Claimants always seem surprised to learn that their disability applications have been denied even though their doctors provided a letter stating that their patient is disabled or their medical records show that they have a medical condition. The surprise stems from the fact that disability decisions are primarily based upon an individual's functional capacity as opposed to his or her doctor's opinion or diagnosis.
Different disability programs or policies use different definitions of disability. For example, you may need to show you cannot do any type of work for Social Security or Long term Disability; whereas, you may need to show you cannot do your past work for worker's compensation or disability retirement. The claim adjudicator will not assume that the doctor knows the proper definition of disability. Instead, the claim adjudicator will decide if you have the mental and physical ability to do a particular job or category of work.
Applications are frequently denied on the grounds that while a person has a medical problem, there is no evidence that it is severe enough to preclude work. To avoid this, a claimant needs to submit evidence regarding functional limitations.
What matters in a Social Security disability claim is your functional limitations. I have discussed this issue before, most recently in Your Doctor's Opinion and Reserved to the Commissioner. Jeff's article hits the nail on the head with its excellent distillation of the issue. Disability is functionality.