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CommInsure: Arthritis sufferers denied insurance payouts due to 'antiquated' medical definitions

Sufferers of crippling arthritis are being denied payouts due to the use of "antiquated" medical definitions buried in insurance policies, adding to calls for a Royal Commission into the financial services industry.

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CommInsure's 'nastiness'

Arthritis patient Michael Gill says CommInsure wanted him to cease his medication so his bones would deform to prove his claim.

In a development that widens the scandal engulfing Commonwealth Bank's life insurance division, Fairfax Media can reveal that CommInsure and other insurers – including AMP and Zurich – have been using definitions for severe rheumatoid arthritis that medical professionals say are decades out of date and unfairly prevent customers from receiving payouts.

The trauma insurance policies require customers to be "deformed" by the condition, and meet other criteria including blood tests, before they can receive a payment. However, modern treatments prevent many patients with severe rheumatoid arthritis becoming deformed, even as they continue to suffer from the pain and debilitation brought on by the condition.

CommInsure said this week that it would be upgrading its definition of severe rheumatoid arthritis, as well as its definition for heart attacks, in the wake of the joint Four Corners-Fairfax Media investigation exposing unethical practices within the company.

But CommInsure said it would only back-date its severe rheumatoid arthritis and heart attack policy definition to May 2014, when it last issued a product disclosure statement for its trauma insurance. Trauma insurance provides payouts for conditions like heart attacks, cancer and severe rheumatoid arthritis. Other insurance products, such as income protection insurance attached to superannuation, can include similar definitions.

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Definition 'out of date'

CommInsure's changes will exclude sufferers such as 62-year-old Michael Gill, who was struck down with severe rapid onset rheumatoid arthritis on Christmas morning in 2010. His $200,000 claim under his CommInsure trauma insurance policy was rejected and the Financial Ombudsman Service (FOS) – which handles disputes between consumers and financial services companies – ruled against him in 2013.

"The thing I couldn't understand was the definition is 30 to 40 years out of date," he said. "It essentially means you have to stop taking the drug and when you get deformed come back and we will pay you."

After being contacted by Fairfax Media on Friday, AMP said it was reviewing its definition of severe rheumatoid arthritis. Zurich said: "we review our definitions regularly and are applying the lens of this week's industry news to ensure our definitions are up-to-date". Zurich policies also allow the use of "other tests" where definitions have been superseded.

Nationals Senator John Williams, who spearheaded a senate inquiry into CBA's financial planning scandal in 2014 and who has expanded the terms of reference of a senate inquiry to life insurance, said the country needed a royal commission into the finance sector. "The more I go on, the further the case builds," he said.

Medical classifications relating to rheumatoid arthritis, an autoimmune disease which impacts 1 per cent of the population, have not required a patient to be "deformed" by the condition since at least 1987.

Cabrini Medical Centre rheumatologist, associate professor Stephen Hall, said he had been battling the issues surrounding insurance companies and rheumatoid arthritis for 30 years, and estimated that 50 of his patients had been disadvantaged by outdated definitions in insurance policies.

"The issue is that the insurers' definitions are derived from actuarial tables that are now 50 years old," he told Fairfax Media. "Fifty years ago we had no drugs that were capable of preventing damage. The expression of the disease has modified and it means that deformity doesn't always occur."

Dr Hall said that identifying deformities in patients was "very much dependent on the competency of the doctor". While some were obvious, others that could be identified by a rheumatologist may not be identified by a less specialised doctor hired by an insurance company.

And as many as 50 per cent of patients with rheumatoid arthritis would not have the "positive rheumatoid factor" in their blood required by insurers, he said.

'Clinically correct'

The Australian Rheumatology Association said it was "aware of patients' concerns" about the definition of rheumatoid arthritis in certain insurance policies and said it would work with "insurance associations, regulators, or the government to assist in resolving the issues".

Sydney-based Associate Professor David Champion described as "antiquated" the definitions used in a current policy sent to him by Fairfax Media.

A spokesperson for CommInsure said its current definition for rheumatoid arthritis was "clinically correct". "However we have found that some customers have had difficulty meeting this definition, as treatment can mean that they have temporary improvements in their symptoms."

But Dr Hall said the current definition "disenfranchised 50 per cent of people who would otherwise qualify". Another medical practitioner said: "the issue in question is not that it is incorrect, but that it is overly onerous on the claimant to prove".

Mr Gill's claim was rejected by CommInsure in 2011, despite him seeing more than five specialists who all diagnosed him with the disease.

They included Dr Champion, who said in his medical note about Mr Gill that: "my view is this (the insurer's policy) would be extremely unreasonable and inappropriate and that the insurer's policy should enter the 21st century."

Extreme pain

Mr Gill was a director with Cisco Systems with responsibility for Australia and New Zealand when he developed the "silent disease". He was made redundant in August 2011.

The condition hit him hard. "I was taking a lot of drugs when I was also trying to lodge claims," he said. "I was battling extreme bouts of pain, restricted movement and taking 40 milligrams of morphine and other strong drugs, so they were attacking me at my weakest."

CommInsure offered him $90,000 to settle but his lawyer advised him to await the outcome of FOS, which sided with CommInsure on the basis that his condition did not meet the policy definition.

Mr Gill could not afford to take the matter to court.

He said CommInsure – and other insurers with a similar definition – should be changing the definition but going back further than 2014.

For support with rheumatoid arthritis visit dragon-claw.org

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