Firm News Archives - Page 15 of 76

Robert J. McKennon and McKennon Law Group PC Receive Top Attorneys Awards

Newport Beach, CA (February 2018) — Newport Beach attorney Robert J. McKennon achieves Top 100 Insurance Lawyers in California and Super Lawyer status, and McKennon Law Group PC named Insurance Litigation Law Firm of the Year.

Bad Faith Insurance and ERISA litigation attorney Robert J. McKennon, founder of McKennon Law Group PC, which represents policyholders in their insurance disputes with insurers, was recently named a 2018 Southern California Super Lawyer – Insurance Coverage. McKennon also received Top 100 Insurance Lawyers in the State of California for 2018 recognition by the American Society of Legal Advocates, which he has received every year since 2013.

“After representing insurance companies for 24 years and now representing policyholders against them, it is a great honor to be recognized individually and as a law firm for the strong commitment to our clients in getting their life, medical and disability insurance claims paid,” said McKennon.

McKennon appeared in the January 2018 edition of Southern California Super Lawyers magazine. McKennon has received this prestigious designation every year since 2011. McKennon was voted by his peers for this award and was recognized for his excellence in representing his life, health and disability policyholder clients. The Super Lawyer designation is given to less than 5% of lawyers nationally after being nominated and voted on by their peers.

Furthermore, Lawyers Worldwide Awards Magazine recently named McKennon Law Group PC as “Insurance Litigation Law Firm of the Year – California” and “Insurance Litigation Law Firm of the Year – USA” for 2017. McKennon Law Group PC was voted by its peers for these awards and it was recognized for excellence in representing its life, health and disability policyholder clients against the biggest insurers in the world.

About Robert J. McKennon, McKennon Law Group PC
Robert J. McKennon represents individuals and corporations against insurers in insurance litigation matters throughout California and nationally in state and federal courts. He has an AV Preeminent rating from Martindale-Hubbell and a “Superb” Avvo rating. Practice areas of McKennon Law Group PC include bad faith insurance, disability insurance, life insurance, ERISA/employee benefits, health insurance, long-term care, property and casualty insurance, directors and officers liability insurance, professional liability insurance, and insurance agent and broker liability. McKennon Law Group PC publishes a widely read Insurance Blog at https://mslawllp.com/category/insurance-blog/. For more information, please call (949) 387-9595, or visit the firm’s website at www.mslawllp.com.

About the NALA™
The NALA offers small and medium-sized businesses effective ways to reach customers through new media. As a single-agency source, the NALA helps businesses flourish in their local community. The NALA’s mission is to promote a business’ relevant and newsworthy events and achievements, both online and through traditional media. The information and content in this article are not in conjunction with the views of the NALA. For media inquiries, please call 805.650.6121, ext. 361.

Bad Faith Claims Handling: California Department of Insurance Investigates Aetna’s Health Claim Denials

On our blog, we frequently discuss the improper tactics insurers use to deny legitimate claims for life, health, disability and other forms of insurance. For our latest article on the pervasive problem in health insurance claims denials, see https://mslawllp.com/la-times-report-pervasive-problem-of-improper-health-insurance-denials/. Mckennon Law Group PC has had much experience litigating against health insurers who deny legitimate medical claims. We know this is a rampant problem. So, it was not shocking to us that at least one very large health insurer, Aetna, took highly improper actions to deny medical insurance claims.

On February 12, 2018, the California Department of Insurance (“CDI”) issued a press release confirming its investigation of Aetna, one of the largest health insurance providers in the U.S. California Insurance Commissioner Dave Jones directed an investigation into Aetna’s claims handling practices for potential misconduct. Specifically, Aetna’s determinations to deny coverage without a physician’s review of the medical records. The Commissioner expressed his concern over Aetna’s reviewing practices as follows:

I have directed the California Department of Insurance to open an investigation of allegations regarding Aetna’s practices in denying claims and requests for prior authorization for care. The department is also investigating Aetna’s utilization review process. If a health insurer is making decisions to deny coverage without a physician ever reviewing medical records that is a significant concern and could be a violation of the law. The department is seeking more information from Aetna about their claims denial process and I would encourage any Californians who are concerned that they might have been affected to contact the California Department of Insurance at 1-800-927-4357.

CDI’s announcement follows from a report on the topic by CNN, focusing on several troubling admissions made by Aetna’s former medical director for southern California, Dr. Jay Ken Iinuma. Reportedly, Dr. Iinuma admitted that he did not review patients’ medical records firsthand. As a matter of practice, he instead relied on nurses’ secondhand reporting of pertinent information in the medical records.

These admissions appear during the former medical director’s video-taped deposition in an ongoing lawsuit for breach of insurance contract and bad faith. In the lawsuit, Plaintiff Gillen Washington alleges that his health insurer, Aetna, improperly denied preauthorization coverage of his monthly infusion of intravenous immunoglobulin, an otherwise regular treatment for his rare immune disorder. Although Dr. Iinuma authorized the denial as not medically necessary, the deposition transcript revealed his limited knowledge of Washington’s rare disease and its necessary treatment.

Whereas CNN described Dr. Iinuma’s admissions as “stunning,” the use of underqualified consultants to support a denial of coverage is more common than some might think. At the McKennon Law Group PC, we frequently see improper claims denials supported in this manner, through a nurse consultant’s review of the medical records and not a physician’s review of the same. Even more shocking, the insurer often relies on the unqualified consultant’s opinion over that of the insured’s treating physician. We regularly see this in the handling of long-term disability insurance claims, short-term disability insurance claims and health insurance claims.

Similarly, an insurer may attempt to support an improper denial of coverage by using a non-specialist physician. This can be problematic in instances like the above because, as Dr. Iinuma also admitted in his deposition, he had little experience treating those with the rare immunological disorder Washington suffers from, and thus, he knew little about its necessary treatment. We can also surmise that the Aetna nurse who had reviewed his medical records also had little experience treating those with immunological disorders. Yet, he still authorized denial of coverage for the treatment as not medically necessary. More troubling still, lurking behind these issues of qualification are issues of bias. Often, the unqualified consultants work on-site, essentially acting as employees of the insurer, which in turn, renders them more likely to provide an opinion in favor of a claim denial.

Having an experienced long-term disability, individual disability, health and life insurance attorney matters to the success of your insurance claim, particularly where the denial of coverage relies on the opinion of an unqualified consultant or non-specialist peer review physician. If your claim for health, life, short-term disability or long-term disability insurance has been denied, call (949)387-9595 for a free consultation with the attorneys of the McKennon Law Group PC, several of whom previously represented insurance companies and are exceptionally experienced in handling ERISA and Non-ERISA disability and medical insurance claims.

Fee-Shifting: When are Attorneys’ Fees Recoverable in ERISA Cases?

Challenging a wrongfully denied claim for life, health, long-term disability or accidental death and dismemberment benefits can be a very time-consuming endeavor for law firms handling these types of cases. The resources required to fight a sophisticated insurer can quickly become very expensive. Without the ability to collect attorney’s fees, many wrongfully denied insurance claims would go unchallenged, not for lack of merit, but due to a lack of economic viability. Fortunately, the Employee Retirement Income Security Act of 1974, or ERISA, allows for recovery of attorneys’ fees upon a showing of some degree of success on the merits. In other words, a meritorious lawsuit under ERISA will almost certainly result in making the culpable party (usually the insurer who denied the claim) foot the bill. Without this key incentive, insureds and their attorneys would be hard-pressed to pursue a wrongfully denied claim for benefits. Although not the subject of this article, attorney’s fees may also be obtained in non-ERISA state court insurance bad faith cases too.

In this article, we focus on the importance of ERISA’s fee-shifting provisions and some of the contours of that statutory remedy. First, we provide a brief background on attorneys’ fees in our legal system, largely governed by the “American Rule.” Next, we discuss ERISA’s fee-shifting provision as a statutory exception to that rule and as applied by the Ninth Circuit in Dishman v. UNUM Life Ins. Co. of Am., 269 F.3d 974 (9th Cir. 2001).

The “American Rule”
In the U.S., our legal system largely allocates responsibility for attorneys’ fees in accordance with the American Rule. Unlike the English Rule, its American counterpart assigns each party responsibility for his or her own attorneys’ fees, unless a statute or contract provides otherwise. This responsibility applies even if the other party is at fault. The American Rule contrasts with the English Rule in that the latter awards attorneys’ fees to the winner as an element of damages, i.e., the loser pays. Many believe the English Rule is a fairer approach, although it may unfairly penalize parties for defending or pursuing an action where the legal outcome is uncertain.

ERISA’s Fee-Shifting Provision
ERISA provides a “fee-shifting,” statutory exception to the American Rule. See 29 U.S.C. § 1132(g)(1). More like the English Rule’s loser-pays regime, this provision grants the court discretion to award reasonable attorneys’ fees and costs in an ERISA action. ERISA’s generous fee-shifting provision does not even require that the party prevail to be entitled to attorneys’ fees. As the U.S. Supreme Court declared in Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010), under ERISA, the court may award attorneys’ fees based solely on a showing of some degree of success on the merits.

When Does ERISA’s Fee-Shifting Provision Apply?
As discussed in various other blogs on the subject, employee benefits governed by ERISA typically require at least one mandatory internal appeal to the insurer (if the Policy has such a provision, which they typically do). Thus, if you have a long-term disability policy through your employer, and the governing policy or plan document requires appeal of any denial or termination of benefits, one would have to exhaust that internal appeal before he could file a lawsuit. Failure to do so may prevent the participant from filing a lawsuit in the future.

ERISA’s fee-shifting provision applies only to those fees incurred in preparation of litigation and not typically in the requisite administrative appeals process. However, there are exceptions to this rule. One case that discusses such an exception is Dishman v. UNUM Life Ins. Co. of Am., 269 F.3d 974 (9th Cir. 2001), in which the Ninth Circuit Court of Appeals approved an award of attorneys’ fees for work that would otherwise be considered part of the administrative process. In Dishman, the court approved plaintiff’s attorneys’ fees because it found that there was nothing to pare off, as the insurer did not make an adequate administrative remedy available to plaintiff.

The plaintiff, Mr. Dishman, struggled with disabling migraines for many years before he could no longer work. Unum accepted Mr. Dishman’s claim; however, after a few years, Unum assigned Mr. Dishman’s claim to its Complex Claim Unit and hired several private investigators. Instead of conducting medical evaluations, Unum’s investigation focused on Mr. Dishman’s potential affiliation with a Colorado company. Based on this information, Unum called Mr. Dishman and cancelled his benefits, later retracting the cancellation, calling it a “suspension.”

The correspondence that followed appear as attempts to engage in the administrative appeals process under ERISA. Mr. Dishman’s attorney corresponded with Unum on his behalf, proposing that Mr. Dishman be examined by a neutral neurologist. Unum declined and requested further information related to Mr. Dishman’s potential employment in Colorado. Mr. Dishman attempted to comply with Unum’s requests for some time, but when Mr. Dishman’s attorney requested a copy of Unum’s claim procedure, his first request was ignored. As to his second request, Unum responded only that it “does not have a Claims Procedure with regard to the suspension or termination of benefits.”

Although this back-and-forth looks akin to an attempted administrative process, the court determined that Unum’s conduct communicated to Mr. Dishman that he had no administrative recourse. Accordingly, the Court upheld the District Court’s exception to the exhaustion requirement because Unum gave Mr. Dishman inadequate notice of the denial and available appeals procedure. Further, the court also largely agreed with the District Court’s award of all Mr. Dishman’s attorneys’ fees (absent interest thereon) because:

[T]here was nothing to pare off […] none of the claimed hours were expended in connection with the exhaustion of administrative procedures, inasmuch as Unum did not make any administrative remedy available to the plaintiff.

In sum, the courts have long-acknowledged the importance of this recovery provision in achieving the fundamental goals of ERISA. It provides a financial incentive for attorneys to represent plan participants, beneficiaries or fiduciaries with wrongfully denied claims for benefits. It also penalizes administrators for claims handling misconduct by forcing them to internalize those costs. Along with other statutory incentives, the threat of looming attorneys’ fees gives real teeth to ERISA’s procedural protections, increasing the cost of failure to comply with these ERISA protections. McKennon Law Group PC has recovered significant attorney’s fees in many of the bad faith and ERISA insurance matters it has handled for our clients. This has allowed our clients in those cases to keep all or most of their disability, life, accidental death and long-term care benefits.

Attorneys’ Fee Awards in ERISA Cases: McKennon Law Group PC Gets A Large One

Most employee benefits are governed by a federal law called the Employee Retirement Income Security Act of 1974 (“ERISA”), including life insurance, health insurance, disability insurance, pensions and other benefits offered by employers to their employees through their employee benefit plans. Sometimes the plan, or an insurance company if the plan’s benefits are funded by an insurance policy, wrongfully refuses to pay benefits that are due to an employee. If an employee files a successful ERISA lawsuit to collect his plan benefits, he is entitled to recover his attorneys’ fees incurred in the lawsuit. The applicable ERISA statute, 29 U.S.C. section 1132(g)(1), states: “In any action under this subchapter . . . by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” In Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010), the Supreme Court interpreted that statute and concluded a plan participant is entitled to recover his “reasonable attorneys’ fees” if he achieves some degree of success on the merits of the case.

That begs the question. What are reasonable attorneys’ fees in an ERISA case? The hourly rates charged by ERISA lawyers and the amount of time spent on a case can vary greatly, depending on the experience, skill and reputation of the attorney involved and the complexity of the matter. Hourly rates of up to $700 for highly experienced attorneys have been approved for ERISA cases by California federal district courts, including fee awards in the multiple hundreds of thousands of dollars.

The McKennon Law Group PC recently obtained such an award in Reddick v. Metro. Life Ins. Co., No. 3:15-CV-02326-L-WVG, 2018 WL 637938 (S.D. Cal. Jan. 31, 2018), where the Court approved its hourly rates of up to $700 and awarded it 100% of its fees, almost $300,000. We prevailed in that ERISA lawsuit filed against Metropolitan Life Insurance Company (“MetLife”), our client’s group long-term disability insurer, after MetLife terminated his benefits. Our client was a financial advisor that could no longer perform his job duties because of debilitating, post-surgical low back pain and impaired concentration caused by his pain medication. On the eve of trial, after the McKennon Law Group PC prevailed on two critical evidentiary motions, the disability insurer capitulated and agreed to pay our client all his benefits. The insurer, however, offered to pay just a small fraction of the firm’s attorneys’ fees and costs, contending they were unreasonable in amount. We promptly filed a motion to recover our attorney’s fees, which MetLife vigorously opposed.

On January 31, 2018, in a detailed 11-page opinion, the Honorable Judge M. James Lorenz of the United States District Court for the Southern District of California granted our motion. The Court ordered MetLife to pay 100% of our attorneys’ fees (and some costs), together totaling $294,391. Judge Lorenz concluded that the firm’s hourly rates of $700, $600 and $290 for Robert McKennon, Joseph McMillen and Stephanie Talavera, respectively, are reasonable for ERISA work given their strong experience and outstanding abilities, including decades handling insurance coverage, ERISA and bad faith insurance lawsuits. Judge Lorenz concluded that every minute of the firm’s time spent on the case was reasonable and recoverable from the disability insurer, MetLife:

[C]onsidering the quality of the work produced by [McKennon Law Group PC] and the successful result obtained, the Court finds reasonable the 515.1 hours counsel spent on this case.

Key Take Away
You should hire an experienced ERISA lawyer to represent you if your claim for life, health, disability or pension benefits is denied, even if they are more expensive than a less qualified lawyer. The law permits you to recoup your reasonable attorneys’ fees from the insurer or plan that wrongfully denied your benefits. Thus, it is the insurer that will end up paying for your better-quality representation, not you. In the Reddick v. MetLife case, our client was able to keep 100% of his long-term disability insurance benefits.

If your claim for short-term disability, long-term disability, life, retirement or health benefits has been denied, you can call (949) 387-9595 for a free consultation with the attorneys of the McKennon Law Group PC, several of whom previously represented insurance companies and are exceptionally experienced in handling both ERISA insurance claims and non-ERISA California insurance bad faith claims.

Robert J. McKennon Recognized as 2018 “Super Lawyer – Insurance Coverage” and “Top 100 Insurance Lawyers in the State of California” for 2018

McKennon Law Group PC is proud to announce that its founding shareholder Robert J. McKennon has been recognized as one of Southern California’s “Super Lawyers” and appears in the 2018 edition of Southern California Super Lawyers magazine published in January 2018. Mr. McKennon has received this prestigious designation every year since 2011. Mr. McKennon was voted by his peers for this award and he was recognized forheand his excellence in representing its life, health and disability policyholder clients.Each year, Super Lawyers magazine, which is published in all 50 states and reaches more than 14 million readers, names attorneys in each state who attain a high degree of peer recognition and professional achievement. The Super Lawyer designation is given to less than 5% of lawyers nationally after being nominated and voted on by their peers.

In addition, the American Society of Legal Advocates has recognized Mr. McKennon as one of the top 100 Insurance lawyers in the State of California for 2018.Mr. McKennon has received this designation every year since 2013. The American Society of Legal Advocates is an invitation-only, nationwide organization of top lawyers in practice today who combine excellent legal credentials with a proven commitment to community engagement and the highest professional standards.

LA Times Report: Pervasive Problem of Improper Health Insurance Denials

After using a diabetes insulin pump for nine years, David Lazarus suddenly received a denial letter from his insurer, Blue Cross Blue Shield of Illinois. The denial letter notified Lazarus that his employer’s health plan would no longer cover the cost of his diabetes insulin pump. He was now responsible for the cost of the pump: $8,703. The reason cited for his insurer’s sudden change of heart? Lack of medical necessity. His medical insurance claim was denied.

An insurer may deny a medical insurance claim before or after the medical service sought to be covered, either through the denial of preauthorization requests or denial of claims for payment after the medical service is provided. Some insurers require preauthorization requests before treatment, which may result in insurance denials where the policyholder is deemed ineligible for the service or the insurer determines the treatment inappropriate. Claims, on the other hand, may be denied for a variety of reasons: billing issues, documentation issues, duplication issues and various other reasons related to eligibility. One of the most litigated areas of medical insurance coverage denials is the insurer’s denial because the treatment is deemed experimental or not medically necessary.

In a recent column published by the Los Angeles Times, Lazarus shared his personal struggle with an improperly denied health insurance claim as part of a larger discussion of the widespread problem: when a health insurer denies a valid, legitimate claim. To some, including the attorneys of the McKennon Law Group PC, this story may sound all too familiar. Sadly, the fact that health insurers deny valid claims for a variety of reasons, including lack of medical necessity, is not surprising. This problem can be alarming based upon its sheer scale, which as Lazarus noted, is a problem that “applies to millions of people.”

Chuck Idelson, a spokesman for the California Nurses Association, described this conduct as “immoral and unconscionable.” Lazarus likewise expressed his outrage:

[I]t’s unacceptable for patients to have to do battle with monolithic corporations that are seemingly determined not to use common sense (or simple decency) in deciding what treatments to cover.

However, the reality is that health insurers, as do long-term disability insurers, life insurers and accidental death and dismemberment insurers, employ a small army of ‘claims specialists’ to closely scrutinize each claim for potential reasons for denial. While insurers may view this claims handling process as the “rigorous process of evaluating the medical need for a prescribed drug or treatment,” many describe it differently. As Idelson said of the claims handling process:

Insurers employ warehouses full of claims adjusters who, as a primary function, scrutinize claims for pretexts to deny care, saying it is ‘experimental’ or ‘not medically necessary’ even where the medical treatment, prescription medication, diagnostic procedure or referral to a specialist is recommended by doctors.

The column also notes that a significant portion of these claims are denied for reasons unrelated to the claim’s validity. In other words, there was a mishap in processing, such as billing errors, duplicate claims for the same underlying service, or just missing information, as found in a 2011 study done by the Government Accountability Office (“GAO”).

In Private Health Insurance: Data on Application and Coverage Denials, the GAO reviewed nationwide data collected by the Department of Health and Human Services. It covered 459 insurers providing individual and group insurance in all fifty states, including the District of Columbia. Because the data only included application denials for a three-month period from January through March 2010, only one quarter, GAO also supplemented the nationwide data with available data from six states: California, Connecticut, Florida, Maryland, New York and Ohio.

The GAO noted that coverage denials often occur as the result of billing errors and eligibility issues, and less often for reasons about the appropriateness of a service. For six of the largest managed care organizations licensed in the State of California, each with enrollment in 2009 of over 400,000, the rate of claims denials came in at 24% for the year of 2009. But, the data varied widely depending on the managed care organization. Specifically, California’s reported denial rates covered a wide range of 6% to 40% across the six managed care organizations.

As Lazarus discusses in his column, getting health insurance coverage is only half the problem. The other half is the quality of coverage you have once you are lucky enough to get it. Fighting with your insurer over a legitimate claim for health, life, long-term disability, or other insurance benefits can be a daunting task and while Lazarus managed his claims handling problem (after numerous calls and emails), many insureds’ coverage disputes are not so easily resolved.

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