Medical exams when making an insurance claim - the role of advisers

When making a risk claim, clients will often be asked to undergo an independent medical examination. Col Fullagar explains the adviser’s role in ensuring the client is treated fairly.

For the sake of this discussion, death claims will be set aside but otherwise, when a risk insurance claim is being made, the client is almost invariably in a disadvantageous position. 

First and foremost, they will be suffering the physical effects or after-effects of the sickness or injury for which they are claiming. 

Then there is the direct psychological impact, for example, by way of feeling less in control of their situation, concerns about recovery, financial worries and the uncertainty of the future and the indirect impact – for example, knowing others may be worried about their wellbeing. 

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On a positive note, however, traditionally those who have risk insurance in place have been told they have purchased “peace of mind in these troubled times”, which may certainly be the case. Once the necessary requirements have been provided, the assessment process is successfully navigated, the claim is accepted and payment is made. 

Under the guise of assisting, the claims section of the policy will set out some, but not necessarily all, of the client’s obligations and the insurer’s requirements: 

• Advice of a claim should be provided within a certain period of time;  
• The insured must provide initial information supporting the claim at their own expense;  
• The onus of proof lies with the insured; and importantly; and 
• The insured needs to provide additional information requested by the insurer. 

The insurer is generally not backward in requesting additional information, some of which is self-evident and not controversial; claim forms, reports from treating doctors, certain financial evidence, and so on.  

Other requirements may take on the mantle of being more intrusive: factual interviews with investigators; seemingly out-of-control requests for financial information; surveillance; and a perennial favourite, the so-called independent medical examination, affectionately abbreviated to an IME. 

The last of these requirements has somewhat slipped under the radar with little focus being placed on it, yet it is certainly very capable of assisting or assassinating a claim. 

What is an IME? 

An IME occurs when a medical specialist who has not previously been involved in the care or treatment of a client undertakes an examination of the insured and provides a report of their findings and opinion to the insurer.  

There is no previous or ongoing patient/examiner relationship involved in an IME. 

IMEs may be requested when an initial claim assessment is being made or, with income protection and business expenses insurance, for an ongoing assessment. 

An IME may even be requested when a benefit commutation is being considered by either the insurer or the insured. 

If uncertainty remains or there is more than one claimed condition, multiple IMEs may be requested – for example, in the case of Cullinane v Mercer Benefit Nominees FCAFC (29 May 2006), the insured was subjected to 13 IMEs !  

The reason for an IME can vary, for example:

• To clarify a diagnosis and/or suitability of treatment; 
• To assess the insured’s current condition and/or degree of impairment; or 
• To assess the insured’s chances of improvement or deterioration in the future.  

There are different types of IMEs, including those conducted by specialist physicians – for example musculoskeletal, neurologists and ENTs, functional assessments and evaluations by consultant psychiatrists.  

Typically an IME report would contain: 

• The examiner’s qualifications; 
• Observations about the insured made at the time of the examination; 
• A detailed, reported personal and medical history of the insured; 
• Tests undertaken by the examiner and results of the tests; 
• The examiner’s opinion; and 
• The examiner’s response to any specific questions posed by the insurer. 

The IME itself can take two hours or longer to conduct. 

The cost of the IME and the subsequent report might be in the order of $1250 to $1750.  

Impact on the insured 

An IME can have a considerable impact on the insured and therefore the decision to call for one, and the decision to attend one, should not be taken lightly. 

Several clients who have undergone IMEs were asked to detail the impact it had on them before, during and after the examination. Their responses were passionate, enlightening and uncomplimentary. Notwithstanding, each had their claim accepted.  

Before: 

• The requirement to undergo an IME was generally unexpected and unwelcomed; 
• Initial advice was often received by letter and the letter was at best blunt and at time almost brutal, leaving the insured with a feeling of simply being told what to do and being expected to comply; 
• At times the insured was expected to travel long distances to attend despite, for example, suffering from a medical condition that made travel difficult; 
• Sometimes, but not always, the insured was given a choice of dates and times; less often the insured was asked to suggest convenient dates and times, and even more rarely was the insured given a choice of examiners;  
• The request for an IME left insureds feeling anxious, uncertain and apprehensive as the day of the examination drew closer and heightened their feelings of not having any control over their situation. 

During: 

• Almost invariably a considerable amount of time was spent in the examiner’s waiting room
• Feelings of uncertainty and apprehension increased when the insured met the examiner, with concerns being held about the reason for the examination and the possibility of hidden agendas on the part of the examiner and/or insurer; 
• Feelings of awkwardness and embarrassment arose when the insured had to relate intimate personal and medical details to a stranger, knowing what was said would be included in a written report which would then be distributed to others unknown to the insured; 
• There were feelings of heightened anxiety at having to relive and relate details of the sickness or injury and the effects it was having in areas such as work, recreation, home life and even, on occasions, sexual activities; 
• In describing the examiner’s questioning and demeanour phrases included; “it felt like an interrogation”, “distressing”, “lacking empathy” and “pressured”; 
• Discomfort and pain occurred as the examiner poked, prodded and stretched the insured to the point of pain in order to gain an understanding of any physical limitations;   
• Mental and physical exhaustion were also common by the end of the examination; 
• There were costs incurred in attending, with often no mention by the insurer of reimbursement; and 
• There was the simple matter of the total time taken preparing for, travelling to, attending and returning from the examination – ie, at least half a day or longer. 

After: 

• Feelings of anxiety were repeated by having to relive the examination when telling others what happened. 
• The insured naturally was anxious about the unknown opinion of the examiner. 
• Having to wait weeks while the report was written, submitted to the insurer, assessed, a decision made and communicated – all this only added to the concerns of the insured, especially when the decision was “more information is needed”. 
• There was often frustration at having to go through a formal privacy request in order to obtain a copy of the report – for example, via the insured’s doctor; and 
• Finally, when the report was received and read, there might be further distress as incorrect statements were attributed and apparently unsupported opinions were made that “the insured is OK and should be working”. 
• One insured described the IME as “degrading and humiliating”. 
• How widespread the above opinions are is unknown, which is why insurer accountability might consider providing the insured with a feedback questionnaire. 

Are IMEs reasonable? 

An insurer may seek to justify the IME request by pointing to the policy: 

“You must provide any requirements which, in our opinion, are reasonably necessary for us to assess your claim”. 

“Reasonable” means “agreeable to reason, sound judgement, logical, not excessive, moderate” – in other words, a reason for the requirement must exist.  

“Requirement” is something that is needed, that is necessary or indispensable. 

The most effective way to assess the reasonableness or otherwise of a request for an IME is to therefore know why it is required – ie, what additional value will be gained over and above other requested and provided information. 

An insurer calling for an IME might therefore establish a protocol of giving the insured this explanation, in a way they can understand at the same time the IME is requested. 

Bearing in mind the potential impact on the insured, the prudent insurer might require the assessor to document the reason for the IME and then sign it off via an appropriately medically qualified person on staff, particularly when the insured is suffering a so-called mental or nervous disorder. 

Insurer versus client choice 

Insurers will generally dictate to the insured the examiner who is to undertake the IME. 

Legal proceedings recently supported the insurer’s right to make this designation (Percy Summerhayes v AustralianSuper Pty Ltd & The Colonial Mutual Life Assurance Society Limited 27 May 2011); however, there were some restrictions to this right: 

• The examiner must be suitably qualified – thus a challenge might be raised if the examiner’s qualifications were not in the field of the claimed condition; and 
• The examiner should be without bias - thus, for example, if a search revealed articles written by the examiner questioning the validity of a claimed condition, again a challenge might be raised.  

Notwithstanding their right to choose an examiner, the insurer would lose no control over the process and might deliver some much-needed control back to the insured, if, where possible, a choice from a designated panel of examiners was allowed. 

Further the insured should be provided with the opportunity to suggest convenient dates and times, such that the examination could be arranged with minimal interruption to their already interrupted life. 

On the other hand, if an appointment is made and the insured’s situation subsequently alters, the insurer should be immediately advised so the appointment can be changed without the incurring of a cancellation fee. 

Any restrictions being suffered by the insured – for example, difficulty driving – should be taken into account – leading in this instance to the IME being arranged as close as possible to the insured’s home, and even a car being supplied to transport the insured to the appointment. 

Offers to reimburse reasonable expenses incurred by the insured should also be considered. 

Hints for the insured 

Being required to attend an IME does not mean the insured has no entitlements either by way of normal rights, negotiation or common sense, for example: 

• The insured should ascertain what information is being provided to the examiner to ensure there is no bias by way of the provision or leaving out of relevant detail. 
• If the basis of the claim is occupation-related, the insured should provide the examiner with an appropriate description of their occupation, duties and skill requirements. 
• During the examination, the insured should remain conscious that the examiner is not their treating doctor and thus they might avoid being overly-familiar or engaging in idle chit-chat but instead stick to the facts. 
• If possible, the insured might have someone attend the examination with them to provide support and take notes about questions asked and answers provided – perceived misquotes forming the basis of examiner opinions are not uncommon. 
• Care should be taken that reported information is consistent with what was advised previously to the insurer and if inconsistencies are realised, an explanation should be provided as soon as possible to either the examiner or the insurer. 
• The insured’s own doctor should be advised about a request for an IME in case they have concerns or they believe precautions need to be taken. 
• The insured might consider seeing their own doctor immediately after the examination to debrief and also ensure there are no ill effects arising out of the examination. 
• Arrangements should be made ahead of time for a copy of the IME report, and even the briefing letter, to be sent to the insured or their doctor; and 
• The insured should bear in mind that if surveillance is being considered, a popular time is before or after the examination, as the insurer will know where the insured will be and when. 

IME bias? 

IME’s are not without their critics. 

Some see them as a tool to enable the rubber-stamping of a decision already made by the insurer to decline or close a claim. This perception might be enhanced if: 

• The insurer provides the IME with details of the insurer’s opinion prior to the examination; 
• The insurer favours one examiner over others because the examiner is seen to provide favourable opinions; 
• The insurer is unable or unwilling to provide statistics showing which examiners are used and where their opinions lean; 
• The examiner’s report reaches conclusions unsupported by objective testing or reported information; 
• The examiner takes on the role of pseudo claims manager and purports to interpret the policy terms and conditions rather than simply providing an informed opinion; and 
• Multiple IMEs form their individual opinion but no specialist opinion is obtained about the combined effects. 

The major criticism of IMEs however, is that the opinion of the examiner, based on a one-off, relatively brief examination of the insured, may be given weight over that of the insured’s own doctor or treating specialist. 

If the IME arrives at a differing opinion, the right of reply should be provided to the insured’s treating physicians. 

Summary 

IMEs are a valuable claims management tool available to the insurer. However, a poor IME experience contributes to any negative perception of the financial services industry and reflects poorly on the many examiners who undertake a respectful and appropriate examination. 

Also, too often (and once is too often), this tool contributes to the derailment of the promised peace of mind that should be provided by the presence of risk insurance cover.  

An experienced adviser can make the difference: 

• By ensuring an IME is a necessary requirement; 
• By explaining to the client what is involved;  
• By ensuring the necessary safeguards are in place for the client; and 
• By supporting insurers that hold themselves openly accountable in regards to IMEs. 

Col Fullagar is the principal of Integrity Resolutions Pty Ltd.