The process for filing claims for disability insurance is tricky but essentially the same regardless of what type of insurance is involved.
There are several procedural pitfalls that must be avoided. Most policies require that the insured provide the carrier with notice of the intention to file a claim within a specified period of time following the onset of disability. They contain separate provisions governing the timing of filing the claim itself. There are also special provisions governing claims arising due to “pre-existing conditions,” “recurrent disabilities” and/or certain specified disabilities including mental impairments. Failure to recognize and comply with these provisions can result in a disclaimer of coverage.
The claim itself is generally filed using forms provided for that purpose by the carrier and augmented by relevant medical and other records. There is usually one form for the claimant and another for his or her physician. For claims arising under group policies, there is also at least one form for the employer.
The claim forms are ridiculously inadequate for the task at hand. They are misleading, contain loaded questions, and generally fail to provide enough space for full and accurate responses. Physicians (and employers) hate filling them out and often do so quickly and without an understanding of the precise issues that will determine the claim’s outcome. The results can be catastrophic.
Proper claim preparation calls for careful completion of these forms, augmented by detailed narratives and medical records that contain all the information required to establish the claim. Special attention must be given to information submitted by the treating physician, who must be fully apprised of the applicable standard of disability and the need to specify detailed diagnostic and examination findings to support an assertion of disability. As much as some physicians may believe otherwise, it’s never enough to simply assert that a patient is “disabled” and leave it at that.
Once a claim has been submitted, it generally takes a carrier 30-45 days to make a determination. There are a lot of things that can slow down the claim determination. The carrier may request additional information to clarify discrepancies or address omissions in the claim documents. It may send a claimant out for an independent medical examination or functional capacity evaluation, or it may request a peer review of the medical evidence by a non-examining specialist. If there are vocational issues (such as the need to determine the precise duties of the claimant’s job or the skills he or she possesses), expert input on those issues may be requested. These delays can be minimized or avoided entirely by a carefully documented claim submission that anticipates the material issues and addresses them in advance.
If a claim is approved, benefits are generally awarded retroactive to the date the waiting period specified by the policy expired. If the claim is denied, the insured has the right to ask for a redetermination and to submit additional evidence in an effort to get the initial decision reversed.
In one sense, appealing an adverse claim determination is easier than filing an entirely new claim. That’s because the insured has the right to examine the carrier’s claim file, determine exactly why the claim was denied, and then address whatever the critical issues are head on. In general, however, it’s considerably harder (and more expensive) to obtain a reversal than a favorable initial determination on a claim. A lot of claims are denied due to sloppy or inaccurate submissions by claimants or their physicians, or the failure to properly document a diagnosis and functional restrictions with objective medical findings. It can be difficult and time consuming to correct these mistakes after the fact.
In situations like this, it is often necessary to obtain additional diagnostics and other new evidence (second opinions, functional capacity evaluations, vocational reports, etc.) to shore up existing weaknesses in the record. It’s always necessary to accompany this new information with a detailed, legal critique of the initial determination and persuasive arguments for the award of benefits.
Generally speaking, one must appeal an adverse claim determination within 6 months or forego the claim entirely. When an appeal has been filed, it usually takes the carrier another 30-45 days to make a new determination, subject to the same considerations that affect the timing of determinations on initial claims.
If the initial decision is reversed on appeal, retroactive benefits are generally awarded. If the decision is sustained, there is generally no alternative but to commence litigation.