Welch v. Unum Life Ins. Co. of America, 2007 U.S.Dist.LEXIS 91796 (D.Kansas Dec. 13, 2007), was before the court on remand from the 10th U.S. Circuit Court of Appeals (Welch v. Unum Life Insur. Co. of America , 382 F.3d 1078 (10th Cir. 2004), where the appellate court ruled that consideration had to be given to a policy amendment limiting the duration of disability benefit payments to two years for ”self-reported” symptoms even though the amendment was not issued until after the onset of the plaintiff’s disability. Following a remand by the appellate court, Kathy A. Welch participated in a reconsideration process mandated by a settlement reached between the insurer and the insurance regulators of 49 states that required Unum and its sister companies to reassess over 200,000 previously denied claims based on the regulators’ concerns about bad faith claim handling. (See: John H. Langbein, Trust Law as Regulatory Law: The Unum/Provident Scandal and Judicial Review of Benefit Denials under ERISA, 101 N.W. U. L. REV. 1315, 1321 (2007)). However, that process also failed to result in payment of benefits and the litigation resumed. In this ruling, after careful consideration, the court determined that the policy limitation was inapplicable and the claimant was entitled to receive more than two years of benefits despite the characterization of his fibromyalgia as self-reported.
Under prevailing 10th Circuit standards as set forth in Fought v. Unum Life Insur. Co. of America, 379 F.3d 997 (10th Cir. 2004), the court required that Unum was under a burden, due to its conflicting roles as plan administrator and claims payor, to demonstrate the reasonableness of its interpretation of the plan. The court found the burden unmet based on the following determination:
”After reviewing the positions taken by UNUM in this case as to interpretation of the self-report clause, the court finds that the clause is capable of two interpretations, and is therefore ambiguous. On the one hand, the clause could be read to apply to the specific sickness or injury involved – in this case fibromyalgia. Under that reading, if the specific disease can only be diagnosed through self-reported symptoms and the diagnosis is not ”verifiable using tests, procedures or clinical examinations standardly accepted in the practice of medicine,” then the self-report clause would apply. A second reading of the clause would not focus on the diagnosis of the disease itself, but on the disability resulting from the disease. Under that reading, even if the disease could be diagnosed and verified through standardly accepted tests, procedures or examinations, the self-report clause would limit the benefits where the extent of the disability is based primarily on self-reported symptoms such as pain.”
The court cited three key cases involving Unum and its self-reported symptom clause: Chronister v. Baptist Health & UNUM Life Ins. Co., 442 F.3d 648, 656 (8th Cir. 2006); Robinson v. UNUM Life Ins. Co. of America, No. Civ.A 02-1346, 2003 WL 1193017, at *7 (D.N.H., Mar. 12, 2003); and Russell v. UNUM Life Ins. Co. of America, 40 F.Supp.2d 747, 751 (D.S.C. 1999). In all three cases, the court found Unum improperly applied the limitation because the condition of fibromyalgia was capable of objective clinical diagnosis. However, despite Unum’s concession that Welch was suffering from fibromyalgia, the insurer still maintained that the plaintiff’s disability benefits could not be extended beyond 24 months due to self-reported symptoms that could not be verified by tests or procedures that showed her inability to work.
Although the court agreed that it would not be unreasonable for Unum to take the position that it could limit the duration of benefit payments to 24 months when the degree of disability could not be objectively established, the court found Unum failed to meet its burden of proving the applicability of the provision. First, Unum did not raise the issue when it initially approved benefits for a short period of time. Further, Unum had the file independently reviewed by a physician at Harvard who suggested that functional testing could establish the degree of limitation, yet Unum did nothing to follow up on that suggestion. Thus, the court held:
”Simply stated, UNUM only considered and applied part of the definition of ”self reported symptoms” while disregarding the caveat that even self-reported symptoms such as pain may fall outside of the plan definition where there are tests, procedures or clinical examinations standardly accepted in the practice of medicine that would verify the severity of the patient’s reported pain. It also apparently disregarded the recommendation of the outside physician it hired to review Ms. Welch’s medical records. Considering that UNUM is acting under an inherent conflict in this case, its total disregard of the definition of self-reported symptoms and total disregard of the recommendations of its outside physician for an examination of Ms. Welch by a trained physical therapist, leads to the conclusion that UNUM did not have substantial evidence to support its denial of Ms. Welch’s claim in this case. 16 UNUM’s approach did not result in a reasoned application of the terms of the plan to this case, untainted by the conflict of interest. See e.g., Fought, 379 F.3d at 1006. Therefore, UNUM’s denial of Ms. Welch’s claim for long-term disability benefits beyond the 24-month period already paid by UNUM in this case was arbitrary and capricious.” The court added in a footnote:
”This is further highlighted by the fact that UNUM had previously concluded that Ms. Welch was disabled based on her inability to perform the material and substantial duties of her occupation, Appnx 0281, that the restrictions and limitations prescribed by Ms. Welch’s rheumatologist, ‘appear reasonable,’ and that the independent physician hired by UNUM thought Ms. Welch would ‘flunk’ an ADL examination administered by a good physical therapist.”
Accordingly, the court awarded benefits to the plaintiff.
Although the plaintiff won here, this case, plus the recent ruling in Williams v. Aetna Life Ins.Co., 2007 U.S.App.LEXIS 25515 (7th Cir. 11/1/2007), along with Boardman v. Prudential, 337 F.3d 9 (1st Cir. 2003), raise a disturbing problem in litigating any case involving pain or fatigue – the difficulty in objectively proving functional restrictions. The converse of these cases is exemplified by Hawkins v. First Union Corp., 326 F.3d 914 (7th Cir. 2003), which represented the prevailing standard of proof prior to cases such as this – once a claimant establishes the presence of a condition known to cause the symptoms and limitations complained of, the allegations must be credited in the absence of evidence to the contrary such as surveillance showing much greater activities than those claimed. Diaz v. Prudential Ins.Co. of America, 499 F.3d 640 (7th Cir. 2007), recently expanded on that ruling and found that the extensive pain treatment efforts undergone by the plaintiff corroborated the severity of his symptoms.
However, if the prevailing standard is to require objective proof of disability, where is that proof to be found? The influential Guides to the Evaluation of Permanent Impairment published by the American Medical Association, acknowledges that there is no medical test that can evaluate the severity of pain. Nor is there any testing that can effectively evaluate fatigue. So-called objective tests such as functional capacity evaluations have been unmasked in cases such as Stup v. Unum Life Insur.Co. of America, 390 F.3d 301 (4th Cir. 2004), which found that a two-hour protocol conducted by a physical therapist can hardly supply proof of someone’s ability to maintain and sustain work over the course of a 40-hour workweek. The Social Security Administration, which administers the largest disability program in the world, is cognizant of the degree of difficulty in proving disability due to pain and fatigue and has issued a series of rulings setting forth guidelines in evaluating disability due to claims of pain or fatigue to help explain the existing regulations – 20 C.F.R. § 404.1529, 416.929. For instance, Social Security Ruling 96-7p, which instructs on the evaluation of symptoms in disability claims, explains:
”1. No symptom or combination of symptoms can be the basis for a finding of disability, no matter how genuine the individual’s complaints may appear to be, unless there are medical signs and laboratory findings demonstrating the existence of a medically determinable physical or mental impairment(s) that could reasonably be expected to produce the symptoms.
”2. When the existence of a medically determinable physical or mental impairment(s) that could reasonably be expected to produce the symptoms has been established, the intensity, persistence, and functionally limiting effects of the symptoms must be evaluated to determine the extent to which the symptoms affect the individual’s ability to do basic work activities. This requires the adjudicator to make a finding about the credibility of the individual’s statements about the symptom(s) and its functional effects.
”3. Because symptoms, such as pain, sometimes suggest a greater severity of impairment than can be shown by objective medical evidence alone, the adjudicator must carefully consider the individual’s statements about symptoms with the rest of the relevant evidence in the case record in reaching a conclusion about the credibility of the individual’s statements if a disability determination or decision that is fully favorable to the individual cannot be made solely on the basis of objective medical evidence.
”4. In determining the credibility of the individual’s statements, the adjudicator must consider the entire case record, including the objective medical evidence, the individual’s own statements about symptoms, statements and other information provided by treating or examining physicians or psychologists and other persons about the symptoms and how they affect the individual, and any other relevant evidence in the case record. An individual’s statements about the intensity and persistence of pain or other symptoms or about the effect the symptoms have on his or her ability to work may not be disregarded solely because they are not substantiated by objective medical evidence.
”5. It is not sufficient for the adjudicator to make a single, conclusory statement that ”the individual’s allegations have been considered” or that ”the allegations are (or are not) credible.” It is also not enough for the adjudicator simply to recite the factors that are described in the regulations for evaluating symptoms. The determination or decision must contain specific reasons for the finding on credibility, supported by the evidence in the case record, and must be sufficiently specific to make clear to the individual and to any subsequent reviewers the weight the adjudicator gave to the individual’s statements and the reasons for that weight.”
Another helpful ruling is Social Security Ruling 99-2p, which relates specifically to chronic fatigue syndrome. In Halpin v. W.W.Grainger Inc., 962 F.2d 685, 695 n.11 (7th Cir. 1992), the 7th Circuit pronounced Social Security concepts ”instructive” in disability claims such as this.
Although this case related to fibromyalgia, which is a condition that can only be diagnosed clinically given the present state of medical knowledge, the implications of imposing a burden of objective proof of functional limitations could dramatically limit claims for individuals suffering from other conditions that are objectively diagnosable using laboratory or imaging methods such as multiple sclerosis or lupus. Even cardiac or orthopedic impairments could be limited if the claimant is unable to objectively prove the degree of fatigue or level of pain experienced. If insurers are only writing coverage that would pay for two years of disability income, they should clearly say so; otherwise, clauses such as the one at issue in this case render illusory the promise of benefits beyond the first two years of payments. The threat posed by this and other recent cases is ominous.
I was counsel in the Diaz case cited in this article; and my office also represented the plaintiff-appellant in Williams.
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This article was initially published in the Chicago Daily Law Bulletin.