Reliance Standard terminates long-term disability benefits after receiving the results of an IME and FCE

A recent federal court opinion upheld Reliance Standard’s decision to terminate a claimant’s long-term disability benefits. The Court stated that the existence of both an Independent Medical Examination (“IME”) and a Functional Capacity Examination (“FCE”) was evidence of a thorough investigation. The Court concluded that the results of those exams and the inconsistent documentation from the claimant’s physicians were sufficient proof to show that that Reliance Standard’s decision was not arbitrary or capricious.

Ryan Tomarkin worked as a network analyst for DecisionOne Corporation. As an employee, he participated in the long-term disability income plan issued by Reliance Standard. On June 28, 2001, Tomarkin injured his back in a swimming pool accident and was eventually awarded long-term disability benefits on February 16, 2002. Under the terms of the policy, Tomarkin was entitled to benefits for the first 24 months if he could not perform the substantial and material duties of his “own occupation.” After that period, disability benefits are only payable if the insured is totally disabled from “any occupation.”

After the claim was approved, Reliance Standard periodically requested updated information to evaluate Tomarkin’s continuing eligibility for benefits:

• In April 2003, Reliance Standard asked Tomarkin’s pain management specialist, Dr. Raymond Sorenson, to complete a Physical Capacities Questionnaire. Dr. Sorenson reported in May 2003 that Tomarkin was capable of performing sedentary level work, with Tomarkin able to perform simple grasping, fine manipulation and the occasional pushing and pulling with both hands.
• In March, April and May of 2004, Reliance Standard requested Tomarkin to complete a supplemental questionnaire and submit updated medical information. Tomarkin never responded.

Reliance Standard then requested records from Tomarkin’s doctors:

• Dr. Gary Goforth, a family practitioner, submitted two Attending Physician Statements dated April 13, 2004 and June 15, 2004, and his patient records of Tomarkin. Dr. Goforth’s Attending Physician Statements were inconsistent. For instance, one stated that the patient could lift/carry less than 10 pounds occasionally, while the other stated he could carry up to 150 pounds. Also, one stated that Tomarkin could not climb, balance, kneel or reach above his shoulder, while the other stated he could do all those things occasionally.
• Dr. Sorenson, the above mentioned pain management specialist, provided medical records that indicated that Tomarkin’s pain level decreased during the time of January 2003 through May 2004.
• Dr. Pamela Thomas-King, another pain management specialist who saw Tomarkin in June 2004, stated that Tomarkin reported his pain was consistently 6 out of 10 through 10 out of 10. Dr. Thomas-King’s examination revealed a range of motion in the bilateral upper extremities within normal limits, bilateral lower extremities negative straight leg raise at 75 degrees, and spine extension and flexion with significant pain and limited mobility. Dr. Thomas-King also reported muscle strength and tone of both the bilateral upper and lower extremities to be +5/5. These were all normal findings.

Reliance Standard’s senior clinical specialist, Dennis O’Brien, reviewed the case file. Because he felt that the information did not support limitations that would affect Tomarkin’s ability to perform duties associated with a sedentary or light occupation, O’Brien recommended a Functional Capacity Exam (“FCE”) be performed.

An ErgoScience FCE Physical Work Performance Evaluation (“PWPE”) was performed on August 26, 2004. Although the PWPE concluded that Tomarkin was incapable of sustaining the sedentary level of work for an 8-hour day, the summary of the PWPE states that “the level of performance was significantly influenced by the client’s self-limiting behavior.” Self-limiting behavior means that Tomarkin stopped the task before a maximum effort was reached. Possible causes include (1) pain, (2) psychosocial issues such as fear of injury, anxiety, depression, and (3) attempted to manipulate test results. The report of the PWPE stated that the “client self-limited on 72% of the 18 tasks.”

Reliance Standard then terminated Tomarkin’s benefits effective September 30, 2004. The denial letter noted that the policy now requires benefit payments only if Tomarkin is unable to perform the substantial and material duties of “any occupation.” Additionally, the denial letter pointed out that Tomarkin failed to respond to their requests for additional information, and concluded by saying there was insufficient evidence from his physicians and from the FCE. Essentially, Reliance Standard concluded that they had no proof that Tomarkin was disabled.

Tomarkin appealed and submitted additional medical records. Tomarkin saw Dr. Robert Remondino who reported that Tomarkin had degenerative disc disease and recommended a two-level fusion surgery.

Reliance Standard then requested an Independent Medical Exam (“IME”) to be performed by Dr. Timothy Pettingell. Dr. Pettingell noted that during the physical examination, “when the claimant was sitting on the examination table (an elevated table), the claimant bent forward at the waist to retrieve his sunglasses from the floor. He was able to perform this with no outward sign of pain and his heels were approximately three inches off the floor while in the sitting position.” While Dr. Pettingell diagnosed Tomarkin with lumbar degenerative disc disease, he concluded that the Tomarkin was not totally disabled from any and all employment.

With these results, Reliance Standard denied Tomarkin’s ERISA appeal and Tomarkin filed an ERISA lawsuit in Oklahoma Federal Court.

Standard of Review

A Federal Court in Oklahoma reviewed the decision of Reliance Standard. The Court first noted that the governing policy gave Reliance Standard discretion to determine whether Tomarkin qualified for benefits. Under case law, the fact that the policy gave the carrier this discretion, the court’s review is limited to determining if the decision was arbitrary or capricious. The court pointed out that to survive the court’s review, Reliance Standard’s decision “need not be the only logical one nor even the best one. It need only be sufficiently supported by facts within the insurer’s knowledge to counter a claim that it was arbitrary or capricious. The decision will be upheld unless it is not grounded on any reasonable basis.” Hancock v. Metropolitan Life Insurance Company. The Court further pointed out that the “any occupation” standard (that is at play in this case) is not demanding. For example, in Duhon v. Texaco, Inc., another court stated that “finding ‘any occupation’ standard is not demanding even where the insured was an older man with only a high school education.” In my opinion the arbitrary and capricious standard is what makes ERISA an extremely unfair a pro-insurance company law.

The Court’s Analysis

Tomarkin attempted to argue that Reliance Standard’s reliance on the results of the Independent Medical Exam which diagnosed Tomarkin with degenerative disc disease but found him to be not disabled was evidence that Reliance Standard’s decision was predetermined and thus arbitrary and capricious. However, the Court noted that on the contrary, in situations involving a conflict of interest (such as here, where Reliance Standard both issues the policy and determines if someone is disabled), Courts encourage insurers to obtain an IME. The Court stated that seeking independent expert advice is evidence of a thorough investigation, and concluded that Reliance Standard’s election to afford more weight to an IME by a specialist than to Tomarkin’s family physician, Dr. Goforth, who gave contradictory conclusions, was not arbitrary or capricious. Additionally, the court noted Tomarkin’s own pain management specialist, Dr. Sorenson, concluded Tomarkin was capable of performing at a sedentary level; that Tomarkin’s family practitioner sent inconsistent physician statements making it difficult to determine if Tomarkin was disabled; and that the FCE’s reporting of Tomarkin’s self-limiting behavior compromised the test results and thus interfered with the assessment of Tomarkin’s physical abilities to match job demands.

The Court found Reliance Standard’s decision was not arbitrary or capricious, but sufficiently supported by the facts, and therefore upheld its decision to terminate Tomarkin’s long-term disability benefits.