Archives for April 14, 2017

The McKennon Law Group PC periodically publishes articles on its Insurance Litigation and Disability Insurance News blogs that deal with frequently asked questions in insurance bad faith, life insurance, long term disability insurance, annuities, accidental death insurance, ERISA and other areas of law. To speak with a highly skilled Los Angeles long-term disability insurance lawyer at the McKennon Law Group PC, call (949)387-9595 for a free consultation or go to our website at www.mckennonlawgroup.com and complete our free consultation form today.

Disability insurance may be the most important type of insurance you can buy. Why? Because it protects your income earning ability if you become disabled. It can provide you with a substitute income when, due to injury or illness, you become disabled and can no longer earn a living. Under most policies and under California law, you are considered “disabled” when you can no longer perform the substantial and material duties of your “own occupation” in the usual and customary manner and with reasonable continuity. If the long-term disability insurance plan is employer-sponsored, it is likely governed by the Employment Retirement Income Security Act of 1974 (“ERISA”). Under ERISA governed plans, you can ensure that you put your best claim forward by providing strong support to your insurance claims administrator. This blog article briefly outlines the support you can provide, which may prevent your long-term disability claim from being denied. That support includes strong medical evidence in support of your disability, sufficient evidence of your occupational responsibilities and consistent behavior reflected in your daily activities and on social media.

Obtain the Necessary Disability Forms and Complete Them Accurately

Your first step after deciding to file a long-term disability insurance claim is to obtain the necessary forms from your insurer and/or your employer. Make sure you carefully complete these forms making sure they are honest, accurate and not overstated.

Strong Medical Evidence for Your Disability

While the specific type of medical evidence you need depends on the circumstances of your physical or psychiatric disability, your claims administrator will need to see that you are under the care of a doctor or mental health provider for your condition who has the requisite expertise in your disabling medical condition(s). Additionally, to the extent you can, you should support your claim with “objective” medical evidence, in the form of X-rays, MRIs, CTs and blood work where possible. While you do need to support your claim with sufficient medical evidence, this can also come in the form of medication and medical records, physician completed forms provided by the insurer, diagnostic records and letters from your physicians. Frequently overlooked, medication records can work to provide additional medical support for your claim in two ways. First, medications, such as those for pain management, can provide additional direct evidence in support of your disability (such as ongoing pain). Second, such medications often have side effects, such as impaired concentration, that can also inhibit your ability to perform your occupation.

In addition to direct evidence of your ongoing, regular treatment, you should request statements from your regular treating physicians in support of your disability. Your physicians should provide detailed statements as to your physical limitations, which will support your claim by explaining how your medical condition(s) cause your restrictions and limitations that prevent you from performing your occupation. Additionally, your doctors should continue to support your disability throughout the claim investigation process. For example, some administrators request a “peer review” of your records by a doctor or nurse hired to review your claim. In this peer review, another medical professional reviews your medical records and other supporting evidence in your claim file, usually on paper although sometimes they can request an in-person medical examination. As part of the peer reviewer’s assessment of your claim, he or she may contact your primary treating physician and ask him or her additional questions about your disability. If this happens, you want to be sure that you have a treating doctor that strongly supports your claim.

Sufficient Evidence of Your Occupational Responsibilities

Although you need to check your specific plan’s definition of disability, it often relies on your inability to perform your “own occupation” or, after a certain period of time, “any occupation” for which you are qualified by education, training, or experience. Often, the claims administrator fails to take into account the specific requirements of your particular occupation, given your level of education, training and experience. Although often overlooked, you can easily request and provide your job description from your employer. Then, there can be no mistaking the requirements of your position. You should buttress your employer’s job description as necessary to assist you in asserting your disability.

Line Up Your Evidence in Support

Determine what other evidence you have to support your disability claim. Do you have witnesses who can support it? If so, get letters or statements from them. Do you have a disability placard from the Department of Motor Vehicles? If so, that may be relevant and you should submit it. Do you have photographs of your home or apartment that show devices you have installed to assist you with your disability? If so, you should submit them. You should think about what evidence exists that will support your disability claim and if it will support your claim, submit it to the insurer.

Surveillance and Social Media Consistent with Your Restrictions?

When you file a “proof of claim,” your insurer begins gathering information, typically referred to as an “investigation” pursuant to its duty to fully investigate all insurance claims. The information your insurer collects will include some of the information discussed above, such as medical records, pharmacy records and even a job description. However, to further investigate the sufficiency of your claim, some insurers may request surveillance or may review your social media. Surveillance may include more traditional “Sherlockian” investigations, such as undercover video surveillance (i.e., an undercover video recording of the insured’s daily activities for a certain period of time). Also, given the rise in the use of social media, it may also include a review of your social media activities. You should, if possible, discontinue or greatly reduce your use of social media.

Given the likelihood of surveillance, it is important that you conduct yourself in a way that is consistent with your restrictions. While some disabilities allow for intermittent periods of activity that may otherwise seem inconsistent, it is important for you to at least be mindful of the potential for such surveillance. As to social media surveillance, the same general principle applies, but please see our detailed article providing best practices in social media for those currently in evaluation for a long-term disability claim.

In addition to the detailed support you can provide, it is also important that you be mindful of the strict deadlines that apply to employer-sponsored ERISA long-term disability claims. Overall, providing the insurance claims administrator with sufficient and timely evidence to support your disability is integral to the success of your claim and having an experienced disability, health and life insurance attorney can make all the difference.

Consult an Experienced Attorney

If your claim is complicated, you may wish to consult an experienced lawyer how handles disability insurance claims and litigation, like the attorneys of the McKennon Law Group PC. We provide consultation services before and during your claim submission to make sure you are putting your best claim forward.

If you wish to consult us regarding the filing of your claim for health, life, short-term disability or long-term disability insurance or if your claim has been denied, you can call (949)387-9595 for a free consultation with the attorneys of the McKennon Law Group PC, several of whom previously represented insurance companies and are exceptionally experienced in handling ERISA and Non-ERISA insurance claims.

In the April 13, 2017 edition of the Los Angeles Daily Journal, Robert McKennon and Stephanie Talavera of the McKennon Law Group PC published an article entitled “Ruling Limits Who Can Bring Suit Under ERISA,” summarizing a new Ninth Circuit case which limits the circumstances in which health care providers can bring suit under ERISA. In the article, Mr. McKennon and Ms. Talavera explain that the new ruling limits the ability of healthcare providers to bring suit under ERISA by narrowing the term “beneficiaries” under ERISA to exclude health care providers, eliminating their right to sue under ERISA in most, but not all, situations. DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 2017 DJDAR 2813 (Mar. 22, 2017). However, the article also explains that even if health care providers are not able to avail themselves of ERISA remedies, they may well find solace in non-ERISA state law remedies.

The article is posted below with the permission of the Los Angeles Daily Journal.

Ruling limits who can bring suit under ERISA

By Robert J. McKennon and Stephanie L. Talavera

Courts continue to grapple with who can sue under the Employment Retirement Income Security Act of 1974. ERISA provides procedural and fiduciary protections that govern employer-sponsored insurance plans, but persons who want to sue under ERISA first must qualify as a plan “participant” or “beneficiary.” See ERISA Section 502(a), 29 U.S.C. Section 1132. Last month, the 9th U.S. Circuit Court of Appeals narrowed the term “beneficiaries” under ERISA to exclude health care providers, eliminating their right to sue under ERISA in most, but not all, situations. DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 2017 DJDAR 2813 (Mar. 22, 2017).

The Case

In DB Healthcare, the 9th Circuit decided two similar cases together, as both addressed the same central issue: whether a health care provider (the doctor or hospital that provides health care to a covered patient) designated to receive direct payment from a health plan administrator for medical services is authorized to sue under ERISA. The 9th Circuit answered “no,” because the health care providers did not have direct authority as “beneficiaries” under ERISA and did not have derivative authority to sue as assignees.

The parties in DB Healthcare were engaged in a standard health care reimbursement dispute. The plaintiffs included 12 medical facilities in Arizona, 10 nurse practitioner employees and a medical facility in Bakersfield (the providers). The defendants, the administrators for the relevant ERISA-governed employee benefit plans, included Blue Cross Blue Shield of Arizona Inc. and Anthem Blue Cross Life and Health Insurance Company (the ERISA plan administrators).

The providers performed blood tests and other services for the individual patients enrolled in an employer-sponsored health insurance plan. Initially, the ERISA plan administrators reimbursed the providers for $237,000 and $295,912.87, but later changed course and requested repayment. After running post-payment reviews, the ERISA plan administrators decided the providers were not entitled to the reimbursements. Blue Cross found the tests were investigational, and therefore were not covered by the plan, while Anthem determined the women’s health center had used faulty practices to bill for the tests and therefore was not entitled to payment. The providers refused to return the money and a legal battle ensued.

The providers filed lawsuits against the ERISA plan administrators, asserting numerous claims under ERISA, but generally alleging that the ERISA plan administrators violated ERISA’s protections when they unilaterally determined that the blood tests and other services performed were not reimbursable.

As to Blue Cross, the providers sought injunctive relief regarding Blue Cross’ refusal to credential nurse-practitioners and its threat to cancel provider agreements if they did not repay them, alleging that Blue Cross violated ERISA’s prohibition against retaliation for the exercise of rights guaranteed by employee benefit plans. See 29 U.S.C. Section 1140. The providers also sought a declaratory judgment that Blue Cross’ recoupment efforts violated the ERISA claims procedure, 29 U.S.C. Section 1133, and the ERISA claims procedure regulation, 29 C.F.R. Section 2560.503-1, which provide procedural protections for ERISA claimants.

As to Anthem, the providers asserted four claims for relief, three under ERISA. Under ERISA, the providers sought declaratory judgment and an injunction that prohibited Anthem’s attempts to recoup payments as violating ERISA’s claims procedure, 29 U.S.C. Section 1133, and the ERISA claims procedure regulation, 29 C.F.R. Section 2560.503-1. The providers also sought monetary damages for past recoupments, and requested declaratory and injunctive relief regarding Anthem’s alleged violation of fiduciary duty to plan beneficiaries and participants. The district courts in each case found the providers were not authorized to sue under ERISA’s civil enforcement provisions.

The 9th Circuit affirmed the district court judgments dismissing the actions. As the court noted, ERISA outlines who can sue to vindicate a claim as a “beneficiary” under Section 502(a). ERISA defines “beneficiary” as “a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.” 29 U.S.C. Section 1002(8) (emphasis added). However, as the 9th Circuit noted in DB Healthcare, ERISA does little to directly define “benefit.” But, within the larger context of ERISA, the courts have determined that “benefit” refers to the specific advantage provided to a covered employee because of his or her employment, for a purpose connected to alleviating various life contingencies. See DB Healthcare at 2815-16 (citing Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, Inc., 770 F.3d 1282, 1289 (9th Cir. 2014); Rojas v. Cigna Health & Life Ins. Co., 793 F.3d 253, 257 (2d Cir. 2015)). The 9th Circuit reasoned that reimbursement for health care services is not a “benefit” within the meaning of the ERISA. Thus, consistent with several other circuits, the 9th Circuit found that the providers were not “beneficiaries” within the meaning of ERISA’s enforcement provisions and could not bring claims directly under ERISA.

The 9th Circuit further held that the providers could not bring their ERISA claims under derivative authority, through assignments by individual employee beneficiaries. In determining that the providers were not entitled to reimbursement, the 9th Circuit reviewed several contracts that governed the relationships between the parties, as well as the underlying assignments.

As to Blue Cross, the governing plan document had a non-assignment clause that read as follows: “The benefits contained in this plan, and any right to reimbursement or payment arising out of such benefits, are not assignable or transferable, in whole or in part, in any manner or to any extent, to any person or entity.” The court found that this non-assignment clause prevailed over any purported assignments.

With respect to Anthem, the 9th Circuit found a lack of derivative authority for a slightly different reason. Although the plan had no prohibition on the assignment of the right to benefits, the dispute was as to recoupment of payment and therefore did not fall within the scope of the assignment. Thus, although the patients signed forms to the health care provider that stated “I Hereby Authorize My Insurance Benefits to Be Paid Directly to the Physician,” those forms did not actually give the health care provider the right to relief.

Moving Forward

While DB Healthcare limits the possibilities for reimbursement for some health care providers, it does not entirely foreclose the possibility of recovery. As the 9th Circuit noted, there is no reason that the providers in DB Healthcare could not have brought their claims in state court, as ERISA would not have preempted the claims. See Blue Cross of Cal. v. Anesthesia Care Ass’n, 187 F.3d 1045, 1050-52 (9th Cir. 1999).

Moreover, if medical providers cannot sue under ERISA because of an anti-assignment clause in the ERISA plan document, it is possible that they may still bring an action against a claims or plan administrator for breach of oral contract, equitable or promissory estoppel and other theories for recovery under state law if the claims or plan administrator pre-authorized coverage of the claim directly with the medical provider. See Morris B. Silver M.D., Inc., v. Int’l Longshore & Warehouse Union Pac. Maritime Ass’n Welfare Plan, 2 Cal. App. 5th 793 (2016) (holding that ERISA did not preempt provider’s claims for breach of oral contract, quantum meruit and promissory estoppel). Therefore, even if health care providers are not able to avail themselves of ERISA remedies, they may well find solace in non-ERISA state law remedies.

Robert J. McKennon is a shareholder of McKennon Law Group PC in its Newport Beach office. His practice specializes in representing policyholders in life, health and disability insurance, insurance bad faith, ERISA and unfair business practices litigation. He can be reached at (949) 387-9595 or rm@mckennonlawgroup.com. His firm’s California Insurance Litigation Blog can be found at www.californiainsurancelitigation.com.

Stephanie L. Talavera is an associate at McKennon Law Group PC.

In theApril 13, 2017edition of the Los Angeles Daily Journal, Robert McKennon and Stephanie Talavera of the McKennon Law Group PC published an article entitled “Ruling Limits Who Can Bring Suit Under ERISA,” summarizing a new Ninth Circuit case which limits the circumstances in which health care providers can bring suit under ERISA. In the article, Mr. McKennon and Ms. Talavera explain that the new ruling limits the ability of healthcare providers to bring suit under ERISA by narrowing the term “beneficiaries” under ERISA to exclude health care providers, eliminating their right to sue under ERISA in most, but not all, situations.DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 2017 DJDAR 2813 (Mar. 22, 2017).

Putting Your Best Claim Forward: Is Your Long-Term Disability Application Going to Be Denied?

Archives for April 14, 2017

Ruling limits who can bring suit under ERISA

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