Two lessons taught by a recently decided case from Indiana are that insurers need to fairly and independently assess disability claims and must consider the co-morbidity of multiple physical and psychological impairments.

In Maiden v. Aetna Life Insurance Co., 2016 WL 81489 (N.D. Ind., Jan. 6, 2016), the court was harshly critical of the manner in which Aetna Life Insurance Co. evaluated Andrew Maiden’s claim for disability benefits brought under the federal Employee Retirement Income Security Act.

Maiden, who had worked as a lab technician for 25 years, applied for disability benefits in 2013 due to physical and mental health issues – spinal impairments, diabetes, sleep apnea and bipolar disorder. Although Maiden’s claim was supported by reports from several treating physicians, Aetna denied his disability benefit claim along with a claim for continuation of his life insurance under a waiver of premium on account of his disability. The court overturned that denial.

The court began by recounting that Maiden’s file was reviewed by two “independent” consultants, Drs. Malcolm McPhee and Leonard Schnur. However, the court questioned the consultants’ independence and explained the deliberate use of scare quotes around the word “independent,” observing: “Their bread has been buttered by Aetna before; each of them has been hired by Aetna multiple times to conduct these kinds of disability reviews (collecting 10 reported court opinions).”

Turning to the merits of the claim decision, the court found the biggest problem in Aetna’s decision was its failure to address the co-morbidity of Maiden’s physical and psychological problems even though the treating doctors viewed the interplay of his disparate impairments a significant factor in assessing treatment options and functionality.

The court elaborated that while Aetna maintained it had assessed both physical and psychological impairments, it did so “in silos, considering whether Maiden’s back pain rendered him disabled under the plan separate and apart from whether psychological problems did.”

The court cited specific examples from the file-reviewing doctors’ reports which showed that neither consulted the other in an effort to assess the co-morbidity of Maiden’s physical and psychological problems.

Moreover, the court was troubled by Aetna’s file reviews since neither McPhee nor Schnur furnished a reasoned basis for disagreeing with the treating doctors. The court concluded that both doctors’ reports were a product of their bias.

“Dr. McPhee and Dr. Schnur’s relationship with Aetna is not immaterial to my analysis here. A consultant ‘hired by the administrator … may have a financial incentive to be hard-nosed in his claims evaluation in order to protect the financial integrity of the plan.’ Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 917 (7th Cir. 2003).

“If a treating physician and a plan’s consultant are assumed to have equal and opposite incentives, then ‘consideration of the incentives drops out and the superior information is likely to be possessed by the treating physician, especially when … the consultant does not bother to examine the patient.’ Dr. McPhee and Dr. Schnur appear to have an ongoing consulting relationship with Aetna, and there is no dispute that they based their opinions entirely on the record evidence [rather than firsthand examinations].”

The court observed that Aetna and its reviewers rejected Maiden’s complaints of back pain based on their assertion that minimal findings were revealed on MRI evaluation. However, the court rejected that analysis because the MRI evidence was significant and its correlation to symptom complaints was well-established by clinical findings that reproduced the pain complaints on examination. Moreover, the court observed that the “diagnostic procedures and treatment … [Maiden underwent] would make no sense if Maiden’s pain were insignificant or were not caused by a problem in the thoracic spine.”

Hence, the court concluded, “Aetna’s failure to say why it had disregarded such evidence or considered it but found it unpersuasive is suspect, to say the least.”

The court found regular complaints of pain on repeated visits to the doctor reinforced the plaintiff’s credibility and obligated the insurer to take those complaints into consideration rather than rejecting them as “self-reported.”

Next, the court dismissed Aetna’s argument that Maiden had worked for several years with his condition. First, the court rejected the argument since it was not raised until litigation and was therefore an improper post hoc rationale, which is disregarded under ERISA law (citing Halpin v. W.W. Grainger Inc., 962 F.2d 685, 696 (7th Cir. 1992) (“A post hoc attempt to furnish a rationale for denial of … benefits in order to avoid reversal on appeal, and thus meaningful review, is not acceptable.”)).

But even if the issue had been properly raised, the court deemed Maiden’s long work history and willingness to continue working as evidence that “he is not a shirker of work or someone inclined to malinger.” The court also cited Hawkins v. First Union Corp., 326 F.3d 914, 918 (7th Cir. 2003), which addressed the same issue and found there is no “logical incompatibility between working full time and being disabled from work full time. … A desperate person might force himself to work despite an illness that everyone agreed was totally disabling [but] might not be able to maintain the necessary level of effort indefinitely.”

Turning to the psychological impairments, the court called Dr. Leonard Schnur’s review “problematic” based on its insufficiencies and conflict with the clinical findings that clearly reported information he deemed to have been absent.

Hence, the court overturned the denial based on a finding that Aetna abused its discretion.

The court here compiled a litany of missteps by Aetna. While some courts eschew a “batting average” approach to claimants’ challenges concerning particular consultants utilized by benefit plans, as the court’s catalog of cases involving the two reviewers demonstrates, at some point, the frequency of their retention has to make their objectivity suspect.

The court’s recognition of the importance of not viewing separate impairments in “silos” and its criticism of Aetna’s selective consideration of the evidence are also critical. And the court’s finding regarding Maiden’s extensive treatment supporting his credibility is similar to the observation in Diaz v. Prudential Insurance Company of America, 499 F.3d 640, 646 (7th Cir. 2007), which cited a Social Security case, Carradine v. Barnhart, 360 F.3d 751, 755 (7th Cir. 2004), to reach the conclusion that an extensive course of treatment bolsters the credibility of pain complaints.

I represented the plaintiff in the Diaz case cited in this article.

This article was published in the Chicago Daily Law Bulletin.

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