I haven’t written very much this year about new claims mostly because it is presumed that the majority of readers to Lindanee’s Blog have claims that are ongoing. Nevertheless, I think all insureds with claims at various levels of review may find something here of interest to them.
There are basically 3 stages of disability claims review, 1)initial review 2) ongoing claims review, and 3) long-term risk assessment. Although insureds are unaware, their claims review takes place in the exact order as I’ve outlined above. If the insured, at any point in the review process fails to meet any aspect of the plan or policy, the review STOPS and no further review is conducted.
The outcome of the claims review process is often the result of the expertise of the claims examiner and the amount of training provided. But, let’s start at the beginning with Initial Review.
Initial claim review involves a rather intensive review of the 10 Plan (ERISA claims) provisions on the “SPD”, or Summary Plan Description, found at the very beginning of employer Plans. Provisions include, “class of employee and identification of Group”, minimum hours worked provision, elimination period, pre-existing conditions, worker’s comp application, percentage of benefit allowed, and several other qualifying provisions. If any one of the above provisions is NOT met, the review STOPS and the claim is denied.
For example, if the claimant did NOT meet the Elimination Period as given in the Plan, then the review stops at that point and no further investigation is conducted, such as review of medical records. The only exception to this is when the claimant fails to meet the pre-existing condition provisions and a pre-existing investigation is subsequently performed.
Initial new claims review is very important since it would be a waste of time to continue the review when the insured/claimant doesn’t meet the SPD provisions. For example, there is no reason to continue to review an IDI claim when the insured did not have at least a 20% earnings loss to begin with.
Only when the claimant/insured meets every condition of the SPD, or contract page of the IDI policy, will the review be passed on to the second level of review, namely Ongoing Claims Review. Remember, we’re still dealing with new claims, therefore no decision as been made yet to approve or disapprove any claim.
At this point the claim is examined to determine if the claimant/insured meets the definition of disability as written. This would include a complete medical review of records obtained, occupational and financial data, and personal phone call data, if they can get it. At this point, the claims examiner acts as a “super paper chaser” by requesting all medical, occupational and financial records. When received, these records are reviewed internally by the “powers that be” – medical reviewers, vocational specialists and financial departments. Try not to forget that Claims Examiners are the lowest rung of the file review ladder and have no authority to make claims decisions. They may make recommendations whether to approve or not, but they are NOT final claims decision makers. Managers make claims decisions, not Claims Examiners.
If all of the paperwork is accepted, verified and signed-off on, the claim is then reviewed for “risk implications.” While the first two steps in the hierarchy of review depend on training, the third step, “risk management” is totally dependent on EXPERIENCE. At this point, the claims financial reserve impact is reviewed and planned action steps are documented to describe the “Expected Resolution Date”, ERD, and more specifically the actions that should be taken on the claim to bring about the EXPECTED RESOLUTION.
In this final stage of initial claims review, specific future actions are identified that will bring about either a denial or approval decision. I have to say here that “denial decisions” can be made to happen by well planned actions in the future. These planned future actions are then documented in a “Planned Direction” statement that provides an outline of future actions to bring about a termination of claims. Approvals are generally held in the manager’s office until the financial reserve can be pitted against denials to meet projected financial targets.
While you may have thought a claims examiner just reviewed your medical information and made a decision, I can say as someone who used to do all of this, that’s not true at all. New claims are intensively investigated, reviewed, and given “Expected Recovery Dates”, AND are managed to bring about the expected results.
In summary, the major point of this article is to point out that IF claims are found TO NOT MEET any prior provision or condition, the claim review STOPS and the claim is denied. Sometimes, callers ask, “They never requested records from my doctor, or employer, so how can they deny my claim?” Attorneys sometimes only see an “inadequate or incomplete review” and act accordingly.
It makes sense though doesn’t it? If a claimant doesn’t meet the elimination period then, there’s no point of moving the claim forward? No insurance company is going to devote resources to claim reviews that did not meet basic provisions in the SPD.
Also, as a reminder, if your claim is being paid on a regular basis, you are way beyond the “Hierarchy of Review”, and your claim is sitting on someone’s desk while the “risk” is reviewed over and over again. The last step in the process never ends for the life of the claim.
If you find that you are in need of assistance, please feel free to contact me at 207-793-4593, or visit my website at:
