Azur: "It was a scam, I'm tellin' ya. . . Don't you understand what a scam is?"
Watters: "I'm trying to figure it out."

(Exchange between witness Raymond S. "Muzzy" Azar and attorney, Russell F. Watters in the 1990 civil trial relating
to suspected arson at the Gateway Hotel back in my old home town of St. Louis, Mo.)


The “IME-TSA Swindle” - Getting around the law


In the ERISA field things are generally not what they seem and words lose meaning. Two examples are the “Independent Medical Examination” (IME) and the “Transferable Skills Analysis” (TSA). In reality, IME's are almost never “independent” and TSA's seldom provide any kind of reliable “analysis”. These are fictions, but they're important fictions that insurance companies are allowed to rely upon. These two contrivances are combined so as to deny LTD claims. If a lawsuit is filed, a court’s review is generally limited to the “administrative record”.  Insurance companies use IMEs and TSAs to slant the evidence in that record in their favor.  This usually happens without the claimant even knowing about it, until it’s too late to do anything about it.


For plans containing a two-tiered definition of “disability”, once a claimant falls under the second-tier “Any Occupation.” (“Any Occ.”) definition, access to benefits becomes much more restricted.  The claimant bears the burden of proving that he is incapable of performing the material and substantial duties of any occupation for which he is qualified by reason of education, training or experience.  Usually, claimants are older workers, who have only done one job for perhaps 15 or 20 years. Those individuals may have no “education, training or experience” beyond their own job. In such cases the distinction between “Any Occ.” and “Own Occupation.”(“Own Occ”) disability gets rather blurred. For example, what if the claimant has worked as a mechanic for 20 years, but develops severe arthritis in his hands and can no longer reliably grip or hold his tools. Everyone agrees he can’t work as a mechanic, but he has no other work experience or skills. So how can an insurance company deny his disability claim even under the “Any Occ.” definition?  By shifting the focus away from his actual job skills to what are called “transferable skills”, that's how.


Even though our mechanic may have no other specifically identifiable job skills, he will certainly have general skills that could theoretically transfer to some other occupation.  For example, his unique knowledge of nuts and bolts might permit him to work as a quality control inspector at a “nut and bolt” factory. It does not matter that there are no jobs available for such a position anywhere near his residence.  The fact that there might be some such position available somewhere in the national economy is all it takes.  There are no doubt numerous hypothetical jobs that we could dream up that our mechanic friend would be capable of doing. All an insurance company needs to do is to find a few and document it for the administrative record and that's where special types of medical and vocational reports come in. Insurance companies combine biased medical exams or medical record reviews with bogus self-generated vocational reports to slant the evidence in their favor. And since it’s likely the only evidence on that issue that a judge will ever see, they can get away with denying legitimate disability claims.


 “Peer Reviews” and the Independent Medical Examination (IME)


Before an insurance company concocts the TSA report, it will first seek to define a claimant’s medical “restrictions and limitations”.  (A “restriction” is what a physician orders the patient not to do so as to prevent further harm or injury.   A “limitation” is something the patient cannot do, because of his medical condition.) This is sometimes done by conducting an “independent medical examination” (IME) and having the examining physician prepare a report. Although in recent years, insurers have more often opted for cheaper “peer review” reports, which are nothing more than a paper review of the medical file by a doctor, who has never seen the claimant.  As far as an IME is concerned, “independent” doesn’t really mean “independent”. The last thing any insurer wants a fair objective evaluation by a truly independent expert.  The IME doctor is paid directly or indirectly by the insurance company and has a financial interest in saying what the insurance company wants to hear. And what it wants to hear is that the claimant has some ability to sit, stand, walk, lift, bend, etc.


When it comes to more common “peer review”, a report is obtained from a paper-reviewing doctor.  Since that doctor has never seen the claimant, in an effort to lend some credibility to the report, he will often contact the claimant’s treating doctor by telephone, for a “doctor to doctor” discussion of the case. Nothing good ever comes from those contacts.  If the treating physician has already stated an opinion as to a claimant’s, impairment, there is absolutely no evidentiary value in the hearsay recitations of doctors talking on the telephone. The only purpose of these contacts is to undermine the opinion of the treating physician. This is sometimes accomplished by outright trickery to get the doctor to say anything damaging to the claim.  If the he makes some careless, off-the-cuff remark, the “peer review” doctor will take that down, and put it into a written report for the insurance company to use. 


In one case I handled, a reviewing doctor outright lied about what three treating doctors had told him over the telephone.  In that case the insurance company approved the claim and paid LTD benefits for more than a decade.  However, documents in the claim file indicated that when the company initially approved the claim, it only reserved three years of benefits, apparently believing that he would be dead within that time.  But because of certain medical advances, the client committed the inexcusable sin of refusing to die on schedule. So at that point the insurer implemented what it called a “Clinical Management Plan”, which euphemistically meant, “Let’s terminate his benefits.”  As part of this scheme, the insurance company secured the services of a reviewing medical doctor to conduct an oversimplified review of the medical records.  This doctor, made three separate phone calls to three of the client’s treating physicians.   


There were copies of three letters in the insurance company’s claim file from the reviewing doctor to each one of the treating doctors, purporting to confirm the substance of each of those phone conversations. Each of those letters stated that the treating doctor had ten days to respond and that if no response was received, he would assume everything stated in his confirming letters was accurate and complete.   Then, the very next day, he sent his report to the insurance company.   (i.e. The idiot didn’t even wait the ten days for a response).  According that report, each of the treating doctors concurred with his opinion that since the claimant’s condition was “stable”, he was no longer totally disabled and could go back to work.  After that, the insurer had its own, in-house vocational consultant write a report, stating that given the duties of the occupation, as he understood them and given the reviewing doctor’s medical conclusions, the claimant was suddenly ready and able to return to work.  Based solely upon those two reports, the insurance company terminated benefits.  


I personally contacted the three treating doctors. Each one of them not only denied the alleged substance of the phone conversations with the reviewing doctor, but each of them emphatically stated that his statements were misquoted and distorted in the report to the insurer.  And each treating doctor said that he vehemently disagreed with the review doctor’s conclusions regarding the client’s impairment, who each said remained 100% disabled from all work. But it got even way better than that.  Each of the treating doctors categorically stated, in writing, that he had never received any letter at all from the reviewing doctor, purporting to confirm the substance of any of the phone conversations.  Now that is what’s commonly known in the law as fraud.   As a result of that fraud, not one of those treating doctors had any opportunity to respond to the mischaracterizations in the report to the insurance company. When I called this to the attention of the LTD carrier, to its credit it immediately reversed the denial and reinstated benefits. 


The Transferable Skills Analysis (TSA) report


Once it’s established, by “independent” medical evidence that a claimant is capable of some physical activity and thus has some “functional capacity” to work, then the claims examiner will present this bogus medical evidence to an in-house vocational consultant, who then prepares a report consistent with the IME or “peer review” findings.  From an evidentiary standpoint the TSA report will perhaps be the single most critical document in the administrative record, because it will be the only evidence in existence, linking the medically documented work restrictions and limitations stated in the IME or “peer review” report to identifiable jobs.  The report will identify several jobs for which it will be said that the claimant has “transferable skills” to perform and it will state that the duties of those jobs are consistent with the restrictions and limitations stated in the newly-generated medical reports.  It will also invariably confirm the existence of actual jobs, in the “general economy” that are said to be compatible with the claimant's education, training, and experience.  Once the report makes its way back to the claims examiner’s desk, that person will issue a denial or termination of LTD benefits, based upon all of this medical and vocational evidence.


Just like the IME, the pretense is that the TSA report involves some kind of assessment by an independent expert to ascertain if the claimant has any marketable job skills. In reality, however, nothing could be further from the truth.  The report will be always be done by an employee of the insurance company. The reason is obvious. Because it is so critical to its efforts to “paper the record”, there is no way any insurer is going to entrust it to a truly independent outside expert. It wants complete control over what that report says and what better control is there than to have it done by someone, who draws a paycheck from the insurance company.  It also wants the ability to bury the report, if by some chance the “consultant” displays an unanticipated streak of honesty or naiveté.


There are many ways to attack TSA reports. In many cases, they’re sloppily prepared. Frequently they list several sedentary-type jobs. But often, nothing in the report matches the listed jobs with the listed restrictions and limitations.  There may be nothing linking any of the jobs identified with the claimant’s specific job skills. There may be nothing establishing that any one of the identified jobs involve employment in the same industry as the claimant's work history; or nothing establishing that the claimant is even qualified (by virtue of education, training or experience) to actually do any one of the jobs identified; or nothing, disclosing the alleged degree of transferability of the claimant's job skills to the jobs identified (e.g. low, fair, excellent); or nothing, revealing the amount of additional training, if any, that would be required for a claimant to assume the duties of any of the jobs identified. Finally, there may be nothing in the report showing that the actual physical demands of the jobs identified are indeed within the scope of the claimant’s physical restrictions and limitations; or that the claimant is physically capable of doing any of the jobs identified.


Simply put, “Transferable Skills Analysis” reports prepared by insurance company vocational consultants usually contain no “analysis” at all. They frequently rely upon vocational software programs and are often nothing more than hearsay recitations of computer-generated reports, which supposedly identify jobs from the Dictionary of Occupational Titles (DOT) that are said to be consistent with a claimant's vocational preparation and general educational development. Obviously, the results from such programs can only be as good as the data inputted into the computer; however, I can assure you that the raw data that was inputted will never see the light of day outside the insurance company offices. The only thing that will ultimately be disclosed to the claimant is the TSA report itself, not the vitally important source data that that was relied upon to prepare it.


In the final analysis, a TSA report will likely contain nothing except bare conclusions concerning the transferability of the claimant's job skills, and his supposed employability. For that reason alone, it can often be argued that the report does not constitute substantial evidence upon which to deny a claim. Furthermore, if nothing in the report establishes that any prospective employers in the identified job categories would be willing to hire a person with the claimant's disability, then it can further be argued that the TSA report is evidence of nothing. (This would be especially true if the claimant's disability is progressive and degenerative).


Another common inadequacy of TSA reports is that they frequently identify jobs that are not consistent with the claimant's “station in life”. For example, our mechanic friend may have been earning $40,000 a year on his old job, but the jobs identified in the TSA report may only pay $25,000 to $35,000 a year. The reason for this common mistake is that the vocational consultant may use the monthly LTD benefit payment as a benchmark, instead of using the claimant's pre-disability income. (LTD benefits are usually in the range of 60% to 80% of the claimant's pre-disability income). That is not the proper measurement. For one thing, quite often, the LTD benefit is non-taxable, whereas the stated income for the jobs listed in the TSA report would be taxable.


Finally, the whole concept of “transferable” skills is a bit esoteric anyway and anything that claims an ability to identify such skills should be treated with skepticism.  TSA reports are often nothing more than hearsay recitations of undisclosed, in-house, computer-generated reports that rely upon unknown software programs and suspect raw data to spit out job descriptions from the DOT, with no analysis at all as to whether the claimant could physically do the jobs identified, let alone whether the jobs are consistent with his education, training or experience.  In order for there to be at least the pretense of objectivity, any such reports should be independently prepared and all of the data relied upon by the vocational expert should be disclosed.  











How Insurance Companies Combine Biased Medical Exams
with Bogus Self-generated Vocational Reports to Deny
Legitimate Disability Claims
By: Michael A. McKuin


ERISA Disability Lawyer