From the Courts

February 1, 2015 | Appeals | Insurance Coverage

Plan Administrator Did Not Err In Requiring Plaintiff to Provide Objective Evidence of Her Fibromyalgia

The plaintiff in this case alleged that her health began to deteriorate beginning in early 2009, with symptoms that included debilitating pain and fatigue. By the end of that year, according to the plaintiff, these symptoms forced her to leave her position as director of digital promotions at HAVI Group, a shipping and logistics company. She said that she eventually was diagnosed with fibromyalgia, adrenal fatigue, gait disturbance, lumbar spondylosis, dysomnia, and depression.

In June 2010, the plaintiff filed for long term disability benefits under her employer’s health care and disability insurance plan, which was subject to the Employee Retirement Income Security Act of 1974 (ERISA). The plan’s administrator, Metropolitan Life Insurance Company, denied the claim because it did not consider the plaintiff’s supporting documentation to be adequate.

The plaintiff refiled the claim, this time including notes and diagnostic reports from her treating physicians that described her symptoms and expressed the physicians’ professional opinion that she was unable to return to work. MetLife reviewed the plaintiff’s new information, but did not conduct a physical examination, and again denied the claim, explaining that her documents failed to include any “objective findings to support [the plaintiff’s] subjective complaints at this point in time or to impair you to the point where you would have any restrictions/limitations that would preclude you from being able to work fulltime.”

MetLife informed the plaintiff of her right to appeal and advised her to submit “medical records to include office visit notes, diagnostic-testing, lab reports, treatment plans and current restrictions and limitations that are causing a functional impairment that would prevent you from returning to work.”

The plaintiff appealed the decision. She supplied further records from her treating physicians that set out her symptoms and physical limitations, and she provided MetLife with medical literature explaining that fibromyalgia was of “unknown etiology” and, therefore, could not be objectively detected or diagnosed.

MetLife conducted a second paper review of the plaintiff’s submissions. The medical document reviewer found that “the records available for review did not document objective findings that support [the plaintiff’s] inability to work,” and MetLife affirmed its denial of benefits.

The plaintiff sued MetLife and the plan in a federal district court in Michigan. The plaintiff’s primary argument was that it was arbitrary and capricious for MetLife to require her to provide objective evidence of her disability.

The district court ruled in favor of MetLife, and the plaintiff appealed to the U.S. Court of Appeals for the Sixth Circuit.

The circuit court affirmed the district court’s decision. It upheld the district court’s conclusion that MetLife had not acted arbitrarily or capriciously when it had demanded objective evidence supporting the plaintiff’s claim, and that it had been reasonable for MetLife to require objective evidence of functional limitations resulting from the plaintiff’s fibromyalgia – limitations that it said could, for example, have been chronicled by a functional capacity evaluation.

The Sixth Circuit concluded that the district court also had not erred when it upheld MetLife’s decision to credit its own non-treating physician reviewers over the plaintiff’s treating doctors, given the rule in the Sixth Circuit that, “[u]nder ERISA, plan administrators are not required to accord special deference to the opinions of treating physicians.” [Hunt v. Metropolitan Life Ins. Co., 2014 U.S. App. Lexis 19857 (6th Cir. Oct. 10, 2014).]

Plan Administrator Could Delay Payment of Claims Stemming from Auto Accident until It Received No-Fault Information, Circuit Court Rules

In this case, the plaintiff’s son was injured in an automobile accident and hospitalized. The plaintiff submitted numerous medical claims to Aetna Health Inc., the administrator for the self-funded ERISA benefit plan provided by his employer, Chevron Phillips, in which the plaintiff was a participant and his son a beneficiary.

Aetna requested information from the plaintiff about the applicability of any no-fault insurance coverage and pended processing of the claims until it received this information.

Instead of providing Aetna with any of the information it requested about the applicability or not of no-fault insurance coverage, the plaintiff brought a putative class action, alleging that Aetna wrongfully had denied him and other similarly situated individuals medical benefits in violation of ERISA. He contended that Aetna had breached its obligations under the plan, and thus had violated ERISA, by “immediately” denying his medical claims rather than denying them upon his failure to provide the requested no-fault insurance information.

The district court dismissed the plaintiff’s ERISA claims and rejected the plaintiff’s contention that Aetna had immediately denied his medical claims pending receipt of no-fault insurance information, finding instead that Aetna had acted in accordance with the express terms of the plan. The district court found that, under the plan’s coordination of benefits (COB) provision, no-fault, first-party, automobile insurance was primary to the plan and, therefore, benefits under the plan were secondary and determined after those of an applicable automobile insurance policy. Moreover, the district court continued, to effectuate this coordination of benefits and order of payment, the plan specifically authorized Aetna to request no-fault coverage information before it adjudicated a claim, and required the beneficiary “to furnish all information and proofs that may reasonably be required regarding any matters pertaining to the plan.” The district court also pointed out that the plan stated that if the information was not provided when requested, payment of benefits “may be delayed or denied.”

The plaintiff appealed to the U.S. Court of Appeals for the Fifth Circuit.

The Fifth Circuit affirmed. In its decision, it agreed with the district court that Aetna had not wrongfully denied medical benefits to the plaintiff in violation of the plan and, in fact, had acted in accordance with the plan’s terms when it pended the processing of the plaintiff’s claims subject to receiving information related to no-fault insurance coverage. According to the circuit court, the plaintiff’s “conclusory allegation” that Aetna improperly had “denied” his benefits was insufficient to survive dismissal because it was “contradicted by the documents.” [Hollingshead v. Aetna Health Inc., 2014 U.S. App. Lexis 21176 (5th Cir. Nov. 4, 2014).]

Plaintiff’s Alleged Alcoholism Was Insufficient to Find Him Disabled under the ADA, Court Rules

The plaintiff in this case alleged that he suffered from alcoholism and that his employer, Verizon New York, Inc., became aware of the plaintiff’s alcoholism when the plaintiff lost his driver’s license. The plaintiff asserted that, from August 2012 through January 31, 2013, Verizon accommodated the plaintiff by not requiring that he perform “on the road” duties, but that Verizon terminated the plaintiff’s employment on January 31, 2013.

The plaintiff sued Verizon, alleging that it unlawfully had ceased accommodating his disability in violation of the Americans with Disabilities Act of 1990 (ADA) and unlawfully terminated him because of his disability.

Verizon moved to dismiss, and the court granted its motion, but afforded the plaintiff an opportunity to replead.

In its decision, the court explained that, to state a claim for discrimination based on a failure to accommodate, a plaintiff must allege, among other things, that he or she was a person with a disability under the meaning of the ADA. The court added that the ADA defined “disability” to mean: “(A) a physical or mental impairment that substantially limits one or more major life activities of such individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment.”

The court acknowledged that alcohol addiction was recognized as an “impairment” under the ADA. The court added, however, that alcohol addiction was “not a per se disability” and a plaintiff must show not only that he or she was addicted to alcohol, but that the addiction substantially limited one or more major life activities. As the court noted, major life activities included, but were not limited to, “caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating and working.”

In this case, the court found, the plaintiff had not pleaded any facts indicating that his alleged alcoholism limited one or more of his major life activities. Thus, the court ruled, he had not plausibly pleaded that he was disabled within the meaning of the ADA. The court concluded, “Without facts supporting the existence of a substantial limitation, [the p]laintiff’s allegations do not plausibly suggest the existence of a disability, and dismissal of his ADA discrimination claims is warranted.” [Cullen v. Verizon Communications, 2014 U.S. Dist. Lexis 163374 (W.D.N.Y. Nov. 21, 2014).]

Court Upholds Decision Denying Coverage for Cochlear Implant

The plaintiff in this case, a natural gas pipeline superintendent, was a member of the Laborer’s International Union of North America 621 and was eligible for health benefits coverage through the Southern Tier Building Trades Plan. The plaintiff suffered from serious hearing loss since birth and, in 2011, his physician and his audiologist determined that he would be a good candidate for a cochlear implant, which is a small electronic device that consists of an external portion that sits behind the ear and a second portion that is surgically placed under the skin.

In 2011, the plaintiff received a cochlear implant at the University of Rochester Medical Center. The plan, through its board of trustees, denied his requests for coverage for his cochlear implant surgery, the cochlear implant device, and related treatment. The board determined that the cochlear implant was an “artificial implant” excluded from coverage by the express terms of the plan. It determined that the appropriate definition of “implant” was something that was “placed, usually surgically, within a living body, such as a medical device.”

The plaintiff appealed this decision twice; both of his appeals were denied. The plaintiff then sued the plan under ERISA to recover benefits he claims were due to him under the plan, and the parties moved for summary judgment.

The court ruled in favor of the plan. In its decision, the court decided that the board reasonably had concluded that the plaintiff’s cochlear implant expenses were not covered under the plan due to the “artificial implant” exclusion in the plan.

The court acknowledged that the plaintiff had argued that the board’s definition of artificial implant was improper and overly broad and, as such, would include, for example, pacemakers and surgical screws. It also recognized that the plaintiff had contended that because the cochlear implant had both internal and external components and did not serve a cosmetic purpose, it was unreasonable for the board to determine that it was an “artificial implant” as that term was used in the plan.

The court reasoned, however, that it was not arbitrary and capricious for the board to determine that a cochlear implant was an “artificial implant.” It stated that in a situation where both the trustees of an ERISA plan and a rejected applicant offered rational, though conflicting, interpretations of plan provisions, the trustees’ interpretation had to control. Although the plaintiff offered evidence that it would have been rational for the board to conclude that a cochlear implant was not an “artificial implant,” it also was rational for the board to conclude that it was, the court stated.

The court declared that the fact that that the plaintiff thought a cochlear implant should be included in coverage, and the fact that other insurers and Medicare covered cochlear implants, ultimately was “not dispositive” because ERISA did not dictate the terms of any plan and did not require a minimum level of coverage. “ERISA merely requires that the plan administrator interpret the provisions reasonably,” the court said. It concluded that the board had applied a reasonable interpretation of the phrase “artificial implant” in this case, and that it would not disturb it. [Niedermaier v. Southern Tier Building Trades Plan, 2014 U.S. Dist. Lexis 151229 (W.D.N.Y. Oct. 24, 2014).]

Court Limits Plaintiff’s Discovery Requests in ERISA Suit

The plaintiff was employed by Lighthouse Capital Partners, Inc., from 1995 through 2011. Effective August 1, 2004, Union Security Insurance Company (formerly known as Fortis Benefits Insurance Company) issued a group disability insurance policy to Lighthouse that insured the Lighthouse Capital Partners, Inc. Long Term Disability Plan. Union also served as the claims review fiduciary for the plan; Lighthouse was the plan administrator.

The plaintiff submitted a claim for disability benefits under the plan in September 2010, asserting wrist, neck, back pain, post-operative shoulder pain, thoracic outlet syndrome, ulnar numbness, and limited spine motion caused by cervical degenerative disc disease and chronic cervical strain. Union granted the claim and paid benefits through November 19, 2010. The plaintiff appealed Union’s 2010 termination, and Union overturned its decision and paid benefits to the plaintiff through October 26, 2012, at which point it terminated her benefits for a second time. The plaintiff again appealed Union’s termination, and Union upheld its decision on two levels of appeal, after which the plaintiff had exhausted her administrative remedies.

The plaintiff then sued Union. In her lawsuit, the plaintiff served Union with a notice of deposition for medical reviewers involved in the plaintiff’s claim for benefits and a request for documents. Union objected to the plaintiff’s requests, the parties were unable to resolve their disputes, and the court settled the dispute.

In its decision, which concerned the limits of discovery in an ERISA action where the court’s standard of review is de novo, the court first found that the plaintiff was entitled to her insurance claim file from Union, which she had requested. It then ruled that she also was entitled to Union’s guidelines, procedures, and rules that were applied to her claim.

The court reached a different result with respect to the plaintiff’s next request: information about Union’s relationship with medical reviewers that she alleged was “probative of bias,” including performance evaluations, the compensation and bonuses provided by Union, and their contracts with Union. The court refused to order Union to turn over performance evaluations, service contracts, or compensation for the medical reviewers. The court specifically noted that other courts have ruled that receiving compensation for performing medical reviews was “insufficient by itself to be probative of bias,” and it declared that, in the absence of “concrete allegations pertaining to qualifications or credibility,” it would not find an exceptional circumstance warranting additional discovery.

Finally, the court rejected the plaintiff’s argument that she was entitled to depose the medical reviewers involved in her claim for benefits on the ground that they had “cherry-picked” her medical records and had discounted unrefuted evidence of disabling pain. The court ruled that the plaintiff’s allegations of bias were “not a valid basis for the requested discovery.” The court explained that because the medical records and the doctors’ reports presumably were part of the administrative record, it would be able to identify whether certain medical records were cherry-picked. [Healy v. Fortis Benefits Ins. Co., 2014 U.S. Dist. Lexis 156549 (N.D. Cal. Nov. 5, 2014).]

Reprinted with permission from the February 2015 issue of the Employee Benefit Plan Review – From the Courts.  All rights reserved.

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