An experimental Medicaid program is helping beneficiaries live independently.
The piece was driven by Sen. Tom Coburn, a far-right Republican from Oklahoma perhaps best-known for being a climate change denier. Coburn’s staff is investigating disability fraud, and just so happens to be releasing a report on the issue the day after the 60 Minutes segment aired…
As economist Dean Baker (Beat the Press, 10/7/13) wrote: “The basic fact, which may be painful for CBS News and 60 Minutes, is that it is not easy to get on Social Security disability. Close to three quarters of applicants are turned down initially and even after appeal, 60 percent of applicants are denied benefits.”
Or as the Consortium for Citizens with Disabilities (10/4/13) explained in a letter to CBS:
“The Social Security disability standard is incredibly strict, and just four in 10 applicants are awarded benefits. Award rates have further declined during the recent economic downturn. Demonstrating eligibility requires extensive medical evidence, and even people with life-threatening illnesses can wait months if not years to receive benefits. Many individuals are denied despite significant disabilities and chronic illnesses.”
So what explains that surge in disability payments? As Neil deMause noted in Extra! (6/13 ), it should not come as a surprise: “The number of Americans receiving disability benefits has indeed risen steadily over the years, but there are plenty of demographic reasons why. As a group of eight former Social Security commissioners (4/4/13) wrote in an open letter in response to the NPR story: The growth that we’ve seen was predicted by actuaries as early as 1994 and is mostly the result of two factors: Baby Boomers entering their high-disability years, and women entering the workforce in large numbers in the 1970s and 1980s so that more are now “insured” for DI based on their own prior contributions. (Like Social Security, SSDI is paid for out of workers’ own payroll tax contributions.)”
According to Barron’s, “One place in Unum’s financials where investors might want to look closely is the company’s reserves for future claims. As insurance icon Warren Buffett points out, reserves in essence are self-graded exams allowing insurers, depending on their assumptions, to boost or punish earnings.”
I understand the desire to avoid any contact with these people though – it’s like prodding a witch.
Although most benefit claims arising under policies of disability insurance are processed routinely, a disability claim can give rise to a dispute about how impaired or how employable an insured actually is. Such cases are intrinsically factitious. The recurrent question is whether, on the facts regarding this worker’s physical and occupational circumstances, he or she is unable to resume employment as defined in the policy…
Employees interviewed on the Dateline program disclosed that the claims that were “the most vulnerable” to pressures for bad faith termination were those involving “so-called subjective illnesses, illnesses that don’t show up on x-rays or MRIs, like mental illness, chronic pain, migraines, or even Parkinsons.”
In one such case, a federal judge sustained a $5 million punitive damages award on the ground that the trial “jury heard more than enough evidence to conclude that Plaintiff was totally disabled and that Defendants in bad faith terminated her benefits and caused her damages.”
Hangarter v. Paul Revere Life Ins. Co., 236 F.Supp. 2d 1069, 1082 (N.D. Cal. 2002), aff’d 373 F.3d 998 (9th Cir. 2004). Counsel for the plaintiff has written a book about the case, see Ray Bourhis, supra note __.
In the course of discovery proceedings in the litigation against Unum, a remarkable internal memorandum came to light, authored by a Unum executive, that exults in the “enormous” advantages that ERISA, as now interpreted, bestows upon Unum in cases in which an insured challenges a benefit denial in court. “[S]tate law is preempted by federal law, there are no jury trials, there are no compensatory or punitive damages, relief is usually limited to the amount of benefit in question, and claims administrators may receive a deferential standard of review.”42 The memorandum recounts that another Unum executive “identified 12 claim situations where we settled for $7.8 million in the aggregate. If these 12 cases had been covered by ERISA, our liability would have been between zero and $0.5 million.”
That court listed more than thirty cases in which First Unum’s denials were found to be unlawful, including one decision in which First Unum’s behavior was “culpably abusive.” Id. at 247 n.20…
He originally applied for and was denied disability benefits in 1996, and the fact that he lived through the glacial administrative and legal process of ERISA claims is nothing short of a miracle, or perhaps the will of a determined man who had been wronged…
As Professor Langbein so acutely observed in his article on the Unum Provident scandal cited by the Courts in both Glenn and McCauley:
“Cases of abusive benefit denials involving other disability insurers abound. Unum turns out to have been a clumsy villain, but in the hands of subtler operators such misbehavior is much harder to detect.” 101 Nw.U.L.Rev. at 1321.
I guess Unum has learned a lot from its past mistakes, and perhaps this corporation is no longer so clumsy at hiding misbehavior.
According to the Unum lawsuit, Unum actually hired third-party surveillance of Steven. During the week Unum paid for the investigators, Steven only left his house three times for short durations. The Unum lawsuit states that the investigators’ report actually supports the allegation that Steven is disabled. The Unum lawsuit further alleges that Unum refused to acknowledge that their surveillance actually supported the ultimately-denied disability claim.
Additionally, the Unum lawsuit states that Unum claimed that three short trips outside of the home meant that Steven could continue to work. The Unum lawsuit holds that these action were a matter of bad faith, enabled by the conflict of interest inherent to a situation where Unum gets to decide if the plaintiff is truly disabled or not…
Though this particular Unum claim denial lawsuit is sparse on details, it alleges that Plaintiff Mary D. worked for the University of Arkansas for Medical Science in Little Rock. Her employment benefits included an Unum disability benefits plan.
Initially, Unum approved Mary’s disability benefits claim, and paid out on it for about two years. However, Unum later ruled that Mary was not fully disabled, despite the fact that her physicians ruled that she was medically unfit for even light sedentary work…
A 2001 investigation by the television newsmagazine “60 Minutes” featured a former Unum in-house physician who alleged that the company fired him after he refused to override patients’ physicians’ determinations of disability.
Additionally, the segment alleged that Unum set a “denial quota” or required number of disability benefits denials. Additionally, the investigation exposed the now-infamous “hungry vulture award,” which was given to the employee that processed the most disability benefits denials.
The Unum Disability Insurance Lawsuit is Case No. 4:14-cv-00640-KGB, in the Circuit Court of Pulaski County in Arkansas.
But the New York-based appeals court found that in light of a 2008 U.S. Supreme Court decision regarding plans governed by the Employee Retirement Income Security Act, Unum was operating under a conflict of interest. In Metropolitan Life Insurance Co. et al. vs. Wanda Glenn, the Supreme Court ruled in 2008 that lower courts should consider an insurer’s potential conflict of interest when reviewing employee benefit denial cases where the insurer is the claims administrator and the benefits payer…
Provident sent one of its senior executives, Jeff McCall, to Worcester to oversee the psychiatric unit. One of McCall’s first orders of business was to subject all new high exposure claims to roundtable review and to track the number and dollar amount of claims terminated due to roundtable discussion… Each adjuster in the psychiatric unit for example was required to submit what can only be described as a “hit list” a running list of claims that were projected for closure in the coming months, together with the dollar amount of reserves held on those claims… In 1999, Provident merged with Unum Life Insurance Company to become UnumProvident, by far the largest disability insurer in the country.
Nee was fired shortly after Dateline NBC and 60 Minutes aired an exposé of Unum in October 2002. According to Nee, she was fired for whistleblowing, but Unum said she was terminated for “poor performance,” even though she received considerable pay raises up to and including a month before she was terminated. “But if I were Unum I would have fired me too,” says Nee. “I was a lead customer specialist giving away Unum’s unfair claims practices to regulators.”
But according to confidential employee sources and claimants who have been through the new loop, business is the same despite the agreement that calls for favorable reinstatement of claimants already on Social Security Disability. But the company had provisions written in the multi-state settlement giving them the option to deny those claims again based upon what it deems as incompetence of Social Security Awards.”
But did Unum reassess all of those claims? Nee says that, based on the information she has, Unum did reassess the claims but there is some controversy. She believes that only about 60 percent of the claims were reversed, so for 40 percent of denied claimants, the reassessment process didn’t turn out well…
“In other words, Unum is now claiming the right of excluding a witness and they have no right to screen witnesses,” explains Nee. “And Unum is now claiming that, if an insured wants to audio-record an IME, they must use a court reporter selected by Unum; they have to pay for it; and they have to give Unum a copy of the report. What a good deal for Unum!”
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“Depression is an interference phenomenon. Rumination and negative thought-loops interfere with a person’s ability to think. We hypothesize that when individuals with depressed mood are exposed to stimuli, such as a meaningful song or a place that evokes sad feelings, the brain fixates on that and can’t focus on daily tasks such as a phone conversation or completing a grocery list,” explained Dr. Rypma, Meadows Foundation Chair and Associate Professor in the School of Behavioral and Brain Sciences at The University of Texas at Dallas.
“Chronic pain is an interference phenomenon. Pain-carrying neurons and thought-loops interfere with a person’s ability to think and their will to live. We hypothesize that when pain patients are exposed to activities and behaviors that increase pain, such as physical activity and stress, the brain fixates on the pain, can’t focus on daily tasks such as balancing a check book, and often becomes anxious, depressed, and without hope for the future,” explained pain patients everywhere.