Federal Court Criticizes Long-Term Disability Insurer for “Paper Reviews” and Dismissing SSA Award

Were you denied benefits by your group long-term disability insurer without the insurance company’s doctor examining you in-person?  Did your insurer deny your claim even though the Social Security Administration concluded you are disabled?  If so, the McKennon Law Group may be able to help get your disability benefits by appealing the insurer’s decision or by filing a lawsuit against it in federal court.  As experienced ERISA disability insurance lawyers who have handled hundreds of individual and group long-term disability claims, we see all too often insurance companies unjustly deny claims based purely upon a “paper review” of the employee’s medical records by a biased medical consultant and, worse yet, often by just an unqualified nurse employed by the insurer.  No rational doctor would determine whether his patient is disabled from working without examining him.  But that is precisely how group disability insurers deny claims on a regular basis, hiring a doctor to perform a cursory review of the claimant’s medical records without ever examining him or speaking to him.  Unfortunately, it is a widespread, endemic practice in the disability insurance industry.

Fortunately for claimants, courts often criticize this “pure paper review” practice to decide claims.  A federal court in Oakland, California recently did in the case of Lin v. Metropolitan Life Insurance Company, 2016 WL 4373859 (N.D. Cal. Aug. 16, 2016).  In that case, Senior United States District Judge Saundra Brown Armstrong was persuaded that Metropolitan Life Insurance Company (“MetLife”) improperly terminated Steven Lin’s disability benefits based in large part on the fact that MetLife’s doctors never examined him.

Mr. Lin has a Ph.D. in chemistry and was employed by TriNet as its Director of Polymer Technologies when he had to stop working because his kidney failed.  His job required him to generate ideas, focus and concentrate, and provide leadership and direction to subordinate chemists.  Fortunately, years earlier he had enrolled in TriNet’s employee welfare benefit plan, including for long-term disability benefits, in case of such a dire event.  The plan was funded by a group disability insurance policy issued by MetLife to TriNet for the benefit of its employees including Mr. Lin.

Mr. Lin submitted a claim to MetLife for long-term disability benefits and reported he could not perform his job because of kidney failure, headaches, chest pain, fatigue, loss of memory and sleepiness.  At just 48 years old he underwent a kidney transplant obtained from a cadaver.  He was positive for Hepatitis B at the time of his surgery.

MetLife initially approved Mr. Lin’s claim.  Over the course of the next several years Mr. Lin was regularly examined by his personal physician, Shahrzad Zarghamee, a nephrologist, to mandate his continuing disability.  After documenting Mr. Lin’s consistent fatigue and headaches in her progress notes, Dr. Zarghamee concluded that her patient, Mr. Lin, could not work because he was unable to focus or concentrate, experienced extreme exhaustion when he tried to focus on even mundane matters, and consistently suffered from debilitating headaches and chronic fatigue on a daily basis.

Despite the opinion of Dr. Zarghamee, MetLife terminated Mr. Lin’s benefits four years after it started paying them based upon the opinions of three other doctors, two of which were MetLife’s employees and another, nephrologist Michael Gross, M.D., of which MetLife hired as a consultant.  MetLife’s doctors reviewed Mr. Lin’s medical records and concluded based purely on that review, without ever examining him, that his kidney function was normal and there was no objective support in his medical records for his subjective complaints of fatigue and pain.  MetLife thus concluded Mr. Lin was not disabled from working based on what its doctors said.

MetLife acknowledged in its termination letter that the Social Security Administration awarded Mr. Lin Social Security disability benefits.  But MetLife summarily dismissed the award by stating that a Social Security finding of disability does not guarantee the continuation of long-term disability benefits.  Without analyzing why, MetLife stated that its decision may differ from the Social Security Administration because it “may not have the same information that was utilized in making our decision.”

Mr. Lin sued MetLife for recovery of disability benefits under ERISA.  The Court conducted a bench trial to determine whether MetLife properly terminated Mr. Lin’s benefits.  The Court found MetLife made the wrong decision, that Mr. Lin was in fact disabled.  It reinstated his disability benefits and ordered MetLife to pay them plus interest and attorneys’ fees.

In the key part of its analysis, the Court criticized MetLife’s use of “paper reviews” instead of retaining a doctor to actually examine Mr. Lin:

[O]ther aspects of the administrative record also persuade the Court that MetLife erroneously terminated Plaintiff’s benefits. In particular, the Court finds it significant that MetLife terminated Plaintiff’s benefits without actually examining him.

The Ninth Circuit has recognized that an insurer’s decision to conduct “a ‘pure paper’ review. . ., that is, to hire doctors to review [the claimaint]’s files rather than to conduct an in-person medical evaluation of him” may raise “questions about the thoroughness and accuracy of the benefits determination.” Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 634 (9th Cir. 2009) . . . .

Here, MetLife’s termination decision was predicated principally on the reports of its outside consultant, Dr. Gross, and its Medical Director. Both of these individuals evaluated Plaintiff’s claim for benefits without physically examining him.  . . . While MetLife was not necessarily required to conduct a personal examination of Plaintiff as a prerequisite to terminating his benefits, the fact that MetLife failed to do so—in contravention to the recommendation of its own consultant—further underscores the result-driven nature of MetLife’s decision to terminate Plaintiff’s benefits.

The Court found the opinions of Mr. Lin’s treating physicians more than sufficient to establish he was disabled despite the contrary opinions from the insurance company’s “paper reviewers.”  The Court also rejected MetLife’s contention that “objective” medical findings showing disability is required, not just a treating physician documenting Mr. Lin’s subjective complaints of chronic fatigue and pain in her progress notes.

Finally, the Court held that, in order to terminate Mr. Lin’s insurance policy benefits, MetLife was required to meaningfully address why its decision differed from that of the Social Security Administration who, in fact, had found Mr. Lin disabled under its rules.  It held that analysis must entail comparing and contrasting the definition of disability in MetLife’s policy to that used by the Social Security Administration and also the medical evidence considered by each, not simply dismissing the Social Security award with an entirely generic, conclusory analysis like MetLife did.  Because of that conduct, coupled with MetLife’s decision to rely on “paper reviews,” the Court was persuaded that MetLife improperly terminated Mr. Lin’s benefits and that he was disabled within the meaning of its policy.

The Court also explained that MetLife was not allowed to discount the Social Security Administration’s disability finding in court based upon a rationale MetLife first raised during the litigation.  In other words, by failing to use the rationale during the claim administrative process, MetLife waived any right to employ it in court: “MetLife cannot attempt to downplay the significance of the SSA award on a ground that was not specified in its termination letter.”

If you are an employee covered under your employer’s group short-term disability, long-term disability, life insurance or health insurance policy and had your claim denied, do not give up.  If your insurer denied your claim without examining you, or, even after you were awarded Social Security disability benefits, there is a good chance we can help.  You should immediately contact the McKennon Law Group, a law firm specializing in ERISA insurance and employee benefits litigation.  Let us decide whether your claim was wrongfully denied and let us see if we can assist you.

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