MetLife's denial of short-term disability benefits found arbitrary and capricious

After 18 years of work as a management assistant at Raytheon Company, Dorothy Whitehouse suffered a psychotic episode in the workplace triggered by an experience with her boss and co-workers. The severity of the attack prompted her to immediately schedule an emergency appointment with her therapist, a licensed social worker on August 23, 2007.

On August 28, Whitehouse filed a claim for short-term disability benefits with MetLife, the insurance company that provided Raytheon’s short-term disability basic benefit plan. The company plan provided income replacement at 75% of her weekly base pay for 10 weeks. She also participated in a short-term disability plus coverage plan that covered the remaining 25% of her weekly base pay.

Whitehouse went to see a psychiatrist who submitted session notes to MetLife on August 30. Whitehouse’s therapist also sent a short letter to MetLife on September 6. He described the incident precipitating her claim and stated that she reported a feeling of exhaustion, inability to focus and fear. He noted that she was seeing him and that he had also encouraged a transfer from her work environment.

On September 7, during a phone call with a MetLife representative, her therapist stated that Whitehouse had suffered a mental breakdown and had visited him twice since the incident. He felt she was doing better. The same MetLife representative spoke with Whitehouse as well. She told him that September 6 was the first time she’d been able to leave her house since her appointment with her therapist. See said her therapist had recommended that she take a leave of absence from work, claiming that both her psychiatrist and therapist had told her not to think about work.

On September 25, Whitehouse’s husband called MetLife to inform them that she was seeing a different psychiatrist who had doubled her antipsychotic medication. The MetLife representative consulted an independent board certified psychiatrist the same day who gave his opinion, that Whitehouse was just staying home in order to avoid dealing with her supervisor and because she was afraid of another paranoia attack. Based on this conclusion, the MetLife recommended that Whitehouse’s claim be denied.

The next day on September 26, Whitehouse’s therapist called to give an update on her condition. He said that she had not shown any further paranoia symptoms since the work incident, but she did continue to exhibit anxiety and depression.

On September 27, MetLife notified Whitehouse of its decision to deny her short-term disability claim. They stated that her clinical data did not support the existence of a condition that would render her totally disabled and unable to perform her job. They found that she was ineligible for any benefits because the plan’s waiting period extended to August 30, and she’d only been disabled from August 23 through August 30.

Whitehouse appealed the denial. She asked her psychiatrist and therapist to submit additional information on her behalf. Anderson did so on October 1. He diagnosed her with “a major depressive disorder with psychotic features.” He compared the onset of the psychotic episode to a posttraumatic stress disorder incident which could be triggered or reactivated by the behavior of a colleague in the workplace. He stated, “Ms. Whitehouse is still clearly not mentally or emotionally capable of returning to work at this time…”. It should be noted that psychotic features include delusions and seeing or hearing things that aren’t there.

MetLife sent Whitehouse’s appeal to another board certified psychiatrist. His assessment, released on October 17, concluded that there was insufficient documentation to prove that Whitehouse had any formal thought disorder that would prevent her from being able to work or function. He claimed that if Whitehouse was able to drive and perform the activities of daily living and manage her finances, there was no reason she should not be able to return to work.

MetLife sent a copy of this report to Whitehouse’s therapist on October 18, giving him 10 days to respond. They also sent a copy of the report to her previous psychiatrist, even though they had been informed that she had changed psychiatrists. Instead of waiting 10 days to receive a reply from either source, MetLife denied Whitehouse’s appeal four days later on October 22.

They received a response from her therapist on October 24, just two days after they sent out the denial letter and within the 10-day time limitation. In his letter, he noted significant errors in MetLife’s assessment. He restated his conclusion that she was still significantly impaired and unable to return to work. He contested her ability to function saying that she barely managed, could drive occasionally, but he stated that she was unable to manage her finances without assistance. He expressed his surprise that both his records and the report of her treating psychiatrist were not being used to support her claim of serious functional limitation.

MetLife had their psychiatrist review her therapist’s letter and speak with her treating psychiatrist. MetLife’s psychiatrist noted that her psychiatrist strongly supported her debility, but in his November 7 assessment concluded that her inability to function was still not supported adequately, claiming that his telephone conversations with both her psychiatrist and her therapist contradicted their assertions regarding her capabilities.

MetLife affirmed their denial by letter on November 9. Whitehouse responded by seeking judicial review under the Employee Retirement Income Security Act (ERISA). She sought to recover the benefits due to her under the terms of both the short-term and long-term disability benefit plans operated by MetLife, which she calculated to be worth $52,152.31 including health insurance payments, denied benefits and legal fees. Both Whitehouse and MetLife filed cross motions on the administrative record, the file used to determine the claim decision.

First, the Court had to determine the standard under which they were to review the case. Because they found that the plan gave discretionary authority to the plan administrator, the Court had to apply the arbitrary and capricious standard of review. This meant that if MetLife’s process was reasoned and supported by substantial evidence, the court would uphold its denial of benefits.

When the court looked at the administrative record, they found that MetLife’s denial of Whitehouse’s appeal was arbitrary and capricious. They found that issuing the denial without waiting for response, within the 10-day time limitation, demonstrated arbitrary and capricious action. They also found that the findings of Whitehouse’s doctors were consistently mischaracterized and inconsistent with the evidence.

The court recognized that plan administrators don’t have to give special weight to treating therapist’s opinions, but to ignore the opinion entirely as MetLife did was arbitrary. The court found that MetLife was inconsistent in its review of the psychiatric notes from Whitehouse’s attending physicians. They claimed that pharmacotherapy did not appear to be particularly aggressive, ignoring the psychiatric notes listing the doubling of her antipsychotic medication. In fact, the Court found that MetLife had never sent her new psychiatrist the report that her therapist had corrected.

The court also found that the November 9 denial failed to meaningfully consider the evidence that Whitehouse supplied in response to her denial. They brushed aside her therapist’s opinion that conflicted with their psychiatrist’s assessment. They also misquoted her psychiatrist as saying she was able to function, when he had clearly stated that she was not able to function.

The Court also found that MetLife did not update its factual conclusions when they received new information that contradicted prior assumptions. They made statements into “fact” without supporting evidence. In fact, evidence to support opposite facts had been provided. The denials continued to include factual inaccuracies that had been refuted by Whitehouse’s treating physicians. The court found their denial of short-term disability benefits was capricious and arbitrary.

Whitehouse was also seeking long-term disability benefits, but the court found that because she had not been qualified by MetLife to receive the full 10-weeks of short-term disability benefits, the insurer had never reviewed her claim for long-term disability benefits. So the court awarded Whitehouse short-term disability benefits for the time between August 31, 2007 and October 24, 2007. The court then sent the extension of short-term disability benefits and long-term disability benefits decision back to MetLife for review. The court also awarded costs to Whitehouse.