A woman worked for her employer as an ultrasound technician. After about seven years, she stopped working due to neck, shoulder, and upper back pain. Her employer provided a long-term disability benefits plan governed by the Employee Retirement Income Security Act of 1974 (ERISA). Her employer’s long-term disability benefits plan administrator terminated her long-term disability benefits after two years.
According to the terms of the plan, to continue receiving benefits after two years, a claimant must be “totally disabled” such that she is incapable of performing the material duties of any occupation for which she is qualified by way of education, training, or experience. Under the plan, an insured is totally disabled if due to an injury or sickness he or she is capable of only performing the material duties on a part-time basis or part of the material duties on a full-time basis.
The woman requested continued benefits after the first two years. The plan administrator’s internal vocational staff evaluated reports provided by her primary treating physician and treating orthopedic surgeon and performed a residual employability analysis and listed five sedentary occupations appropriate for the woman. Consequently, the plan administrator determined that, while the woman could no longer work as an ultrasound technician, she appeared capable of sedentary work activity and decided to discontinue her long-term disability benefits.
As part of her administrative appeal, the plan administrator asked the woman to submit to an in-person evaluation and independent review conducted by a physical medicine and rehabilitation specialist. The specialist, while crediting the woman's chronic, irreparable right shoulder pain and acknowledging her treating orthopedic surgeon's diagnosis, concluded in a detailed report that the injury did not prevent the woman from performing sedentary work. A second residual employability analysis taking into account the specialist's report concluded that the woman was capable of performing sedentary work in at least three alternative occupations. Relying on these reports, the plan administrator denied the woman's appeal.
After the woman exhausted her administrative appeals, she filed suit in the United States District Court for the Northern District of Texas. The district court granted summary judgment in favor of the plan administrator.
The Fifth Circuit United States Court of Appeals affirmed. The court held that substantial evidence supported the plan administrator's decision to discontinue the woman's long-term disability benefits, the plan administrator substantially complied with ERISA in its initial denial decision, and the woman was not denied a full and fair review of the plan administrator's decision.
Substantial evidence supported the plan administrator's decision to discontinue the woman's long-term disability benefits. The plan administrator's vocational expert and examining physician provided sufficient evidence to justify the denial including evidence that the woman could perform full-time sedentary work despite her neck, shoulder, and upper back pain. Specifically, the plan’s experts provided evidence that the woman could sit frequently and occasionally stand, walk, and climb stairs. The woman's treating physicians equivocated at different times about extent of her disability, even though her primary care physician ultimately concluded that she was totally disabled. For example, in the notes from one appointment her orthopedic surgeon stated that her function was good, even though she had some discomfort.
The plan administrator substantially complied with ERISA in its initial denial decision. When denying claims, ERISA-covered employee benefit plans must: (1) provide adequate notice; (2) in writing; (3) setting forth the specific reasons for such denial; (4) written in a manner calculated to be understood by the participant; and (5) afford a reasonable opportunity for a full and fair review by the administrator. In its initial written denial, the plan administrator addressed: (1) medical records about the woman's right shoulder injury, crediting her right rotator cuff tear but highlighting her treating orthopedic surgeon's observation that her function was “good even though you have discomfort”; (2) the myriad medical issues—unrelated to the right shoulder problem—that the woman experienced, including those related to her neck and shoulder pain, heart problems, and depression; and (3) the internal vocational rehabilitation specialist's finding based on submitted records that “while unable to work in your normal occupation, you appear capable of sedentary work activity.”
The woman was not denied a full and fair review of the plan administrator's decision. The plan administrator's presentment of the independent medical examiner's (IME’s) report only in the final stage of the woman's appeal did not deny her a full and fair review of plan administrator's decision. The woman was on notice beginning with the initial denial that she needed to bring forward evidence of her inability to perform sedentary work. ERISA does not guarantee claimants an opportunity to rebut an IME report generated during an appeal prior to a denial of benefits. The underlying justification for each denial remained constant: her ability to perform sedentary work. There was nothing in the IME report that altered the plan administrator’s original position.
The Fifth Circuit United States Court of Appeals affirmed the district court’s grant of summary judgment in favor of the long-term disability plan administrator.
See: Killen v. Reliance Standard Life Ins. Co., 2015 WL 127379 (C.A.5 (Tex.), January 8, 2015) (not designated for publication).
See also Medical Law Perspectives, October 2014 Report: Backaches and Court Battles: When Chronic Back Pain Leads to Litigation
See also Medical Law Perspectives, June 2013 Report: Independent Medical Evaluations: Legal Risks and Responsibilities