Friday, May 19, 2017

IMA CE

The State agency continues to send letters insisting that Social security Disability (“SSD”) claimants go to consultative examinations (“CEs”) by Industrial Medicine Associates (“IMA”). I represent a 59 year old former security guard with breast cancer and orthopedic problems whose SSD application was approved today, even though she did not go to the IMA CE. 

The State agency was unconcerned about the cancer because it was Stage I. Nonetheless, the claimant had three separate orthopedic specialists who treated her bilateral hand, lumbar spine, and knee problems. Their treatment records and supporting summary reports with functional assessment were obtained quickly. The same State agency that said it was necessary for the claimant to attend a CE, determined that the claimant was disabled from work, despite the fact that she did not attend the IMA CE. 

Ongoing communications with the State agency representative assigned to the claim helped expedite the case. We were able to pin down exactly what the State agency claimed would be needed from the CE, and had the claimant’s doctors’ provide it. Getting the information made the representative’s job easier as we did the job for her. Avoiding the IMA CE with its inevitable conclusion that the claimant could work made the extra effort worth it.

Wednesday, May 17, 2017

RSD Journal

The Social Security Administration (“SSA”) has a special rule that covers Reflex Sympathetic Dystrophy (“RSD”) claims. In a previous blog, I discussed how Social Security Disability claimants with RSD can use that rule to help win their case by submitting third party information. That rule also discusses the value of a claimant’s journal. 

Typical RSD symptoms include severe burning pain, pathological changes in bone and skin, excessive sweating, tissue swelling, and extreme sensitivity to touch. Evidence supporting the severity of those symptoms usually comes from the medical records, and is corroborated by third party information, such as hearing witnesses or affidavits. However, the RSD rule specifically adds that a claimant’s own records can establish the functional impact of RSD. 

Most of the time, the SSA disregards a journal or diary as either redundant of testimony or self-serving. However, the RSD specifies that such evidence would be documentary validation of a claimant’s subjective allegations. Therefore, the SSA’s failure to credit that evidence would be error, and provides the claimant with additional evidence that is consistent with the claims. 

I just had another RSD claimant’s application approved. In the past I have been told that I submit cumulative evidence. The SSA has effectively replaced the test of a claimant’s credibility with a test of the consistency of the evidence. It is more important now than ever to submit as much evidence from multiple sources, including evidence that is not from physicians, to show that any adverse evidence, usually limited to SSA doctors, is the inconsistent evidence.

Monday, May 1, 2017

Psychotherapy Treatment Records

The Social Security Administration (the “SSA”) uses the HIPPA definition for “psychotherapy notes,” which are also known as session or process notes. Mental health professionals document their conversations of counseling sessions with notes, and according to the SSA, it “recognizes the sensitivity and extra legal protections that concern psychotherapy notes and does not need the notes." The SSA excludes medication prescription and monitoring, counseling session start and stop times, the modalities and frequencies of treatment furnished, results of clinical tests, and any summary of the following items: diagnosis, functional status, the treatment plan, symptoms, prognosis, and progress to date, from psychotherapy notes. 

Most mental health providers have one set of treatment records, which leaves two choices. First, the records that would be considered psychotherapy notes can be blacked out. Alternatively, the mental health care provider can prepare a report that details the critical current and longitudinal aspects of the patient’s treatment and their functional status. Most Social Security Disability attorneys provide mental medical source statements that provide the information consistent with the second option. Nonetheless, the SSA always insists on having the actual treatment records. 

The problem with supplying the psychotherapy notes is that the SSA cherry picks comments out of context to argue that the claimant’s mental impairments are insufficiently severe to be disabling. When the SSA demands my client’s psychotherapy notes, I offer to provide them if they confirm in writing that the information from their website is incorrect. I also offer to supply a report providing whatever details regarding the critical current and longitudinal aspects of the claimant’s treatment and functional status that the SSA claims was omitted form the mental medical source statement. 

I represent a claimant with anxiety and depression whose application was approved today less than two months after it was submitted. The SSA insisted on a consultative examination (“CE”) for my client because I only submitted mental medical source statements and narrative reports. After I submitted a letter discussing the above, the SSA withdrew the CE demand, and approved the application.

Saturday, April 8, 2017

Unum Rubberstamping Puppets

I read a blog by a former Unum claim representative that described how Unum claim handlers are glorified secretaries. The truth is that calling Unum claim handlers glorified administrative assistants is an insult to the latter. 

I deposed a Unum claim representative who approved, and then 20 months later terminated, my client’s long term disability {“LTD”) benefits. The claim handler testified that my client’s benefits would continue if her condition did not improve, and that he was required to consider all of the evidence that my client had submitted. While my client continued to submit the same evidence that Unum found rendered her disabled, when terminating my client’s benefits, the Unum claim handler admitted that he did not even compare the findings and opinions of Unum’s doctors with those of Plaintiff’s doctors, and the issue of improvement was never even considered. 

An administrative assistant may not perform executive or managerial tasks, but they do exercise independent judgment. On the other hand, the Unum claim handler unabashedly testified that he exercised absolutely no independent judgment in his work. The claim handler admitted that he relies exclusively on what Unum’s doctors say, that he simply accepts whatever Unum’s doctors say, and rubberstamps their conclusions. 

In other words, Unum completely disregards all the evidence that supports a claimant being disabled, as long as Unum’s doctors say a claimant can work, regardless of what that evidence shows.

Sunday, April 2, 2017

Chronic Fatigue Syndrome Update

Today’s New York Times included an article entitled "Getting It Wrong on Chronic Fatigue Syndrome.” The article describes how a closer examination of the evidence reveals that psychotherapy and a steady increase in exercise are not effective treatments for chronic fatigue syndrome (“CFS”). In short, once access to the actual data, which was the genesis for those treatment options, was made available for analysis, the data revealed that psychotherapy and graded exercise do not improve symptoms, and to the contrary, frequently make them worse.

Saturday, April 1, 2017

Consultative Examinations

The POMS revised its rules regarding a consultative examination (“CE”). A claimant’s own medical source, which does not have to be a physician, “is generally the preferred CE source.” 

The State agency is supposed to schedule a CE with your doctor who: is qualified; has adequate training and experience necessary to perform the types of examinations and tests needed; has access to the equipment required to perform the types of examinations and tests needed; is willing to perform the examination or test for the fee schedule payment; and is willing to provide a detailed written report of the examination in a timely manner. 

The State agency will assume your doctors are not willing to do a CE if they failed or refused to provide medical evidence when asked. The State agency frequently asks treating doctors if they are willing to do a CE – in small print – on their letters to doctors that request medical records. The State agency might also call to ask if your doctor would do a CE. 

If you are applying for Social Security Disability (“SSD”) benefits, you should tell your doctors in advance to say that they will do the CE, or to send any letter they receive from the State agency to you or your attorney to respond. You should also arrange to pay the difference between what the State agency will pay for the CE and what your doctor will accept to avoid payment from being an obstacle for your doctor to do the CE.

Thursday, March 30, 2017

Discretionary Clauses

Englert v. Prudential Insurance Company of America, 2017 WL 1133380 (N.D.Cal. Mar. 27, 2017), is the latest federal district court from outside New York to rule that discretionary clauses are not enforceable. Disability insurance companies misuse discretionary clauses to deny benefits to claimants. 

Discretionary clauses are contract provisions that grant an insurance company or administrator the unrestricted authority to determine eligibility for benefits and to interpret terms and provisions of the policy, contract or certificate. An example is: “the company has full, exclusive, and discretionary authority to determine all questions arising in connection with the policy, including its interpretation.” 

Why Discretionary Clauses Need To Be Banned In New York 

Over 20 States prohibit discretionary clauses in insurance policies because they have been found to be unjust, unfair and inequitable. New York once banned discretionary clauses, but the insurance lobby succeeded in having the insurance regulations banning those clauses withdrawn. 

Discretionary clauses place the insured at a great disadvantage in any disagreement over the meaning of the insurance contract, usurp the role of the courts in deciding a matter of law, that is, the meaning of the contract, and exacerbate the insurer’s inherent conflict of interest in being both the entity that pays and decides what does or does not need to be paid. In other words, the insurance company profits increase when it denies and terminates claims. As noted by the Supreme Court in Metlife v. Glenn, 554 U.S. 105, 128 S.Ct. 2343 (2008), where an insurer both determines whether an employee is eligible for benefits and pays those benefits out of its own pocket, there is a conflict of interest. This conflict would be mitigated by prohibiting discretionary clauses and lessening the insurer’s discretion to decide what the contract means. 

Discretionary clauses are also unjust and contrary to the laws of this State because the deferential standard of review is opposed to the common law doctrine that ambiguities in insurance contracts should be construed in favor of the insured. Moreover, discretionary clauses in insurance contracts are misleading because policyholders probably do not understand when reading these clauses that they are giving up the right to a neutral, merits-based review of the insurer’s decisions and the meaning of the policy, and that the insurer as a practical matter could proceed with essentially absolute discretion as to what the policy means. Disability insurers always argue that they have the discretion to deny or terminate benefits by relying exclusively on the opinions of their doctors, who reject the opinions of the treating doctors, regardless of what the evidence reveals. 

A disability or health insurance policy is a contract. The interpretation of a contract is a matter of law and ordinarily questions of law are for the judiciary to decide. In a lawsuit on a contract, such as when an insured sues an insurer, a court looks at the question of law de novo, i.e., without regard for how the contract might have been initially interpreted by the insurer. However, when a discretionary clause is present, it usurps the role of the courts because they are required to give deference to the insurer’s interpretation of the contract, and will only overturn the insurer’s view if the court finds the insurer’s decision was arbitrary and capricious. This leads insurers to deny and terminate claims that they know should be approved. 

A client that I am currently representing illustrates a concrete example of what is at stake. She is covered by two disability policies that were issued by First Unum. One policy grants discretionary authority, while the other does not. First Unum found that my client can perform her own occupation, and has denied benefits, under the policy that it mistakenly thinks grants it discretionary authority. At the same time, based upon the same, and actually less, evidence, First Unum found my client was disabled from any occupation under the policy that does not grant discretionary authority. 

Insurance companies’ widespread abuse due to discretionary clauses prompted some regulatory authorities to take action. In 2002, the National Association of Insurance Commissioners (the “NAIC”) issued a model act entitled “Prohibition on the Use of Discretionary Clauses” (the “Model Act”). When an insurance company issues a group disability policy, a discretionary clause grants the insurer or administrator the authority to determine eligibility for benefits and to interpret terms and provisions of the policy. The purpose of the Model Act is to prohibit clauses that purport to reserve discretion to the insurer to interpret the terms of a disability insurance policy. 

The abuse of discretionary authority by the insurance companies became so widespread that the media covered the issue. On October 13, 2002, NBC Dateline did an expose called “Benefit of the Doubt”. The story described how Unum, the largest disability insurance provider, had systematically manipulated and created evidence in order to create excuses to deny and terminate disability claims. On November 20, 2002, CBS 60 Minutes also did an expose on Unum called “Did Insurer Cheat Disabled Clients?” The 60 Minutes piece detailed how Unum forced doctors to manufacture evidence as a means to deny and terminate disability claims. 

The abuses by Unum resulted in the U.S. Department of Labor and 49 State Insurance Departments bringing an action against Unum that resulted in a regulatory settlement agreement. Among other things, Unum was forced to reassess hundreds of thousands of disability claims that it had denied or terminated. Although Unum continues to engage in the same tactics that led to the agreement, no further action has been taken, and other disability insurers are now following Unum’s lead. Perhaps no further regulatory action has been taken because many states have now banned discretionary authority. 

On March 27, 2006, New York State Insurance Department issued Circular Letter No. 8 that adopted the NAIC Model Act. The letter stated that “discretionary clause provisions in accident and health insurance policies and in subscriber contracts will no longer be approved by the Department” because “The Department has determined that the use of discretionary clauses violates Sections 3201(c) and 4308(a) of the Insurance Law in that the provisions ‘encourage misrepresentation or are unjust, unfair, inequitable, misleading, deceptive, or contrary to law or to the public policy of this state.’ Additionally, the Department believes that the use of discretionary clauses is an unfair or deceptive act or practice, within the meaning of Article 24 of the Insurance Law.” 

In what is already a contract of adhesion, i.e., one that a consumer has no choice but to accept, discretionary clauses skew the balance of power even further in favor of the insurer. In other words, when a disability policy in New York grants the insurer discretionary authority, New Yorkers are at a severe disadvantage in any contest over questions of coverage, eligibility and interpretations and applications of the provisions of the contract for the simple reason that the insurer included a discretionary clause in the contract. If discretionary clauses are prohibited, then the courts apply the de novo standard of review, and are free to substitute their own judgment for that of the insurer. If a matter comes to court, the consumer faces a level playing field, and is better protected. 

What is perhaps most affected by the differing standards of review is the mindset of the insurer – its confidence that whatever it decides is sacrosanct under the “arbitrary and capricious” standard, as opposed to the more cautious approach it would take knowing that its decisions would be reviewed de novo. My experience has shown that whenever a court rules that a de novo standard of review applies, the insurer immediately seeks to settle the case, which is a tacit admission that the insurer knew its decision was wrong. 

Recognizing that a level playing field would require insurers to stop denying and terminating claims, the insurance lobby prevailed upon the Insurance Department to withdraw the Model Act just three months after it was adopted. On June 29, 2006, the Insurance Department issued Circular Letter No. 14, which withdrew the ban. The Letter stated that discretionary clauses that require courts to review disability and medical insurance claims under an arbitrary and capricious standard of review rather than de novo review negate essential features of the policies, as well as statutorily required appeal rights, which nullifies the insurer’s responsibility to pay. The Insurance Department found that discretionary clauses were likely to mislead the policyholder, contract holder or certificate holder; were “unjust, unfair or inequitable; and were an “unfair or deceptive act or trade practice.” While no longer banning discretionary clauses, the Insurance Department stated that it was “drafting regulations that would prohibit the use of discretionary clauses” in insurance policies. 

To date, seven years later, no such regulations exist, although in April 2010, the Insurance Department asked for comments about proposed regulations to ban discretionary clauses, but no regulations were enacted. Last year, I spoke with Insurance Department-Department of Financial Services representatives, and they said that it was highly unlikely that anyone would be drafting any such regulations now. 

Over twenty States have enacted legislation to ban discretionary clauses, and the list includes “Red” States such as Texas and “Blue States” such as Vermont. Adopting the Model Act levels the playing field when the disabled are forced to sue insurance companies to receive their benefits. For example, in Barrett v. Life Insurance Company of North America, 868 F.Supp.2d 779 (N.D.Ill. 2012), based on the Illinois law that adopted the Model Act, the court ruled that, “review will be de novo rather than measured against an arbitrary-and-capricious yardstick.” How long must New Yorkers wait for similar protection? 



[1] Circular Letter No. 14 can be found at: http://www.dfs.ny.gov/insurance/circltr/2006/cl06_14.htm.
[1] Subchapter M, §§3.1201- 3.1203

[1] 8 V.S.A. § 4062f