Denial Of Short-term Disability By Broadspire Services Successfully Appealed
Suzanne Lee had been diagnosed with degenerative disc disease in October 2003, which had caused her chronic pain since that time. She managed to work while suffering from the pain till January 18, 2005, when the pain became so severe that she had to stop coming to work. By this time she had been employed with BellSouth for 10 years. It was her doctor's opinion that she was unable to sit for longer than 1-1/2 hours and stand or walk for more than 15 minutes because of pain she suffered.
As a BellSouth employee, she had participated in the BellSouth short-term disability insurance plan, which was administered by Broadspire Services. She applied for benefits under the plan, and her application for short-term benefits was evaluated by Broadspire Services.
Lee provided more than five pieces of evidence, which included opinions from different physicians. She believed that this evidence showed that she was suffering from a medical condition that made her disabled. Broadspire sent her file to two separate physicians for peer review and on their recommendations determined that she was ineligible for short-term disability benefits.
After BellSouth, represented by Broadspire Services, rejected Lees final appeal, she filed an ERISA suit against BellSouth for wrongful denial of short-term disability benefits. The District Court found that BellSouths denial of benefits to Lee was justified, and that BellSouths decision passed the arbitrary and capricious standard of review. The Court also found that BellSouths decision of denial of benefits to Lee was a reasonable conclusion based upon the evidence presented to it and the wording of the BellSouth Short-Term Disability Plan.
Was Correct Standard of Review Chosen for Short-term Disability Lawsuit?
Because Broadspire was granted complete discretion by BellSouth to determine whether Lee was eligible for short-term disability benefits, the Court of Appeals agreed that the District Court had chosen the correct standard of review. Lee's ERISA attorney also had no argument with using this standard of review. The question before the Court then was "Did Broadspire reach a reasonable decision in light of the evidence in the administrative record?"
Was Claimant Required to Present Proof of Disability?
According to the terms of the disability plan, Lee would be entitled to disability benefits if she suffered from "a medical condition supported by objective medical evidence, which [made her] unable to perform any type of work as a result of a physical or mental illness or an accidental injury."
Reading the terms of the plan as they would reasonably be read by an ordinary plan participant, the Court concluded that any type of work referred to any job with or without accommodation, and not just her regular job with or without accommodations or temporary modifications of duties.
The Court understood that the plan required objective medical evidence that a medical condition existed, but it did not require objective medical evidence that Lee was disabled. The Court understood that the plan required Lee to submit objective medical evidence that showed that she was suffering from a medical condition. Once she had done that, only then could a judgment be made whether the objective evidence supported her disability.
What is Objective Medical Evidence?
Laboratory test results, CAT scans, MRIs and functional impairment tests have long been recognized by the Courts as objective medical evidence in support of a disability claim. Lee had presented examples of many of these tests as objective medical evidence of her medical condition. The Court recognized that the subjective aspect of pain could not be measured objectively, and that most often the only evidence for the pain the patient may suffer is the subjective opinion of a physician the patient may interact with.
In Mitchell v. Eastman Kodak Co., it was recognized by the Court that even though Chronic Fatigue Syndrome (CFS) could not be detected by any laboratory test, the disease is almost universally recognized as a severe disability. The Court ruled that since a claimant suffering from CFS could not provide objective medical evidence, requiring a claimant suffering from CFS to show such evidence would deal a fatal blow to the plan participants expectation that they could collect benefits were they diagnosed with CFS.
The Court observed that numerous treating physicians had noted their diagnosis of Lees medical condition in her medical record. In Oliver, the Court had ruled that the refusal of the disability insurance company to recognize the only evidence Oliver could produce was arbitrary and capricious. Oliver had produced reports from a number of physicians stating that her reports of pain were consistent with their diagnosis of her condition, and the tests they had conducted, which included MRIs, RMGs and nerve conduction tests.
More Than Sufficient Medical Evidence is Available in File.
Lees file contained reports from five treating physicians, all of whom agreed that she was suffering from debilitating chronic thoracic pain. According to her physicians, her chronic pain required her to take so much pain relieving medication that she functioned in a state of seriously limiting sedation, which was a side-effect of the medication.
The Court observed that the terms of the short-term disability plan did not exclude pain-related disabilities from coverage.
The Court also recognized that disability plans had the right to require objective evidence to support any disability caused by pain syndromes. In this case, there was considerable evidence available which supported Lees claim that she was unable to work in a sedentary position for long. Her functional impairment test in January, 2004 had this to say about her inability to function in a work-related environment: "[Her] functional motions were insufficient to assess lifting [and her gait] was aberrant and appeared more as a shuffle as opposed to attempt to reduce stance on either side".
Lees case was similar to Oliver. Not only had the insurance plan provided no evidence to dispute the physicians observations and tests on Lee, it also failed to provide clear guidance to Lee about what additional testing would meet its criteria of objective evidence.
Broadspire Peer Reviews are flawed says Court.
Broadspire, on behalf of BellSouth, had requested peer reviews from two physicians. When these physicians reviewed the medical evidence presented by Lee, they had arbitrarily determined that Lees physicians were only repeating the information supplied by her. Whereas, in the Court's eyes, it was clear that Lees physicians were reporting their objective observations of Lees medical condition.
One of her physicians had reported seeing her at his clinic, and observing that she could hardly talk and breathed with difficulty because of the severe muscle spasms she was suffering from. He reported that he personally assisted her to get into his office, and felt that she needed the help of a nurse too in that endeavor. This observation by the doctor was clearly an objective piece of evidence.
These flawed peer reviews led Broadspire to conclude that Lee was not "unable to perform any type of work." Yet, neither of the two reviewers who conducted the peer reviews addressed the fact that it had been consistently reported by multiple physicians that she could not sit for more than 1-1/2 hours at a time. They failed to address the fact that she required heavy medication even to do just that, and that the medication left her heavily sedated, resulting in a mental fog that made it even harder to perform her job. They also failed to recognize the fact that her doctors had observed, through functional impairment tests and other observations, that she was unable to move, speak, or breathe freely.
Court Finds Medical Records Prove Disability.
After reviewing the medical evidence presented by Lee and her treating physicians, the Court found that Lee was clearly disabled under the terms of the short-term disability plan, and had been eligible for short-term benefits from the time of her application on January 25, 2005.
Despite the fact that the second peer reviewer had concluded that Lee was disabled, as defined by the plan, between May 16, 2005 and July 19, 2005, the day he reviewed her file, Lee had never received any short-term disability benefits because now she did not meet the requirement of being an employee of BellSouth, having been terminated after she had exhausted all her Family and Medical Leave benefits.
The short-term disability plan benefits excused absence from work for up to fifty-two weeks "as long as the Participant remained continually disabled and otherwise met the terms and conditions for Benefit payment. Having found that Lee was wrongfully denied benefits, the Court also ruled that she was wrongfully terminated from her job at BellSouth.
Court Finds Broadspire/BellSouth Decision Arbitrary and Capricious.
On March 10, 2009, the Appeals Court found that BellSouth had not acted reasonably in the light of available medical evidence. The case was sent back to the District Court for reevaluation.
The District Court needed to evaluate whether Lee was entitled to short-term disability benefits from July 19, 2005 to January 25, 2006, the end of the term of short-term disability plan. The Appeals Court had already decided that she deserved short-term disability benefits for the duration of January 25, 2005 to July 19, 2005. The District Court would then also decide whether Lee was entitled to the long-term disability benefits that would have begun at the end of the short-term disability plan on January 25, 2006.
This case is a very good example of the value of pursuing an appeal when a district court decides in favor of the disability insurance plan. Because three judges sit on the Appeals Court bench, claimants are less dependent on the reading of one single judge. Oftentimes at least two of the judges are inclined to reach a decision favoring the claimant, especially after reviewing the evidence presented. This enhances the chances that a favorable outcome will be achieved.
As a BellSouth employee, she had participated in the BellSouth short-term disability insurance plan, which was administered by Broadspire Services. She applied for benefits under the plan, and her application for short-term benefits was evaluated by Broadspire Services.
Lee provided more than five pieces of evidence, which included opinions from different physicians. She believed that this evidence showed that she was suffering from a medical condition that made her disabled. Broadspire sent her file to two separate physicians for peer review and on their recommendations determined that she was ineligible for short-term disability benefits.
After BellSouth, represented by Broadspire Services, rejected Lees final appeal, she filed an ERISA suit against BellSouth for wrongful denial of short-term disability benefits. The District Court found that BellSouths denial of benefits to Lee was justified, and that BellSouths decision passed the arbitrary and capricious standard of review. The Court also found that BellSouths decision of denial of benefits to Lee was a reasonable conclusion based upon the evidence presented to it and the wording of the BellSouth Short-Term Disability Plan.
Was Correct Standard of Review Chosen for Short-term Disability Lawsuit?
Because Broadspire was granted complete discretion by BellSouth to determine whether Lee was eligible for short-term disability benefits, the Court of Appeals agreed that the District Court had chosen the correct standard of review. Lee's ERISA attorney also had no argument with using this standard of review. The question before the Court then was "Did Broadspire reach a reasonable decision in light of the evidence in the administrative record?"
Was Claimant Required to Present Proof of Disability?
According to the terms of the disability plan, Lee would be entitled to disability benefits if she suffered from "a medical condition supported by objective medical evidence, which [made her] unable to perform any type of work as a result of a physical or mental illness or an accidental injury."
Reading the terms of the plan as they would reasonably be read by an ordinary plan participant, the Court concluded that any type of work referred to any job with or without accommodation, and not just her regular job with or without accommodations or temporary modifications of duties.
The Court understood that the plan required objective medical evidence that a medical condition existed, but it did not require objective medical evidence that Lee was disabled. The Court understood that the plan required Lee to submit objective medical evidence that showed that she was suffering from a medical condition. Once she had done that, only then could a judgment be made whether the objective evidence supported her disability.
What is Objective Medical Evidence?
Laboratory test results, CAT scans, MRIs and functional impairment tests have long been recognized by the Courts as objective medical evidence in support of a disability claim. Lee had presented examples of many of these tests as objective medical evidence of her medical condition. The Court recognized that the subjective aspect of pain could not be measured objectively, and that most often the only evidence for the pain the patient may suffer is the subjective opinion of a physician the patient may interact with.
In Mitchell v. Eastman Kodak Co., it was recognized by the Court that even though Chronic Fatigue Syndrome (CFS) could not be detected by any laboratory test, the disease is almost universally recognized as a severe disability. The Court ruled that since a claimant suffering from CFS could not provide objective medical evidence, requiring a claimant suffering from CFS to show such evidence would deal a fatal blow to the plan participants expectation that they could collect benefits were they diagnosed with CFS.
The Court observed that numerous treating physicians had noted their diagnosis of Lees medical condition in her medical record. In Oliver, the Court had ruled that the refusal of the disability insurance company to recognize the only evidence Oliver could produce was arbitrary and capricious. Oliver had produced reports from a number of physicians stating that her reports of pain were consistent with their diagnosis of her condition, and the tests they had conducted, which included MRIs, RMGs and nerve conduction tests.
More Than Sufficient Medical Evidence is Available in File.
Lees file contained reports from five treating physicians, all of whom agreed that she was suffering from debilitating chronic thoracic pain. According to her physicians, her chronic pain required her to take so much pain relieving medication that she functioned in a state of seriously limiting sedation, which was a side-effect of the medication.
The Court observed that the terms of the short-term disability plan did not exclude pain-related disabilities from coverage.
The Court also recognized that disability plans had the right to require objective evidence to support any disability caused by pain syndromes. In this case, there was considerable evidence available which supported Lees claim that she was unable to work in a sedentary position for long. Her functional impairment test in January, 2004 had this to say about her inability to function in a work-related environment: "[Her] functional motions were insufficient to assess lifting [and her gait] was aberrant and appeared more as a shuffle as opposed to attempt to reduce stance on either side".
Lees case was similar to Oliver. Not only had the insurance plan provided no evidence to dispute the physicians observations and tests on Lee, it also failed to provide clear guidance to Lee about what additional testing would meet its criteria of objective evidence.
Broadspire Peer Reviews are flawed says Court.
Broadspire, on behalf of BellSouth, had requested peer reviews from two physicians. When these physicians reviewed the medical evidence presented by Lee, they had arbitrarily determined that Lees physicians were only repeating the information supplied by her. Whereas, in the Court's eyes, it was clear that Lees physicians were reporting their objective observations of Lees medical condition.
One of her physicians had reported seeing her at his clinic, and observing that she could hardly talk and breathed with difficulty because of the severe muscle spasms she was suffering from. He reported that he personally assisted her to get into his office, and felt that she needed the help of a nurse too in that endeavor. This observation by the doctor was clearly an objective piece of evidence.
These flawed peer reviews led Broadspire to conclude that Lee was not "unable to perform any type of work." Yet, neither of the two reviewers who conducted the peer reviews addressed the fact that it had been consistently reported by multiple physicians that she could not sit for more than 1-1/2 hours at a time. They failed to address the fact that she required heavy medication even to do just that, and that the medication left her heavily sedated, resulting in a mental fog that made it even harder to perform her job. They also failed to recognize the fact that her doctors had observed, through functional impairment tests and other observations, that she was unable to move, speak, or breathe freely.
Court Finds Medical Records Prove Disability.
After reviewing the medical evidence presented by Lee and her treating physicians, the Court found that Lee was clearly disabled under the terms of the short-term disability plan, and had been eligible for short-term benefits from the time of her application on January 25, 2005.
Despite the fact that the second peer reviewer had concluded that Lee was disabled, as defined by the plan, between May 16, 2005 and July 19, 2005, the day he reviewed her file, Lee had never received any short-term disability benefits because now she did not meet the requirement of being an employee of BellSouth, having been terminated after she had exhausted all her Family and Medical Leave benefits.
The short-term disability plan benefits excused absence from work for up to fifty-two weeks "as long as the Participant remained continually disabled and otherwise met the terms and conditions for Benefit payment. Having found that Lee was wrongfully denied benefits, the Court also ruled that she was wrongfully terminated from her job at BellSouth.
Court Finds Broadspire/BellSouth Decision Arbitrary and Capricious.
On March 10, 2009, the Appeals Court found that BellSouth had not acted reasonably in the light of available medical evidence. The case was sent back to the District Court for reevaluation.
The District Court needed to evaluate whether Lee was entitled to short-term disability benefits from July 19, 2005 to January 25, 2006, the end of the term of short-term disability plan. The Appeals Court had already decided that she deserved short-term disability benefits for the duration of January 25, 2005 to July 19, 2005. The District Court would then also decide whether Lee was entitled to the long-term disability benefits that would have begun at the end of the short-term disability plan on January 25, 2006.
This case is a very good example of the value of pursuing an appeal when a district court decides in favor of the disability insurance plan. Because three judges sit on the Appeals Court bench, claimants are less dependent on the reading of one single judge. Oftentimes at least two of the judges are inclined to reach a decision favoring the claimant, especially after reviewing the evidence presented. This enhances the chances that a favorable outcome will be achieved.
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