Many of my clients ask the question: "How do disability insurers consider my pain?" My short answer to this question is: "They don't." As most disability benefits claimants learn the hard way, disability insurer have a very high tolerance for their pain. Why do you ask? A disability insurance is a corporation. It is an entity, not a person. It does not feel. It does not care. Its priority is to maximize its profits for the benefits of its stockholders. As you will see, this economic pursuit directly collides with the interests of disabled persons seeking benefits from the insurer.
The disability insurers' priority on profits is made very clear during the claim process. A claims division is a loss leader in an insurance company. The sole purpose of a claims department is to pay claims. Thus, this division only creates losses and has no capacity to create income. The only way in which the claims department can assist in the corporate profit bottom line is to minimize the payment of the claims. The mathematic formula is obvious, limiting losses while continuing to charge premiums leads to greater profits.
This bottom line profit motive is reflected in how disability insurers treat cases which involve the common symptom of pain. First of all, pain is subjective by definition. Only the claimant can feel his or her pain. There is no "pain meter" by which a reading can be taken on a claimant and demonstrate on an objective scale how much pain a person suffers. For this reason, it is typical for insurers to state in claim denials that a claimant failed to "demonstrate by objective evidence to support the level of his/her pain." This, of course, is utter nonsense. Yet, it does not stop these companies from attempting to use this ploy every day to fend off deserving claimants from appealing their disability appeals.
Why do the claims personnel take such a harsh and unfeeling stance? It goes back to Upton Sinclair's prescient statement: "It is difficult to get a man to understand something when his salary depends upon his not understanding it." (I, Candidate for Governor: And How I Got Licked, 1935). The claims personnel are merely minions following the instructions of their corporate masters in denying as many claims as possible.All denials must be signed off on by a claims supervisor and are tracked carefully. If these employees don't deny the claims, they lose their jobs. Given today's economic climate, few people can afford to lose employment and associated benefits by taking "moral" stands against their employers. After some time, more conscientious will be fired or leave for other work. The remaining jaded employees just keep on denying claims and, as you will read before, may receive even greater incentives.
Although disability insurers will not admit exactly how employees are rated for the purpose of performance evaluation. Their "claims handling performance" is a large consideration for the purpose of receiving bonuses, raises or promotions. Some companies reward bonuses in the form of company stock which causes claims personnel to become even more invested in the company's profit motives.
The expectations for denials goes beyond that of mere job retention, raises or advancement. Some disability insurers have gone so far to create " denial promotions" for achieving claim denials. One large insurer sponsored a "Hungry Vulture" award (based on the old cartoon of two vultures sitting in tree with one vulture saying to the other, "Patience my ass. I am going down there and killing something.") for creating denials. When this was not done voluntarily, case file "round ups" were undertaken during which personnel have been asked to find inconsistencies and technicalities by which to deny claims. Another company set actual monthly goals and offered prizes for personnel assisting the most in meeting those goals.
Scott Elkind is an attorney in Silver Spring, MD whose practice focuses on disability issues. He can reached at 301-495-6665.