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Witness Testimony of Kevin P. McCarthy, Unum US, President and Chief Executive Officer, Portland, ME

Mr. Chairman, members of the Committee, I’d like to thank you for the opportunity to testify before you.  My name is Kevin McCarthy and I am the President of Unum US.  Unum is a subsidiary of Unum Corporation.

Unum’s involvement was generated by our CEO (a graduate of Virginia Military Institute) wanting to explore how the company could assist with sharing its best practices that might be useful in a new world, “post-Walter Reed.”  Since that time, Representative Michaud has visited Unum and viewed firsthand how the combination of our people and technology are integrated together in a way that reduces delays in every aspect of claim processing/case management.  As a result of this visit and our meetings this summer and fall with House and Senate Congressional staff, the Veterans Affairs Administration and the Department of Defense on sharing best practices between the private sector and the public sector, I am here today to discuss how we use these smart systems and people not only to reduce waiting times for setting up independent medical examinations or assisting a claimant’s medical team in developing a treatment plan specific to that individual, but also how these are aspects of a larger integrated case management/claim management approach that includes everything from regular contact with our insureds so they know what is happening “real time” on their claim to assisting them with vocational rehabilitation.  This integrated approach actually speeds up not only actions like wait times on individual, specific issues, but the entire claim/case management process.   We would be pleased to continue to be a resource for the sharing of best practices between the public and private sectors as you continue to evaluate the disability adjudication/case management processes at the VA.

Corporate Overview

Unum is a company of people serving people.  As one of the world's leading employee benefits providers, Unum helps protect more than 21 million working people and their families in the event of illness or injury. 

We provide more than a benefit check to customers --- we provide a wide range of benefits and services designed to help people during what is often the most trying time of their lives --- loss of income due to illness or injury.

For 30 years Unum has been an industry leader in providing income protection and employee benefits.  Unum is ranked #1 in long term disability income protection, #1 in short term disability income protection, #1 in individual income protection, and #1 in group long term care insurance.  We are also among the market leaders in group life insurance and supplemental benefits.  We provide leave management administration services, health and productivity services and a work-life balance program with health risk assessments.

In 2006, we serviced more than 420,000 newly filed claims (disability products, long term care, and voluntary benefits) and replaced $4 billion in lost income to help provide support to our insureds and their families.  These benefits are paid directly to our insureds.  To our knowledge, this is more than any other private income protection provider in the world. 

Our customers expect that their claims will be paid promptly and accurately.  In order to ensure we get it right the first time, we carefully measure customer satisfaction.  In fact, nine out of ten are satisfied with the handling of their claim.  In addition, 97% of the businesses we insure give us high marks.

Our ability to pay our customers billions of dollars annually with these high levels of satisfaction is due to our highly trained people, coupled with the right technology. 

The substance of my testimony will be focused on how we track, manage and pay the more than 400,000 claims we receive each year with high levels of customer satisfaction.

Our people and tracking systems ensure we stay in close touch with our customers as we take the steps necessary to enable us to pay their claims.  Our physicians and claims payers work closely with the insureds’ medical providers to, for example, schedule medical examinations, set up calls so our doctors can speak directly with the insureds’ doctors and establish that they are receiving regular care and treatment.

How do we keep our promises? 

By employing:

  • experienced people and leading technology;
  • a claims management approach that applies the most accurate resources to each claim;
  • best-in-class decision making supported by expert systems and resources with an emphasis on quality and tracking.

Customer Service and the Disability Management Process

While a person’s disability can be a complex, ongoing and ever-changing life event, our goal is to make the claim payment process simple and transparent for our customers during this trying time in their lives.

We make it easy to submit a claim.  It can be done by internet, telephone, fax or mail.  

At any time after the claim has been submitted, our customers can speak with a skilled person.  We handle more than 4.5 million calls a year.  Eighty percent of calls are answered within 20 seconds and eighty five percent are managed without holding or transferring.  It is a combination of selecting talent with the right skills, developing quality training programs, and employing the right technology that enables us to handle these high volumes with just 300 employees.

While our goal is to make it easy for customers to reach us, we also understand that many need our help. 

Thus, we regularly reach out to our insureds and their health care teams.  We view it as critically important to speak with our insureds and their physicians and we frequently help them follow up with their doctors.

We are able to do this because we have invested in an innovative technological process which sorts claims by complexity and severity --- this technology is supported by hundreds of highly trained Benefits Specialists, physicians, nurses and vocational rehabilitation consultants.  Again, it is this unique combination of people and technology that enables us to fully understand and respond to our customers’ needs.

The Benefit Specialists help the claimants keep everything on track – the Benefits Specialists essentially “case manage” the claims.  For example, they set up medical exams, help insureds with vocational rehabilitation, assist our customers in obtaining Social Security once we have determined that they may be eligible, and ensure that the relevant medical records have been received by Unum for a full, fair and thorough evaluation.

Our technology provides a single point of coordination which enables the team to efficiently:

  • manage workloads;
  • make appointments;
  • review all claim documents;
  • schedule follow-up appointments, calls, letters and medical exams; and
  • provide real time management access and quality assurance review.

This technology involves an imaging system so all the claims are paperless and can be viewed across multiple locations at the same time.  This allows us to tap into expertise in other locations while also enabling easy communication between team members, even if they are not located in the same office.  It also allows real-time claim assessment and processing.  Finally, it ensures a consistent claim history, claim documentation, medical records and correspondence.

The technology also includes an automated scheduling system so claim management activities – such as calling doctors’ offices and setting up independent medical exams – are done accurately and promptly.

Each one of the activities the Benefit Specialist does is scheduled and tracked to ensure that the right resources are applied to the right claims at the right time.  In fact, the technology gives us the ability to determine whether appointments are being kept, calls are being made and whether there are delays in the claim processing.

The claim status is also viewable on the web so our customers can see their claim status “real-time.”   Privacy protections are in place.

Unum’s goal is to make a determination within 3-5 days on 95% of short duration claims and within 45 days on longer term, more complex claims.

In regard to the specifics of the management process, when a claim is received it undergoes an initial claim review.  During this phase the following steps occur:

  • we verify eligibility;
  • we evaluate the claimant’s functional ability;
  • we work in partnership with the insured’s employer to assess the physical and cognitive occupational demands;
  • we partner with the employer to determine any possible accommodations that could be made so the person can return to work; and
  • the Benefit Specialist partners with in-house medical, vocational and management resources as needed.

The more complex claims are sent electronically to Benefits Specialists and medical professionals who specialize in certain types of claims – allowing efficient, high quality, customer focused handling.  For these claims, each customer is called and we set up an individual follow-up action plan with the insured based on the dynamics of the specific medical condition.  The claims process looks at the whole person, not just the diagnosis.  We provide information and motivation to the claimant and the employer and work in collaboration to find the most appropriate resolution to the claim.  The claimant’s level of function is assessed, medical records and the treatment plan are obtained, and activities of daily living are determined.  We then work with the insured on a return to work plan.  A specific claim example may be a behavioral health claim that is based on ICD9 (“International Coding of Diagnostics 9” -- a standardized Medical Diagnosis system where each diagnosis is assigned a code, i.e. The “ICD9 code”) code and is sent to a Benefits Specialist with a specific skill set.  That Benefit Specialist would review the claim on our image-based system.  Based on the specific facts of the file, the Benefit Specialist could:  call the claimant, obtain medical records, schedule an independent medical examination if necessary, call the claimant’s doctor or set up a meeting between one of our doctors and the claimant’s medical team to establish a treatment plan or gather outstanding information.  The system could be set up to automatically remind our claims payer, nurse or doctor to call the claimant and see whether the appointment was kept or the agreed upon treatment plan was being followed.  Based on the specific diagnosis, the system can automatically generate follow-up activities to ensure that our team is in regular contact with the insured and his or her medical team.  As the insured’s condition improves or otherwise changes, we can continuously adjust our actions to make sure that the insured is getting the treatment, care and claim management that will enable us to assess the individual’s condition “real-time.”

During the assessment and review process, the Benefits Specialist partners with the insured’s medical team as well as with our internal doctors, nurses and vocational rehabilitation staff to:

  • assess the duration of the claim;
  • provide rapid resolution to medical issues; and
  • assist with helping the claimant return to work.

In addition to medical and vocational professionals, the Benefits Specialist has access to a wide variety of experts who can help with Social Security advocacy, wellness and disease management, an employee assistance program and return-to-work consulting.

Quality Assurance

The investment in the people and technology has given us the ability to easily measure and carry out all of the actions we schedule during the claim process. 

From a Quality Assurance perspective, it gives us the ability to roll up the information in many ways.  For example, we know whether appointments are being kept as we stay in close touch with the claimants and their doctors. 

Behind the tracking systems, our robust quality assurance and continuous improvement programs also help:

  • maintain a strong, customer based focus;
  • manage workloads for each of our claims specialists, nurses, doctors, and vocational rehabilitation specialists;
  • facilitate an audit of claim decisions, both real-time and post-claim;
  • support an appeal process with feedback; and
  • allow for management review, involvement and reporting.

In conclusion, we would be more than happy to assist you in any way.  You have an open invitation to visit Unum.  We would welcome the opportunity to continue to share knowledge of our capabilities, systems and expertise.  Thank you for the opportunity to testify before the Committee.