You should be aware of the several Investigative Tools used by insurance carriers to help legitimize disability insurance claims.  These tools include:

     Attending Physicians Statements
     Personal Claimant Interviews
     Video Surveillance
     Independent Medical Examinations
     Functional Capacity Evaluations
     Financial Underwriting

I won’t go into great detail about each of these tools but do want you to better understand their use in evaluating the merits of a disability claim.

Attending Physician Statements are just what they sound like.  The physician caring for a disabled client of yours will be asked to submit an initial APS outlining the specific disability and its resulting limitations and restrictions on the insured.  He or she will also be asked for specific dates of treatment, when the total or partial disability began and when the physician feels your disabled client can or will return to full-time or part-time work. 

In addition to many disabled insured’s not completing their initial claim application properly, the APS is often incomplete, at times confusing to claim personnel and in my experience, can be the cause for some disagreement between insured and insurance company, regarding the degree of disability.  It is important for the treating physician to understand the nature of disability, not merely be able to describe symptoms and treatment!  He or she must also understand what your disabled client did during a normal workday.  The treating physician should personally complete the APS and not merely hand it off to a medical secretary to fill in the blanks from the client’s file.  It is also important that the treating physician be “appropriate” for the type of disability.  Companies frown on a GP or Family Physician (as an example) treating your client who is severely depressed, especially where “heavy duty” medications are involved.

The Personal Interview is another “tool” used during the process of many claims.  Here, a field investigator will contact your disabled client and typically ask for a 30-40 minute meeting to review information the company has received from that client, his treating physician(s) and perhaps, other sources.  Questions related to incomplete information and any ongoing progress the disabled insured is making would generally be the topic of conversation.  If there are any real concerns about the legitimacy of a claim, the field investigator will probe more deeply into all aspects of the past and current activities of your disabled client.

Field investigators sometimes don’t call in advance to make an appointment with the disabled insured.  They may just show up at the door with, “I was in your neighborhood and thought I’d stop by.”  My advice to disabled clients is, if it’s not a convenient time, ask the field investigator to make an appointment.  A disabled client of yours should never feel they are on the defensive side of life. 

Video Surveillance is an entirely different affair.  I personally look at them as a necessary tool but wonder how many times this tool is not handled “properly.”  Some claimants are overly concerned about the use of video surveillance.  They have heard the war stories from others who were denied disability benefits for what seemed to be the misuse of this investigative tool. If a disabled insured is claiming disability benefits due to a significant back injury a video tape showing them lifting a large bag of fertilizer out of their Volvo is not going to help the claim!  Using the reasoning, “it was one of my good days,” isn’t going to help either. 

Insurance carriers understand the nature of disability.  If they suspect someone is not being totally above board with them, and video surveillance might help prove that fact, it’s going to be used. My biggest concern is when video surveillance is used to establish a myopic view of a claimant.  In addition, you should know that claimants who live in gated communities are not immune to video surveillance.  Investigators using video surveillance must be careful not to engage in harassment and understand the laws regarding invasion of privacy.

Independent Medical Examinations are a “litmus test” to the validity of many claims.  If the attending physician states that your client is totally disabled but does not submit adequate objective information detailing the degree of disability, an IME will almost always be asked for.  In addition, in every claim I have handled where mental or nervous conditions where the cause of disability, an IME has been requested.  In several of these cases both a psychologist and psychiatrist were separately involved.

The problem with IME’s is, I don’t feel they are totally “independent.”  After all, the insurance carrier is paying to have these examinations completed.  In addition, there are a growing number of physicians I’ve heard of who “specialize” in doing these IME’s for insurance carriers.  Thankfully, every once in awhile, I hear of an IME that totally supports a claim but recently, I reviewed the following case that heightened my concerns.  The IME physician agreed with several treating physicians that the claimant was indeed, totally disabled.  Several weeks after the insurer reviewed the IME report, it contacted the IME physician and somehow, the company came away from that conversation with a significantly negative view of the claim.  This doesn’t leave me with a good feeling about how the company is handling this particular claim.

Functional Capacity Evaluations are in my opinion, “tests” not examinations.  Some attorneys I have spoken to contend that “examinations” are within the scope of most disability policies.  However, “tests” may not be.  More important for you and your client is the fact that FCE’s may exhaust that disabled client and in specific situations, may actually inflict additional damage.  I attending a litigation conference last year and one of the guest speakers was as expert in training physical and occupational therapists in work-related assessments and treatment (FCE’s).

She opened my eyes to the lack of standardization and objectivity of many of these tests, which measure specific performance of physical activities over a brief period of time and extrapolating these results to an 8-hour day.  She questioned the consistency and reliability of these tests and the lack of in-depth training of those who administer these tests.  Your disabled client might well be advised to resist this type of testing. At the very least, have your clients attending physician know beforehand, that an FCE is being asked for.  The physician may object to the test.

Financial Underwriting is necessary in all residual disability claims, as these claims involve the loss of income.  When an insured applies for disability benefits, the insurance carrier doesn’t know if the claim will prove to be one for Total disability or Residual disability.  The company will take into consideration the definition of Residual Disability (assuming the policy includes residual) and ask for past personal and business tax returns.  This could amount to five years worth of previous tax returns.  That’s a great deal of financial information for a CPA with perhaps, a forensic background to study and question. 

I feel this volume of information isn’t really necessary when a clear-cut case can be made for total disability from the initial filing of a claim.  Financial underwriting at the time of claim can however, provide a picture of potential motivation for a disabled insured to remain on claim if his or her business was troubled prior to disability. 

The following is a list of what I call “Red Flags” to potential claim problems for a disabled insured. These are indications to the insurance carrier that further investigation might be called for.

     Self-reported symptoms without objective physical findings
     Complaints of pain in excess of objective physical finding
     Restrictions & limitations not consistent with diagnosis
     When appropriate, claimant is not under regular care of a physician
     Physician certifying to disability outside cope of expertise
     Noncompliance with medical recommendations
     Claimant completing supplemental claim form and doctor signing it
     Claimant doesn’t follow-up with recommendation to see a specialist
     E & O claim against disabled insured
     Multiple missed medical appointments
     Pending divorce
     Pending close of business due to financial losses
     Significant discrepancies between treating physicians
     No objective medical testing to support claimed disability
     Claimant appears to be doctor shopping
     Treating physician not in same geographic area as claimant

Next month I will walk you through a typical disability claim and provide additional advice that could help you and your disabled client. # # # # #