Justin Frankel

	The lump sum settlement, like many issues about disability insurance, is rife with the possibility of expensive mistakes. 

This is the final article in a series of four prepared by Jason Newfield and Justin Frankel of Frankel & Newfield law firm on disability claims and what the practicing dentist can expect when filing a claim. Their goal is to educate dentists, so they are better prepared to file and address the outcomes of their disability claims.

A word of caution: the first offer made by a disability insurance policy to a claimant is going to be a low offer. The problem facing the disabled dentist is that they are likely to be tired of doing battle with the disability insurance company, scared that they might end up with nothing, and may not know how the insurance company determines the value if their policy. This is one you don’t want to do on your own—the risk is too great.

Not all dentist’s disability insurance policies are eligible for lump-sum settlements.  Such a resolution is what is known as an “outside the contract” settlement. It is never mandatory for an insurer to pursue a lump-sum settlement of a claim. But beware, if an insurer is interested in doing this, it must be favorable to them, so careful consideration of the issues is required.

Like any division of any insurance company, the disability insurance company has a lot of number crunchers on its team: analysts, economists and actuaries. They know what the aggregate value of your policy is and what it costs the insurance company every time a check is deposited into your account. Offering a lump sum settlement is only going to be offered if it will ultimately save the disability insurance company money. Often, by moving a claim (liability) to a resolution, they are able to free assets for their corporate balance sheets. This helps the company’s overall profitability.

There are a number of factors that need to be considered by a disability insurance claimant before considering entering into any kind of negotiations with the long-term disability insurance company:

		What is the present value of your disability policy?

		How is that calculated — what factors are utilized, what assumptions made?

		Does your policy have a lifetime payout, or do benefits end at age 65 or Normal Retirement Age?

		Will you ever be able to return to practicing dentistry, or working in any capacity in the field?

		How old are you and what is your life expectancy?

		How many disability policies do you have, and are they private/individual policies or group policies?

		What is the potential taxability of any settlement?

While the idea of never having to worry about if the disability insurance company is going to terminate or delay benefits is tempting, there are pros and cons to the lump sum settlement that must be strongly weighed and considered.

Before you can make an informed decision, you’ll need to understand what your policy is worth to you, and what it is worth to the insurance company.

The value of your policy is called the “present value of future benefits.” It is not a matter of simply multiplying your monthly benefit over 12 months and then multiply that by the number of years left until the end of the policy.

There are many other factors to consider, among them, life expectancy, interest rates and inflation, which will help with a calculation of the Present Value.  A dollar today is worth more than 100 cents in 10 years.  The concept of determining present value is not difficult once visualized.

The younger you are and the bigger your monthly disability benefit, the more interested the disability insurance company will be in a lump-sum payout, as the reserves freed up from settlement will be greater.

Let’s say your disability benefits came to $100,000 annually, and you had twenty years left on your policy. The disability insurance company is looking at the total amount it would have to pay you, the value of the total in terms of current and future interest rates, what reserves are available to cover your policy (and those of thousands of others) and the rate of inflation.

A lump-sum disability policy buyout is a negotiable item, and often, the first offer is going to be low (relatively). The insurance company is counting on the dentist going into negotiations with little information, or incorrect information. The advantages and disadvantages of resolution in a lump-sum settlement need to be reviewed and analyzed by experienced counsel who understands how disability insurance companies perform their analysis and equally importantly, who understands the situation facing a dentist who has become disabled.

Gather all information from the insurance company before agreeing to anything:

		The total value of all remaining payments

		Any fees or costs that would be attached to the lump sum

Another consideration is whether or not you will be able return to work, either as a dentist or in some capacity that will create an issue for your receiving further long-term disability insurance benefits.  If that is the case, a buyout may make sense, as it may free you to engage in other activity.

But remember, if the offer is too low, and you accept it, there are no “do-overs.” And once the insured dies, there are no further continued payments to a surviving spouse.

The lump sum settlement, like many issues about disability insurance, is rife with the possibility of expensive mistakes. Working with an experienced disability insurance attorney can help you navigate the pitfalls: those you might expect, and the unexpected.

RELATED: For more on filing a disability claim:

Filing a Claim for Disability Benefits — What You Can Expect

What Happens After You've Filed a Claim for Disability Benefits

The Disability Appeals Process and Litigation

 are the founding partners of Frankel & Newfield, a law firm focusing on long term disability insurance issues on behalf of claimants.  Both have attained AV Preeminent ratings from Martindale-Hubbell® and have been selected for inclusion in the Metro New York Super Lawyers. The practice represents many dentists, orthodontists, periodontists and other medical professionals.

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Before entering any kind of negotiations with disability insurance company, dentists should consider these important factors.

When to Negotiate a Lump Sum Settlement from a Disability Insurance Company

	The clock starts ticking on your time to appeal once the denial is issued —whether you open the envelope or not.

 This is the third in a series of four articles prepared by Jason Newfield and Justin Frankel of Frankel & Newfield law firm on disability claims and what the practicing dentist can expect when filing a claim. Their goal is to educate dentists, so they are better prepared to file and address the outcomes of their disability claims.

An educated claimant who understands the disability claims process and the potential pitfalls will be more likely to succeed than one who treats a disability insurance claim like any other insurance claim. The disability claim is very different and requires detailed preparation at every stage to increase the insured’s chances of success.

Does the dentist who files a long-term disability insurance claim need to become a disability insurance expert?

Dentists, like many other medical professionals, often consider themselves knowledgeable about insurance claims, as they or their office staff handle them routinely for patients. Unfortunately, dental insurance and disability insurance claims are completely different, with one common feature — the desire to delay or deny claims.

Our first recommendation is that claimants speak with us before filing a claim. That way we can carefully plan the issues out while assessing the likelihood of the claim being challenged, and when possible eliminate any potential issues in advance, so they do not become claim landmines. Once the claim has been filed and has been unfortunately denied, time becomes an essential concern.

What happens after your disability claim has been denied

If the long-term disability policy is through the employer and governed by ERISA, the dentist has a limited amount of time to respond. There have been cases brought to Federal Court over interpretations of these strict time limits. Since the last thing you want is to give the insurance company a reason to deny your appeal, be mindful of this time frame. The clock starts ticking on your time to appeal once the denial is issued —whether you open the envelope or not.

Why would your claim be denied? Do the math. Let’s say your benefits are $6,000 a month, and you are a relatively young 45-year-old, with a disability policy that promises coverage until age 65. That’s twenty years of paying $72,000 a year. It costs less for the disability insurance company to push back against a claim than to pay it. With in-house counsel, outside attorneys and third-party claims administrators, there is a virtual army of people engaged in a battle to avoid paying claims.

Thus, ensuring that the issues are developed IN ADVANCE is of paramount significance to developing your best likelihood of a successful claim.

A common tactic we see in our disability practice is the claim by the insurer to cancel the contract, return any previously paid premiums and close any contractual relationship. Essentially, after the fact, the insurance company wants to pretend that no relationship ever existed.

To accomplish this devious approach, the insurer claims the policy was procured by a misstatement in the policy application or some other claim of fraud. Essentially, the insurer says that it relied on certain statements made by the claimant to purchase the policy and that those statements were not true.

Unfortunately, the law on this topic generally favors the insurer, so many claimants are left without coverage, despite paying premiums for many years and then finally needed to file a claim. If nothing else, the insurance company tries to use this position as a vehicle to negotiate with the insured.

An unfortunate example happened to a claimant who had filed a disability claim for anxiety and depression. The claim was denied, and he proceeded to litigate the claim, bringing an action in Federal Court.

During the discovery process, the attorney for the insurance company reviewed documents from the claimant’s general physician as well as the treating physician. The records indicated that during a routine office visit, he had complained to his general physician that he was feeling anxious. The doctor prescribed a medication to address his anxiety.

Even though the claimant never remembered filling the prescription and the issue was never raised again, this doomed his case.

He did not report this particular information in his policy application, and the insurance company made the argument that the application had been falsely completed. It was based upon a misstatement — they claimed a FRAUDULENT misstatement. They further claimed that had the company known of his condition, the company said it would have never issued him a disability policy.

This claim for rescission was developed and this issue forced the claimant to settle with the insurance company for a significantly lower number than the real worth of the claim — as the disability was quite significant. His option was to take the lower number, or risk losing everything due to the potential rescission claim.

There have been cases when the loss of a license can act as a bar to a claim, but if the dentist is disabled first and then loses his or her license, the argument can be presented that they are still disabled and still entitled to benefits.

However, many insurance companies will see the loss of a license as a legal disability: the dentist who is not legally permitted to engage in their profession, therefore they cannot be unable to practice. This issue has resulted in numerous battles — a fight that often can determine whether benefits are payable at all.

The insurance company believes that a dentist who has lost his or her ability to practice because their license has been revoked or suspended will be seen as a bad person and are more likely to aggressively deny or terminate the claim.

Tactically, one must think hard about timing issues when a disability is involved and licensing issues are also potentially implicated.

By law, ERISA claims can only go to litigation after all other administrative proceedings have failed. We devote a large part of our practice to avoiding litigation through skilled negotiations and aggressive representation during the appeals process. But when these approaches are not successful, our next step is to file a lawsuit.

Just as any materials provided with a disability insurance application, including medical records, diagnostic tests, etc., are used to file a claim and to overturn an appeal, these same materials are used in litigation. They must be considered at all stages of the claim as materials that may at some point in the future be used in court.

 are the founding partners of Frankel & Newfield, a law firm focusing on long term disability insurance issues on behalf of claimants. Both have attained AV Preeminent ratings from Martindale-Hubbell® and have been selected for inclusion in the Metro New York Super Lawyers. The practice represents many dentists, orthodontists, periodontists and other medical professionals. 

After you submit a claim, how do you handle the disability appeals process? Here are some tips to help you navigate the litigation of a disability claim denial.

	Filing a claim for disability benefits leads to all types of requests for information. Learn how to handle each of them.

This is the second in a series of four articles prepared by Jason Newfield and Justin Frankel of Frankel & Newfield law firm on disability claims and what the practicing dentist can expect when filing a claim. Their goal is to educate dentists, so they are better prepared to file and address the outcomes of their disability claims.

If there’s one thing that insurance companies are good at, it’s denying claims from dentist claimants. The physical nature of dentistry, as 

, led to a large proportion of claims filed by dentists and related dental professionals, and disability insurance companies are aware of this.

While the level of “red flags” being raised in the minds of insurance companies is not as high as for certain illnesses, like Fibromyalgia or Chronic Fatigue Syndrome, there are certain occupations that appear to receive increased scrutiny from claims examiners, and dentistry is among them.

What should the dentist expect once a claim has been filed?

When a claim is filed, the insurance company will typically seek to secure (and lock in) a claimant’s factual history of the claim, and they will attempt to elicit other information from a claimant. Often the person will have a script to work with, and that person will have handled hundreds of these.

In contrast, a newly disabled dentist, focused on his/her health first and foremost, may not keenly respond to the inquiries in a way that is in their best interest, and could negatively impact his/her claim.

As counsel for dentists, we typically do not permit such interviews, or they are conducted in our presence and with our participation.

As per the language of your policy, which should be reviewed by an experienced disability insurance lawyer, the insurance company is typically entitled to access and review information from you and from third-parties (scope is what might be at issue).

In our practice, we see a lot of requests for information that are overreaching authorizations that provide the insurer with access to materials that, frankly, are not relevant to the claim — or can be used negatively against a claimant. In residual or partial disability claims, the financials are relevant, while they might not be in a total disability claim.

What most dentists don’t realize is that they have a right to restrict the scope of the materials that are being requested. They also have the right to modify the scope of any authorization. There may be push back; the insurer may complain that the restrictions make it difficult for them to render a decision on the claim.

If that occurs, the dentist or the dentist’s attorney should request that the insurer clearly explain why it needs such a broad authorization, and on what basis does the policy demand it.

It is appropriate to seek to enforce your rights — whether on your own, or through counsel.

IMEs and FCEs — Examinations and Evaluations 

It is likely that the policy owner is required by the terms of the policy to undergo, as reasonably requested by the insurance company, an IME — Independent Medical Examination. Practically every policy now gives the insurer a right to conduct an IME as often as reasonably necessary.

The IME is one of the basic tools that disability insurance companies use to “determine” the extent of a claimant’s disability, and the dentist seeking benefits under his/her policy has an obligation to appear. There have been cases where the claimant objects to attending and this is almost universally held to be a basis to deny a claim, since it is a contractual obligation.

However, the contours of the examination, whether it can be audio or videotaped, or whether a witness can attend, and/or take notes, are issues of significance in this process.

Remember, there is a built-in conflict of interest in these exams. The examining doctor is being paid by the insurance company for each exam. The doctor who reports that many claimants are disabled is less likely to continue to be sent cases by the insurance company.

Protecting your rights against a process which might be stacked against you is of paramount significance in preserving your disability claim.

The FCE, Functional Capacity Exam, is riddled with problems. Unless your policy requires that you undergo this specific test, we advise our clients about the significant concerns we see in such evaluations.

An FCE, which requires the dentist to perform at maximum physical capacity, has been demonstrated to actually harm to some claimants. Often, those who limit their movements due to pain are accused of faking the claim. We ask the insurance company to provide the contractual language that requires this test, based on our experience with safety and reliability issues that it presents.

What is not revealed in a file is how the claimant is doing day one, two, three or two weeks after the FCE. These are rigorous tests of activities and may serve to exacerbate the claimant’s condition.

We have counseled dentists who are being required to attend Upper Extremity FCE’s, where the assessment focuses more on hand issues more prevalent in a dentist’s work. There are significant challenges with this testing as well, but often it poses challenges to claims.

Another tool often seen in dentists’ claims involves the use of surveillance. This clandestine (sneaky) observance of you while you engage in everyday activities will be studied in an effort to “capture” some inconsistency to use against your claim.

While you must live your life, a disabled dentist should be aware of what they do, and that can be harmonized with being disabled from being a dentist.

These are some of the claim handling issues typically seen when a claim gets filed. In our next piece, we will discuss some of the issues that might arise, or challenges we see made by insurance companies in an effort to avoid their contractual obligations.

What is the difference between an IME and a FCE? Dentists filing for disability should know. Here's what to expect after filing a claim for disability benefits.

Don’t expect the same response from the disability insurance company that you expect to receive from homeowners or auto insurance companies. How your claim is prepared in advance and what you do if it’s delayed or denied could make all the difference for you and your family.

This is the first in a series of four articles prepared by Jason Newfield and Justin Frankel of Frankel & Newfield law firm on disability claims and what the practicing dentist can expect when filing a claim. Their goal is to educate dentists, so they are better prepared to file and address the outcomes of their disability claims.

Recognizing the importance of having disability insurance is an important part of any dentist’s financial well-being. The body-mechanics of dentistry — exerting a strong amount of force using the hands, arms, shoulders and back, combined with repetitive motions, often with vibrating instruments over extended periods of time – often leads to musculoskeletal injuries that can make practicing dentistry difficult and often, impossible, due both to pain and the functional issues attendant to the condition.

Most dentists don’t think of their profession as a highly physical one, but the number of dentists we represent in our disability insurance law firm upends that idea. The prevalence of disability for dentists is one of the highest among all white-collar professions. Insurance companies are often wary of claims by dentists due to how many they see filed.

First Step: Preparing to File a Disability Claim

Understand that the disability policy is essentially a contract between the insured and the insurance company. The terms and provisions in the policy define the entire process, including the restrictions and limitations that are commonly faced and the respective rights and obligations of the parties to the contract.

The first step in preparing to file a claim is to review the terms of the policy. We routinely find issues that dentists are not aware of, and even the straightforward matters can become problematic.

The issues that come to light during a policy review include:

		Elimination period — how long do you have to wait until benefits will be paid?

		Definition of disability — these vary widely from policy to policy. Some definitions are more favorable than others, and some are overly restrictive.

		Partial disability terms — could you work part time or in a related capacity and still collect benefits?

		Insurance company’s rights to contest the claim — and proof of loss – what is required to prove the claim.

		Requirements for medical examinations — includes IMEs and FCEs – examinations or evaluations.

After a thorough review, you should have a better understanding what the insurance company wants to see as for the proof of disability, before it will consider issuing a check to its insured. 

Receiving a diagnosis, no matter how dire, is not enough to entitle one to receive benefits.

The insurance company needs to appreciate that you are unable to perform the tasks that are a part of your occupation. Often, it is considered the “material” or “important” duties of the occupation. Our office works closely with treating physicians to be sure that the medical records reflect this information, and the appropriate restrictions and limitations in functionality which impair one from practicing.

Here’s the fine point: you took out disability insurance to insure your income as a dentist. If you own your own practice and you are actively engaged in the administrative functions of the office, the insurer will likely seek to argue that while you cannot perform the tasks of dentistry, you can still do certain administrative duties. Or, the insurance company will claim that you can still evaluate patients and create a treatment plan, even if you are not performing the actual dental services.

They may claim that these duties are material, and that diagnosing patients is also material, as part of an attempt to create a claim for partial disability, rather than full disability. If you own the dental practice or have partners, the situation may be more compromised.

Once a claim becomes partial versus total, the door will be open to the insurance company’s need to perform a financial analysis of all income, and a loss of income will need to be demonstrated. The maximum benefit period could also be impacted if a partial disability claim is established.

The review of the disability insurance policy is not a cursory matter, and an experienced disability insurance attorney will provide valuable insights.

Next Step: A Conversation with Your Treating Physician

Unless your doctor has experience with disability claims, it is highly unlikely that he or she understands the importance of properly prepared medical records when pursuing a disability insurance claim. The insurer will be reviewing medical records, and they may contact the doctor directly or speak with support staff in the doctor’s office. If the records are not properly prepared with an eye to a disability claim, providing support rather than simply a diagnosis, or if a casual comment is made to the effect that the dentist is not really disabled, the claim could be stopped dead in its tracks at this point.

Our firm devotes a good deal of time to working with treating physicians. We educate them about the importance of their notes in the records, the need to include the limitations that the disability has created for the dentist and the definitions in the terms of the policies that are critical to the claim’s success.

Many treating physicians think that “disability” refers to someone who is bedridden or in a wheelchair. They do not understand the nuances, nor should they: it’s not their policy and it’s not their claim. But the physician plays a critical role, providing objective support for the claim and supporting the claim with objective diagnostic tests and when necessary, documented clinical findings.

Today the number of potential pitfalls for a disability claim has increased dramatically. In the past, the claimant would receive a folder or kit with forms to complete. Those forms were spring-loaded and were designed to elicit information that might negatively impact a claim. Unsuspecting claimants who did not recognize this were doomed to make mistakes that would lead their own claim to disaster.

Now, you can go online and provide information that leads to a denial or a request for more information faster than ever before. The convenient portals now available to claimants make the application process seem like any other information they post on the web.

What they don’t tell you on the form is what will happen to the information.

It must be understood that any information provided to the insurance company, from doctor’s charts to office notes to online forms or old school hard copy forms, are essentially building the foundation for the insurance company to deny a claim.

If the claim is being made on a policy that the dentist gets through work, versus a privately purchased policy, the documents in the “claim file” are the ONLY documents that can be reviewed during a Federal Court review of an administrative appeal. If the disability claim is an employee benefit, it is governed by a set of rules known as ERISA (Employee Retirement Income Security Act of 1974, a federal law that was originally designed to protect employees).

Under this law, the policyowner does not get a jury trial, but any denials or challenges to the claim must be decided through an administrative hearing, prior to even getting the ability to sue the insurance company. In litigation, generally the only documents that can be reviewed to make the decision are in the claims record — the file of materials gathered by the disability insurance company.

In our next article, we’ll examine what happens once your claim is filed.

RELATED: For more on insurance and disability claims:

Not All Disability Policies Are Created Equal

Is Your Dental Practice Prepared for an Insurance Audit?

How do you prepare to file a disability claim? First, make sure you understand the process. Here are the steps dentists should follow as they ready their submission.