UnumProvident Corporation, a provider of disability insurance, has been the victim of recent negative publicity surrounding claims handling practices, according to the company. Behind the allegations reportedly are a handful of plaintiff’s attorneys and a few disgruntled former employees, all of whom have personal interests in painting a negative view of the industry-leading company.
Among the allegations being leveled at the company are accusations that there are “targets,” “quotas” or financial incentives set to close valid claims.
“Nothing could be further from the truth,” Tom Watjen, chief operating officer of the company, said. “Any business involves expectations of performance, and ours is no exception. However, to suggest that the natural stresses of our business involve pressure of any kind to close claims inappropriately is absolutely false.”
The company does make projections for claims, just as it makes for other areas of the business such as sales, underwriting or investments. These projections are necessary to manage the business and to provide quarterly reporting to the financial markets. “But,” Watjen added, “to represent these as “targets” or “quotas” for closing valid claims is simply wrong.”
UnumProvident will pay approximately $3.6 billion in claims this year alone, an amount that has increased every year for the past decade. And only two percent of the policyholders who filed a claim with the company last year were found not to be disabled, an amount consistent with prior experience. “The facts simply do not support allegations that we deny valid claims,” Watjen remarked.
Correspondence to the company has reportedly been overwhelmingly supportive, prompting the creation of new web pages at www.unumprovident.com/commitment to provide a way for people to share their experiences with the company. “We had a great demand from people who know our company well and wanted to be heard,” said Watjen. “They are angry that we are being misrepresented in the media.”
Since 1997 the company has managed over 2,000,000 disability claims. According to the company, only a minute fraction of claims ever involve litigation. When cases resulted in a judgment last year, the courts ruled in favor of UnumProvident three out of every four times, further validating the company’s fair, objective claims process. In the past six weeks, the company has won three more significant victories in front of juries across the country in defense of its claims practices.
“We are committed, even with the verdicts of most juries in our favor, to being a learning company … an organization that listens,” J. Harold Chandler, chairman, president and chief executive officer of the company, said. “In that spirit, we will continue to make adjustments whenever appropriate to serve our customers even better.”
The company has taken issue with the 60 Minutes coverage, which it characterizes as inaccurate and not representative of company practices. “I was particularly disappointed in their description of the case of Dr. John Tedesco,” Watjen said. “We never denied a Parkinson’s claim on Dr. Tedesco. His original claim was for his back, which he injured trying to lift a golf cart. We paid the claim. He subsequently chose to close his practice and became ineligible for further benefits. On appeal, he alleged a diagnosis of Parkinson’s disease. We denied benefits based on the back claim and requested a new claim for Parkinson’s with the appropriate information. The records needed were not made fully available until after Dr. Tedesco’s lawsuit had been filed. Once we received the definitive diagnosis of Parkinson’s, we paid the claim.”
The other case 60 Minutes briefly referenced is still being appealed. In that situation, five different doctors, including the original treating physician, said there was no objective medical evidence to support disability. 60 Minutes also interviewed the Insurance Commissioner-Elect in California (John Garamendi), who has not assumed office. UnumProvident believes that when he does and has access to the full facts of the company, he, too, will value the thorough, fair and objective way claims are managed.
“Our employees are remaining focused on our customers during this period,” Chandler said. “They provide a stark contrast to the few former employees depicted on 60 Minutes. Our 13,000 associates realize that we deal with people during very difficult times in their lives. Return to work services require specialized skills, and the results can have an enormously beneficial impact on individuals and families. We take this responsibility very seriously.”
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