by Thomas J. Pryor, Esq.

When the rigors of practicing medicine, chronic illness, or serious injury prevent doctors from continuing to earn a living in their chosen specialized field, claims for long-term disability may arise. Many physicians and other professionals have personal disability policies intended to cover this eventuality. Some have coverage available through their practices or other employer, on an individual or group basis.

We have seen increasingly exacting scrutiny applied by disability insurance carriers to claims filed by healthcare professionals because many older policies contain terms more favorable to the insured than policies written over the last 15 or so years, some suspect that practitioners have the clinical knowledge to embellish claims, and salaries are typically higher than in other occupations which can generate substantial claims well above seven figures. Consequently, payment of disability benefits presents significant exposure to insurance carriers over the life of a claim. The stakes are high for all involved.

Typically benefits are calculated based upon the difference between pre- and post-disability income and the benefit stream can run to age 65. Claims for persons working in medical occupations can involve musculoskeletal injuries, coronary issues, repetitive stress injuries, or chronic debilitating conditions.

Claims under group policies trigger a more complex legal analysis under a standard less advantageous to claimants. A federal statute (ERISA) supplies the legal standard to establish a payable claim, which is harder for a claimant to satisfy.

In most instances, however, privately owned individual policies are implemented. Ideally, the policy will provide coverage on an “own” occupation basis, which is defined precisely to mirror the specific type of medical practice so that a claim for benefits is payable if the claimant is rendered unable to perform the important or material duties of his or her occupation.

Issues as to what defines the claimant’s occupation can be significant. Some insureds are engaged in more than one “occupation,” and some policies provide that the insured’s occupation is the recognized specialty defined by the practice; issues can arise when, say, a physician works both in an ER and in occupational medicine. When securing coverage it is critical to get the most favorable definition of the insureds actual “occupation” in language that defines “disability” as the inability to perform that specific occupation. Analysis of the claim can involve examining the percentage of time devoted to each specialty within a broader “occupation.”

Some policies are written on an “any” occupation basis that restricts coverage unless the claimant is unable to perform the duties of any occupation for which he or she is fitted by education and experience, a much more exacting standard to meet. Some policies provide for crossover from “own” occupation to “any” occupation after 24 months.

Claims by medical practitioners, generally fall within the “own” occupation definition. Policies will cover total disability, or the inability to perform the “important” or “material and substantial” duties of the defined occupation. Some will include residual disability coverage, intended to cover the inability to perform one or more of the important duties of an occupation, or the inability to perform in the practice on a full time basis. For example, a practitioner who can see patients for consults but whose dexterity is limited so that no surgical procedures can be performed may not be able to stay in the same practice.

In addition to medical evidence of treatment, diagnosis, objective medical testing, and related information investigated by the insurance company, extensive financial records including tax returns must typically be analyzed, involving the doctor’s accountant or financial advisor in the process. Often CPT code information must be compiled and dissected to tease out what procedures were performed pre- and post-disability, for comparison purposes. Problems can arise when the coding information is imprecise or does not capture the true nature of the limitation.

Although much of the information provided in support of a claim is documented in various files and records, a successful claim often requires going beyond the claimant statement and related forms. Humanizing the claim and providing “day in the life” narrative statements from the claimant and others familiar with their daily activities or job responsibilities can help ensure that the insurance carrier analyzes and considers all nuances and variables impacting the claimant’s ability to perform his or her duties in the former occupation.

If a physician’s disabling conditions have seriously impacted or severely limited their ability to focus, stay on task, and present the detailed information necessary to accurately document the claim, legal counsel and financial advisors can assist by reviewing policy documents, assembling supporting proofs and presenting all within a timely basis to document the claim.

Insurance carriers typically rely on vendors and internal or external medical consultants to gather and analyze claims, especially those that fall within more obscure practice areas or involve uncommon, atypical, or idiosyncratic illnesses, symptoms, or injuries. Every claim is different and invariably there are individualized factors that must be fully explored and properly presented so the final review and decision on the claim is based upon an accurate and complete record.

Anyone seeking to protect an income stream should purchase policies affording long-term disability benefits tailored specifically to suit their needs. Paying premiums as a young professional can seem wasteful or unnecessary when balanced against student loans or other pressing obligations, but setting those protections in place early will pay dividends if illness or injury strikes suddenly, decades later, abruptly terminating or impairing the ability to earn a livelihood.

Thomas J. Pryor, Esq. is a shareholder in the Princeton law firm of Stark & Stark and Chair of the firm’s Insurance Practices Group.

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