The question before the court in Glazer, which was ultimately answered in the negative, was whether ”medical reports relied on by a plan administrator during the review of a denial of benefits must be produced to the claimant for her to receive a ‘full and fair review.’ 29 U.S.C. § 1133(2).” Glazer v. Reliance Standard Life Ins.Co., 2008 U.S.App.LEXIS 8583 (11th Cir. April 21, 2008).

Priscilla Glazer, who had worked as a technical writer, became disabled in 2003 due to myofascial pain syndrome, fibromyalgia, cervical spondylosis, and radiculopathy. Benefits were initially approved; however, a few months later, Reliance decided that Glazer was no longer disabled. When Glazer appealed and submitted additional medical records, a review conducted by Dr. William Hauptman was relied on to uphold Reliance Standard’s findings.

The principal issue raised in the ensuing court proceedings was whether Reliance denied Glazer a full and fair review by not providing her with Hauptman’s report so that she could respond before a final determination was reached. Reliance argued the ERISA claim regulations do not mandate production of documents relied on during the pre-suit appeal until after a final decision is issued, and the court agreed. The court read the applicable claim regulations as requiring the production of ”relevant” documents (29 C.F.R. § 2560.503-1(h)(2)(iii)), a term which is defined later in the regulations to mean documents that were relied on or were ”submitted, considered, or generated in the course of making the benefit determination.” 29 C.F.R. § 2560.503-1(m)(8)(i)-(ii). Since Hauptman’s report did not fit that definition of ”relevant” in the court’s view, the court ruled ERISA imposed no requirement that Reliance Standard had to produce Hauptman’s report during the claim appeal.

The court also cited Metzger v. UNUM Life Insurance Company of America, 476 F.3d 1161, 1167 (10th Cir. 2007), for the proposition that ”subsection (h)(2)(iii) does not require a plan administrator to provide a claimant with access to the medical opinion reports of appeal-level reviewers prior to a final decision on appeal.” To impose such a requirement would, according to Metzger, create ”an unnecessary cycle of submission, review, re-submission, and re-review.”

The plaintiff in Glazer also challenged the merits of the decision; however, the court found adequate support for Reliance Standard’s determination under an arbitrary and capricious standard of review.

Metzger is not the only U.S. Circuit Court of Appeals ruling on this issue. Appellate rulings in Abram, v. Cargill Inc., 395 F.3d 882 (8th Cir. 2005), Saffon v. Wells Fargo & Co. Long Term Disability Plan, 511 F.3d 1206 (9th Cir. 2008), and Kosiba v. Merck & Co. , 384 F.3d 58 (3d Cir. 2004), have all either concluded or explicitly ruled that the claimant is entitled to know of and address the accuracy and reliability of all adverse evidence that is being relied upon as the basis for either rendering or upholding the claim denial.

In this case, Hauptman’s track record would raise the eyebrows of even the most skeptical judge who would otherwise be inclined to deem his review of the file sufficient. Hauptman’s opinions on behalf of Reliance Standard have been questioned in numerous court rulings, such as: Omasta v. Choices Benefit Plan, 352 F.Supp.2d 1201 (D.Utah Dec. 23, 2004); Smetana v. Reliance Standard Life Ins. Co., 2003 U. S. Dist. LEXIS 19564 (E.D. Pa. Oct. 1, 2003); Schmidlkofer v. Directory Distrib., Assocs., 107 Fed. Appx. 631; 2004 U.S. App. LEXIS 18270, (6th Cir Aug. 25, 2004) (unpublished); Smith v. Reliance Std. Life Ins. Co., 2004 U.S. Dist. LEXIS 26195 (S.D. Fla. Sept. 9, 2004); Conrad v. Reliance Std. Life Ins., 292 F. Supp. 2d 233 (D. Mass 2003); and especially in Gunn v. Reliance Standard Life Insur. Co., 399 F.Supp.2d 1095, 1105 (C.D.Cal. 2005), which cited the Conrad ruling and concluded that ”Dr. Hauptman appeared to be a man with a mission – to find a way to justify a denial of benefits.”

While there is some visceral appeal to the reasoning the court applied from the Metzger ruling, there is a stronger rationale, as well as a basic understanding of the terms ”full and fair” contained in 29 U.S.C. § 1133, for having a rule, consistent with ERISA’s regulatory purpose and its protective philosophy, that prevents insurers from ”sandbagging” claimants. Particularly if discovery is not allowed in courts applying the arbitrary and capricious standard of review as is generally the case in the 7th Circuit according to Semien v. Life Insurance Co. of North America, 436 F.3d 805 (7th Cir. 2006), to deprive claimants of the opportunity to respond to the opinions generated by the insurer’s consultants is to deny a full and fair review since, as the Court of Appeals ruled in Halpin v. W.W. Grainger Inc., 962 F.2d 685, 689 (7th Cir. 1992):

”[T]he persistent core requirements of review intended to be full and fair include knowing what evidence the decision-maker relied upon, having an opportunity to address the accuracy and reliability of that evidence, and having the decision-maker consider the evidence presented by both parties prior to reaching and rendering his decision” (citations omitted).

I was counsel in Semien v. Life Ins.Co. of North America cited in this article.

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This article was initially published in the Chicago Daily Law Bulletin.

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