When Rosemary McGahey was denied long-term disability benefits after 24 months, she appealed Harvard University’s decision. She had been approved by Social Security for disability coverage. But Harvard claimed that their standards were different than Social Security’s. At Harvard’s request, she had seen numerous physicians and psychologists, physical therapists and occupational therapists. Did the evidence from these visits validate Harvard’s decision?
McGahey took action pursuant to the Employee Retirement Income Security Act (ERISA) in the United States Court for the District of Massachusetts. Harvard’s long-term disability plan is self-funded, which means that Harvard is the payor and decision maker of all disability claims. An initial reading of the facts suggests that her case could have gone in Harvard’s favor. So let’s look at McGahey’s story.
McGahey has spent her entire working life in the area of food services. She started out with an Associate Degree in Culinary Arts and Hospitality for Bunker Hill Community College. While in college, she worked as a chef at a nursing facility then went on after graduation to work 16 years as a senior food service director at Boston University. In 1999, McGahey began work at Harvard University as Director of Residential Dining.
All went well until February 6, 2004. On this day, McGahey slipped on an icy sidewalk on the campus. She injured her right knee in the fall. She returned to work part time in March. Physical therapy enabled her to resume work full time on June 30, 2004.
On August 25, still recovering from her first injury, she slipped in the dining hall. This time the fall reinjured her knee and caused pain in her right groin, right hip and lower right leg. The incident was reported by Harvard to the Massachusetts Dept of Industrial Accidents (DIA) on August 27. Harvard reported that she was totally disabled. She was placed on restricted duty hours on August 30 and stopped working entirely on September 2, when her treating physician, Dr. John Siliski recommended it.
An MRI, scheduled on September 8, revealed swelling in her knee. Physical therapy was resumed through the end of September. Her therapist noticed that she complained of increasing pain in her knee and the onset of pain in her lower extremities and back.
Harford requested that McGahey present herself to Brian McKeon for an independent medical examination (IME). Dr. Mckeon noted that she was hypersensitive to pain with specific symptoms involving her lower leg, knee and hip. He reviewed the September 8 MRI. He saw no major issues with regard to her knee. He was confident that her physical therapy regimen was effective and declared her ready for work based on her tolerance level and some mild restrictions. He did recommend another MRI.
Based on Dr. McKeon’s recommendation, McGahey underwent another MRI on her right hip in October. On the 29th of October, she went to see a Dr. Jeffrey van Flandern, an orthopedic surgeon at New England Baptist hospital. Dr. Flandern concluded that her knee was “under control for the most part.” Instead, he focused on her right hip which he concluded was the cause of the problem in her knee. He diagnosed her with an anterosuperior labral tear, and recommended surgery to repair the damage, concluding that minimal progress had been achieved in eight months of physical therapy. McGahey agreed to the surgery which occurred on November 24.
On November 9, 2004, McGahey submitted her application to Harvard for total disability benefits. They finally approved her application on January 13, 2005, and paid the retroactive benefits from November 11, 2004. The initial claim was approved through April 30, 2005. Harvard stipulated that McGahey must apply for social security disability insurance (SSDI) coverage and workers’ compensation benefits. She filed her application with SSDI on November 19.
During his post surgery exam on December 7, Dr. Flandern noted that McGahey had to walk with the assistance of a crutch and that she exhibited a noticeable limp favoring the right side. He recommended that she resume physical therapy, and he also prescribed anti inflammatory and pain medications. He noted in her file that she would be limited to only work duties that involved extremely sedimentary activities from her home.
A month later on January 11, 2005, Dr. Flandern submitted an affidavit to Harvard stating that McGahey could work “from home only” up to “1 to 2 hours with frequent breaks” and that her prognosis was “guarded.” On February 15, Dr. Flandern stated his opinion that she had “total temporary disability.” He also expressed his concern that her feelings of pain had not improved. As a result, he had referred her to Dr. James Rainville of New England Baptist Hospital Spine Center. He suspected she might have a problem in the lumbar region. Dr. Rainville ordered an MRI over lumbar spine, on February 14.
No longer in need of an orthopedic surgeon, McGahey stop seeing Dr. Flandern and began seeing Dr. Marc Wiener, a neurologist. Dr. Wiener reviewed the results from her MRI and upon physical examination reached the conclusion that there was internal derangement in her right knee and hip, and that she had herniation in the L5-S1 disk. He concluded on March 28, 2005 that the combined injuries amounted to a “total disability from her employment.” Dr. Wiener prescribed a stronger pain medication. He reaffirmed his diagnosis in a letter submitted to Harvard on November 12, 2005.
Harvard extended McGahey’s total disability benefits through July 31, 2005. on May 3, 2005, during this extension, Harvard asked McGahey to see Dr. George McManama, an orthopedic surgeon. After his physical exam and reviewing her MRIs, Dr. McManama issued his evaluation. He stated that she exhibited positive Waddell signs (physical symptoms that indicate a psychological connection to lower back pain). “Disability carriers will often rely on a positive Waddell signs test result in order to argue that a claimant is not being honest about their pain complaints”, said disability insurance attorney Gregory Dell . He questioned the importance of the disk herniation, but recommended a steroid injection to cope with the pain in her back. While he recommended additional testing, he concluded that she would not be able to return to her old job, but that she would be able to work in a position that involved “light duty work with restrictions.”
On June 7, 2005, the social security administration notified McGahey that her application for benefits had been denied. Harvard notified her that she must make further appeals “diligently.” So she promptly filed an appeal on June 28.
In July of 2005, McGahey began seeing Dr. Michael Marcus, a psychiatrist. She had seen him previously for unrelated psychological issues back in 1971. When Harvard learned that she was seeing him, they ordered an IME from Dr. Michael Rater, also a psychiatrist. He examined her on January 19, 2006 for 1 hour and reviewed her medical records. His conclusion? That she had a major depressive disorder and pre-existing conditions. Dr. Rater concluded that McGahey did not meet the definition for long-term disability. He noted she might be hard to employ because he found her irritable and impatient.
Harvard now requested that McGahey file a claim for workers compensation. In order to do this, she was examined by Dr. Joseph Ferrone, another orthopedic specialist. His February 22, 2006 exam diagnosed her with “herniated nucleus pulposis, L5-S1, right, causing right sciatica” among other conditions. He found no evidence of Waddell symptoms. He concluded that “the right knee internal derangement and right hip internal derangement would not be likely to result in total disability from employment.” But he felt that the L5-S1 disk herniation could result in total disability.
Meanwhile Harvard had commissioned a vocational assessment of McGahey. Based on a 45-minute meeting on January 19, 2006, and a review of the medical records, the vocational expert determined that McGahey would be capable of sedentary work. Five jobs in the Boston area were suggested. This information became part of the evaluation of whether to extend McGahey’s total disability benefits beyond Feburary 28, 2006, the 24-month anniversary of her initial disability claim.
On March 8, Harvard denied McGahey’s application for long-term disability benefits. They listed the information used to make their decision. Most of the documentation reflected physicians and specialists chosen by Harvard. They also cited her denial by SSDI.
A second vocational assessment was requested on June 12, 2006 in conjunction with the workers compensation proceedings. This time the assessment was based on 4 1/2 hours of interview. The report issued on September 12, 2006 stated that “the combination of physical and psychological restrictions would preclude any work [by McGahey] in the labor market.”
McGahey filed an appeal to Harvard’s denial of her total disability benefits on September 14, 2006. She supplemented her appeal with new information, including a dispute of the vocational assessment based on McGahey’s personal knowledge of the Food Services industry and updated medical reports from her training physicians.
Harvard responded by ordering additional IMEs. They asked her to see a psychologist, Stuart Clayman for another psychiatric evaluation. After 4 hours of interview, Dr. Clayman found that she would be able to engage in “substantial gainful activity.” McGahey took issue with much of the information presented by Dr. Clayman in his report on April 11, 2007.
Harvard also ordered another IME with orthopedic surgeon Dr. Hyman Glick. Dr. Glick concluded from the February 26 exam that McGahey’s “right knee condition has resolved” and is “not a problem.” He felt her right hip was doing reasonably well. He observed a condition of the L5-S1 disk but minimized its importance. He concluded that there was a significant psychological component to her impairment. His final conclusion was that she seemed “suitable for full-time sedentary job categories.”
Harvard also ordered another IME with Dr. McManama on March 30, 2007. He returned the same decision as he had before. He did observe that there was a “mild disc bulge at L5-S1.” He reaffirmed his conclusion that she was “capable of fulltime, light duty work.”
Harvard then ordered another vocational assessment. On March 19, 2007, this new report repeated the view that McGahey could work in a sedentary environment. The report listed seven potential jobs in the local economy.
SSDI reversed its denial of benefits on March 22, 2007. On April 4, 2007, McGahey’s application for workman’s comp was also approved. Harvard was ordered to pay, and Harvard appealed.
Harvard once again considered, McGahey’s appeal on May 11, 2007. On the 16th they sent her a letter telling her that her appeal had been denied. They did not give weight to the fact that she had been awarded benefits by SSDI, claiming that their plan had a different standard for determining total disability.
After reading all this, you may have drawn the conclusion that taking this case to court was risky. But a careful reading of case law gave McGahey’s attorneys reason to expect success. As expected, the Court discovered something in their review of the case.
Harvard both administered the long-term disability plan and had discretion over who benefited from the plan. This conflict of interest meant that the court had to weigh the evidence against the arbitrary and capricious standard. If no evidence of manipulating information in its favor existed and the decision was reached using a reasonable and consistent process, the plan administrator’s decision would have passed the test and summary judgment for Harvard would have been granted.
In this case, the court found that Harvard’s requirement that McGahey apply for SSDI was inconsistent with the denial to consider approval for SSDI as evidence of permanent disability. Then to also discount her approval for worker’s compensation, demonstrated an arbitrary and capricious decision on Harvard’s part.
McGahey alleged that Harvard had repeatedly tipped the scales in favor of a denial of benefits by choosing physicians for the IMEs who evaluated her condition as far better than it in reality was. This was a serious accusation. The court ordered Harvard to produce all the IME reports that were commissioned from Drs. McManama, Clayman, and Glick from February 1, 2004 through May 31, 2007. The court ordered that the raw number of claims that each physician recommended for denial and recommended for approval also be presented.
The results were telling in the court’s view. Dr. McManama reviewed 22 cases. He recommended denial for all 22. Dr. Clayman’s record was slightly better. Of the 31 cases he reviewed, 25 were recommended for denial and 6 for approval. Glick’s only case was McGahey’s, so it couldn’t demonstrate any bias. Even when this information was compared to the other 11 medical professionals who treated McGahey, the Court still didn’t have proof that Harvard had been sinister in its selection of physicians. But when the refusal to consider McGahey’s approval for SSDI and workers’ compensation as well as the opinions of her treating physicians were added to the evidence, the court found that Harvard behaved in an arbitrary and capricious manner.
The court issued summary judgment in McGahey’s favor. While much of her benefits are already offset by her SSID and workmans’ comp awards, she now is entitled to the benefits that mattered most – primarily health and dental insurance, life insurance and retirement contributions at her pre-injury levels.