Recently, a former Compliance Specialist for PNC Financial Services Group was unsuccessful in her lawsuit again her former employer and Sedgwick. This case is a strong reminder that even though a claimant has been awarded disability benefits from the Social Security Administration, it does not mean that the Long Term Disability Insurance Provider must also award disability benefits.
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Let’s take a closer look at why the Federal Court ruled against the claimant in the case of Kimberly B. v. The PNC Financial Services Group, Inc. and Affiliated, Long Term Disability Plan.
Kimberly B. worked as a compliance specialist for PNC from June 26, 1990 until March 23, 2007, when she was forced by sicknesses to apply for her long term disability benefits because she was “unable to work due to extreme fatigue, mental confusion and forgetfulness.” Her last day of work was March 23, 2007.
Armed with a Treating Physician’s Statement that listed her diagnosis as “chronic fatigue syndrome and memory loss,” Balas submitted her long term disability benefits application to Sedgwick Life Insurance, PNC’s provider.
Claimant was Originally Denied Her Long Term Disability Benefits in 2007
Kimberly B. was denied that application in a letter dated August 30, 2007 which indicated that Kimberly B. was not eligible for disability benefits because she was not unable “to perform each of the material duties of [her] own occupation as Compliance specialist throughout the elimination period.”
Consequently, Kimberly B. appealed this decision and Kimberly B.’s appeal was sent to three independent third-party medical reviewers for opinions. Two of the reviewers came back with a conclusion that while Kimberly B.’s symptoms were clinically significant, they did not rise to the standard of a disability to warrant a categorization of her as “disabled from her unrestricted job.” The third reviewer, a physician of Internal Medicine and Nephrology, was of the opinion that Kimberly B. is disabled due to her fatigue and “cannot do any type of work,” and that her “expected appropriate length of disability is indefinite.”
Based on these reviews, Kimberly B. appealed for long term disability benefits and was approved on November 6, 2007. As required by Sedgwick, Kimberly B. applied for Social Security Disability Benefits, but was denied those benefits on November 21, 2007. The insurer referred her to an agent to assist her in an appeal of those SSD benefits, and as a result of the appeal, she was awarded SSD on July 10, 2008 and Sedgwick received its offset against Kimberly B.’s LTD benefits in the amount awarded to her by SSA.
Claimant Supplies Sedgwick with Medical Records Confirming her Diagnosis
Continuing her treatment for her condition, Kimberly B. was asked for and complied with an update of her medical status to Sedgwick. In his report, Kimberly B.’s treating physician reported her continuing symptoms of fatigue, joint stiffness and pain and noted that she could complete light housework do laundry, and prepare meals; but because of her inability to stay awake and her requirement of frequent rest, she remained totally disabled from work.
In March, the insurer contacted another of Kimberly B.’s doctors, who confirmed that Kimberly B. was unable to work due to lack of energy and stamina, however the doctor also indicated that her prognosis for returning to work was “extremely good.” Since January 10, 2008, this particular doctor had been treating Kimberly B.’s condition with a “treatment of antifungal therapy, back and muscle IV, sleep hygiene and a yeast diet.” Consequently in February 2008, this doctor reported to Sedgwick that Kimberly B. was sleeping better, was in less pain, had more energy, and confirmed that Kimberly B.’s physical examination was within normal limits.
However, Kimberly B.’s primary treating physician did not agree with this positive prognosis and stated that her “return to gainful employment was poor.”
In 2009 Kimberly B.’s lab results were normal except for a low iron reading. With conflicting reports, Sedgwick sent Kimberly B.’s medical information to a third party to review. That third party reviewer determined that Kimberly B. “is expected to be capable of unrestrictive work, from a rheumatology viewpoint.” Determining that Kimberly B. had “failed to provide proof that [she] continue[d] to be totally disabled” per her PNC plan, Sedgwick terminated her disability benefits as of March 1, 2009.
As expected Kimberly B. appealed that decision, but was denied on the opinion of two other physician reviews which claimed that Kimberly B.’s complaints of fatigue and exhaustion were not upheld by her medical records. Thus, Sedgwick upheld its denial, resulting in Kimberly B. hiring a Pennsylvania disability lawyer to represent her in the United States District Court for the Western District of Pennsylvania. Consequently, Summary Judgment was the appropriate venue for Kimberly B.’s complaint. Faced with determining if Sedgwick’s denial of benefits was “arbitrary and capricious,” the Court drafted a memorandum to justify its decision against Kimberly B. and for Sedgwick.
In the complaint put before the Court, Kimberly B. and her attorney contended that the insurer’s denial of continuing long term disability benefits was arbitrary and capricious because the denial was:
(1) based purely on lack of objective findings; (2) was in total disregard of the SSA’s determination that Balas was totally disabled; (3) failed to provide any explanation for rejecting the opinions of the treating physicians; (4) reversed its prior decision granting [Kimberly B.] LTD benefits even though her condition had not changed; and (5) was based on opinions of reviewing physicians who had not be supplied with complete medical records.
The Court’s Reasoning in its Decision Concerning this Case
The Court defended its decision for the insurer by addressing these issues as follows.
Issue One: Lack of Objective findings.
The question wasn’t that objective findings were required, but that Kimberly B. could not offer objective proof that she was unable to perform the functions of her job. The Court, provided with more evidence that Kimberly B. was capable of working than evidence that she was not, determined that it could not substitute its judgment for that of the administrator who used the information provided to make his/her decision that Kimberly B. was capable of working.
Issue Two: Disregard of SSA Findings.
Even though Sedgwick did not address Kimberly B.’s Social Security Administration (SSA) award in its denial letter to her, case law has previously been established “that an award of SSD benefits does not in itself establish that Sedgwick’s decision was arbitrary and capricious.”
While the Court did state that a SSD benefits award did not have to be considered when evaluating plan benefit awards or denials, it did concede that when an insurer encourages an applicant to apply for SSD benefits, which Sedgwick did in this case (even going so far as to offer assistance in an appeal of her initial SSD denial), the insurer should have considered those benefits and given Kimberly B. a reason for not taking them into consideration.
Consequently, the Court looked at this point as a favorable one in proving that Sedgwick acted arbitrarily and capriciously in this case.
Issue Three: Opinions of Treating Physicians.
Case law has established that plan administrators are not required to give “greater weight to the opinions of a claimant’s treating physicians than to those of independent medical examiners.”
The Court noted that in Kimberly B.’s case her treating physicians relied on the claimant’s “self-reported fatigue, exhaustion and decreased cognitive function” in concluding that she was disabled without listing her restrictions and limitations in their medical records. And, Kimberly B. reported herself that she was “fully ambulatory, and she could drive, take care of her two (2) children, clean the house, prepare meals, do laundry and sleep nine (9) to ten (10) hours per night.”
Thus, the Court concluded that no objective evidence exists to support Kimberly B.’s inability to work and did not find the denial of her long term benefits to be arbitrary and capricious on the part of Sedgwick.
Issue Four: Reversal of Prior Decision of Granting of LTD Benefits.
Normally, if an insurer denies benefits after initially approving them without additional medical evidence to reverse its stance, the Court would determine that that decision was an abuse of its discretion (synonymous with the phrase “arbitrary and capricious”). The Court pointed to the information from one physician who had been treating Kimberly B. with “antifungal therapy, back and muscle IV, sleep hygiene, and a yeast diet” and stated that her prognosis for returning to work was extremely good, was new evidence of a change in Kimberly B.’s condition.
Kimberly B. did not provide additional medical information that her condition had not changed until after her benefits had been terminated. And even then her doctors reported that her condition had improved.
Issue Five: Opinions Based on Incomplete Medical Records.
On this issue the Court found Kimberly B.’s contention that Sedgwick reviewers did not consider any information from the physicians who upheld her disabled condition because the reviewer did not speak personally with them, to be without merit.
According to the evidence presented to the Court, the reviewer did speak with these physicians and that Kimberly B. did not provide Sedgwick with her records of treatment from a Fibromyalgia & Fatigue Center where she was getting therapy in a timely fashion so there was no way for the reviewer to have had access to these medical records. Thus, the reviewer wrote his report based on the information he did have. Thus, the Court determined the denial decision of the insurer in this case did not arise to the charge of an arbitrary and capricious.
Consequently, after reviewing the charges in Kimberly B.’s complaint, the Court determined that Sedgwick’s decision to deny benefits was not arbitrary and capricious.
Click here for more information and similar cases involving Sedgwick long term disability denials.