SIXTH CIRCUIT RULES THAT PLAN CANNOT IGNORE OBJECTIVE EVIDENCE OF DISABILITY WHEN MAKING CLAIMS DECISION

In a recent case, the Sixth Circuit U.S. Court of Appeals reiterated its position that while an ERISA plan administrator need not give special deference to the opinions of a treating physician it cannot simply ignore such evidence either, especially when it relies solely on a record review by a consulting physician to support its denial of benefits.

In Zuke v. Am. Airlines, Inc., No. 15-3465, 2016 U.S. App. LEXIS 6086 (6th Cir. Mar. 31, 2016),  Zuke was a former sales and service representative for American Airlines who had stopped working for American in 1998 due to injuries she suffered in an auto accident. She applied for and received long-term disability benefits through an ERISA-governed plan, sponsored by her employer and administered by MetLife. In order to receive benefits under the plan, Zuke had to be totally disabled, which the plan defined as being “unable to perform major and substantial duties of any occupation for which [she] was reasonably qualified.”

In late 2011, MetLife requested documentation from her so it could conduct a review and manage her LTD claim. Through a series of miscommunications, MetLife never received all the documents it felt it needed to assess the ongoing claim and on April 19, 2012 it sent a letter to Zuke informing her that her benefits had been terminated and also telling her how to request a review of its decision.

Four days later, Zuke requested a review and also sent additional documents she alleged supported her claim. MetLife had the claim file, including the new information, reviewed by a physician consultant, board certified in occupational and environmental medicine, who determined that the file contained “no documentation of any restrictions in range of motion of any joint, in the axial skeleton or spine.” Based on that review, MetLife upheld its previous denial, which Zuke once again appealed and submitted further medical records, including findings from two recent examinations and tests by two of her treating physicians. One of those doctors opined that Zuke suffered from fairly significant degenerative disc disease, a herniated disc and mild to moderate restriction of motion, in her cervical, thoracic and lubrosacral spine. That doctor had also told Zuke to severely limit numerous daily activities, including only walking 100 feet or less at a stretch and taking at least an hour and a half break before walking another 100 feet. The records from her other treating physician noted that she had restricted range of motion and suffered from cervical radiculopathy and cervical post-laminectomy syndrome.

MetLife had these records reviewed by different physician consultants who again conducted a file review of the records. One of those consultants concluded that there was no evidence to support the restrictions suggested by her treating doctors and stated “[r]eturning to work would, in fact, likely ameliorate Ms. Zuke’s ongoing complaints of pain.” Based on that file review, in April 2013, MetLife issued its final determination to deny benefits and Zuke filed suit in the Southern District of Ohio seeking, among other things, reinstatement of her long-term disability benefits. The district court granted defendants’ motion for judgment on the record, which Zuke appealed to the Sixth Circuit.

On appeal, Zuke claimed that she was denied a full and fair review when MetLife ignored reliable, objective evidence from her treating physicians. Reviewing the case under the arbitrary and capricious standard, the Sixth Circuit determined that she had not been given a full and fair review because, among other things, it believed that the plan ignored key objective evidence in the record that supported her disability claim, e.g., the degenerative disc disease and disc herniation, her pain level and her limited range of motion. While the court noted the long-standing rule that plan administrators need not give special deference to a treating physician’s opinions, it also held that the administrator cannot simply ignore those opinions and claim there is no objective evidence in the record, especially where, as here, the plan administrator chose to conduct only a record review rather than conducting its own independent medical examination. The appeals court reversed the district court’s ruling, remanded the case back to MetLife and instructed it to conduct a full and fair review of the claim.

This case is yet another example of how careful a plan administrator needs to be when an appeal review includes a file review by a physician consultant. This case continues the general trend of the past few years of courts putting more teeth in the arbitrary and capricious review process and holding plan administrators more accountable when the court perceives that the plan has either ignored objective evidence or has selectively chosen evidence that only supports denial of benefits. It is important to note that courts generally have no argument with the practice of only conducting file reviews, and that option is certainly the most cost-effective one, especially with relatively small claims, but in order to help protect themselves, plan administrators need to more closely monitor the physician consultants’ reviews to ensure that those consultants are addressing all the material evidence in the record during their reviews and giving specific reasons based on that record why the treating physicians’ opinions are being discounted. Doing so will make it easier to defend the actions in court and, as such, help minimize adverse court rulings. This is especially important now that courts have become more apt to award attorneys’ fees based on Supreme Court’s decision in Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010), which allows those fees to be awarded if the claimant achieves “some degree of success on the merits,” which courts, including those in the Sixth Circuit, have held includes a remand to the administrator.