Orthopedic Issues Series: Degenerative Disc Disease – Part 1

This post is the first in a series we will be doing on common orthopedic issues.  In Part 1 of this post, we will discuss the anatomy of the spine and some of the causes of Degenerative Disc Disease (DDD), a common yet misunderstood spinal condition that affects a large portion of the population.   In Part 2 of this post, we will go over some of the symptoms of DDD and some of the methods for treating DDD.

Anatomy

There are thirty-three vertebrae in the vertebral column of the human spine, twenty-four of which articulate and move.  Between each of the vertebrae in the three articulating sections of the spine – the cervical, thoracic, and lumbar spine – there is an intervertebral disc.  Each disc, composed of soft jelly-like center (nucleus pulposus) surrounded by a capsule of connective tissue (annulus fibrosis), provides shock absorption and flexibility within the spine.  There is very little blood flow to this region of the body, and if discs are damaged or deteriorate they cannot regrow or heal themselves.

Causes

Degenerative Disc Disease (DDD) is the breakdown in the size and cushioning of the intervertebral discs, which can lead to chronic pain, weakness, numbness and tingling in extremities, and reduced flexibility in the spine. The name of the condition is actually somewhat of a misnomer – it is not actually a “disease”, but rather a condition that is characterized by the degeneration of the intervertebral discs over time. Because of this, the condition can be confusing to understand.

Reduction in the size and cushioning of your discs is part of the normal process of aging, and magnetic resonance imaging (MRI) studies have shown that almost everyone over the age of 60 has degeneration of their intervertebral discs to some degree.[1]  Not all people with disc degeneration have back pain or other symptoms – in fact, individuals with relatively mild disc degeneration may experience no symptoms whatsoever.

However, age is not the only factor in DDD.  Deterioration of the intervertebral discs can be accelerated and exacerbated by other factors.  The culprit in many severe cases of DDD is stress-related damage in the form of repetitive use, trauma, injury, poor posture, poor movement, and obesity.  Among these, one of the most common factors is repetitive use.

Medical professionals are particularly susceptible to developing DDD due to the static postures that some specialties require in clinical practice, most notably dentists.  For example, the repetitive, static posture of a dentist performing clinical procedures creates compressive forces on the cervical discs due to neck flexion and compressive forces on the lumbar discs due to axial loading (the weight of the body compressing the spine vertically).  When these compressive forces are applied for year after year on a daily basis, the result can be an accelerated deterioration of the intervertebral discs.

For more information on how disability insurers evaluate claims based on Degenerative Disc Disease, see:

A Stiff Upper Lip Can Lead to Getting Stiffed by Your Insurer

Disability Insurance: Who Gets Denied?

Myelopathy: Part 1

Myelopathy: Part 2

[1] http://www.arthritis.org/about-arthritis/types/degenerative-disc-disease/


Share

Ed Comitz Named as Top Lawyer in Field of Insurance Law

untitled

Ed Comitz, one of the firm’s founding members, was recently named as a Top Lawyer in the field of insurance law in Phoenix Magazine’s special, 50th Anniversary Issue.

Mr. Comitz’s practice primarily focuses on helping physicians and dentists secure private disability insurance benefits.  Mr. Comitz and the legal team at Comitz | Beethe also represent doctors in several other areas, including practice transitions, employment law, business litigation, estate planning, regulatory compliance, and licensing issues.


Share

Thinking About a Policy Buyout? How Lump Sum Settlements Work: Part 2

In this two-part series we are addressing the two most common scenarios in which insurance companies pursue lump sum buyouts.  In Part 1, we talked about buyouts for individuals who are totally and permanently disabled and have been on claim for several years.  In Part 2, we will address the other scenario in which buyouts occur: after a lawsuit has been filed.

In the context of an individual disability insurance policy, a lawsuit is generally filed in one of two common scenarios: (1) a person on claim with a legitimate disability has their benefits terminated; or, (2) a person with a legitimate disability has their claim denied.  A lawsuit is typically considered to be the last line of defense in the claims process.  By the time a lawsuit has been filed, the claimant’s attorney has likely exhausted every available means to resolve the claim without legal action.  Litigation is costly, time-consuming, and can drag on for years.

If an insurance company offers a lump sum buyout during litigation, it will typically be at one of three stages in the case: (1) after the Complaint and Answer are filed; (2) after all stages of pretrial litigation and discovery are complete; or (3) after the claimant/plaintiff wins at trial.

The first stage of any lawsuit is the filing of the Complaint.  This is a document the plaintiff files with the court outlining all of the claims and allegations against the defendant.  After receiving a copy of the Complaint, the defendant then has a specified period of time in which to file an Answer responding to the plaintiff’s allegations.

Prior to the filing of a lawsuit, a contested claim has likely been reviewed only by the insurance company’s in-house attorneys.  However, once litigation begins, the insurance company will retain a law firm experienced in insurance litigation to handle the case.  After the filing of the Complaint, the insurance company’s outside counsel will have the opportunity to evaluate the strength of the case and the claim.  Viewing the case through the prism of their experience, the insurer’s litigation team may recommend offering a buyout to avoid the risk, costs, and time associated with the lawsuit.

The second point of a lawsuit at which a buyout may occur is after all stages of pretrial litigation are complete.  Once the parties have had the opportunity to conduct discovery and litigate any pretrial motions, they will have a full picture of the case and their prospects at trial.  Through discovery both sides will be able to obtain all documents and interview all witnesses the other side intends to use at trial.  Through the filing of pretrial motions the parties can attempt to prevent or limit the use of certain evidence or witnesses at trial.

At this juncture, the insurance company may seek to avoid the risks of trial and settle the claim before the first juror is ever impaneled.  The insurance company’s incentive to resolve the case at this point – even after both sides have invested substantial resources in the litigation – is the financial exposure and bad publicity it faces with a loss at trial.  Additionally, a bad result at trial for the insurance company could create undesirable legal precedent for future cases.

If a jury (or a judge, depending on the case) determines that the insurance company has unlawfully denied or terminated a legitimate disability claim, the insurer will not only be required to pay the benefits the claimant/plaintiff is entitled to, but may also be liable for damages and other costs.  The insurer may be required to pay back benefits, plaintiff’s attorneys’ fees and costs, consequential damages, and punitive damages.

In the context of a disability insurance lawsuit, consequential damages come in the form of any financial harm to the claimant/plaintiff resulting from the insurer’s denial or termination of benefits.  For example, if the insurer’s termination of benefits led to the claimant/plaintiff losing their house in foreclosure, the insurer could be liable for consequential damages.  Punitive damages are designed to deter the insurer from denying legitimate claims in the future, and can be multiplied several times over if the insurer is found to have acted in bad faith.  Additionally, some states allow acceleration of benefits – in which the courts can order the insurer to immediately pay future benefits that would owed to the claimant/plaintiff over the full life of the policy.

The final stage at which a lump sum buyout may be offered is after a victory at trial by the claimant/plaintiff.  You may be wondering why anybody would entertain a settlement offer right after a being awarded back benefits, damages, and costs at trial – why accept anything less?  The answer is simple: appeals.  The insurance company can tie up a trial court victory in the court of appeals for years, which they can use as leverage to offer a settlement smaller than the trial award.

Though these three stages of litigation are the most common points at which a buyout may occur, buyouts themselves are uncommon during litigation.  Depending on the situation, the specter of a long, drawn out legal battle can either provide the insurance company with the incentive to settle the lawsuit early with a buyout or harden its resolve to fight the claim to the bitter end.  You cannot count on simply filing a lawsuit and expecting the insurance company to be eager to settle.  Some insurance companies want to settle early and avoid the financial risks and bad publicity of a defeat at trial, while others take a hard line and use their nearly limitless resources to fight a war of attrition.  Ultimately, whether or not an insurer offers a lump sum buyout in the midst of litigation depends largely on the individual facts of the case, the risks at trial, and the parties and attorneys involved.


Share

Thinking About A Policy Buyout? How Lump Sum Settlements Work: Part 1

Lump sum buyouts are a frequent source of questions from our clients and potential clients. With that in mind, the next few posts will address different aspects of the buyout process.

Buyouts typically occur in one of two situations: 1) after you’ve been on claim for several years, or 2) after a lawsuit has been filed.  This blog post will focus on the first scenario.

Lump sum buyouts that occur outside of litigation normally won’t occur unless and until the insurance company decides that you are totally and permanently disabled under the policy definition.  Typically, the insurer won’t consider whether this is the case until you’ve been on claim for at least two years.  If the insurer determines that you’re totally and permanently disabled, it will then determine whether it makes sense financially for the company to offer you a percentage of your total future benefits rather than keep paying your monthly benefits for the entire duration of your claim.

To understand how the insurance company calculates whether a buyout is in its financial interest, you should understand how insurance company reserves work.  The purpose of reserves is to ensure that the insurance company has the resources to fulfill its obligations to policyholders even if the company has financial difficulties.  Thus, disability insurers are required by state regulators to keep a certain amount of money set aside, or “reserved,” to pay future claims.  Any money required to be kept in a reserve is money that the insurer can’t spend on other things or pay out in dividends.  The amounts required to be kept in the reserve are determined by the state, depending on factors like how much the monthly benefit is and how long the claim is expected to last.

For a disability insurance claim, a graph of the required reserve amount over time looks like a Bell curve: low at the beginning, highest in the middle, and low again towards the end of the benefit period.  The ideal time for a settlement, from an insurance company’s perspective, is at or just before the high middle point–typically about five to seven years into the claim, depending on the claimant’s age and the duration of the benefit period.  At this point, the company is having to set aside the highest amount of money in the reserve.

If the insurance company can pay you a percentage of your total future benefits, it can not only save money in the long run, but it can release the money in the reserve.  The insurer can then use those funds for other purposes, including providing dividends for its investors.  In addition, the insurance company will save all of the administrative expenses it was putting towards monitoring your claim.

In the next post, we’ll address how and why buyouts occur after a lawsuit has been filed.


Share

Unum Outsourcing Jobs to India?

In past posts, we have discussed Unum’s track record of wrongfully denying disability claims and Unum’s bad faith efforts to avoid paying legitimate claims.  Unum was again in the news last year when it made significant changes within the upper echelons of company management.   Unum is now making headlines again, due to speculation that it is in the process of outsourcing hundreds of jobs overseas.

Unum is apparently currently in talks with several information technology (IT) firms to outsource up to 350 jobs to India.  A Unum employee, who spoke to the Portland Press Herald on the condition of anonymity, told the newspaper that as many as 200 jobs could be cut at Unum’s Portland, Maine offices, and estimated that the cuts could affect up to 350 jobs company-wide.  The employee reported that Unum was meeting with several vendors to discuss different levels of sourcing.  Florida attorney Sara Blackwell, who operates the website ProtectUSWorkers.com, claims that Unum has met with Cognizant and HCL – two multinational IT consulting firms – to discuss the potential move.  In an interview with the Times Free Press, Ms. Blackwell expressed concerns that policyholders’ personal medical information may be compromised by outsourcing to countries that don’t have strict provisions such as HIPAA to protect the medical records of policyholders.

It will be interesting to see if Unum’s outsourcing efforts end with its IT department, or whether this is the first step towards Unum outsourcing positions that play key roles in the disability claims process, such as claims managers and in-house medical consultants.

References:

http://www.pressherald.com/2016/06/16/sources-unum-in-talks-to-outsource-hundreds-of-jobs/

http://protectusworkers.org/2016/06/stop-unum-now-is-the-time-you-can-make-a-difference/

http://www.timesfreepress.com/news/business/diary/story/2016/jun/16/chattanooga-based-unum-criticized-outsourcing/371288/


Share

Should Women Pay More for Disability Insurance? Part 2

In a previous post, we discussed how a woman with the same age, job and health history as a man can end up paying an average of 25% (and in some cases, 60%) more for the same level of disability insurance protection.  We also discussed how some insurance companies raise premiums based on conditions unique to one’s sex, such as pregnancy.

When we first addressed this issue, the Massachusetts legislature was considering a bill that prohibited insurers from charging higher rates to women than to men.  At the time, Massachusetts law prohibited insurance companies from using race and religion as rating factors when determining the cost of insurance, but there was no law against using gender as a rating factor.

Recently, the Massachusetts Senate voted to approve a budget amendment adding gender to other rating factors that insurance companies are not allowed to consider when determining the cost of premiums.  The bill passed by a wide margin:  32 senators in favor of the amendment, and only 6 senators voting against the amendment.

It will be interesting to see if, in the future, other states follow suit and start to pass laws requiring insurance companies to give men and women the same premium rates for the same level of disability coverage.

References:

http://www.masslive.com/politics/index.ssf/2016/05/senate_votes_to_exclude_gender.html


Share

Long Term Disability by Diagnosis

In previous posts, we have been looking at the findings from the most recent study on long term disability claims conducted by the Council for Disability Awareness.  In this post we will be looking at the types of diagnoses associated with long term disability claims, and which types of claims are most common.

CDA Graph - Diagnosis

As you can see from the chart above, the most common type of both new and existing long term disability is musculoskeletal disorders—a category which includes neck and back pain caused by degenerative disc disease and similar spine and joint disorders.

This is particularly noteworthy because physicians and dentists, who often have to maintain uncomfortable static postures for several hours each day, are very susceptible to musculoskeletal disorders.  In addition, claims involving musculoskeletal disorders can be challenging, because oftentimes there is little objective evidence to verify the pain.  If you suffer from degenerative disc disease or a similar disorder, an experienced disability attorney can explain how to properly document your claim to the insurance company.

References:

http://www.disabilitycanhappen.org/research/CDA_LTD_Claims_Survey_2014.asp


Share

Case Study: Factual Disability v. Legal Disability – Part 3

In the last post, we discussed the facts of the court case Massachusetts Mutual Life Insurance Company v. Jefferson[1].  In that case, the court was asked to determine whether a clinical psychologist whose license had been suspended was entitled to disability benefits.  In this post, we will discuss how the court ultimately ruled, and go over some takeaways from this case.

The Court’s Ruling

As explained in the last post, the key question was whether Dr. Jefferson’s legal disability (i.e. the suspension of his license to practice psychology) happened before the onset of Dr. Jefferson’s factual disability (i.e. his depression).  In the end, the court determined that Dr. Jefferson was not entitled to disability benefits for the following reasons:

  • Dr. Jefferson’s claim form stated that he was not disabled until April 29, 1990, which was two days after the licensing board revoked his license.
  • Although Dr. Jefferson later claimed that his depression went as far back as May 1989, the court determined that such claims were inconsistent with:
    • Jefferson’s representations to the licensing board that he was a “highly qualified and competent psychologist”;
    • The fact that Dr. Jefferson had been consistently seeing patients up until the day his license was revoked; and
    • The fact that Dr. Jefferson had scheduled patients during the month following the licensing board’s hearing.

Thus, under the circumstances, the evidence showed that Dr. Jefferson’s was not entitled to benefits because his legal disability preceded his factual disability.

Takeaways

Dr. Jefferson’s case provides a good example of the challenges that can arise in a disability claim if the claimant has lost his or her license.  Here are some of the major takeaways from this case:

  1. Be Precise When Filling Out Claim Forms. The date you list as the starting date of your disability can be very significant.  Take your time when filling out claim forms, and make sure that the date you provide is accurate and consistent with the other information you are submitting with your claim forms.  It is always a good idea to double check everything on the form at least once after you have completed it, to make sure that you did not make a mistake.
  1. Recognize that Your Claim Will Not Be Evaluated in a Vacuum. Other proceedings—such as board hearings—can directly impact your claim.  You should always assume that anything you say in such a proceeding will at some point end up in front of the insurance company.  This is particularly problematic when, as in Dr. Jefferson’s case, the goals of the other proceeding are inconstant with the goals of the disability claim.  In such a situation, you may have to decide which goal is more important to you.  An experienced attorney can help you assess the strengths and weaknesses of each available option so that you can make an informed decision.
  1. Do NOT Engage in Activities that Place Your License in Jeopardy. Losing a license that you worked hard for several years to obtain is not only emotionally devastating, it can severely limit your options going forward.  Even if you have a disability policy, it is very difficult to successfully collect on a disability claim if your license has been revoked or suspended.  Once again, if you find yourself in Dr. Jefferson’s position, you should talk with an experienced attorney who can help you determine what your available options are, if any.

[1] 104 S.W.3d 13, 18 (Tenn. Ct. App. 2002).


Share

Case Study: Factual Disability v. Legal Disability – Part 2

In the last post, we discussed the distinction between “factual” and “legal” disability and why that distinction matters.  In this post, we will begin looking at a court case involving “factual” and “legal” disability.  Specifically, in this post we will begin looking at the facts of the case and the test that the court applied.  In Part 3, we will see how the court ultimately ruled.

The Facts

In the case of Massachusetts Mutual Life Insurance Company v. Jefferson[1], the court assessed whether Dr. Jefferson—a clinical psychologist—was entitled to disability benefits.  Here are the key facts of the case:

  • From October 1987 to February 1989, Dr. Jefferson had an affair with a former patient.
  • When Dr. Jefferson’s wife found out about the affair, she filed a complaint with Dr. Jefferson’s licensing board.
  • During the hearings in front of the licensing board, Dr. Jefferson argued that he was a competent psychologist, and that he should be permitted to continue to see patients.
  • On April 27, 1990, the licensing board permanently revoked Dr. Jefferson’s license to practice psychology, effective as of May 15, 1990. On appeal, a chancery court reduced the permanent revocation to an eight year suspension ending on May 15, 1998.
  • Up until the day his license was revoked, Dr. Jefferson continued to see patients and schedule future patients.
  • On October 1, 1900, Dr. Jefferson filed a claim under his disability policy, claiming that he was disabled due to “major depression.”
  • On his claim form, Dr. Jefferson listed the beginning date of his disability as April 29, 1990. Later on, Dr. Jefferson attempted to submit evidence that he had been depressed as early as May 1989.

The Court’s Test

As a threshold matter, the Court determined that the suspension of Dr. Jefferson’s license was a “legal disability” and assumed for the sake of argument that Dr. Jefferson’s “major depression” was a “factual disability.”  As explained in Part 1 of this post, courts generally hold that disability policies only cover factual disabilities, not legal disabilities.  However, the court’s decision becomes more difficult when a claimant like Dr. Jefferson has both a legal disability and a factual disability.

Although different courts approach this situation in different ways, here is the test that the court came up with in Dr. Jefferson’s case:

  • Step 1: Determine which disability occurred first.
  • Step 2: Apply the following rules:
    • Rule # 1: If the legal disability occurred first, the claimant is not entitled to benefits.
    • Rule # 2: If the factual disability occurred first, the claimant is entitled to benefits, if the claimant can prove the following three things:
      1. The factual disability has medical support.
      2. The onset of the factual disability occurred before the legal disability.
      3. The factual disability actually prevented or hindered the claimant from engaging in his or her profession or occupation.

In the next post, we will discuss how the court decided this case.  In the meantime, now that you have the key facts and the court’s test, see if you can guess how the court ultimately ruled.

[1] 104 S.W.3d 13, 18 (Tenn. Ct. App. 2002).


Share

Case Study: Factual Disability v. Legal Disability – Part 1

In the next few posts we will be looking at the distinction between “factual” and “legal” disability.  In Part 1, we will discuss the difference between a factual and a legal disability, and why that distinction matters.  In Parts 2 and 3, we will look at an actual court case involving “factual” and “legal” disability.

What is “Factual Disability”?

Factual disability refers to incapacity caused by illness or injury that prevents a person from being physically or mentally able to engage in his or her occupation.  This is the type of disability that most people think of in connection with a disability claim.

What is “Legal Disability”?

Legal disability is a broad term used to encompass all circumstances in which the law does not permit a person to engage in his or her profession, even though he or she may be physically and mentally able to do so.  Here are some examples:

  • Incarceration;
  • Revocation or suspension of a professional license;
  • Surrendering a professional license as part of a plea agreement or to avoid disciplinary action; and
  • Practice restrictions imposed by a licensing board.

Why the Distinction Matters

In sum, someone with a “factual disability” is mentally or physically unable to engage in their profession.  In contrast, someone with a “legal disability” is not allowed to engage in their profession.  Courts have repeatedly held that disability insurance policies provide coverage for factual disabilities, but not for legal disabilities.

If a claimant has both a factual and legal disability, things become more complicated.  In the next few posts, we will look at an example of how one court determined whether someone with both a factual and legal disability was entitled to benefits.


Share