel the contract, return any previously paid premiums and close any contractual relationship. Essentially, after the fact, the insurance company wants to pretend that no relationship ever existed.
To accomplish this devious approach, the insurer claims the policy was procured by a misstatement in the policy application or some other claim of fraud. Essentially, the insurer says that it relied on certain statements made by the claimant to purchase the policy and that those statements were not true.
Unfortunately, the law on this topic generally favors the insurer, so many claimants are left without coverage, despite paying premiums for many years and then finally needed to file a claim. If nothing else, the insurance company tries to use this position as a vehicle to negotiate with the insured.
An unfortunate example happened to a claimant who had filed a disability claim for anxiety and depression. The claim was denied, and he proceeded to litigate the claim, bringing an action in Federal Court.
During the discovery process, the attorney for the insurance company reviewed documents from the claimant’s general physician as well as the treating physician. The records indicated that during a routine office visit, he had complained to his general physician that he was feeling anxious. The doctor prescribed a medication to address his anxiety.
Even though the claimant never remembered filling the prescription and the issue was never raised again, this doomed his case.
He did not report this particular information in his policy application, and the insurance company made the argument that the application had been falsely completed. It was based upon a misstatement — they claimed a FRAUDULENT misstatement. They further claimed that had the company known of his condition, the company said it would have never issued him a disability policy.
This claim for rescission was developed and this issue forced the claimant to settle with the insurance company for a significantly lower number than the real worth of the claim — as the disability was quite significant. His option was to take the lower number, or risk losing everything due to the potential rescission claim.
There have been cases when the loss of a license can act as a bar to a claim, but if the dentist is disabled first and then loses his or her license, the argument can be presented that they are still disabled and still entitled to benefits.
However, many insurance companies will see the loss of a license as a legal disability: the dentist who is not legally permitted to engage in their profession, therefore they cannot be unable to practice. This issue has resulted in numerous battles — a fight that often can determine whether benefits are payable at all.
The insurance company believes that a dentist who has lost his or her ability to practice because their license has been revoked or suspended will be seen as a bad person and are more likely to aggressively deny or terminate the claim.
Tactically, one must think hard about timing issues when a disability is involved and licensing issues are also potentially implicated.
By law, ERISA claims can only go to litigation after all other administrative proceedings have failed. We devote a large part of our practice to avoiding litigation through skilled negotiations and aggressive representation during the appeals process. But when these approaches are not successful, our next step is to file a lawsuit.
Just as any materials provided with a disability insurance application, including medical records, diagnostic tests, etc., are used to file a claim and to overturn an appeal, these same materials are used in litigation. They must be considered at all stages of the claim as materials that may at some point in the future be used in court.
RELATED: For more on filing a disability claim:
Jason Newfield and Justin Frankel are the founding partners of Frankel & Newfield, a law firm focusing on long term disability insurance issues on behalf of claimants. Both have attained AV Preeminent ratings from Martindale-Hubbell® and have been selected for inclusion in the Metro New York Super Lawyers. The practice represents many dentists, orthodontists, periodontists and other medical professionals.