Most disability insurance policies allow the insurer to arrange for a reasonable, relevant independent medical examination (IME) of the claimant. While on its face this sounds fair and even potentially helpful for a disability claimant, the insurance company may use IME findings to deny a claim or terminate disability benefit payments, even in the face of the claimant’s own strong medical evidence.
A physician who performs numerous IMEs for insurance companies may have an inherent conflict in that they are often paid well by the insurance company to assess a claimant’s functionality. A finding of disability means that the insurance company could potentially pay thousands of dollars in disability benefits whereas if the IME doctor determines the claimant can work then the insurance company can argue that no benefits are payable. Disability carriers often hire doctors through well-known vendors or may even have the physician on payroll. Unfortunately, this kind of IME doctor bias exists far too often.
Insurers combine what is often a biased IME with another classic deceptive tactic: cherry-picking. Cherry-picking of medical evidence occurs when the insurance company or its claim administrator pulls isolated threads of information from the medical record that they can twist to support the denial of a valid claim despite otherwise strong evidence of disability.
Claim denials based on cherry-picking ignore solid medical evidence of disability. Rather, they inflate the importance of minimally negative evidence without explaining why it is discounting strong proof of disability from a claimant’s treating doctors.
The combination of cherry-picking and hiring a known insurance IME doctor will very likely provide the insurance company with the basis for a denial of benefits.
A recent example
In 2021, the federal appeals court in Noga v. Fulton Financial Corporation Employee Benefit Plan found that “procedural irregularities” in an IME and paper reviews by outside medical professionals contributed to a finding that the insurer abused its discretion in terminating a claimant’s benefits. There, the claimant was a financial analyst who developed diabetic polyneuropathy and neurogenic muscular atrophy, causing trouble driving, walking and standing.
He eventually stopped working and filed for disability insurance benefits under a policy through his employer.
In-house nurses reviewed the medical records and certified significant impact on standing or walking and on “consistent work function,” after which the insurer approved the claim. The insurer’s nursing staff recertified benefit eligibility six times in the next two years.
Out of the blue and shortly after the sixth recertification, the insurer ordered an IME. That doctor found symptoms consistent with earlier diagnoses, but he wrote that the claimant exaggerated symptoms, engaged in “inappropriate pain behavior” and could walk around the exam room, so he was capable of working.
Not surprisingly, the insurer then found the claimant no longer disabled and able to perform his job. The claimant filed an administrative appeal (within the insurance company) along with updated medical records. An in-house analyst reversed the termination. Despite this, the analyst ordered two peer reviews from outside doctors (like IMEs but without the physical exam, just a review of existing medical records).
The two peer reviewers both said the claimant could work despite his diagnoses, so on that basis combined with the earlier IME, the benefits were again terminated At that point, the claimant filed a lawsuit.
Procedural anomalies and a structural conflict of interest
After considering the conflict of interest of an insurer that both decides the claim and must pay it, along with suspicious procedural actions during the claims process, the appeals court affirmed the U.S. district (trial) court’s retroactive reinstatement of benefits.
First, the insurer suddenly requested the IME with no new medical evidence of improvement that would suggest the claimant could work after six internal recertifications. The court found the “timing of and professed need for the IME … irregular” and an indication of “procedural bias” since the nurse had just recertified the disability. This suggested the insurer was not a “disinterested fiduciary,” but rather a “financially motivated actor.”
Second, the analyst’s request for two outside peer reviews the day after he had reinstated benefits was “unusual in … timing, [unstated] impetus, and scope.” The “financial outcome” of these third-party review requests “directly changed the financial outcome” in the insurer’s favor.
Benefits of legal counsel
A seasoned attorney can take on IME doctor bias head-on through background investigation and, where permissible, by requesting video recording of the IME. For example, the lawyer may already be familiar with an IME physician who regularly performs exams for insurers. The doctor may have a lopsided record favoring insurers or may be financially dependent on their IME business. Did they cherry-pick from the medical records? Are their findings in conflict with overwhelming evidence of disability from treating sources?
The lawyer can also spot procedural irregularities in the claims process that point to an abuse of discretion.
How can Disability Insurance Law Group help?
A delay or denial of a disability claim can be financially devastating. Disability Insurance Law Group represents long term care and all disability insurance claimants at every stage of the insurance process. If you have any questions regarding your disability or life insurance claim, our team of attorneys would be happy to provide you with a free consultation. Please contact us at 954-633-8811 or email us.