It is important to point out that this case was not handled by Dell & Schaefer. However, we wanted to write about this case as there is much to learn from this ruling out of the United States Court of Appeals for the Eighth Circuit. First, this case is an example that demonstrates that just because you win summary judgement of your disability claim in District Court, it does not mean that the fight is over. Secondly, this case also stands for the fact that “independent” reviews can be a valid basis for denying a claim.
Damon Zaeske worked at Walmart as a project manager. He stopped working on April 4, 2014 due to severe back pain. Luckily for him, his employer insured him under a long term disability insurance policy with Liberty Life. He applied for benefits. In assessing his application, Liberty relied upon a review by an independent consultant physician named Dr. Shannon. Dr. Shannon concluded that Mr. Zaeske was limited to Sedentary work. Because his occupation at Walmart was Light Duty work, Liberty approved Mr. Zaeske’s claim and benefits commenced on July 6, 2014.
Although the claim was approved, Liberty still requested updated medical records on a regular basis. Although some records were provided in response to Liberty’s requests, many updated records were not. On December 12, 2014, Liberty Life denied further benefits on the basis that it had not received updated records.
Subsequent to the denial, updated records were sent to Liberty. These records were sent by Liberty to Dr. Glassman, a second independent consulting physician. Dr. Glassman concluded that because there was no evidence of any disc herniation, Mr. Zaeske could perform full-time activities throughout an eight-hour work day, five days a week. With this assessment, Liberty Life concluded that Mr. Zaeske was not entitled to LTD benefits and upheld the denial of his claim.
Mr. Zaeske filed an appeal to challenge the denial, but Liberty again upheld the denial because it said it had no received no additional medical evidence. Mr. Zaeske then submitted additional information including a MRI performed on January 13, 2015. In response, Liberty had all the files reviewed by Dr. Reecer, a third independent consulting physician. Dr. Reecer determined that Mr. Zaeske could work an eight-hour shift, forty hours a week with some slight restrictions and limitations. Using Dr. Reecer’s review, Liberty Life again denied Mr. Zaeske’s claim.
Lawsuit Filed by Mr. Zaeske
Upon receipt of the final denial letter, Mr. Zaeske filed an ERISA lawsuit in the Western District of Arkansas. Ruling in Mr. Zaeske’s favor, the District Court concluded that “Liberty Life’s decision to terminate Zaeske’s disability benefits was not supported by substantial evidence and was therefore an abuse of discretion.” “The district court’s conclusion rested on its determination that the opinions of Dr. Glassman and Dr. Reecer were unreliable.” In its ruling, the court awarded LTD benefits and attorney fees to Mr. Zaeske.
Liberty Life Files an Appeal
Unfortunately for Mr. Zaeske, despite the fact that he won in district court, the fight to obtain LTD benefits did not end. Liberty Life filed an appeal in the United States Court of Appeals for the Eighth Circuit. The Court of Appeal first noted that the policy governing Mr. Zaeske’s claim grants the plan administrator discretion to determine whether a claimant is eligible for benefits. In such a situation, a review of the administrator’s decision (Liberty’s decision) is to see if the administrator “abused its discretion.” The Court then noted that “a plan administrator’s decision is not an abuse of discretion if it is reasonable – that is, if the decision is supported by substantial evidence.” The Court of Appeal then essentially stated that the decision whether Liberty’s decision is reasonable is whether it was permissible to rely upon the opinions of Dr. Glassman and Dr. Reecer, the two consulting physicians that Liberty hired.
The Court of Appeal’s Decision
Ultimately, the Court of Appeal overturned the district court and found in favor of Liberty. This was so unfortunate for Mr. Zaeske. In ruling in favor of Liberty, the Appeals Court noted that it disagreed with the assessment of the lower court who found the consulting physicians’ opinions unreasonable. The Appeals Court found that “the assessments of Dr. Glassman and Dr. Reecer were not outside the range of reasonableness, and it was not an abuse of discretion for Liberty Life to rely on them.” The Appeals Court noted that the two reviewing doctors did not ignore any medical evidence and that their opinions were supported by the records and were a reasonable interpretation of such.
Appeals Court also noted that although the initial independent consultant’s review from June 2014 was favorable for Mr. Zaeske, the subsequent reviews could differ as time had passed and Mr. Zaeske’s symptoms may have improved.
Furthermore, the Appeals Court made an important distinction to note that even if the latter reviews were inconsistent with one another, “a plan administrator has discretion to choose between two reliable but conflicting medical opinions” and “a plan administrator may even prefer the opinion of its own consulting physician over that of an applicant’s treating physician.
Because the Court found that Dr. Reecer’s opinion was a reasonable interpretation of the medical records, the Court ruled that his opinion “was sufficiently reliable to support Liberty Life’s decision to deny Mr. Zaeske’s claim. The Court thus overturned the lower court’s decision and Mr. Zaeske will now not receive his benefits.
This case is important for all claimants to understand. The ERISA laws and the Case Law severely favor the insurance companies. Insurance Companies can rely upon the reviews by doctors they hire who are merely performing a Monday morning quarterbacking job of the treating physicians’ files. They can rely upon these reviews despite the fact that these doctors have never treated, evaluated or even laid eyes upon a claimant and insurance companies can choose these reviews over the treating physicians who have actually assessed, evaluated and treated a patient. It does not seem logical and it is evidence that the ERISA Laws are clearly not fair for claimants. It is important to point out that it is the rarest of occasions that insurance companies actually follow the opinions of the treating doctors over the opinions of the doctors they hire to perform reviews. The percentage has to be close to zero. So the deck is stacked against claimants.
That being said, this case teaches us that it is so important to build your file as strong as possible. Though there is no way to guarantee an approval of benefits, steps can be taken to make one’s claim as strong as it can be. If you have been denied LTD benefits by Liberty or any disability insurance company, please do not hesitate to call Attorney Alexander Palamara at Dell & Schaefer. We always offer a free consultation.