In a recent long term disability insurance case against Hartford Life and Accident Insurance Company (Hartford), Glenn Pauley alleged that Hartford wrongfully denied his long-term disability benefits. This case is a classic example of the frequent tactic used by Hartford to deny long term disability claims. On numerous Hartford claim denials we have seen Hartford draft undisclosed one-sided letters to the treating physician of a disability claimant. These letters are drafted with specific questions designed to establish a denial of a claimant’s long term disability benefits. In most cases, a claimant’s treating physician will not discuss the questions with a claimant and will not understand the consequences of the answers they choose to provide. A treating physician should always discuss any letters from a disability company with the patient. This case may never have ended up in court had Pauley’s doctor been advised of the significance of the letter that Hartford secretively sent him.
Pauley had been an employee of Bayer Corporate and Business Services LLC when he began to experience severe pain in his feet, ankles, knees, low back, shoulders, neck and hands. This is not surprising as his job was in the product drumming facility. His duties included “product drumming facility loading, loading 150 lb. drums onto pallets, unloading and loading trucks for product distribution.” It was very physical work, which he was finally unable to continue doing on February 10, 2005.
Pauley chose to utilize the long-term disability plan that he had been participating with at Bayer. His application for disability insurance benefits was approved effective August 10, 2005 after a six-month waiting period had expired. As is typical of most long-term disability plans, the Bayer plan had two definitions of disability. For the first two years, Pauley would qualify for benefits as long as he was unable to perform the duties of his “own occupation.” But after two years, Pauley would have to prove that he was unable to work in “any occupation.”
When August 10, 2007 came around, Hartford terminated Pauley’s benefits, claiming that he had failed to prove that he was disabled from working in “any occupation.” The long-term disability insurance company reached this conclusion after reviewing the medical evidence in his administrative record. It is most common for long-term disability benefits to be denies when the definition of disability changes from own-occupation to any occupation.
The denial letter notifying Pauley of why Hartford was denying him benefits under the “any occupation” clause itemized the medical records used to reach that determination, as required by ERISA. The record included reports from eight different physicians, all confirming that Pauley suffered from a range of health problems, including fibromyalgia, degenerative joint disease, osteoarthritis, carpal tunnel syndrome, just to name a few. MRI test results also showed degenerative changes in his spine. And EMG results demonstrated neurological damage.
Pauley submitted an ERISA Appeal of his termination in February 2008. He included additional medical records and letters from two of his physicians. During the appeal, Hartford hired two specialists to review Pauley’s medical records, speak with his physicians and prepare reports. Both of these physicians concluded that Pauley could work in a sedentary position, so Hartford upheld its denial of benefits.
ERISA Disability Insurance Attorney Becomes Involved
Pauley hired an ERISA disability insurance attorney and filed an ERISA lawsuit on August 5, 2009. The basis of the action against Hartford? Hartford misled Pauley’s treating physician and did not base its decision on substantial evidence.”
The core of the dispute surrounded the opinion of Pauley’s family physician, who had diagnosed Pauley with rheumatoid arthritis in 2005 and had advised Pauley to stop working. With his initial application for benefits, Pauley had listed this one physician as his only doctor. This same physician had responded to a June 23, 2006 letter from Hartford telling the doctor that if he didn’t inform Hartford otherwise, they would consider Pauley capable of performing sedentary work and prepare a vocational assessment based on the assumption. Hartford asked Pauley’s doctor if he agreed that Pauley could perform work “requiring no more than a sedentary-type functional capacity that is primarily seated with the option to sit/stand as needed with minimal lifting of no more than 10 pounds”. Pauley’s doctor said yes, and failed to list any specific restrictions or limitations in the space provided on the response form. Pauley’s disability attorney argued that this was a misrepresentation of his doctor’s opinion. It is very common for Hartford and other disability insurance companies to send one sided letters to the treating physician of a disability claimant. One way to avoid this situation is to have a disability attorney involved in the monthly claim handling of your disability claim. A disability attorney can restrict the disability carrier from having undisclosed communications with a claimant’s treating physician. When a claimant is represented by counsel, all communications from the disability carrier should be sent to the office of the attorney only. A disability insurance attorney can identify the tactics that a disability carrier is trying to use in order to set a disability claim up for denial. At Attorneys Dell & Schaefer we advise all of the disability carriers that if they ever need to speak with our client’s treating physicians, please contact us and we will arrange for the meeting to take place as soon as possible.
Court Determines if Hartford Abused its Discretion and Wrongfully Denied Disability Benefits
The standard of review for this ERISA lawsuit fell under the abuse of discretion standard. This meant that not only did Pauley’s attorney have to prove that he was entitled to benefits. He also had to prove that Hartford’s denial was unreasonable.
The Court would use a multi-faceted test developed in Booth to consider whether Hartford’s decision was reasonable. The court would look at:
- What the Hartford long-term disability plan promised in its language
- The purposes and the goals expressed in the plan
- The sufficiency of the materials that Hartford considered as it made its decision and the degree to which those materials supported the decision
- How consistent Hartford’s interpretation of the different provisions of the plan were
- How recent and principled Hartford’s decision-making process was
- How consistent the decision was with the requirements under ERISA
- The external standards that might be relevant to the exercise of discretion
- Whether a conflict of interest existed
ERISA Disability Attorney Argues That Materials Were Inadequate
Pauley’s ERISA attorney argued that the quality of the letter that Hartford relied on to determine that Pauley was not disabled was doubtful. For one, nowhere in the letter was the doctor asked in a straightforward manner whether he believed that Pauley was able to work at a sedentary job. The court agreed that the letter was worded awkwardly. It would’ve been very easy for the physician to misunderstand what was being asked of him.
Pauley had submitted other more reliable documents which demonstrated that his physician believed that he suffered from a degenerative disease which rendered him unable to work in any capacity. His physician had said only a month earlier that he could not perform “Sedentary Level Work full time which is sitting most of the time with flexibility to change position as needed, and occasionally lifting 0-10 lbs.”
The court found that Hartford had relied much too heavily on this particular letter. It was mentioned in Hartford’s internal notes, and by both physicians who reviewed his file. In light of the other medical evidence in his file, the court found that it was strange that Hartford made no further in depth requests about his functional limitations.
The court also found it troubling that there was no medical evidence in the record that fell close to the time of the final decision to deny Pauley’s appeal. To rely heavily upon a physicians report that had been collected over a year before without seeking more updated information was unreasonable.
The two independent physician reports were heavily weighted in favor of information that predated the letter in question. Letters written in November 2007 and January 2008 both claims that Pauley’s condition was a chronic condition that would not improve, and that it left him incapable of working in any capacity.
The court recognized that Hartford had no obligation to give special deference to Pauley’s physician’s opinions. But Hartford also did not have the right to “arbitrarily refused to credit the claimant’s reliable evidence, including the opinions of the treating physician.” If the two physicians disagreed with Pauley’s treating physicians, they needed to supply a sufficient explanation as to why they disagreed.
The court found that they had not done so. Neither of Hartford’s reviewing physicians’ had explained why the analysis of his primary care physician was incorrect, nor did they address Pauley’s “ability to lift, which is one of the requirements of sedentary work.” They ignored his treating physician’s letter stating that he was suffering from “severe” degenerative joint disease. They also did not follow Hartford’s instructions to make sure that they spoke with all three of the physicians who had treated him.
On top of this, Pauley’s disability insurance attorney argued, Hartford had made no effort to reconcile Social Security’s finding that Pauley was disabled with their finding that he was not. The Court has found in the past that such determinations “should at least be addressed or considered, especially when Hartford receives reimbursement because of an SSA finding of disability.” Hartford had received $11,210.60 from Social Security disability insurance which Hartford used to recalculate what it should be paying in benefits between August 10, 2005 and June 30, 2006.
Court Finds Hartford Did Not Conduct a Fair Review and Wrongfully Denied Disability Benefits
Because Hartford’s decision:
- was based on stale medical evidence;
- overemphasized one letter at the expense of all other evidence presented by Pauley; and
- discredited reports from Pauley’s treating physicians without contacting them.
The court concluded that Hartford had lacked adequate evidence upon which to base a reasonable decision. The court remanded Pauley’s claim back to Hartford. The court ordered Hartford to “collect updated, in-depth evidence of Pauley’s alleged functional limitations; consider the Social Security Administration’s award of benefits; and consult with his treating physicians before rendering a decision.”
Pauley’s disability attorney had moved for summary judgment. By choosing to remand the matter back to Hartford for more thorough analysis, the Court chose to deny the motion for summary judgment. Since the case was remanded back, Hartford still has the opportunity to deny Pauley’s disability benefits. The judge had the ability to award disability benefits and then have Hartford continue to evaluate the claim, but the court failed to exercise this discretion. It is troubling that Pauley has been without disability benefits for years and now must continue to wait for Hartford to make a claim decision. If Hartford denies the claim, then Pauley will need to file another ERISA appeal and possibly another lawsuit.