Citing a financial incentive to cheat, the United States Court of Appeals for the Ninth Circuit recently overruled the decision of CIGNA (CI) to deny disability benefits to a man suffering from chronic fatigue syndrome. For anyone disabled by chronic fatigue or fibromyalgia this is a very supportive case and great law. The court provided five reasons that Cigna abused its discretion by denying disability insurance benefits. Let’s take a close at the case history and the court’s reasoning.
Disability Claim Background
Harvard and Massachusetts Institute of Technology graduate Samuel Salomaa was described as an ideal employee of the American Honda Motor Company. His supervisor described him as “without a doubt the best employee to have worked for me.” Salomaa never got sick, never left work early nor arrived late for more than 20 years. However, that all changed after suffering a bout with the flu in 2003. After a few days off, Salomaa attempted to return to work, but something was different. The smallest of tasks left him completely exhausted and he even showed signs of diminished intellectual capacity.
After several months of working on a diagnosis, Salomaa’s physicians diagnosed him as suffering from chronic fatigue syndrome. One physician wrote that “since beginning our Kaiser Permanente Chronic Fatigue/Fibromyalgia Clinic in 1992, Mr. Salomaa is one of the more severe patients that I have seen in the clinic”¦ Mr. Salomaa is totally disabled and would not be able to work even 30 minutes per day on a daily basis.” Additionally, the director of the New Jersey Medical School Chronic Fatigue Syndrome/Fibromyalgia Center also stated that after personally examining him, he found Mr. Salomaa to be suffering from the most severe case of the elusive disease he had ever seen.
With such a diagnosis and medical support, Salomaa applied for his employer provided long-term disability benefits as well as Social Security Disability benefits. He was approved by the Social Security Administrator, but was denied by CIGNA, the claim administrator of the plan provided by his employer. In denying the claim, the claim manager from CIGNA wrote that the lack of objective physical findings formed the basis for the denial. She also noted in error that Mr. Salomaa had “no fevers or weight loss,” when in fact he had lost 14% of his body weight in six months, and she stated that his “depression had improved”, when in fact he had never suffered from depression. The claim administrator also stated that she relied on her “medical department’s” review in reaching her decision, when in fact she meant that one physician had read Salomaa’s medical file and wrote his opinion.
Disability Lawsuit and The Court’s Findings
After exhausting all of his administrative appeals, Mr. Salomaa and his California disability attorneys filed an ERISA disability lawsuit in 2006. The United States District Court For the Central District Of California upheld CIGNA’s determination after it determined that CIGNA did not abuse its discretion in reaching its decision. Mr. Salomaa’s California disability lawyers immediately filed an Appeal with the Ninth Circuit Federal Court of Appeals. The Court of Appeals reversed the lower court and provided five reasons to support their decision. The Court of Appeals found that, “(i)n this case, the plan abused its discretion. Its decision was illogical, implausible, and without support in inference that could reasonably be drawn from facts in the record, because:
- every doctor who personally examined Salomaa concluded that he was disabled;
- the plan administrator demanded objective tests to establish the existence of a condition for which there are no objective tests;
- the administrator failed to consider the Social Security disability award;
- the reasons for denial shifted as they were refuted, were largely unsupportive by the medical file, and only the denial stayed constant; and
- the plan administrator failed to engage in the required Ã¢â‚¬Ëœmeaningful dialogue’ with Salomaa.”
The Court noted the frustration that disability plan administrators can experience when dealing with claims based on diseases such as chronic fatigue syndrome and fibromyalgia. Such diseases have an absence of objective proof such as x-rays or blood tests which show its existence or non-existence. Such diseases create the risk of false claims. However, the Court pointed out, that claimants are not the only ones with an incentive to cheat. The Appellate Court stated that:
“the plan also has a financial incentive to cheat. Failing to pay out money owed based on a false statement of reasons for denying is cheating, every bit as much as making a false claim. The plan has no exception to coverage for chronic fatigue syndrome, so CIGNA has taken on the risk of false claims for this difficult to diagnose condition. Many medical conditions depend for their diagnosis on patient reports of pain and other symptoms, and some cannot be objectively established until autopsy. In neither case can a disability insurer condition coverage on proof by objective indicators such as blood tests where the condition is recognized yet no such proof is possible.”
In the end, the Appeals Court found that CIGNA abused its discretion and found that its decision to deny Salomaa’s claim was arbitrary and capricious. The Court awarded Mr. Salomaa his long-term disability benefits.
Salomaa v. Honda Long Term Disability Plan (9th Cir. – March 7, 2011).