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Standard Abuses its Discretion – E.D. KY

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  • Standard Abuses its Discretion – E.D. KY

    Here’s a new case out of the Eastern District of Kentucky, Lewis Bustetter v. Standard Insurance Company. This is an LTD case and the court finds that Standard’s denial of Bustetter’s LTD claim was arbitrary and capricious.

    Although the Group LTD Policy permits Standard to have a claimant examined by a physician of its choice (AR 42), Standard chose not to do so. Instead, Standard commissioned a report from Dr. Syna who after reviewing Bustetter’s updated medical records, opined that Bustetter was capable of performing sedentary-level work despite suffering from cervical myelitis and chronic radiculopathy. (AR 75). Mr. Petersen then relied on Dr. Syna’s conclusion to find that Bustetter was capable of working in sedentary occupations.

    • • •

    More importantly, that an administrator may rely exclusively on non-treating
    physicians “does not mean that the administrator can ‘arbitrarily refuse to credit a claimant's reliable evidence.’” Gillespie, 567 F. App’x at 353 (quoting Nord, 538 U.S. at 823). In her second review of Bustetter’s medical record, Dr. Syna devotes a mere paragraph to discussing Bustetter’s January 2017 FCE and Dr. Dalton’s notes. (AR 74). Like in Gillespie, where the Sixth Circuit held that the claim administrator acted arbitrarily, here Dr. Syna “failed even to acknowledge that [Bustetter’s] treating physicians disagreed with [her] conclusion.” Gillespie, 567 F. App’x at 353.

    Dr. Syna must provide “at least some sort of explanation for [her] dismissal of the conclusions of [Bustetter’s] treating physicians.” Id. In what appears to be a vague attempt at criticizing Ms. Scholl’s findings, Dr. Syna observed that the FCE failed to include validity testing. (AR 74). Yet, “conclusory allegations” and “unsupported statements” discrediting the opinions of a claimant’s treating physicians will not suffice. See Cooper, 486 F.3d at 170; Kalish v. Liberty Mutual/Liberty Life Assurance Co. of Boston, 419 F.3d 501, 508 (6th Cir. 2005). Dr. Syna fails to explain how or why the absence of validity testing impacts the reliability of the FCE and if its lack of validity testing was the basis for her disagreement with its conclusions. (AR 74). As such, Dr. Syna’s blanket statement is “a mere assertion unaccompanied by any explanation” and “fails to address the fundamental concern of [Bustetter’s] treating doctors” that he was unable to work due to significant pain.
    The court notes that Standard is presenting arguments only after the lawsuit and not in the administrative appeal and that it dismissed subjective complaints of pain.

    These flaws may in fact provide Standard a valid basis for disregarding the January FCE. The problem for Standard, however, is that it failed to point out these flaws in its administrative review, waiting instead to present them in its brief to the district court. The Sixth Circuit has expressly rejected administrators’ attempts at post-hoc rationalizations of their claims decisions. See Corey v. Sedgwick Claims Mgmt. Servs., 858 F.3d 1024, 1028 (6th Cir. 2017) (“Although the administrator enjoys interpretive latitude, we defer
    only to its actual interpretations—it can’t issue a conclusory denial and then rely on an attorney to craft a post-hoc explanation.”) (citing University Hosps.vV. Emerson Elec. Co., 202 F.3d 839, 848 n.7 (6th Cir. 2000)). As such, Standard may only rely on the explanation it provided in the administrative record, which is insufficient to withstand arbitrary-and-capricious review.

    Finally, what is particularly troubling about Standard’s review process in this case is that it relied on a non-examining physician’s opinion to disregard Bustetter’s subjective complaints of pain. The Sixth Circuit has made clear that “[b]ecause chronic pain is not easily subject to objective verification,” it is arbitrary and capricious for a plan administrator to rely solely on a non-examining medical consultant to determine the severity and credibility of pain. Shaw v. AT&T Umbrella Benefit Plan No. 1, 795 F.3d 538, 550 (6th Cir. 2015); accord Smith v. Cont’l Cas. Co., 450 F.3d 253, 263–64 (6th Cir. 2006). Standard second-guessed Bustetter’s treating physician when it credited Dr. Syna and Mr. Petersen’s assumption that Bustetter could perform sedentary work over Ms. Scholl’s conclusion that Bustetter could not work at all due to his reported pain. Standard therefore made an implicit credibility determination without physically examining Bustetter. Accordingly, Standard’s decision-making was arbitrary and capricious. Shaw, 795 F.3d at 550.
    The court remands the case to Standard for a full and fair review and denies both parties’ motions for attorney’s fees and costs. The opinion is attached below.
    Attached Files
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