San Francisco Bad Faith Insurance Law Blog

Your Attempt To Return To Work Does Not Bar A Finding Of Disability

California case law is clear that an insured’s attempt to return work may not bar a finding of disability.  The California courts have long recognized that people who are struggling with pain and other symptoms will nevertheless attempt to work.  In recognizing that people may continue perform job duties that endanger their health, courts have stated that, in such instances, the test for disability is not what the insured actually did but what he could safely do.

One such case is Wright v. Prudential Insurance Company of America (1938) 27 Cal.App.2d 195, 214-217, in which the insured, an assistant engineer in the boiler room suffering from neurological difficulties, continued to work for more than two year after the onset of his symptoms.  Even though the insured continued to work “as best he could” during this two year period, the appellate court upheld the trial court’s judgment that, during that period, he was still totally disabled.  As the court stated:

“In the light of the medical and other evidence recited and in support of the trial court’s findings, we must, as we think, take it to be true that, as early as the fall of 1934, respondent’s ailment had reached a stage when, in the exercise of ordinary care for his own health, he ought to have ceased work, not temporarily only, but permanently and entirely. This he did not in fact do, but instead, continued, as best he could, to follow his occupation until February 16, 1936, and to receive compensation for such services as he in the meantime rendered.”  Id. at 214-215.

Even in ERISA cases, courts have recognized that an insured’s continuing to work does not preclude a finding of disability.  As the 7th Circuit stated in Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 918 (7th Cir. 2003), “A desperate person might force himself to work despite an illness that everyone agreed was totally disabling.”  Similarly, in Levinson v. Reliance Standard Ins. Co., 245 F.3d 1321, 1326 n.6 (11th Cir. 2001), the court stated that the insured’s status as a full-time employee does not constitute reliable evidence that he is able to perform his material job duties full time.  Other courts have stated that a return to work is not conclusive on whether the insured is disabled.  See Stark v. Weinberger, 497 F.2d 1092 (7th Cir. 1974 and Lasser v. Reliance Std. Life Ins. Co., 344 F.3d 381, 391-392 (3d Cir. 2003)

If your insurance company have denied your claim where you returned to work full time due to economic necessity or with persisting symptoms, you likely have a basis for challenging the denial.  If your evidence is properly presented to the insurer or to the court, even if the insurer still persists in affirming its denial, you have a strong chance of reversing the insurer’s denial and receiving benefits.

Posted October 27, 2016

San Francisco Bad Faith Insurance Law Blog

Even In An ERISA Case, The Disability Insurer Must Consider the Insured’s Actual Job Duties

Some disability insurance policies include a provision that the insurer will try to use to disregard the insured’s actual job duties in deciding whether the insured is disabled.  A number of these policies, especially those sold by Standard Insurance Company, contain language that states that, in deciding whether to pay the claim, the insurer can “look to” how the occupation is performed “in the national economy” or how the occupation is “generally” performed.  The insurance company will wield this language like a sword to disregard a particular job duty that the insured is required to perform but is unable to do.  Often the insurance company will not even inquire into the insured’s actual job duties but instead simply quote from this policy language permitting it to look to how the occupation is performed in the “national economy” or performed elsewhere.

In the 9th Circuit, it is clear that in evaluating a disability claim, an insurance company or ERISA Plan must “analyze, in a reasoned and deliberative fashion,” the actual job duties required of a claimant for his particular employer.  Salz v. Std. Ins. Co., 380 Fed. Appx. 723, 724 (9th Cir. 2010).  In Salz, in reversing the district court’s decision upholding Standard Insurance Company’s denial of disability benefits by, the 9th Circuit Court of Appeals stated at page 724:

“Second, even if use of the Department of Labor’s Dictionary of Occupational Titles (1991) (“DOT”) is appropriate, Standard’s exclusive reliance on the DOT failed to take into account Salz’s “Own Occupation.” While the policy states that Standard “is not limited to looking at the way you perform your job for your Employer” (emphasis added), a proper administrative review requires Standard to analyze, in a reasoned and deliberative fashion, what the claimant actually does before it determines what the “Material Duties” of a claimant’s occupation are.”

If your claim has been denied, read the denial letter carefully to see if the insurance company ever expressly acknowledged the specific job duties or functions of your job that you state you are limited in performing and whether it has expressly considered whether you can perform them.  If the insurance company never identifies those job duties or functions and never states considers whether your medical condition limits you in performing those job duties or functions, it is likely that the insurance company has violated the requirements of governing case law.  Under the Salz case, failure to consider your actual job duties should be a solid ground for reversing the insurance company’s denial.

 

San Francisco Bad Faith Insurance Law Blog

An ERISA Insurer Cannot Refuse To Credit The Claimant’s Medical Evidence Without A Sufficient Explanation

In the recent case of Backman v. Unum Life Ins. Co. of Am., 2016 U.S. Dist. LEXIS 74918 (N.D. Cal. June 8, 2016), in which the claimant sought disability benefits for a painful back injury, the US District Court for the Northern District reversed Unum’s denial and ordered the payment of benefits. Unum had denied benefits based on the opinions of its own hired medical consultants. However, Unum’s consultants dismissed the well reasoned opinions of the claimant’s long time treating physicians without explaining why their opinions were not correct.

In deciding the case, the District Court stressed that it improper for an ERISA insurer to accept the opinions of its handpicked experts over the treating physicians where those experts never explain in any reasoned way why the treating physician’s opinions are incorrect As the Backman Court stated at pages 48-49:

“The Ninth Circuit has cautioned that “complete disregard for a contrary conclusion without so much as an explanation raises questions about whether an adverse benefits determination was ‘the product of a principled and deliberative reasoning process.’ Salomaa, 642 F.3d at 679 n. 35; see also Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 635 (9th Cir. 2009). Here, Unum maintained its opinion that Backman’s pain was out of proportion to the clinical and diagnostic findings in the record, despite contrary conclusions from her treating physicians, with little credible explanation for why it dismissed those conclusions…”

Other District Courts have strongly criticized the ERISA insurer for seizing upon the opinions of its hired consultants who say that the claimant is not disabled where those consultants dismiss without a reasoned explanation the opinions of the treating physicians. See, for example, James v. AT&T West Disability Benefits Program, 41 F. Supp. 3d 849, 879, (N.D. Cal. 2014).

If you were denied disability benefits insurer never explains in any reasoned, sensible way why the opinions of your treating physicians are not valid, it is likely that your insurer has violated the settled rules and standards in the federal courts that apply to your case.

San Francisco Bad Faith Insurance Law Blog

In Many ERISA Cases, The Disability Insurer Should Be Barred From Requiring “Objective Evidence” Of Disability

In ERISA claims, disability insurance companies often state in their denial letters that the insured does not qualify for benefits because he has not stated “objective evidence” of disability. However, case law in the 9th Circuit and elsewhere is clear that an ERISA insurer cannot properly insist on proof with “objective evidence” if the condition is one for which objective evidence is unlikely to exist.

“[C]onditioning an award on the existence of evidence that cannot exist is arbitrary and capricious.” Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 678 (9th Cir. 2011). In the 11th Circuit, the Court of Appeals stated: “Many medical conditions depend for their diagnosis on patient reports of pain or other symptoms, and some cannot be objectively established” but “a disability insurer [cannot] condition coverage on proof by objective indicators . . . where the condition is recognized yet no such proof is possible.” Id. The United States Court of Appeals for the Eleventh Circuit has observed, “There is, quite simply, no laboratory [ ] test to diagnose chronic pain syndrome. . . . Chronic pain syndrome is a severely debilitating medical condition that may be fully diagnosed only through long-term clinical observation . . . .” Lee v. BellSouth Telecomms., Inc., 318 F. App’x 829, 837 (11th Cir. 2009).”

In Palmer v. University Medical Group, 994 F. Supp. 1221 (D. Or. 1998) in which the insurer denied benefits on the ground, in part, that the insured’s back injury symptoms were all “subjective” and not confirmed by X-Ray or MRI, the court reversed the ERISA insurer’s denial. In reversing the denial and ordering he payment of benefits, the court stressed that, absent solid proof that the “subjective” symptoms were not genuine, the denial was improper. As the Palmer Court stated:

“Throughout the claims review process, Standard’s overriding concern was “objective medical evidence” While that certainly is a relevant consideration, Standard erred in this instance by elevating it to an absolute pre-requisite. Not all medical conditions as readily susceptible to verification by x-rays or other laboratory tests. Some complaints — such are pain and fatigue — are difficult
to objectively measure, and there is considerable variation among individuals. See Bunell v. Sullivan, 947 F.2d 341, 345-47 (9th Cir. 1991) (en banc). There also is much that we do not know about the human body. Merely because we cannot see pain or fatigue on an x-ray, or measure it in a laboratory, does not mean that it is not real. CF, Bunell, 947 F.2d at 347 (“We cannot conclude that Congress intended to require objective medical evidence to fully corroborate the severity of pain while aware of the inability of medical science to provide such evidence.”)”

(Emphasis Added.) (Id. at 1233.)

If you received a denial of benefits based on the absence of “objective evidence,” chances are high that the insurer’s denial is arbitrary and capricious. In fact, a denial based on the purported lack of “objective evidence” is one that usually betrays a biased and unfair evaluation.

San Francisco Bad Faith Insurance Law Blog

How The Insurance Company Uses The “Vocational Expert” To Support A Denial

Insurance companies use a “vocational expert” to assist them in denying claims. Rather than assess whether the policyholder is able to perform his or her actual job as reflected in an accurate job description or a fair analysis of the actual functional requirements of the job, the “vocational expert” is enlisted to redefine the policyholder’s job. By redefining the job to be something it is not, the insurer can far more easily deny the claim and provide a disingenuous justification for its denial.

Among the techniques commonly used by the insurance company’s “vocational expert” in drafting memos or reports to assist insurance companies in denying  claims are as follows:

  1. Using the Dictionary of Occupational Titles, a publication of the federal government, last updated in 1999, to describe the occupation performed by the policyholder rather than the policyholder’s actual job description — which is likely to reveal a far more demanding job.
  2. Describing the demands of the policyholder’s occupation solely as “sedentary” and disregarding or minimizing the cognitive demands of the job — more particularly, for example, disregarding the need for the policyholder to sustain focus and concentrate for prolonged periods of time on complex and detailed subject matter, multi-task, speak at meetings of co-workers or speak and interact in public forums and perform other complex and demanding tasks that far exceed the mere ability to sit.
  3. Disregarding in their analysis that policyholder, in the real world, is required to perform his or her job duties “with reasonable continuity” and in the “usual and customary way” — as recognized in the California definition of “disability” or “total disability.”
  4. With regard to physicians applying for disability benefits, mischaracterizing the actual occupation duties of the particular physician — for example, mischaracterizing the nature of the surgical procedures he or she actually customarily performed, the physical and cognitive demands of such surgeries, and the functional requirements of conducting a particular office  practice.

In fairness to the “vocational expert” — who is usually an employee of the insurance company, these techniques designed to deprive the deserving policyholder of disability benefits originate in the insurance company. The “vocational expert” is just another cog in the insurance company’s denial mechanism.

Posted by Bennett Cohen on 4/11/16.

San Francisco Bad Faith Insurance Law Blog

The Insurance Company Doctor’s Techniques To Support A Denial

The insurance company doctor is an essential cog in the insurance company’s denial mechanism. The insurance company doctor typically writes a memo or report on which the insurance company purports to base its claims decision. Techniques that an insurance company doctor commonly employs to assist the insurer in denying claims include:

(i) asserting erroneously that the policyholder has no “objective” evidence of a disability when, in fact, clear objective evidence exists to support the disabling symptoms;

(ii) minimizing the significance of the existing “objective” evidence of disability when its existence is impossible to deny; for example, the insurance doctor may characterize a 3 mm disc herniation — a condition well known to cause incapacitating pain — as “minimal” or “mild”;

(iii) asserting that the policyholder has no “objective” evidence of disabling symptoms due to such conditions as migraines or lupus even though persons afflicted by such conditions can experience incapacitating symptoms in the absence of “objective” signs; in fact, because no tests exist to objectively confirm symptoms of certain illnesses, it is well recognized medically that patients often experience disabling symptoms when no “objective” evidence is present;

(iv) taking entries in medical records out of context — such as selectively seizing upon entries to support the denial while disregarding other entries that render such “cherry picked” entries meaningless; for example, the insurance company doctor may state that the medical records establish that certain medications control the policyholder’s symptoms when the records reveal that these medications worked initially and then, over time, become ineffective;

(v) asserting that the policyholder has a great number of normal findings when these normal findings are irrelevant to the pertinent abnormal finding(s); for example, the insurance doctor may assert that a policyholder with a herniated disc has no evidence of impaired motor function and is therefore not disabled when, it is well recognized medically, that a person can suffer severe pain from a herniation in both the back and legs in the absence of impaired motor function.

These techniques are just a few of the many the insurance company doctor will employ to attempt to deprive a deserving policyholder of disability benefits. As long as there are people who are willing to sell their souls as the expense of the desperately disabled, there will be insurance company doctors.

San Francisco Bad Faith Insurance Law Blog

A Pillar Of The Insurance Company’s Denial:
The Insurance Company Doctor

A technique essential to an insurance company in denying claims is the hiring of a physician consultant on whom it can rely to support its denial.

Unlike the treating physician, most of these insurance company physicians never see or speak with the policyholder. Most only perform a “paper review.” Most disregard the reasoned and informed opinions of the treating doctors. Most employ an array of techniques calculated to selectively review the medical records to support the denial rather than to fairly evaluate the claim. Most assert “reasons” to support the denial that disregard medical science as well as the policyholder’s symptoms, limitations and the functional requirements of the policyholder’s employment.

It is difficult to know how many physicians in the country are willing to sign their name to falsehoods, distortions and disingenuous critiques at the expense of the genuinely disabled. The sad truth, however, is that there exists a subclass of physicians who are devoid of ethics, a subclass of physicians who do not hesitate to wield their credentials and medical knowledge, however modest, to provide cover for patently unfair claims decision.

The insurance company doctor may be an employee of the insurance company or a contractor who is paid by the hour. He may work for a company that provides medical reports to insurance companies. Whether the insurance company doctor is an employee or contractor, the one constant is money.

Many of the physicians who support insurance company denials are semi-retired. Some of these physicians have limited or failing practices. Although some have a substantial income from their medical practice, they perceive payments from the insurance company as an essential supplement to their income. Helping insurance companies generate and sustain denials no matter how meritorious the claim and desperately ill the policyholder is simply too lucrative for this brand of physician to spurn.

Posted by Bennett Cohen on 3/20/16.

San Francisco Bad Faith Insurance Law Blog

Another Insurance Company Technique To Deny Claims: “Doc-to-Doc” Interview

One of the techniques an insurance company employs to deny a claim or buttress its intended denial is known affectionately by insurance companies as the “Doc-to-Doc” interview.

Under the guise of “reaching out” to the treating doctor to seek his opinion in order to fairly decide a claim, a claims person or the physician hired by the insurance company will call the treating doctor. If this agent for the insurance company succeeds in getting the treating doctor on the phone, he will ask very selective questions calculated to elicit information to support the denial and carefully avoid asking questions the answers to which are more likely to support payment of the claim.

The agents for the insurance company often ask a question that seeks to capitalize on the treating doctor’s lack of knowledge concerning the bases for paying or denying claims. For example, the caller may ask the treating doctor, “Can your patient work?” The caller will not specify what he means by “work” or whether he is referring to full time or part time work. Nor will the caller provide to the treating doctor the California definition of “disability” or “total disability” which, unbeknownst to the treating doctor, provides that a policyholder qualifies for disability benefits if he or she is unable to work full time on a consistent basis performing all the material job duties in the usual and customary way.

As treating physicians often believe that it would be therapeutic for their patients to perform occasional or part time work if they are possible able to do so, many physicians will respond that “yes,” the patient can work — when, in fact, they do not believe that their patient is able to return to work full time. As a result of the insurance company asking a question that is misleading at best because it does not define key terms or contain the criteria for qualifying for benefits, the insurance company will then be able to document in its file that the treating doctor believes the policyholder is “able to work.”

If the insurance company does not reach the treating doctor or its agent leaves a message but the treating doctor fails to return the call, the insurance company can then argue that it acted reasonably. Even if the treating doctor later were to testify that the insurance company’s denial is patently unfair, the insurance company can argue that the treating doctor failed to respond when contacted and, therefore, the insurance company cannot be held responsible for the treating doctor’s lack of responsiveness or diligence. Therefore, the technique known euphemistically as the “Doc-to-Doc” interview is one of the more insidious means by which an insurance company uses the policyholder’s own treating physician to set up or sustain its denial.

Posted on 3/15/16 by Bennett M. Cohen

San Francisco Bad Faith Insurance Law Blog

When Does An Insurance Company Act In “Bad Faith?”

If your insurance company denies your disability insurance claim and your case is governed by California law, proving “bad faith” is a two step process.
You must first establish that you are disabled under California law. In other words, you must first establish that, under California law, you are entitled to the disability benefit under the policy. As discussed in a previous blog posting, do not accept that the policy language reflects California law. In disability policies, the policy language may badly misstate your rights under California law — especially the definition of disability.

Once you establish that you are disabled, you must then establish that your insurance company denied your claim unreasonably. An insurance company can act “unreasonably” in a great variety of ways. It may have conducted a very selective analysis of the medical file and disregarded important entries in the medical records that support your disability. It may have seized upon ambiguous entries in medical records and interpreted them to support a denial when it is equally reasonably that they support the payment of benefits. It may have failed to obtain medical or vocational records that are clearly relevant. It may have failed to ask your treating doctor an obvious question that needed to answered before it can reasonably make a claims decision. It may have redefined your occupation to be something it is not — and then denied your claim by considering whether you could perform the wrong occupation. It may not have provided its medical experts with a correct definition of disability under California law and, as a result, the expert may have applied the wrong standard. Your insurance company’s medical expert may be biased, inept or unqualified — and the insurer nevertheless chooses to rely on his opinion.

There are many other ways an insurance company can ask unreasonably in a given case. If your insurance company has failed to fully and fairly investigate and decided your claim, it has acted in bad faith.

San Francisco Bad Faith Insurance Law Blog

What is the definition of “disability” and “total disability” in California?

If your insurance company has denied your disability insurance claim and your claim is governed by California law, you must establish that you are disabled under California law. Whether your policy requires that you establish that you are “disabled” or “totally disabled,” the same definition should apply. California law supersedes the definition in your policy — and, commonly, definitions in disability insurance polices violate California law because they are unduly restrictive and deceptive.

Establishing that you are disabled, may depend on whether you need prove that you are disabled from your “own occupation” or disabled from “any occupation.” The most common definition of “disability” or “total disability” under California — as stated in a well known California Department of Insurance document titled the “California Settlement Agreement” — is as follows:

Own Occupation:

a disability that renders one unable to perform with reasonable continuity the substantial and material acts necessary to pursue his or her usual occupation in the usual and customary way.

Any Occupation:

a disability that renders one unable to perform with reasonable continuity the substantial and material acts necessary to pursue his or her usual occupation in the usual and customary way and to engage with reasonable continuity in another occupation in which he or she could reasonably be expected to perform satisfactorily in light of his or her age, education, training, experience, station in life, physical and mental capacity.

This definition stated by the California Department of Insurance is derived from an important California appellate decision, Moore v. American United Ins.Co., (1984) 150 Cal.App.3d 610, 618. The Moore decision itself is based on California law originating in the 1930’s.

Another California definition of “disability” or “total disability” provides that a person is disabled if, in the exercise of reasonable prudence, she should desist from work. As one California court stated in 1938, “In determining whether there has been total disability, the test of disability is not what the insured actually did in the effort to perform his duties, but what, in the exercise of due prudence he was reasonably able to do.” (Wright v. Prudential Ins. Co. (1938) 27 Cal.App.2d 195, 216)

In evaluating your case, you should be sure to review and apply all definitions of “disability” and “total disability.” You can bet your insurance company has not.