A recent case involving the FedEx disability program, Mason v. Federal Express Corp., 2016 WL 706163 (D. Alaska February 22, 2016), illustrated how exposure of conflicts of interest in a claim determination affects a court's review of the evidence. The case involved Maurice Mason, a FedEx employee who suffered from an auto-immune disorder known as stiff person syndrome (SPS). Although Mason's claim was well documented, Aetna, the claim administrator for FedEx's self-funded plan, denied the claim and his pre-litigation appeal. The court reversed that decision based on its conclusion that obvious conflicts infected the claim determination.
Even though the court acknowledged that it had to defer to the FedEx decision, it made it clear that the abuse of discretion standard of judicial review is not a rubber stamp. Even though FedEx hired Aetna to administer its claims, the court determined that the use of a third-party administrator heightened rather than diminished the potential conflict of interest. The court found that since FedEx pays claims out of its general asset, it "has an obvious incentive to hire a Claims Paying Administrator that minimizes benefits awards." The court also cited a prior appellate ruling to find that "[a] so-called independent administrator may have much more of an incentive to decide against claimants" than either an employer or "an insurance company spending 'its own money.' " The court added, "These 'independent' administrators may have an incentive to 'show how tough they are on claims to better market their services to self-insured employers.'"
But what really concerned the court was the willingness of a medical consultant, Andrew Gordon, M.D., to do an about face and retract a report favorable to the claimant. After issuing his initial report, Dr. Gordon was requested by Aetna to provide a "clarification" that resulted in a report favoring the denial of benefits. The "clarification" requested that Dr. Gordon exclude relevant evidence from his consideration, and the ensuing report failed to explain what might have caused the so-called improvement in the claimant's condition that justified a 180 degree opinion change.
The court was also troubled by Aetna's refusal to consult with Mason's treating doctors or explain to Mason what additional evidence he could submit that might convince Aetna to approve his claim. The court concluded from that course of conduct: "Without any way for his treating doctors to confer with Aetna's doctors, or to submit reports that respond to Aetna's reports, Aetna significantly hindered Mason's ability to develop the administrative record."
The court's recognition of Aetna's conflict is the key aspect of this decision, and this ruling is just the latest in a rapidly growing number of court rulings that have been extremely critical of Aetna's claim-handling in disability benefit cases.