Doctors with “Own Occupation” Group Disability Policies: What to Know

Many doctors who are employed by hospital systems and/or medical groups often have employer provided ERISA group disability policies in addition to privately purchased individual disability policies. With respect to ERISA group disability policies, more often than not disability is defined to mean the inability to perform your own occupation, and some policies will go so far as to contain language regarding board certification as being the ultimate determining factor as to what constitutes your “own occupation.” Such was the case for a doctor who filed a claim for long term disability benefits under his employer’s disability insurance policy with Standard.

Per Standard’s policy, the definition of Own Occupation as it pertained to doctors defined own occupation to mean the “general or sub-specialty in which you are board certified to practice for which there is a specialty or sub-specialty recognized by the American Board of Medical Specialties…” This qualification would serve as the focal point of a recent Virginia federal court ruling in the case of Evans v. Standard Ins. Co. in which the Court ruled that Standard’s interpretation of this very specific definition of own occupation was not unreasonable and in doing so affirmed Standard’s decision to deny benefits.

Per the facts of the case, at the time of disability Evans was working as an interventional radiologist and maintained a board certification in “diagnostic radiology,” a medical specialization recognized by the American Board of Medical Specialties. It is noted that at the time be began the practice of medicine there was no specialty for interventional radiology and that later when a subspecialty for interventional radiology was created Evans never obtained certification in that subspecialty despite the fact his entire practice was in the field of interventional radiology. In the case of an individual disability policy this fact would not play as important a role in this case as Evans’ occupation at the time of disability would have been largely based on his production codes. In this case his production was overwhelmingly that of an interventional radiologist and as such an individual disability carrier would have almost certainly determined his occupation to be such that. However, under the Standard ERISA group disability policy this fact would be the very basis of the claim denial and subsequent litigation.

ERISA and Discretionary Authority

One of the biggest difference between individual policies and ERISA group disability policies is the law that applies to each. Whereas under an individual policy the law of the state in which the policy was delivered governs; under an employer provided policy the applicable law is ERISA, which as we have discussed extensively throughout our website has unique rules that heavily favor the insurance company. One of these is the “standard of review” a court will use to determine which party will prevail. The Standard of Review is based largely on the presence of a discretionary clause, which grants an insurance company the authority to interpret the provisions of a policy. Evans’ policy with Standard contained such a discretionary clause providing Standard discretionary authority. Making matters worse, when a policy contains a discretionary clause, as a default a Court must defer to the insurance companies review and decision. This also creates a standard of review knowns as the Arbitrary and Capricious standard of review, which ultimately requires a Court to determine the reasonableness of Standard’s interpretation of plan provisions as well as the denial of a claim.

Prior to filing for disability Evans began to experience shortness of breath and anemia which was determined to have been caused by exposure to x-rays in the course of his work. After his symptoms continued to worsen his doctors recommended that he stop practicing interventional radiology. Evans applied for disability benefits under his ERISA group disability policy with Standard and submitted opinions from multiple treating physicians that it was unsafe for Evans to continue to practice interventional radiology, and as such that he was permanently disabled from working as a interventional radiologist as there was no way to avoid exposure to x-rays.

At the time Evans submitted his claim to Standard he was still working in the capacity of a diagnostic non-interventional radiologist and had not experience a loss of income on account of same. In submitting his claims Evans argued that as he was not able to perform his “own occupation” as an interventional radiologist and as such he was entitled to disability benefits. The information provided to Standard did document that over 60% of his CPT codes were associated with interventional radiology, however, Standard determined that Evans was not disabled as he was able to continue practicing diagnostic radiology- the area of his board certification. Standard denied Evans claim finding he was not disabled from performing his “own occupation.”

Appeal and Litigation

Evans appealed Standard’s denial and in doing so argued that Standard improperly determined that his pre-disability occupation was as a diagnostic radiologist and not as an interventional radiologist. In response to the appeal Standard argued that Evans was not certified in the subspecialty of interventional radiology, and that he maintained his board certification in diagnostic radiology – a job that he was working in. Following the denial of his appeal Evans file a federal lawsuit under ERISA against Standard.

The Court noted that as the claim was subject to ERISA the ultimate determination would come down to the applicable standard of review. As noted above, Standard’s policy contained a discretionary clause and as such the applicable standard of review was Arbitrary and Capricious. The court explained that under this standard of review:

[T]the question before the court is whether Standard’s interpretation of the Own Occupation provision was ‘unreasonable or unprincipled,’ and not whether this court believed that the provision could be interpreted differently or in a more reasonable manner.

Although the Court understood, and I think sympathetic to, Evans’ position it ultimately ruled that Evans failed to convince the court that Standard’s interpretation of its policy language was unreasonable or unprincipled and as such the Court ruled in favor of Standard.

Why this is important.

As we can see from this case the nature of ERISA and IDI disability policies have key differences that can greatly affect your ability to collect benefits. The decision of the court, though correct under prevailing case law, could have been much different if a de novo standard of review applied to the case, or had Evans suffered a loss of income under the policy. Along with other unique factors discussed by the Court this case serves as an example as to why it is important to understand your policy language and to consult with a disability attorney prior to filing a claim for benefits.

Dell & Schaefer did not represent Dr. Evans in his case against Standard but has represented numerous doctors in situations similar to Dr. Evans.

If you are a doctor and are considering filing for disability benefits please feel free to contact our office and to speak with one of our disability attorneys for a review of your policies and to discuss how we may be able to assist you in securing benefits.

Read more about Standard and why there have been hundreds of lawsuits filed against them due to their failure to pay disability benefits.