This firm recently acquired information in long term disability claim files from Cigna Group Insurance which sheds greater light on the problem of using vendors recommended by insurers to handle Social Security Disability Claims.
The vendor in this case is ALLSUP, a company which is utilized by several disability insurance companies to assist claimants to acquire Social Security Disability benefits in order to create an offset of benefits. The benefit offset favors the insurer in two ways: (1) it reduces the benefits paid by the insurer on a dollar for dollar basis; and (2) it allows the insurer to request a refund of overpaid (duplicative payment due to payment of both SSD and private disability) benefits made in prior months.
What we have learned is that ALLSUP is paid for its efforts in collecting the overpayment for the insurer in addition to collecting a flat fee for its representation. This leads to many ethical problems in terms of conflict of interest. First, an attorney representing a client before the Social Security Administration (SSA) is paid a government-regulated contingency fee in which the attorney receives a percentage of the back benefits capped at a maximum fee. A fee is only paid upon successful resolution of the case. Whereas, ALLSUP is paid directly by the insurer win or lose. Further, ALLSUP does not employ attorneys, but, rather uses "representatives" who have not had the benefit of legal training, nor are permitted to appeal the case to federal court if they are not successful before SSA.
Even more disconcerting is that ALLSUP is paid a percentage of the overpayment recovery. The recovery of an overpayment only benefits the insurer and impoverishes the claimant who could possibly bargain for reduced or delayed repayment.
Instead, ALLSUP receives more money from its percentage of the overpayment recovery than from the representation of the claimant. This places ALLSUP in a direct conflict of interest with the claimant. So, how can this be allowed??? ALLSUP does not use attorneys who are held to ethical standards which forbid this type of conflict of interest. Therefore, not only do you get inferior representation, your representative doubles as a collection agent against you. How nice.
So, when an insurer approaches you and recommends a vendor to assist you with your Social Security Disability case, you answer should be a BIG FAT "NO!."