Among ERISA disability claimants, there is widespread suspicion that benefits plan administrators routinely deny certain kinds of disability claims. Long-term disability claims may be denied when they mature from short-term disability into permanent disability claims. Plan administrators are sometimes accused of failing to request relevant medical records or harassing those with disability claims with repeated requests for duplicate medical records or tests. Critics speculate that reviewers have a financial incentive to deny disability claims, and that this prevents fair benefit decisions. Those receiving long-term disability benefits may be warned to assume that they are under surveillance.
Our ERISA Lawyers Help Long-Term Disability Benefits Clients Get the Help They Deserve
The Employee Retirement Income Security Act (ERISA) sets out rules for pension, health and disability benefits. The issue of long-term disability claim denials is legally and emotionally charged, to say the least. The compassionate ERISA lawyers at Kilgore & Kilgore understand the situation of those with long-term disabilities and work to apply Texas state and federal law to achieve fair disability benefits decisions. If your disability claim for long-term disability benefits was denied and you believe your claim was treated unfairly, contact us for a free review of the facts of your case by clicking here and sending a contact request from our website Kilgore & Kilgore.
Recent Disability Benefits Lawsuits Set Precedent for De Novo Standard
Under the legal standard recently set forth by the Fifth Circuit in Arianna M. v. Humana, courts may take a fresh look at benefit denials. Another recent lawsuit in the Northern District Court of Texas may push the precedent in an even more claimant-friendly direction. In this more recent lawsuit, the claimant won $9,000 a month for the months when his disability benefits went unpaid. That is good news for him, of course; but it may also be very good news for other Texas disability claimants who have been denied.
The Tangled Tale of the Disability Benefits Claimant’s Medical Records
In the Northern District lawsuit, the strangest part of the story of this long-term disability case is how the claimant’s medical records were handled and evaluated. In 2005, the claimant began experiencing back and vertabrae pain. The first physician he saw found that he had a degenerative disk condition but did not see anything significant on x-rays. The patient was referred to a psychiatrist, based on the possibility that his pain was related to anxiety. His condition continued to deteriorate, and he ultimately lost his job.
A few years later, he returned to the same clinic. This time, however, he was seen by an orthopedist who ordered an MRI. Upon review of the MRI, the specialist found that the patient’s back and vertabrae pain was caused by arthritic facet joints, with abnormalities clearly visible on the MRI. The claimant asked the plan administrator to contact this orthopedist. He also requested another review of his file. No one from the plan administrator’s office reached out to the orthopedist, reviewed his file or looked at his MRI. It is difficult to avoid the inference that the plan administrator cherry-picked the evidence in order to reach a conclusion that permitted the insurer to pay only limited benefits.
The Northern District Court’s conclusions, as listed below, were stark. For those with disability claims, the first point may be the most important. Here is a summary:
- First, the court was not required to accept the plan administrator’s decision as presumptively correct, but it could review the record of the claim evaluation de novo.
- Second, that the claimant was totally disabled under the policy, that his disability was not caused by a mental disorder, as defined in the policy, and so should not have been limited to 30 months of payment.
- Third, that the claimant was owed $9,000 per month for all months that were unpaid.
Abuse of Discretion Versus the De Novo Review – This Difference is Key for Disability Claims
Whether courts may re-evaluate benefit payment decisions without evidence that plan administrators abused their decision-making power has been argued for decades, ever since the Supreme Court’s decision in Firestone Tire & Rubber Co. v. Bruch (1989). Under the abuse of discretion standard, which courts followed for much of that time, plaintiffs almost always lost because they had to overcome a presumption that the benefit decision was correct. The argument for this position was essentially that plan administrator decisions should be made by those closest to the situation and too much second guessing by federal courts would simply encourage litigation.
A more recent trend permits courts to review some underlying evidence with fresh eyes. This is called the de novo standard. Most courts have now embraced the de novo standard with respect to some elements of a lawsuit. Plaintiffs, who have long felt aggrieved by unfair disability benefits denials, have a better chance of success under the de novo standard. Texas was among the last states to embrace this change. That is the significance of Arianna M. v. Humana (2017). Arianna M. is a relatively recent decision, so the reaffirmation of that principle by the Northern District Court in this recent case is also quite important.
Disability Claims and the De Novo Review, but of What?
This is now the burning question and the area where claim denied litigation is likely to develop. Courts have always had the power to review the actual words in plan documents under a de novo standard. If, for example, a plan gave participants 30 days to enroll, but administrative practice was to limit the enrollment period to 15 days, a court could conclude that the plan administrator had abused its discretion in limiting the time.
Arianna M., an ERISA benefits lawsuit, takes the next step, permitting a court fresh review of medical records as evidence already in the record that was available to the plan administrator. In Arianna M., it should be noted, the court finally affirmed the plan’s denial of benefits. The de novo standard may be plaintiff-friendly, but it does not always guarantee success.
In this latest decision, the Northern District Court appears to hew closely to the language of Arianna M., announcing at the outset that “the Court is limited to the administrative record, with limited exceptions that do not apply here.” But, in fact, the evidence that it considered does not appear to have been part of the medical records that was before the plan administrator, at least not to the extent that they were in Arianna M. This is a very small difference – hair-splitting perhaps – but it raises an intriguing question: is this a further step forward for the de novo standard? The answer may not be clear until new litigation occurs.
Our Dallas ERISA Attorneys Can Help You Fight Your Disability Benefits Claim Denial
If you believe your long-term disability benefits claim was unfairly denied, the compassionate ERISA attorneys at Kilgore & Kilgore would be happy to help you explore your legal options. Click the following link to learn more about our representation in another disability denial case Cancer Victim Gets Denied Benefits Overturned. For a free evaluation of the facts of your case, use this link to contact us through our website Contact Kilgore & Kilgore.