Claiming that her long term disability benefits were denied improperly under the Employment Retirement Income Security Act of 1974 (ERISA) and 29 U.S.C.§ 1001, et. seq., Nancy C. and her Kentucky disability lawyer filed a disability lawsuit against her employer and disability insurer alleging that the denial of her long-term disability benefits by the insurer was “arbitrary and capricious” and constituted a “breach of fiduciary duty and/or bad faith” on the part of the defendants.
History of the Claim
Employed as a Kentucky Home Care Case Manager/Consumer Directed Options Support Broker for the Paducah Area Development District, Nancy C. made a Mutual of Omaha application for disability benefits due to her inability to work as the result of “severe abdominal pain, fatigue, malaise.” She reported that these symptoms first appeared in December of 2004, but she continued working. However, by October 22, 2009, she could no longer function in her job and resigned her position.
Mutual of Omaha Disregards Claimant’s Dependence upon Medications to Work
Upon the collection of Nancy C.’s medical records, the insurer learned that was diagnosed with abdominal pain, portal vein thrombosis and degenerative joint disease of the knees and that she had been treated with anti-coagulation therapy as well as receiving intermittent treatment of venipuncture blood draws. In addition, as a result of her thrombosis, Nancy C. was found to have “hepatocellular disease with diffuse fatty infiltration in the liver, esophageal varices (dilated veins), splenomegaly (enlarged spleen), and ileus,” according to a CT scan performed on January 21, 2010. Prior to her resignation in October, 2009, Nancy C. paid numerous visits to her physician noting a plethora of symptoms that included shortness of breath, swelling of lower extremities, abdominal pain, fever, chills, pain, nausea, and visual disturbances. With an increase in her medications, Nancy C. continued to work, though her doctor reported that her prognosis for improvement was not optimistic. Her return to work, according to her treating physician was “comprised solely of medicine management” and would require her to cease driving as long as she continued to take her prescribed narcotics.
On March 10, 2010 Carpenter’s long term disability claim was denied by Mutual of Omaha, who stated that the medical documentation available on Nancy C.”does not appear to support restrictions and limitations to preclude sitting 6 hours out of an 8-hour day with ability to occasionally make position changes or occasionally lift up to 10 pounds.” Thus, the insurer determined that Nancy C. could perform the material duties of her regular occupation and thus, did not qualify for long term disability benefits. As expected, Nancy C. appealed the decision, supplemented her medical records to the insurer, and got another opinion which determined that Nancy C.”would benefit from further expertise.”
Mutual of Omaha upheld its denial of Nancy C.’s benefits stating that she “has had the abdominal distention and portal vein thrombosis conditions for some time and that they are established problems, noted to be ‘stable and improved.'” Using the standard dictated by ERISA that the Court must look at a claim of contested benefits in light of the “information actually considered by the administrator” of a claim. Quoting case law to justify its consideration, the Court applied the “arbitrary and capricious standard of review” to Nancy C.’s issue. In their complaint and brief, Nancy C. and her attorney alleged that the insurer denied Nancy C.’s claim without giving proper consideration to her medical records or her receipt of Social Security Disability Benefits.
Court Determines that Mutual of Omaha Had a Conflict of Interest in this Case
According to the Court’s memorandum on this case, even though neither party brought up the topic of the insurer having a conflict of interest, the Court felt that it should point out that this was a consideration as the insurer is both the payor and the reviewer of Nancy C.’s claim and that that should be considered in the review of her case. The Court found that the insurer did indeed act arbitrarily and capriciously in one respect in that Nancy C. was required to drive to eight different counties in Western Kentucky to fulfill the material functions of her job when her physician clearly stated that she should not be driving.
The Court determined that the insurer’s “minimal analysis focused on the symptoms [Nancy C.] does not exhibit, such as abnormal bleeding or poorly controlled blood pressure, instead of focusing on the symptoms she does exhibit and then analyzing how these symptoms would not prevent her from performing the material duties of her occupation” was a factor here. In addition, the Court noted that the insurer disregarded the opinion of her treating physician and his determination of Nancy C.’s “limitations and restrictions but did not expressly explain why it did so.” The Court also found fault with the insurer’s reliance upon the opinion of nurse reviewers, the performance of a file-only review, and the fact that more weight was given to the review of her file than to her treating physician’s medical evaluation of his patient
Quoting several cases which pointed to the insurer’s lack of basing its evaluation of Nancy C.’s claim in a reasonable fashion, the Court ruled that Mutual of Omaha did act arbitrarily and capriciously when it decided to deny her claim for long term disability benefits. The Court further opined that it was “troubled” by the insurer’s “determination that the available medical documentation did not support [Nancy C.’s] reported restrictions when it never had a physician examine her or provide a full analysis of her claim.” And, the Court further admonished the insurer that it believed that the denial of Nancy C.’s claim “was not the result of a deliberate principled reasoning process and was not supported by substantial evidence. However, the Court did state that it didn’t believe that the record associated with this case automatically entitles Nancy C. to receive long term disability benefits and thus, remanded the claim back to the defendant to conduct a full and fair review of her case.