Ruling exposes defects in insurer’s determination

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Ruling exposes defects in insurer's determination

Chicago Daily Law Bulletin
March 16, 2009

by MARK D. DEBOFSKY

Functional capacity evaluations are frequently used in disability insurance evaluations. While some courts have deemed such testing reliable, Alfano v. Cigna Life Ins.Co. of N.Y., 2009 U.S.Dist.LEXIS 7688 (S.D.N.Y. Jan. 30), offers an object lesson as to why courts need to be careful in assessing such tests.

The plaintiff in Alfano worked in an administrative position at the Cornell University Weill Medical College before suffering a severe back injury in a car accident. MRI and electrodiagnostic testing revealed severe damage to the lumbosacral spine with significant impingement on a nerve root, causing excruciating pain and discomfort. As a result, Alfano had to cease work and apply for disability benefits. Although Alfano was initially approved to receive both Social Security disability payments as well as monthly disability insurance payments from his employer's group disability insurer, Cigna terminated the payments after five years despite the absence of any improvement in Alfano's medical condition.

Cigna relied heavily on a functional capacity evaluation, which concluded Alfano could function at the sedentary level of exertion for an eight-hour period. However, in the underlying test findings, the FCE examiner further reported Alfano's inability to complete the lifting portion of the testing and found he could not tolerate sitting for more than 10-15 minutes without ''a drastic change in position.'' The examiner also reported that Alfano had to frequently lie down during the testing. However, based on the FCE's conclusion, Cigna's internal vocational specialist performed a transferable skills analysis that identified seven occupations within the stated capabilities, and Cigna utilized that evidence as the basis for terminating benefits.

Alfano challenged that determination, and in a thoughtful ruling issued by U.S. District Judge Gerard Lynch of the Southern District of New York, the court exposed the defects in the insurer's decision. Although the plaintiff tried to shift the burden of proof to Cigna to establish medical improvement, the court disagreed, citing a prior ruling for the proposition that a plan administrator ''is not required to disprove the possibility that [a claimant is] disabled in order to terminate [his] benefits; rather, it is [the claimant's] burden to demonstrate [his] disability under the Plan.'' Lee v. Aetna Life & Cas. Ins. Co., No. 05 Civ. 2960, 2007 U.S. Dist. LEXIS 38205, 2007 WL 1541009, at 4 (S.D.N.Y. May 24, 2007) at 43. Nonetheless, the court acknowledged that a ''reversal in policy preceded by no significant change in [the claimant's] physical condition'' will weigh against the administrator and in favor of the claimant.'' (citing Connors v. Connecticut Gen. Life Ins. Co., 272 F.3d 127, 136 (2d Cir. 2001)).

The court focused its consideration of the evidence around the definition of ''sedentary'' work as set forth in the U.S. Department of Labor, Dictionary of Occupational Titles (4th ed. 1991) and in 20 C.F.R. § 404.1567, which can be distilled into a requirement that ''sedentary work 'generally involves up to two hours of standing or walking and six hours of sitting in an eight-hour work day.' '' Connors, 272 F.3d at 136 n.5. Thus, the court framed the issue as ''whether Alfano has shown, by a preponderance of the evidence, that he is incapable of sitting for six hours and standing or walking for two hours.''

The court first looked at the treating doctors' opinions. While agreeing with Cigna that the court was not required to give deference to the treating doctors' findings, the court rejected Cigna's ''suggestion that this rule permits it to reject the opinions of treating physicians for any or no reason at all is contrary to established law. Because CIGNA does not cite any rational justification for its decision to discredit Alfano's treating physician evidence, this evidence is entitled to substantial weight.'' The court added that the medical evidence supporting disability was ''extensive,'' citing the MRI findings, EMG results, and other objective testing, coupled with the opinions of multiple physicians, including numerous specialists in orthopedics, neurology and neurosurgery.

The court also deemed the Social Security award relevant, finding: ''Given the absence of any purported justification for ignoring the SSA's findings, as well as its wholesale failure to cite any evidence contradicting those findings, CIGNA erred in discrediting the SSA decision.'' The court was also struck by the irony of Cigna treating the Social Security finding as irrelevant yet accepting the Social Security award when it offset the benefits due by the Social Security payment. Nor did the court deem the disability definitions between Social Security and the Cigna policy to be materially different, and the SSA findings were precisely on point as to the issue before the court. Finally, the court explained: ''The SSA, moreover, is an objective governmental body that undertakes a thorough review of applicants' eligibility for benefits, and has neither the incentive to disperse benefits liberally, nor a reputation for overindulging applicants.''

The court then turned to Cigna's vocational evidence which it characterized as ''internally inconsistent'' and ''inconsistent with the record as a whole.'' The court found the underlying medical evidence established far greater restrictions than the vocational evaluators took into consideration; and in the face of evidence that Alfano could not sit for more than 2½ hours a day, the conclusion that he could perform various sedentary jobs, including his own past work, was inconsistent with the exertional requirements of sedentary work; i.e., the ability to sit for six hours a day.

The court was also critical of Cigna's claim of an alleged ''discrepancy'' between the treating doctor's statement that Alfano could sit, stand and walk occasionally and a conclusion that Alfano was incapable of performing the identified jobs. Because a Cigna form completed by the treating doctor defined the term ''occasionally'' to mean up to 2.5 hours, the court determined, ''CIGNA could not have interpreted Dr. Roach's conclusion that Alfano could occasionally sit, stand, and walk to mean that Alfano possessed the six-hour per day sitting tolerance required of those performing sedentary work.'' Also, the treating doctor's letter following his conversation with the Cigna medical director made his opinion clear that Alfano could not meet the exertional requirements of any job.

The court was especially critical of Cigna's reliance on the FCE, however. The court cited Rappa v. Connecticut Gen. Life Ins. Co., No. 06 Civ. 2285, 2007 U.S. Dist. LEXIS 91094, 2007 WL 4373949, at 10 (E.D.N.Y. Dec. 11, 2007) (disclaiming the reliability of a TSA (transferable skills analysis) showing that the claimant could perform certain sedentary jobs, as the TSA was based on an unreliable FCE). The court found Cigna relied only on the summary conclusion of the FCE, but disregarded the data cited in the body of the report as well as the other medical evidence. Hence, the court concluded, ''Far from providing a valid basis for CIGNA's termination of Alfano's benefits, a proper reading of the FCE corroborates Alfano's claim that he is disabled within the meaning of the Plan, thus counseling in favor of his entitlement to benefits.'' The court found the FCE's summary conclusion was wholly inconsistent with the examiner's report that ''[t]he clinical data obtained at th[e] evaluation does not support his ability to tolerate sitting for any duration greater than 10-15 minutes without a drastic change in position,'' and that ''[d]uring the exam he frequently [lay] down to alleviate symptoms.'' The court further explained, ''These observations alone should have led CIGNA to question the validity of the conclusion that Alfano could function safely at the sedentary level for an eight-hour period. Indeed, had CIGNA ventured even a page or two into the report, it would have discovered that the data collected during the FCE patently contradicts the summary conclusion. In particular, the data explicitly shows that Alfano is capable of sitting for less than 2.5 hours (CLICNY 728), precisely the amount of time cited by Alfano's treating physicians.''

Finally, the court found Cigna's internal reviews and peer reviews significantly flawed. The court explained, ''Not only are the reviews 'not based on any interaction with [Alfano],' but they also wholly 'fail to adequately and credibly rebut the findings of [Alfano]'s treating physicians.' '' (citing Rappa, 2007 U.S. Dist. LEXIS 91094, 2007 WL 4373949, at 11). The court found the medical assessments were wholly inconsistent with the MRI and EMG findings, as well as in conflict with the FCE results. The court further found Cigna's medical opinions failed to account for Alfano's need to lie down during the day, and that even if he could switch positions between sitting and standing, the medical reports assessed his total tolerance for sitting and standing well below the definition of sedentary exertion. Nor was Cigna's finding of ''improvement'' supported. If anything, the court found the evidence suggested Alfano was getting worse. Once again, the court cited Rappa for the conclusion, ''Decisions to terminate benefits in the absence of a change in condition have been held to have been arbitrary and capricious.'' Thus, the court granted plaintiff summary judgment and flatly refused Cigna's request to remand the case, ordering an immediate reinstatement of benefit payments.

While functional capacity evaluations purport to establish an individual's ability to work throughout an eight-hour day, there is little science to support the conclusions reached by such testing. For that reason, cases such as Stup v. Unum Life Insur.Co. of America, 390 F.3d 301 (4th Cir. 2004), have found that a 2½ hour functional capacity evaluation (the typical duration of such tests) cannot predict functionality over an eight-hour day or work week. The court also found that the insurer could not reasonably rely on such testing as the basis for denying benefits when all of the other evidence of record conclusively established the claimant's disability. Michael v. American Intl. Group, Inc., 2008 U.S.Dist.LEXIS 69421 (E.D.Mo. Sept. 15, 2008) and Edgerton v. CNA Insurance, 2002 U.S. Dist. LEXIS 15490 (E.D.Pa. 2002), also concluded that FCE testing cannot assess the effect of pain. And while courts seek objective evidence of functional restrictions, particularly in cases involving fibromyalgia and chronic fatigue syndrome where there are no tests such as x-rays or blood tests capable of diagnosing those disorders, functional capacity evaluations have been found utterly deficient in scientifically assessing functionality. For example, Brown v. Continental Casualty Co., 2004 U.S.Dist.LEXIS 19164 (E.D.Pa. 9/10/2004), ruled that the FCE was a ''one time test ... [that] cannot hope to present a true picture of an illness characterized by variable symptoms.'' Accord, Ott v. Litton Industries, 2005 WL 1215958 (M.D. Pa. 5/20/2005); Crist v. Liberty Life Assur.Co. of Boston, 2006 U.S.Dist.LEXIS 26326 (S.D. Ohio 5/4/2006). But the principal defect here, as ably recognized by Judge Lynch, was that the FCE's conclusion was unsupported by its underlying data. The court did a remarkable job in exposing the numerous defects in Cigna's biased and unsustainable determination.