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November 21, 2002

Human Resources not concerned about Pitt's long-term care insurance provider

Pitt's chief Human Resources administrator said yesterday that his staff has reported "no reason to be concerned" about the reliability of UnumProvident, the company that, since July, has been providing short- and long-term disability insurance — plus an optional, employee-paid, long-term care insurance plan — for staff and faculty here.

On Nov. 17, CBS-TV's "60 Minutes" program quoted allegations by current and former UnumProvident employees that the company pressures its claims handlers to deny new disability claims and terminate existing ones — often, regardless of the claims' legitimacy.

The company denies the charges.

Pitt Vice Chancellor for Human Resources Ron Frisch, who was out of town yesterday, e-mailed the following statement to the University Times: "I did not see Sunday evening's '60 Minutes' program, so I really cannot respond to their story line on UnumProvident's services in relationship to disability coverage. The University initiated its contacts with UnumProvident as of July 2002. As of today, our benefits staff tells me that we have had no reason to be concerned with Unum's practice of managing and subsequently reimbursing claims requests."

Apparently in response to allegations that UnumProvident has been unscrupulous in investigating some claims, Frisch wrote: "As a side note, in reference to disability insurance carriers, following appropriate medical authorization the carrier's role is to closely monitor a claimant's ability to return to work with the objective of moving people back into the work force. I have never met a disability carrier who has not been vigilant in their administration of claims."

The co-chairs of the University Senate's benefits and welfare committee said they heard from a number of concerned professors following the "60 Minutes" report.

"The fear is that if UnumProvident is denying legitimate claims elsewhere, they could do the same thing here," said psychology professor James Holland.

Holland his fellow benefits and welfare co-chairperson, Herbert Chesler of economics, said their committee will pursue the "Unum issue."

"It's on our agenda, for sure," said Holland, who noted that the committee endorsed the choice of UnumProvident to provide Pitt's optional, employee-paid long-term care plan, which was introduced in July.

UnumProvident, "60 Minutes" pointed out, "is the largest disability insurance by far, providing disability insurance to 17 million Americans." Its clients include CBS.

Sunday's "60 Minutes" episode prompted at least one Pitt staff member to cancel his long-term care coverage through UnumProvident. (University employees may cancel their long-term care policies but not their short- and long-term disability coverage, for which the University pays.) Kris Mamula, senior editor of Pitt Magazine, said: "The '60 Minutes' show destroyed my confidence in the company. Most damaging of all was the company's refusal to comment."

CBS and UnumProvident officials agree that the insurer's executives declined to talk to "60 Minutes" on camera. During off-camera meetings with CBS producers, UnumProvident officials denied that the company sets targets for saving money by closing claims, according to both sides.

But "60 Minutes" went on to cite "more than a dozen current and former UnumProvident employees, including former vice presidents of the company," who confirmed some or all of the allegations made on camera by a former UnumProvident claims handler who said the company told its workers they had to shut down enough claims to meet monthly targets in the millions of dollars.

In a statement posted on UnumProvident's web site, the company's chairman, president and CEO, J. Harold Chandler, said the former employees interviewed by CBS "had various job performance and other problems while employed at our company."

Allegations that company managers pressured claims handlers to close valid claims are "absolutely false," Chandler wrote.

"A minute percentage of our claims ever involve litigation," he added. "Of those that resulted in a judgment by a court last year, our company won three out of four times."

The "60 Minutes" segment observed: "While the great majority of lawsuits against UnumProvident are settled out of court, and the company says it wins most of those that do go to trial — this week it lost a big one. A federal court in San Francisco upheld a $7.5 million judgment against UnumProvident, saying it showed bad faith in targeting a claim for closure, and that it employed biased medical examiners and improperly destroyed medical and other reports. The court issued an injunction ordering the company to stop those practices."

A transcript of the "60 Minutes" segment on UnumProvident is available at: UnumProvident's response is available at:

— Bruce Steele

Filed under: Feature,Volume 35 Issue 7

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