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Insurer’s Decision Given Heightened Skepticism Because of Unclear Denial – S.D. Ca.

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  • Insurer’s Decision Given Heightened Skepticism Because of Unclear Denial – S.D. Ca.

    Insurer’s Decision Given Heightened Skepticism Because of Unclear Denial – S.D. Ca.

    Attached hereto is a case out of the Southern District of California, Bergman v. Federal Express Corporation Long Term Disability Plan, et. al. In this case, plaintiff seeks long term disability benefits under an ERISA governed plan. Defendant denied plaintiff’s claim because

    continuing disability was not supported by any objective findings beyond that date. (AR 006-08.) Aetna’s letter stated that “there are no objective finding to support a continued disability” and contained a few lines regarding the type of objective findings that were lacking. (AR 006.) The letter noted that Aetna attempted to reach Dr. Kim three times, but was unable to speak with him. (Id.) It also included a general description regarding how to appeal and perfect one’s claim, but no specifics were given for Bergman’s case nor did the description discuss Aetna’s need to speak with a treating physician.
    Plaintiff exhausted administrative remedies and filed suit. The court found that defendant’s decision was entitled to heightened scrutiny, in part, because defendant failed to follow proper procedures in denying plaintiff’s claim.

    In this case, the Court finds a number of factors that warrant additional scrutiny: the failure to follow proper procedures in denying a claim, including failing to provide a reasonably clear reason for denial and communicate fully with Bergman; the absence of an in-person examination of Bergman; and the quality and quantity of medical evidence. See Montour, 588 F.3d at 630; see also Harlick, 686 F.3d at 707; Booton v. Lockheed Med. Benefit Plans, 110 F.3d 1461, 1463 (9th Cir. 1997).
    The Court should consider a lack of communication and clarity when determining whether the claims administrator abused its discretion. Abatie, 458 F.3d at 974. As the Ninth Circuit stated in Abatie:

    An administrator must provide a plan participant with adequate notice of the reasons for denial, and must provide a full and fair review of the participant’s claim. . . . Moreover, . . . an administrator that adds, in its final decision, a new reason for denial, a maneuver that has the effect of insulating the rationale from review, contravenes the purpose of ERISA. This procedural violation must be weighed by the district court in deciding whether [the defendant] abused its discretion.3

    Id. (internal citations and quotations omitted); see also Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 680 (9th Cir. 2011) (“An administrator does not do its duty under the [ERISA] statute and regulations by saying merely ‘we are not persuaded’ or ‘your evidence is insufficient.’ Nor does it do its duty by elaborating upon its negative answer with meaningless medical mumbo jumbo.”); Booton, 110 F.3d at 1463 (finding that, if administrators fail to use “reasonably clear language” when denying a claim, courts must increase their skepticism of the denial). Moreover, a part of an administrator’s “duty . . . to have a meaningful dialogue with the beneficiary” includes keeping the claimant up to date with the communications that the reviewing board has, or does not have, with the claimant’s doctors. Saffon v. Wells Fargo Co. Long Term Disability Plan, 522 F.3d 863, 873 (9th Cir. 2008) (finding the communication between Aetna and claimant was “hardly a model of clarity”).

    Even though Bergman has the burden of proof in front of the Court, Aetna was not absolved from having a meaningful dialogue with her. In her initial claim, Bergman submitted various medical examinations, which included analyses of Bergman’s medical testing, for review. (See AR 167-171.) But, in Bergman’s initial termination letter, Aetna provided one short generalized description of why Bergman’s benefits were terminated as of December 31, 2014. (AR 006-08.) The letter fails to explain—in “reasonably clear language”—how Aetna reached its conclusion. See Booton, 110 F.3d at 1463. Aetna failed to explain why the medical examinations from Drs. Kim and Warren, which analyzed medical testing and included objective findings, were insufficient to support Bergman’s ongoing disability, or what specific types of testing and medical exams would be sufficient. The letter also did not explain what changed in Bergman’s claim that caused Aetna to change the earlier determination that Bergman was disabled, i.e. there is no explanation as to whether this was due to a change in her doctors’ observations, her medical testing, or simply a lack of more recent tests or examinations. And, though Aetna’s denial letter provided a general statement of how Bergman could perfect her claim (AR 007), this general description was not specific or helpful. This type of clarity was particularly important in this case because Aetna previously determined that at least some of Bergman’s medical documentation amounted to “significant objective findings” to substantiate Bergman’s entitlement to STD and LTD benefits. (See AR 001.)

    Further, there is no evidence that Aetna communicated to Bergman the importance of speaking to Dr. Kim or that his medical documents and findings would be rejected or ignored without a peer-to-peer discussion (assuming this is what happened, the January 30, 2015 denial letter is not clear). (See AR-006-07; 172-77.) FedEx’s employee benefits handbook specifically states that Aetna will ask claimants for assistance with their physicians if needed. (AR 189 (“If your health care professional does not provide [continuing disability] information, Aetna will ask for your help in obtaining the medical data.”).) If Bergman had this information, she could have had the opportunity to assist Aetna with connecting to an appropriate and willing physician, or provided Aetna with more information from her doctors in lieu of a phone conversation. This was especially relevant here because the reviewing physician on appeal stated that he had questions for Dr. Kim regarding Dr. Kim’s specific objective findings and stated these questions “remain[ed] unanswered.”4 (AR 176.)

    Moreover, while the Court recognizes that Aetna is not required to conduct an in-person examination of a claimant, the Court is permitted to consider the absence of an in-person examination in its abuse of discretion analysis. See Montour, 588 F.3d at 630 (finding that for an abuse of discretion case, a court may consider “whether the plan administrator subjected the claimant to an in-person medical evaluation or relied instead on a paper review” of the existing medical records). The Court takes this in consideration in its analysis, particularly because Aetna observed that Bergman had many “self-reported” or subjective complaints of pain and because the reviewing doctor on appeal discounted the treating physician’s findings and stated he had “unanswered” questions based on the paper record. (See, e.g., AR 003, 176; Def. MSJ at 6.) This case would have been apt for an in-person examination, but Aetna relied on the medical records only. This provides additional support for the conclusion that Aetna abused its discretion.

    The Court finds that Aetna failed to follow proper procedures as required by ERISA when it failed to provide a reasonably clear explanation as to why Bergman’s claim was terminated and failed to communicate with Bergman regarding how she could perfect her claim. The Court also finds that Aetna did not subject Bergman to an in-person exam, even though her claim may have benefited from one. Additionally, the Court recognizes the quantity and quality of medical evidence provided by Bergman (over forty documents from various physicians and medical personnel discussed throughout this opinion). (See AR 173.)

    Thus, the Court reviews Aetna’s decision with an increased degree of skepticism, even under an abuse of discretion standard. However, even without this enhanced skepticism, the Court finds Aetna had no reasonable basis for terminating Bergman’s LTD benefits.
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