In this article I review 4 reasons you should avoid an internal appeal with your insurance company.
If the insurance company denies you disability claim, an internal appeal is when you as them to review their decision.
All insurance companies let you do one or more of these internal appeals before you take the step of bringing your claim before an arbitrator or judge. Naturally, you need to do as many internal appeals as they will allow, right?
Sometimes internal appeals in a long-term disability case can cause unnecessary delays, wasting your time and financial resources. So how do you know what to do?
Let’s discuss when it makes sense to continue doing internal appeals and when you should avoid them and go for outside help. But let’s start by making sure we all know what an “internal appeal” really means.
This article is part of our Ultimate Guide to Long-term Disability.
What is an internal appeal for long-term disability benefits?
When you apply to a provider for disability benefits, the company assigns an agent to review your claim and approve or deny it. If you get denied and request an internal appeal, the provider assigns a new agent to review the denial and decide whether to overturn it and give you your benefits or let it stand.
We call the appeal “internal” because at this point, it only involves you and the provider. “External” appeals involve an outside party, usually a judge or other arbitrator.
Internal appeals are the first step in the appeals process, and most providers offer two or three rounds. But with some insurance plans, you may not need to go through all the rounds. If the first internal appeal fails, you can choose to move right to the final appeal with the arbitrator or courts. Your HR department or union may not understand all the options that apply to you. You may need to seek a free legal consultation to get straight answer about what options your plan allows.
When should I do an internal appeal?
Believe it or not, providers can and will admit they made mistakes and approve internal appeals. But you should only appeal internally if you have a chance of success. Your chances of success depend on your personal characteristics, claim evidence, and the provider’s reasons for denial.
Your personal characteristics include your age, education, work history, pre-disability income, medical condition(s), symptoms, and temperament. If the first agent reviewed your details and missed an important characteristic that validated your claim, you can point it out in the internal appeal. Often your personal characteristics will create a bias against you.
For example, if you are over age 55, the insurance company may believe you want to use your disability benefits for “early retirement”, rather than for a valid disability claim. Or if you have an invisible medical condition (e.g, fibromyalgia, depression, etc), then the insurance company can’t verify the seriousness of your symptoms with objective tests, so they often assume you could be exaggerating.
Claim evidence includes the medical reports from your doctor that discuss your diagnosis, symptoms, and treatment plan. It also includes medical opinions from the provider’s doctors and even surveillance videos of you doing daily activities. The first agent could have missed a crucial item here too.
However, more often the problem is a law of information or gaps in the medical evidence. Common gaps in medical information can include a discussion of the severity of your symptoms or the treatment done and planned. On appeal, you would need to have your doctors fill in these gaps by by sending a letter or medical report to the insurance company.
The provider’s reasons for denial can include not only the stated reasons but also unnamed reasons. Often the unnamed reasons can relate to bias or stereotypes that are applied to people making disability claims. Common examples include, you are too young to be disabled, you don’t like your current job and don’t have other employment options, or that you must want an early retirement because you are over 55 years old. Unstated reasons for denial are harder to discover and dismiss.
So, when does it make sense to appeal?
You can win internal appeals in these kinds of situations:
- The provider denied your initial claim because it needed clarification from your doctor.
- You failed to provide requested information.
- You hadn’t had a particular treatment or appointment at the time of the claim, although you have now had that treatment or appointment.
- Your doctor submitted incomplete or vague information.
- The provider’s doctor hasn’t evaluated you yet.
- The provider has no surveillance of your daily activities.
- The provider has yet to spend much money or time on your appeal.
If any of these reasons seem like they fit your situation, then you should consider moving forward with the internal appeal, supplying the proper evidence, and following the typical process.
Now let’s look at when you shouldn’t follow the process.
4 reasons to avoid internal appeals for a long-term disability claim
Reason 1 – Your chances of success are slim to none
You should always appeal internally when you have a reasonable chance of success. But what if you’re not sure what your chances are?
Consider whether any of these situations sound like yours:
- Your denial involves the two-year “change of definition” for occupation, where it switches from “own” (your last job) to “any” (whatever work you can find).
- The provider sent you to a medical examination, vocational assessment, or rehabilitation program and you failed to follow through.
- Surveillance video shows you engaging in activities your disability should prevent.
- The provider has invested a lot on medical examinations, treatment, or video surveillance for your claim.
- Your denial cites technical reasons, like a pre-existing condition or late application.
- The provider blames your inability to work on your employer, like for a toxic work environment or insufficient accommodations for your disability.
If any of the above situations sound like yours, then don’t waste your time with internal appeals. You can still win, but you’ll have to let the provider know that you intend to pursue an external appeal. Some providers will even voluntarily reverse decisions before your case goes to court.
Reason 2 – Your provider’s well is deeper than yours
Have you heard of the Fabian strategy? This tactic defeats opponents by wearing them down over time rather than facing them directly. Used successfully, the Fabian strategy drains the opponent’s resources and morale without ever entering a confrontation.
Multiple rounds of internal appeals can easily become a Fabian strategy, draining you of your ability to continue fighting for benefits. Think about it: A delay of several months or a year has much less effect on a provider’s resources than on yours, especially if you can’t work.
After several months with no income, you may no longer have the money, time, or will to push through external appeals. Out of desperation, you’ll accept the provider’s settlement terms just to get the ordeal over with rather than fighting for what you deserve.
Reason 3 – You may harm your disability claim
This reason doesn’t present a huge risk in most cases, but if your claim involves technical legal issues, a toxic workplace, or credibility problems, then you can really make a mess of things if you don’t carefully control your story and evidence.
For example, let’s say a “pre-existing condition” seems to exclude you from coverage under your policy. If you don’t understand precisely what “pre-existing condition” means in your policy, then you and your doctor might accidentally create evidence that can hurt your case.
Or what if a toxic workplace contributed to your depression and anxiety? You and your doctor may overemphasize that factor in discussing your condition. Providers have successfully argued against paying benefits in these cases, claiming that remedying the situation will cure your inability to work. Strangely enough, some claimants believe that focusing on the toxicity of their work environment helps. Please don’t make this mistake.
Reason 4 – You may run out of time to file a lawsuit
When the provider denies your claim or terminates your benefit payments, you have a limited amount of time to file a lawsuit, usually one or two years. Lawyers can make legal noises about when the “clock” begins, but providers will always argue that it starts from the time of the first denial letter to you.
One of my clients found himself stuck in internal appeals for over two years, making him miss the deadline. He eventually reached a settlement with the provider, but the missed deadline forced him to accept a smaller amount than he deserved.
Don’t accept anyone’s assurances that you have plenty of time to file for an external appeal. As soon as you receive your denial, you can begin an appeal, either internal or external, but always keep that ticking clock in mind.
In some cases it makes sense to request an internal appeal. If you’ve just begun the claims process and you have legitimate information that the provider didn’t consider, then an internal appeal has a good chance of success.
However, you need to recognize when further internal appeals may not succeed – denials on technical grounds, the change of occupation definition, or the provider’s medical or video evidence that contradicts your claim.
Forcing yourself through internal appeals with limited chances of success will drain your financial and emotional resources and get you nowhere. Your fatigue and frustration will have you making strategic mistakes and getting confused, as the provider patiently waits for you to give up.
Don’t let the process wear you down. Review your situation with the above points in mind, decide which direction you’ll take, and move immediately. If you’re not sure how your situation fits in these points, please call our disability support team toll free at 1-888-732-0470 for a free consultation.
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