Standard Insurance denies disability claim to a wheelchair bound woman

Lynda Sacks worked as a mortgage loan underwriter for Countrywide Home Loans, Inc. Her employer offered both short-term and long-term disability plans issued by Standard Insurance Company (Standard) effective January 1, 2005. Standard was responsible for funding both disability plans and making the claims determinations.

Policy language

In order to make a claim, the policy stated that Sacks had to be unable “to perform with reasonable continuity the material duties of [her] own occupation.” The policy defined “own occupation” as the duties connected to the job which could not be expected to be modified or omitted. The policy allowed Standard to compare the occupation with national norms.

The primary duties of Sacks’ position as an underwriter included approving or denying mortgage loans, following mortgage standards, reviewing and evaluating information on mortgage loan documents, and assembling documents in the loan file. While the job was primarily sedentary, it did include the need for occasional reaching, walking and handling documents and keyboard skills.

Disabling condition

Sack’s problems began in 2001, when she began to experience leg pain, and she would also fall occasionally. In 2003, she was diagnosed with peripheral polyneuropathy, Charcot-Marie-Tooth Disease (CMT). CMT causes pain and affects mobility in both the legs, feet, forearms and hands. She was told that the disease is progressive, degenerative and incurable.

As her condition worsened, Sacks had to leave her three-story home in 2004 and move into a one-story home. Sacks missed a month of work due to a fall in 2006 but was able to return to work by using a walker. By 2007, her nightly leg pain was so severe that she began taking Nortriptyline so she could sleep. She found that the side effects of the drug the following morning, left her sluggish and in a mental fog, making work difficult and concentration a challenge. She found that she had to work extra hours to make up for the inefficiency of the morning, which only aggravated her symptoms.

Claim history

Finally, on July 10, 2007, Sacks stopped working. She filed a short-term disability benefits claim with Standard, claiming that her “extreme pain and difficulty when walking” made continuing to work impossible. Her neurologist provided a doctor’s certificate dated August 7, 2007 outlining her diagnosis of CMT. He stated that he supported Sacks’ application for disability. He also noted that she reported her hands were weaker than before and that she had been dropping things. In addition he also noted that she had mentioned that she was having trouble getting in and out of her car.

Sacks also visited a physical medicine and rehabilitation specialist, Dr. Kaiser, on August 13, 2007, for assistance with symptoms of back pain, hip pain and lower extremity weakness. On the day of her visit, most of her pain had resolved itself. The doctor noted at this visit that there was no evidence of muscular atrophy or significant weakness in the peripheral region of her limbs. She was referred to Kaiser’s orthotics department, and he recommended additional physical therapy.

Standard acknowledged Sacks’ claim for short-term disability benefits on August 24, 2007. She was told that she might need to provide additional medical, vocational, and financial information before they could make a final decision. Standard had a board certified physiatrist conduct a paper review on August 29, two days before they received a copy of her job description. With only the notes from her August 7 visit with her neurologist and her August 13 visit with the rehabilitation specialist, the physiatrist concluded that she should still be capable of full-time sedentary level work.

Based on this evaluation, Standard denied Sacks’ claim on September 5, 2007. The denial letter included four pages in which they recognized that she was having difficulty walking and standing, but they stated that walking and standing were not material duties of her occupation. She was advised that she could request a review and submit additional information, including the medical records dated from January 3, 2007, to the current date.

On September 22, Sacks appealed. She gave a history of the progression of her CMT. She pointed to how she had missed work for an entire month in 2006 because of a fall, how she was only able to return to work using a walker, and that she experienced pain night and day. She noted that her current braces no longer prevented her from falling. She also included a DVD she had made so a prosthetic specialist could evaluate her and included his clinical response received by e-mail.

In addition, she reported that she now had weakness and numbness in her hands. She claimed to have pursued numerous treatments in hopes of improving her health such as acupuncture, physical therapy, water aerobics, prosthetics, canes and crutches. She also re-emphasized the fact that her medication caused cognitive impairment.

Standard sent the file to a nurse whose primary conclusion was that if Sacks was having a problem with her medication there was nothing in the medical record to indicate that she had complained about it. The nurse found no new evidence present in Sacks’ appeal that supported impairment from a sedentary occupation.

The woman handling Sacks’ claim questioned whether CMT would preclude Sacks from a sedentary occupation for the inability to walk. She also asked if CMT would preclude Sacks from working due to lack of concentration. She sent the file back to the nurse for clarification.

The nurse tried to contact the physiatrist who had originally reviewed Sacks’ file. Unable to do so, she turned to a board certified internist. The report issued recognized that CMT is a progressive disease but found no evidence that Sacks was any less capable of handling her sedentary job than previously. The doctor felt that Sacks was no more likely to fall at work than at home. Based on these findings, Standard’s Benefits Review Department upheld the denial of Sacks’ claim.

Disability appeal denied by Standard

Sacks appealed. Her claim was referred to a benefits review specialist. In an October 18 conversation with Sacks, the specialist recommended that she provide additional medical information, as Sachs had a new primary care physician, who disagreed with her prior rehabilitation specialist. Sacks informed the specialist that all her doctors were with Kaiser. Sacks’ husband e-mailed Standard on October 19 to inform them that they were approved to request medical information from Kaiser.

Standard requested copies of Sacks’ entire medical record beginning with July 11, 2005 to the present. Two days later, they received records from all but her most recent physician. The medical record demonstrated the progressive nature of her disease.

The benefits review specialist then forwarded her file to a board-certified neurologist. After reviewing the records, this neurologist noted that Sacks would be prevented from “prolonged standing, walking, going up and down stairs, kneeling, squatting and lifting.” His recommendation was to compensate for these problems by purchasing a motorized scooter. He felt that there was no support for any specific side effects of the low dose of Nortriptyline prescribed.

While this neurologist saw no evidence that Sacks numbness and weakness were caused by the progression of her CMT, he did state that if it did begin affecting her upper extremities, she would be unable to perform the typical activities of her job which included fingering and handling. He recommended an independent medical exam to determine whether her upper extremities were involved because he saw no test had been performed to evaluate this.

Sacks responded to a request for this test, pointing out that she’d already had EMG testing done in 2006 which involved both her legs and her arms. The claim representative, like the neurologist, overlooked the upper extremity results.

Two months later on January 28, 2008, Standard arranged for Sacks to undergo an independent medical examination. After his examination, the doctor drew the conclusion that further study of the upper extremities should be conducted. He recommended a repeat EMG/MC. When the claim representative sought to clarify the doctor’s response to their question as to whether Sacks could perform her job as an underwriter, he said he felt it was necessary to draw comparisons between a new EMG and the previous one because he suspected a disease process was present.

The previous test had shown “very mild bilateral carpal tunnel syndrome with predominant sensory involvement”. Features of the test also suggested right ulnar neuropathy at the elbow. Even when these results were pointed out to the neurologist, he failed to see the same electrodiagnostic abnormalities as the second doctor and he continued to support Sacks’ ability to return to work.

On March 6, 2008, Standard upheld their denial of short-term disability benefits in a nine page letter that outlined the reasons for their denial. They claimed to have evaluated her “own occupation” using the U.S. Department of Labor’s classification of an underwriter as sedentary work, and use the US Department of Labor’s definition of sedentary work. They went on to list many other reasons why they were denying her claim, including the fact that none of her treating physicians had indicated any signs of disorientation during her office visits.

When the Court reviewed the case, they found that a structural conflict of interest existed, because Standard had discretion in considering the disability claim and funded the benefits to be dispersed under the plan. They also made the final decision on appeal. When they weighed the evidence, the court had to review Standard’s claim decision with skepticism and look for facts that might demonstrate that the decision was influenced by the insurer’s financial interest.

Here is what they found:

• The initial denial letter gave no specifics as to what information Sacks needed to provide to support her claim.
• They did not use valid occupational criteria to evaluate Sacks’ claim.
• They asked the independent medical examiner to give his opinions on Sacks’ ability to perform “any sedentary occupation” not for an evaluation of her ability to perform her “own occupation.”
• Standard refused to conduct additional testing when it was suggested.
• Standard ignored Sacks claims that the side effects of her medication impaired her ability to work in the morning. The effects wore off by the afternoon and only affected her in the first half of the day. All of her doctor visits were in the afternoon, making it logical that no effects from her pain medication would be apparent.
• The neurologist routinely earned about $230,000 a year from his medical consulting services for Standard.
• The denial was based on a report from a doctor who noted that insufficient documentation was available for her review.
• Standard determined, without reference to any evidence, that Sacks would be able to maneuver a wheelchair whether it was powered or not.
• Standard used medical reviews that were based on incomplete records.
• Standard rejected the claim partially on an absence of information which they knew they needed to make the decision. But instead of asking the questions, they violated their duty to fully investigate a claim.

The court found that Sacks’ medical evidence was credible. They found that even using the DOT definition of sedentary (as allowed by the policy), which requires a person to walk and stand up to 33% of the day, Standard’s denial of benefits would not be supported by her medical record. The Court found that Standard had abused its discretion using a definition other than that of her own occupation to determine that she was not disabled.

Not only did the Court reverse the claim decision, they ordered Standard to reinstate her plan, pay all benefits due up to the date of November 30, 2009, and to pay her attorneys fees and costs.