Thanks to Glenn Kantor and his excellent ERISA plaintiffs’ firm, we have a very interesting case that combines information about health insurance denials with a good spanking of a disability insurer. Lundquist v. Continental Casualty Co., 394 F.Supp.2d 1230 (C.D. Cal. 2005) involves a disability claim by a clinical research manager in the grievance and appeals department at Blue Cross of California. The disability insurer denied the claim but the trial court reversed that denial. The trial judge found a number of problems with the disability insurer’s handling of Ms. Lundquist’s claim. First, the insurer failed to fairly and completely consider the nature of her job responsibilities in evaluating whether she could perform her work. You can't very well determine whether a person is disabled from their own occupation unless you are willing to find out about and fairly take into account what the job responsibilities of that person are.
Second, the insurer selectively picked portions of a report it procured from a reviewing physician to support its denial of benefits. This violated ERISA’s fiduciary duty and claims procedure requirements. The court determined that the insurer acted unreasonably in denying the disability claim.
Another interesting aspect of the case is that it sheds light on the workload of a reviewer of denied health insurance claims. As part of her disability claim, Ms. Lundquist provided her disability insurer with a detailed description of her job responsibilities at Blue Cross of California as a clinical research manager reviewing appeals from healthcare providers and patients of denied medical claims. In a letter to the disability insurer in 2002 this is how she described these duties:
Since I am one of the managers in [the Grievance and Appeals] department, I have a twofold job. Over the last 18 months the department has decreased in size and all the employees, especially the managers, have assumed an increase in the work load. I added to my work load of trainer of all new hires with a small case load, to a large case load of 135 cases, plus continued as a resource manager to all the employees. These cases have to be reviewed, records requested, re-reviewed and presented to a Medical Director, and closed with a decision within 30 days. There are also expedited appeals that have to be handled and closed within 3 days. This was added on to the 135 cases already being reviewed. Since I am in management I also attend 3-5 meetings per week, that last anywhere from 1-4 hours. . . . The case load was three times what it was when I hired on with the company [in 1997].
There’s a lot of information here to mull over. Even assuming that there are some clerical folks helping a reviewer manage this type of case load, it is pretty clear that any given appeal to this particular health insurer (Blue Cross of California is one of, if not the largest, health insurers in California) isn’t going to receive a lot of attention. Some appeals may not need a lot of energy or time to either reverse or maintain a denial. But a lot of healthcare appeals are complex and/or require careful review of a lot of technical information. It’s hard to believe that those appeals were being considered thoroughly and competently given this type of caseload. And think about the last sentence of Ms. Lundquist’s description. Amazing how this insurer can triple the efficiency of its reviewers in just five years!