Surgeons and Disability:
Better Understanding the Meaning of Total Disability in the Context of a LTD Insurance Policy

Alexander MacDougall and Ray Bourhis

Surgeons are often denied Total Disability benefits under their Long-Term Disability (LTD) policies and are instead paid under their Residual Disability coverage.  This is especially true when the surgeon is either substantially reducing their surgical practice or is spending more time than before on clinical responsibilities.

Unfortunately, many surgeons do not understand that the payment of Residual Disability benefits under such circumstances is contrary to the law in most states.  In addition the payment of Residual Disability rather than Total Disability benefits deprives such claimants of hundreds of thousands of dollars and more.  This is because LTD policies typically pay only a fraction of the monthly benefits under the formula used calculating Residual Disability payments.  In addition, Residual Disability benefits usually terminate at age 65, whereas Total Disability benefits are often payable for the claimant’s lifetime.

Surgeons, including ophthalmologists, neurosurgeons, orthopedic surgeons, periodontists, invasive cardiologists and other specialists must exercise a high degree of focus, stamina, strength, dexterity, and precision in their work.  Because surgeons have such a slim margin for error, and because an error could have such serious consequences, there are many medical conditions that can be totally disabling to such individuals.  The important issue is whether or not the impairment in question adversely affects the doctor’s ability “to perform their substantial and material duties in the usual manner and with regular continuity.”  The above language is the very definition of Total Disability in states such as California, Nevada, Arizona, New Mexico, Florida, and many other states.

Despite the above, many insurance companies will attempt to apply a narrower definition of Total Disability than the one sited above.  Some carriers, for example, attempt to require that to be totally disabled, the claimant not be engaged in any “gainful occupation.”  Other carriers define Residual Disability as the inability to engage in “some” of your substantial and material duties.  These same carriers define Total Disability as the inability to perform “your substantial and material duties.”  Unfortunately, most claimants and even most lawyers are unaware of the significance of this issue.  This mistake could be devastating if the insurer’s wrongful characterization of the level of disability is permitted to continue long enough for a statute of limitations for challenging this conduct to run.

Although this entire scenario is avoided entirely if the surgeon instead stops operating entirely, many surgeons would prefer not to do that.  Physicians have devoted many years of their lives to training and development of their expertise.  They care about their patients and get a good deal of satisfaction out of helping them.  Many surgeons have difficulty giving up their professional activities entirely even when they should.

Despite what some carriers will assert, it should be noted that in most states a failed attempt to return to work is not to be held again the insured.  The same is true for doctors who are continuing to perform some of their prior duties.