I don’t know to what extent my readers are actually interested, or care about what goes on at this time of year relative to their claims. It’s always been my experience that insureds and claimants have no idea what the review process entails and how essential it is to determining whether a claim is paid or not.
The claims review process requires claims managers to be very skilled in managing numbers so that financial profit objectives can be “rolled in by year-end”. Managers are given very attractive bonuses and incentives if they can achieve company profit objectives. This is often called, “shareholder value” so that the real intent of managing numbers can be cloaked. If they can’t do this, they are fired, simple as that.
When I say “manage profits”, I mean managing and manipulating financial reserves. Posted here on Lindanee’s Blog are a few very good articles about financial reserves and how claims are managed playing the numbers. Believe me when I tell you that your claims decisions are all about playing the numbers and nothing more.
While one would think the “business” of disability claims would be about people, it is clearly not. Each claim is assigned a monetary future amount called a reserve, which in theory represents a cushion “reserved” to pay claims. But, financial reserves can be manipulated to control paper profit figures that distort the financial picture of any insurance business. This process is referred to as “Off Balance Sheet Financing”; and, according to Generally Accepted Accounting Principles is not permitted.
For example, if a new claim is marked up in the month of April, a good claims manager will not approve its denial until May. Why? Because it’s a wash (financial reserve UP, and financial reserve DOWN) produces no profit, at least on paper. A good manager would never deny claims in the same month the financial reserve is opened up.
Did you have to wait longer than usual to get a decision on your claim? A “juggling musical chairs” then takes place so that denied claims exceed approved claims in order to show an LAR (Liability Acceptance Rate) less than 60%. This is why all claims are submitted to claims managers for “validation”, so that the numbers can be manipulated. Some managers are good at this, some aren’t. Let’s face it, some insureds are severely disabled and the claims will be paid, but not until a sufficient number of denied claims are available to offset the financial reserve.
Attorneys and even Unum are surprised to learn at deposition that I know about these things, but I was good at my job and managers used me extensively to help them “roll in” their numbers. At the time, managers used an Excel Spreadsheet called OMAR to keep track of claims in, and claims out, based on financial reserve. Insureds should really now understand why they don’t always receive timely claims decisions because of the process of “manipulating” the numbers.
This time of year, managers begin in October (beginning with the 4th Qtr.) to “target” claims based on the “biggest bang for the buck”, meaning it’s always better to “go after” claims with the highest financial reserves first. Insureds receive requests for medical update, questionnaires, treating physicians are contacted, etc. Increased surveillance and IMEs are arranged. “Any occupation” investigations are done, and certain impairments are targeted. This is why it is often said within the ranks that the best claims job is to quit in October and come back in January.
There really is no personalization of disability claims, as one would expect, and clearly no one touching claims cares about disability, or the effects and levels of impairment.
Don’t be misled into thinking your claims handler is “supportive” of you because that’s a false assumption. In reality your claims handler is no more than a glorified administrative assistant pushing claims from one paper reviewer to the next. Your claims handler is also NOT the person who makes a decision on your claim; spending time trying to convince this person your claim is credible is a waste of time, and I don’t recommend trying that. It’s a fool’s errand.
I hope you have a better understanding of how claims decisions are actually made. This time of year is a turkey shoot, and it’s the insureds and claimants who are the victims of corporate profit seeking. This isn’t a game to you, but it’s a definite numbers push to corporate insurance “Robber Barons”.
