VA Hires QTC Crooks to do exams
- VETERANS RESOURCES NETWORK
According to QTC Management, Inc., the Private medical exam provider (owner
of QTC Medical Services, Inc. and hired by the Dept. of Veterans Affairs)
has renewed their contract with VA to provide Claim and Pension exams (the
original contract ended 4/30/03).
Below is an article from the Dow Jones Library about Fraud in Claims exams,
and one of those being sued is QTC Management, Inc. QTC receives millions
of dollars from the Department of Veterans Affairs to do Claim and Pension
exams. (QTC, could stand for "QUACK the Contractor" ).
QTC conspired with an Insurance company to defraud people by having Doctors
they knew to be likely to deny claims, do the exams. The article is from
1999, but this case is still going on and those sued have been order to pay
monies. It's a convoluted story, but in the article below Bay Brooks which
is owned by QTC Management, Inc. is the company being sued. Bay Brooks and
their parent company QTC Management, Inc. adhere to the ENRON style of
The VA system of adjudication appears to only allow the SCUM to rise to the
I urge all veterans to write Congress and ask that all Federal Contracts
given to QTC Management, Inc. and their subsidiaries be immediately
canceled. QTC website:
Ray B Davis, Jr.
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THE WALL STREET JOURNAL / CALIFORNIA
By Sheila Muto
The Wall Street Journal
(Copyright (c) 1999, Dow Jones & Company, Inc.)
SAN FRANCISCO -- In a case that some say could bring millions of dollars to
disabled professionals in California, policyholders are suing an insurer
and a disability evaluation-service firm, alleging they improperly denied
United Policyholders, a nonprofit San Francisco-based advocacy group, and
Wesley Evans, a disabled general contractor in Murrieta, filed suit in
Alameda County Superior Court last month against Provident Life & Accident
Insurance Co., a Chattanooga, Tenn.-based unit of UnumProvident Corp.,
Portland, Maine; and Bay Brook Medical Services, a division of QTC
Management Inc. in Diamond Bar.
The suit alleges, among other things, that Provident violated
California's Unfair Competition Act by making "deliberate plans to increase
profits by reducing claim payments," primarily to "high end" holders of its
disability policies. To help accomplish that, the complaint alleges,
Provident contracted with Bay Brook, which "provided referrals to
physicians" it believed would back Provident's claims denials.
Provident aggressively marketed the so-called individual disability
policies to doctors, lawyers and small-business owners from 1983 to 1988,
primarily in California and Florida, easing underwriting criteria and
boosting commissions for brokers and agents. Also, the policies could
"neither be canceled nor [their prices] raised," and would cover
incapacitated policyholders regardless of whether they could take up
another job, according to company documents.
Provident documents indicate that the policies initially generated handsome
premium income, on which Provident earned healthy yields thanks to the high
interest rates of 1980s. But rates fell in the 1990s. Meanwhile, Provident
realized that it had underestimated claims. The company responded by
devising a scheme to improperly deny benefits to thousands of customers,
the plaintiffs allege.
UnumProvident spokeswoman Catharine Hartnett says the company does not
comment on pending litigation, but adds: "We're committed to adjudicating
claims fairly and openly." Provident has yet to file a response to the suit.
Bay Brook General Manager Robert Gelb denies the allegations, adding that
the firm never had a contract with Provident and that only 15 of the 10,000
cases Bay Brook handled last year came from Provident, which is typical.
Bay Brook, he says, "did not act in any level of impropriety."
Frank Darras, a Claremont lawyer who represents policyholders in
disability-claim disputes, says this is the first disability case to invoke
the Unfair Competition Act. The statute allows any public prosecutor or
private party to bring a lawsuit "for the interests of itself, its members
or the general public" without having to get the suit certified as a
Elizabeth Story, a spokeswoman for the American Insurance Association in
Sacramento, fears that a victory by the plaintiffs will encourage more such
suits against insurers, which are already vulnerable to actions from the
state regulator. "Eventually," she adds, the "legal costs and exposure of
insurance companies" these cases bring may mean "the price of [insurance]
will follow those costs."
Lawyers for the plaintiffs base their case on Provident documents and
depositions obtained by court order in another lawsuit they filed two years
ago against Provident on behalf of Graham Schneider, chief executive of a
Fremont company who held an individual disability policy. (In that suit,
filed in U.S. District Court here, Mr. Schneider alleged that Provident had
unfairly denied him benefits. In April, a jury sided with Provident.)
"Up until the last couple of years, the courtroom has been a very good
place for insurers," says Mr. Darras. But now, "We're starting to see a
series of documents surfacing that are going to be devastating to the
industry," he adds, noting this suit and two in Arizona that led to
multimillion-dollar jury verdicts against insurers.
Although Provident marketed the disability policies to professionals, many
whose claims were terminated "don't have the personal resources" to take
legal action against the insurer, says Ray Bourhis, a lawyer for the
plaintiffs. Mr. Bourhis, whose San Francisco firm represented Mr.
Schneider, also is a court-appointed "special master" charged with
overseeing the state Department of Insurance's handling of claims disputes.
Provident documents and depositions of its executives, when "put together,"
says Mr. Bourhis, reveal an orchestrated plan to "increase profits by
terminating claims." Provident, he says, "targeted the cases to be reviewed
on the basis of the amount of benefits the company owed."
According to the company's annual report to the Securities and Exchange
Commission, Provident took a $423 million charge in 1993 for losses from
the policies. To make up for those losses, the lawsuit claims, Provident
devised a "net termination ratio" to help determine how much in disability
claims it had to deny each year to make up for the losses.
The suit alleges that Provident did several things to meet those targets,
among them developing a list of physicians it believed would deny that a
disability existed, instructing field adjusters to avoid including
recommendations or conclusions in written reports or anything in claim
files that could be used against the company in court, directing adjusters
to "shred sensitive papers," and establishing "roundtable" meetings to find
ways "to target, terminate and deny claims."
By filing a claim under the Unfair Competition Act, the petitioners seek an
injunction ordering Provident and Bay Brook to stop the illegal practices
and relinquish the profits made from them, says Mr. Bourhis. The
petitioners are also seeking to recover attorney fees and costs.
Neither United Policyholders nor its attorneys know exactly how much money
is at stake, or how many Californians were affected by the alleged
practices. UnumProvident's Ms. Hartnett says the company does not release
such information because "there's no business benefit to us for doing so."
Citing documents, the plaintiffs contend that company executives estimated
it could save up to $60 million annually from "claim terminations." The
suit also asserts that J. Harold Chandler, who became Provident's chief
executive in 1992, had stock options that increased in value by more than
$13 million while the "termination strategy" was employed.
"An insurance company is required to treat the interest of the
policyholders on par at least with its own shareholders," says Alice
Wolfson, lead attorney for the plaintiffs. "That wasn't done."
Amy Bach, executive director of United Policyholders, says it filed suit
partly because of the insurance department's "terrible record" in
investigating major insurance companies. In response, a spokesman, Scott
Edelen, says the department "is leading the nation in consumer protection."
Provident has only 0.11% of the state's life-insurance market (which
includes disability), according to the department. From 1996 to 1998, only
one of the 15 complaints lodged with the department against Provident was
Mr. Bourhis and Ms. Bach, however, say those figures are unreliable.
"Consumers have come to understand that the department is not a proactive
consumer resource," says Ms. Bach.
"If consumers rights are violated, they need to be protected," says Bay
Brook's Mr. Gelb. But the lawsuit makes "baseless allegations" against his
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Veterans Resources Network
Ray B Davis Jr, Editor
East Flat Rock, NC 28726