• Broadspire Disability Insurance Claim and Denial

Broadspire Services terminate long-term disability benefits after paying for 8 years

A Federal Appellate Court recently upheld the decision by Eaton Corporation and Broadspire Services to discontinue the long-term disability benefits to Janice Curry after paying for 8 years. In Curry v. Eaton, the Court ruled that Eaton and Broadspire were not “arbitrary and capricious” in denying continuation of her long-term benefits. The Court found that the review of the treating physicians’ reports conducted by Boroadspire’s companies’ independent physicians was sufficient for their conclusion that Curry was not “disabled” within the terms of the disability plan, even though Curry had been previously approved for Social Security disability benefits. Let’s take a closer look at the background of the case to understand why the Court sided with Eaton and Broadspire Services.

Ms. Curry was employed by Eaton Corporation as an assembly line machine operator for 12 years. In 1993, Curry began suffering low-back pain which led her to see neurosurgeon George Raque. Curry had diagnoses of cervical-disc herniation, cervical- and lumbar-disc bulges, and fibromyalgia. In 1996, Curry received short-term disability benefits, and in 1997, Curry was approved for long-term disability benefits, and was also awarded benefits by the Social Security Administration, who found her to be totally disabled.

In response to a request from the Broadspire Claims Administrator for an update of her condition in June 2003, Curry submitted a Resources Questionnaire and a Medical Provider list wherein she indicated that she could cook, do dishes, do laundry, and dust, but that she did not drive. She also indicated that she had trouble sleeping due to pain. Curry reported that she last visited a Dr. Feltner the previous month, but could not remember her last visit with Dr. Raque.

On November 13, 2003, Broadspire’s hired neurologist reviewed Curry’s claim file and concluded that she was capable of sedentary work. Five days later,Broadspire’s internal medicine physician reached the same conclusion. The following month, Broadspire arranged for an independent Functional Capacity Evaluation of Curry. Laura Goulbourne, a physical therapist, reviewed the Broadspire medical reports, conducted an in-person evaluation, and concluded that Curry qualified for the “sedentary” work category.

In April 2004, Broadspire informed Curry that, based upon a review of the records provided, she was capable of returning to work, she was not disabled under the “any occupation” standard as defined by her long-term disability plan, and her benefits would cease in June 2004. Curry formally appealed Broadspire’s decision in October 2004 and forwarded updated medical records and documentation from her treating physicians. Broadspire hired physicians specializing in physical medicine, rehabilitation, and neurosurgery to review Curry’s file and updated records. Without ever examining Ms. Curry, these physicians also concluded that the objective findings of Curry’s treating physicians were not sufficient to support a finding of “disabled” under the Plan’s “any occupation” standard. Broadspire upheld its decision.

In October 2005, Curry requested reconsideration and again forwarded updated notes from her treating physicians. Broadspire sent Curry’s file to Dr. Eddie Sassoon, a pain-management specialist; Dr. Sheldon Meyerson, a neurosurgeon; Dr. Tamara Bowman, an internal-medicine specialist; Dr. Jamie Wancier, a neurosurgeon; Dr. Lucy Cohan, a specialist in physical medicine and rehabilitation, a neurologist and an orthopedic surgeon employed by the Medical Review Institute of America. All of the file reviewers came to the same conclusion: that insufficient objective evidence had been provided to meet the Plan’s definition of “disabled,” because the evidence was consistent with capacity to perform sedentary work. Broadspire never asked any of their hired doctors to examine Ms. Curry.

A final determination letter was issued in January 2006 upholding the denial of Curry’s long-term disability benefits. Ms. Curry filed an ERISA lawsuit in January 2007.

Legal Standards

When examining a plan administrator’s decision to deny the benefits of an insured in an ERISA disability benefit action, the Court will review the decision under the “arbitrary and capricious” standard if the disability policy contains a discretionary clause. While this standard requires some review of the quality and quantity of the medical evidence and the opinions on both sides of the issues, the courts will uphold an administrator’s decision “if it is the result of a deliberate, principled reasoning process and if it is supported by substantial evidence.” Glenn v. MetLife. Courts do, however, evaluate potential conflicts of interest and consider them as factors in determining whether the decision to deny benefits was arbitrary and capricious. Gismondi v. United Techs. Corp. For ERISA purposes, a conflict of interest is present when the same entity both funds the plan and evaluates the claim. In these types of cases, the arbitrary-and-capricious standard still applies, but the application of the standard should be shaped by circumstances of the inherent conflict of interest.

The Court’s Analysis

The United States Court of Appeals for the Sixth Circuit ruled for Eaton and Broadspire and found that the decision to terminate the long-term disability benefits to Janice Curry after paying for 8 years was correct.

The Court acknowledged that because the Eaton Corporation both funds the disability plan for Curry and evaluates the claim, a conflict of interest was present. However, the court noted that an ERISA plaintiff (Curry) is required “not only to show the purported existence of a conflict of interest, but also to provide ‘significant evidence’ that the conflict actually affected or motivated the decision at issue.” Cooper v. Life Ins. Co. of N. Am. The Court found that Curry had given no evidence and had not proven that the conflict for Eaton had affected its decision.

The Court then noted that in examining the reports of the reviewing physicians upon which Eaton relied, those reviewing doctors accepted the objective findings of Curry’s treating physicians, came to a different conclusion as to their meaning, and discussed their reasons for disagreeing. The Court ruled that in relying on the reviewing physicians opinions, Eaton has offered a reasoned explanation, based on the evidence, that Curry was not “disabled” within the Plan’s terms. Accordingly, the Court held that Eaton was therefore not arbitrary and capricious in denying continuation of Curry’s long-term benefits.

Curry argued Eaton’s reviewing physicians should have been accorded less weight because physicians repeatedly retained by benefits plans may have an incentive to make a finding of “not disabled” in order to save their employers money and to preserve their own consulting agreements. The Court pointed out that the Supreme Court has also said that a patient’s treating physician may also have an incentive to make a finding of “disabled.” Additionally, the Court noted that without statistical evidence that the physician reviewer consistently found that claimants were not disabled, allegations of bias could not permit a conclusion that relying on that reviewer’s opinion was arbitrary and capricious. Kalish v. Liberty Mutual.

Lastly, Curry argued that Eaton acted arbitrarily and capriciously by failing to address the findings made by the Social Security Administration, who had previously found Curry disabled in March 1998 after Eaton encouraged Curry’s Social Security claim as required by a clause in the Plan. In response, the Court stated that a previous Social Security disability determination is a factor to be weighed, but due to the fact that 6 years have past and a significant amount of new information was obtained regarding Curry’s disability from numerous sources, Curry’s SSA benefits determination was insufficient to outweigh the fact that she did not produce the necessary objective evidence of an inability to perform “any employment” to qualify as disabled under the Plan.

As a result, the Court upheld Eaton and Broadspire’s decision to terminate the long-term disability benefits to Janice Curry after 8 years.

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