Lately I’ve been posting articles relating to the insurance industry’s latest resurgence of egregious claims practices resembling those of 20 years ago. Due to the increase in claim terminations, it’s a good idea to review the claims review process in hopes of saving at least some of the claims already targeted for denial.
As most of my readers are aware, insurance companies typically “target” vulnerable (deniable) claims immediately before a profitability reporting period. Anytime the financial reserve is reduced, such as closing out a denied claim, there is an immediate contribution to profit. Insurance companies make money by NOT paying claims.
First quarter reporting is important to insurers because they have an opportunity to “make up for” lost claim denial opportunities from the year before. But, let’s be specific. What happens internally to deny more claims for 1st Qtr.?
- In February, managers and direct reports screen claims (target) to risk manage for denial by March 31st.
- Updates for medical review are requested even if a recent update was just made. Paperwork is sent out.
- Independent Medical Evaluations are requested in order to “stack the deck” with outside medical opinions that support work functional capacity. There would be no time for insureds to challenge IME reports before March 31st.
- Surveillance is requested on a heightened scale. Both in person and Internet systems are checked, as well as local law enforcement, town hall, and LinkedIn. Surveillance reports are misrepresented in order to back-up otherwise weakened, suspicious claims.
- Internally, frequent “roundtables” or unit meetings are taking place too, as my manager used to put it, “See where we are with expected denial dates before 1st Qtr. end.”
- Special projects, are put into place such as audits to make sure claimants have applied for SSDI, or have received approval and are working on overpayments. Any overpayments collected by the end of March reduce financial reserves and therefore contribute to profitability. “Any occupation investigations” are another profitable “profit” project to be assigned to.
- No favors are granted. Requests for “extensions”, or more time to submit paperwork are denied. If the paperwork is not received, claims are closed. Tough luck on the appeal as long as the insurance company receives the credit toward profitability.
- Call-a-thons. Claims handlers are asked to work Saturdays to make phone calls to insureds in search of information that can be used to terminate claims. No one should be speaking with claims handlers anyway, but particularly just before a profitability closing.
- Claims are audited for possible good prospects for Settlement. Be careful here. Insureds are often selected when there is information they need money. During the winter holidays, such as Christmas, ERISA claims are targeted because of the lower benefits.
- Claim approvals are likely to be held back until after March 31st, but claim denials are rushed to be recorded before month-end. If you’re waiting for a new claim approval, shoot for after April 1st.
Scams, shams, and tricks of the trade are often employed depending on what it will take to support claims denials. It’s also important to remember a couple of things that people wouldn’t ordinarily think of, such as the fact that claims handlers in general do not document exactly what you say in a phone call. (This is why I don’t recommend phone calls at all!) Phone narratives are often misrepresented and written to favor the insurance company at the expense of all else in favor the the insured. Don’t be taken advantage of because you think “telling all” will guarantee the approval of your claim. It won’t, and could make matters worse.
We are now within 3 weeks of the end of 1st Qtr. This is NOT business as usual at most disability insurance companies.
If you need help, I am always here, but I’m finding people don’t need or want help these days. In any event, stay smart and tend to your claims accordingly.
http://www.disabilityclaimssolutions.com
