Mutual of Omaha Disability Denial Upheld by Appellate Court
In Giovanna Reichard v. United of Omaha Life Insurance Company (Mutual of Omaha or Omaha), Plaintiff, a nurse employed by a hospital, suffered from headaches, arthritis, Crohn’s disease, and fibromyalgia. She eventually had to quit work because of her illnesses and applied for long-term disability (LTD) benefits through her employer’s group-disability plan administered by Mutual of Omaha.
Omaha granted her request for LTDs for two years during which time the plan considered a person disabled if they were unable to work in their own occupation. Omaha informed Plaintiff that in two years, the definition of disability would change, and she would have to prove she was unable to work in any occupation for which she was “‘reasonably fitted by training, education, or experience’ that would pay at least 60% of her pre-disability earnings within a year of going back to work.”
After two years, Omaha re-evaluated Plaintiff’s claim under the narrow definition of the policy. The company had her medical records reviewed by four professionals: a nurse, a vocational rehabilitation consultant, a physician, and a board-certified rheumatologist, who conducted an independent medical exam (IME). He also reviewed the reports of Omaha’s other medical record reviewers.
After reviewing the four reports, Omaha denied Plaintiff’s claim, and she appealed. On the administrative appeal, Plaintiff objected on the grounds that Omaha:
- Failed to consider the side effects of the medications she was taking.
- Failed to consider some of her medical records.
- Used outdated records and incorrect information.
Omaha responded by having Plaintiff’s medical records reviewed by Dr. Thomas Reeder, its in-house appeal reviewer who also happens to be board-certified in internal medicine. Dr. Reeder is also a senior vice-president for Omaha and its medical director.
Dr. Reeder concluded that there was only one of Plaintiff’s four treating physicians who believed Reeder could not work in any occupation. Dr. Reeder noted that the doctor’s opinion conflicted with notes the doctor had made in the medical file.
Dr. Reeder sent letters to Plaintiff’s four treating physicians informing them of his opinion and inviting them to contact him if they had any objections. Only a neurologist contacted Dr. Reeder and that doctor said he had no objections.
Based on Dr. Reeder’s report, Omaha denied Plaintiff’s appeal, and she filed an ERISA lawsuit in the U.S. District Court for the Eastern District of Pennsylvania. When the District Court ruled in favor of Omaha, Plaintiff appealed to the U.S. Court of Appeals for the Third Circuit.
The Court of Appeals upheld the ruling of the District Court, which held there was substantial evidence to support the Plan Administrator’s decision, so “the insurer’s denial of benefits was not arbitrary and capricious.”
There Was Substantial Evidence to Support Omaha’s Decision to Deny Benefits
The Appellate Court found Omaha’s decision to deny LTD benefits was based on substantial evidence and therefore not arbitrary and capricious when:
- Multiple doctors, including some of Plaintiff’s own physicians, found that Plaintiff could do sedentary or light work.
- Only one of Plaintiff’s doctors said she could not work, and his statement was inconsistent with some of his own notes in the medical file.
- The Vocational Counselor found several jobs he believed Plaintiff could work in, and she provided no evidence to explain why she could not work in those occupations. She simply said she could not work.
- Plaintiff also failed to present any evidence that those identified jobs would not pay 60% of her former salary.
Procedural Irregularities do not Make the Denial of LTD Benefits Arbitrary and Capricious
Plaintiff argued that procedural errors occurred, so she was denied a fair hearing. The appellate court disagreed pointing out the flaws in Plaintiff’s argument. The Court listed Plaintiff’s arguments and why it ruled against them.
She argued Omaha did not tell her what they needed from her to support her claim. The court said there really was little doubt about what was required. She corresponded “at length” with Omaha and submitted extra documentation. In her appeal, she did not state what she would have provided Omaha if she had been asked.
One doctor had several typos in his report which, the Court agreed looked sloppy and did not “inspire confidence,” but the mistakes were not substantive, but only typographical. The Court concluded that the typos “are immaterial.”
She alleged that Dr. Reeder’s employment with Omaha created a conflict of interest. The Court agreed that factor weighed against Omaha but was not enough to overcome the finding that the denial of benefits was based on substantial evidence.
Cumulative effect of the errors was insignificant and did not render Omaha’s decision arbitrary and capricious.
In finding in favor of Omaha, the Appellate Court held that:
“We do not doubt that [Plaintiff] suffers serious illnesses and side effects. But the issue here is whether she can work at any job that pays 60% of her previous salary. United of Omaha found that she could, and our review of its decision must be deferential. It assessed her functional limitations and listed five specific sedentary jobs she could do. Its decision to deny continued benefits rested on evidence from many doctors, and it reasonably disagreed with the one outlier. So, while its procedures might have been imperfect, its ultimate decision was not unreasonable.”
Contact Dell & Schaefer
This case was not handled by our office, but we feel it may be instructive to those who are having similar problems with their insurance company. If you have any questions about this case, or about any issue concerning your disability claim, feel free to contact one of our disability attorneys at Dell & Schaefer for a free consultation.
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Mutual of Omaha Reviews
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Mutual of Omaha
I do not understand how a “medical review team” who has never laid eyes on my wife can say she is able to return to work when her doctors who see her on a regular basis have documented that she can't
My wife fell three years ago and broke her back. She has been found permanently disabled and receives Social Security Disability Benefits. She has also been receiving Bene... read more >
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Mutual of Omaha
THEY SCAMMED ME AND DID NOT CARE
We have had life insurance with Mutual of Omaha since 1998 with a chronic illness rider that we decided to use in 2016. Our policy was for 500k, they approved us for 66,95... read more >
Mutual of Omaha
This company is awful
I think there should be laws put in to place to cover the average Joe. This company is awful. They say so much they don’t even know what lies they have told. My husband ... read more >
Mutual of Omaha
I would encourage anyone who has problems with Mutual of Omaha or United of Omaha to immediately contact an attorney.
I would encourage anyone who has problems with Mutual of Omaha or United of Omaha to immediately contact an attorney. I want to talk about a specific situation in which I ... read more >
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MOO attempted to strong arms me with collection tactics. Now, they're stalling
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MOO stopped my husband's benefits before telling him. They handled his claim terribly
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Mutual of Omaha
This company is very corrupt, Be aware
Please hesitate & educate yourself when deciding on short term or long term disability insurance via Mutual Of Omaha. The company is very corrupt. They speak to you like y... read more >
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Mutual of Omaha is a rip off.
Mutual of Omaha is a rip off. When my husband died in 2011, they refused to pay his death benefit because they said he was disabled when I insured him. He retired from his... read more >
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Q: Can I ask for another appeal?
A: Giovanna, you should consult with the attorney(s) that represented you in your appeal to the Third District Co... Read More >
Q: I'm in jeopardy of losing everything because of MOO. Can you help?
A: Amy, first and foremost, I am sorry to hear of MOO’s delay tactics and the fact that they sound like they mi... Read More >
Q: Can MOO deny my claim on the basis of preexisting condition when my condition is not preexisting?
A: Doomed, if your claim has been denied then Mutual of Omaha will give you the right to appeal. Pre-existing con... Read More >
Q: What is my "regular occupation" if I started my own business after resigning from my old job?
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Q: Am I able to work part time at a different job that is nothing like the one I was at when I was injured?
A: Russell, whether you can work part time in a different occupation depends on the specific language of the Grou... Read More >
Q: Can I get a lump sum check from MOO?
A: Pam, Mutual of Omaha may be willing to negotiate a lump sum buyout of the remaining time on your policy, but t... Read More >
Q: Should I be able to restrict the release of medical records to under 24 months period?
A: Connie, although you could attempt to limit the medical records to be released to Mutual of Omaha, the likely ... Read More >
Q: Should I write an appeal letter? What should it include?
A: Cam, if you are still within your 180 timeline to file an appeal it is imperative that you go through the appe... Read More >
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