Chronister v. Baptist Health, 2006 U.S.App.LEXIS 7178 (8th Cir. 3/23/2006). Chronister, a nurse who worked for Baptist Health, a non-profit organization that operates hospitals in Arkansas, was injured in a car accident in 1995 and developed fibromyalgia and other conditions that eventually led her to file for disability benefits in 1997. Unum, the insurer, initially approved the claim; however, benefits were terminated after two years based on the insurer’s conclusion that the disability was primarily due to ”self-reported symptoms,” and was therefore limited to 24 months of payment based on a policy limitation for such impairments. After Unum rejected Chronister’s pre-suit appeal, she brought suit in state court; however, the insurer removed the claim alleging ERISA preemption. Chronister then sought remand, contending the policy was exempt from ERISA as a ”church plan.” The district court denied the remand request but ultimately determined that the application of the self-reported illness limitation was not supported. Both parties appealed.

The 8th U.S. Circuit Court of Appeals first addressed the ”church plan” issue. The plaintiff alleged the plan sponsor was ”controlled by or associated with” the Baptist Church and ”shares common religious bonds and convictions” with the Baptist Church under 29 U.S.C. § 1002(33)(C)(iv). Moreover, there was no election made by the plan sponsor to be covered by ERISA. Unum disagreed, arguing that there were no specific organizational or financial ties between the Baptist Church and the plan sponsor. The court recognized that if the plan was a church plan, it was obligated to remand the case under the authority of Lown v. Continental Cas.Co., 238 F.3d 543 (4th Cir. 2001), and framed the issue:

”Church plans are not ERISA plans. ‘The term ”church plan” means a plan established and maintained … for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 of Title 26.’ 29 U.S.C.A. § 1002(33)(A) (2005). Further, the statute defines church plans to include plans ‘established and maintained for its employees by a church or by a convention or association of churches including a plan maintained by an organization, whether a civil law corporation or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or convention or association of churches….’ 29 U.S.C.A. § 1002(33)(C)(i) (emphasis added). ‘An organization, whether a civil law corporation or otherwise, is associated with a church or a convention or association of churches if it shares common religious bonds and convictions with that church or convention or association of churches.’ 29 U.S.C.A. § 1002(33)(C)(iv). For example, a church controls an organization when a majority of the officers or directors are appointed by a church’s governing board or by officials of a church. 26 C.F.R. § 1.414(e)-1(d)(2). The regulations also state that an organization is associated with a church if it shares common religious bonds and convictions with that church.”

In analyzing the question, the court noted that Baptist Health severed its association with the Arkansas Baptist State Convention in 1966. However, Baptist Health required that its CEO and Board of Directors are required to be Baptist and its management requires the application of Baptist principles – for example, following Baptist principles, elective abortion is not permitted; and in the case of clinical abortions, two physicians and a Baptist chaplain must all concur. The question of ”church plan” status then came down to whether Baptist Health is ”associated with” the Baptist Church because it ”shares common religious bonds and convictions.”

Examining the Lown decision, the court concluded that the plan was not a church plan. Lown involved a disability claim brought by an employee of Baptist Healthcare System of South Carolina Inc., which, like the plan sponsor in this case, had separated from its state and regional Baptist Convention. In Lown, the court concluded the employer was not controlled by a church or convention because there were no common religious bonds and convictions between the two entities. Although they shared the name ”Baptist,” the court concluded, ”Yet the name is not the thing.” Lown, 238 F.3d at 548. The 4th Circuit in Lown applied a three-part test that the 8th Circuit adopted:

”(1) Whether the religious institution plays an official role in the governance of the organization, (2) whether the organization receives assistance from the religious institution, and (3) whether a denominational requirement exists for any employee or patient/customer of the organization.” Lown, 238 F.3d at 548.

Although there was evidence of the pervasiveness of Baptist doctrine, Chronister ruled that the Unum insurance coverage did not fall within the definition of a church plan, applying the following reasoning:

”First, as stated above, the Arkansas Baptist State Convention has played no role in the governance of Baptist Health for nearly forty years. Moreover, the Arkansas Baptist State Convention does not appoint or approve any of Baptist Health’s board members. Lown, 238 F.3d at 548. ‘Indeed, [Chronister] points to no factor indicating that Baptist Health consulted with the [Arkansas Baptist State Convention] on any matter.’ Id. Baptist churches are not hierarchically governed and it would be inaccurate to ascribe Baptist Health’s generally religious outlook to a specific Baptist Church or association of Baptist churches given their disaffiliation with the Arkansas Baptist State Convention. Second, there is no evidence that Baptist Health received any support from the Arkansas Baptist State Convention after its dissociation. The only financial support mentioned comes from the Baptist Health Foundation, which is made up of a number of local business people with no requirement of any affiliation with the Baptist faith. Third, Baptist Health’s denominational requirement for certain employees of Baptist Health is limited to administrators, the president/CEO, chaplains, and board members. Management employees are instructed to be guided by Christian principles, not specific doctrines of a Baptist church. Baptist Health treats patients of all religions or faiths.”

Accordingly, the court upheld the district court’s finding that it possessed subject matter jurisdiction.

Turning then to the application of the policy’s self-reported illness limitation, the court rejected Unum’s position even though it applied a deferential standard of review. The court noted that Chronister’s treating doctor performed an 18-point trigger test to determine the presence of fibromyalgia; and the plaintiff tested positive on all 18-trigger points. Under the policy limitation, benefits are limited to twenty four months of payment due to self-reported symptoms which the policy defines as ”… the manifestations of your condition which you tell your doctor, that are not verifiable using tests, procedures or clinical examinations standardly accepted in the practice of medicine.”

The district court had concluded that the trigger point test was a clinical examination that constituted objective medical evidence, and the Court of Appeals concurred, finding:

”Under Unum’s policy, the key question then becomes whether fibromyalgia is subject to the policy’s self-reported symptoms limitation. By its plain language the limitation applies only to disabilities that ‘are primarily based on self-reported symptoms….’ Self-reported symptoms are specifically defined as those that ‘are not verifiable using tests, procedures or clinical examinations standardly accepted in the practice of medicine.’ The 18-point ‘trigger test’ performed by Dr. Lipsmeyer qualifies as a ‘clinical examination standardly accepted in the practice of medicine,’ and thus, Chronister’s fibromyalgia is not subject to Unum’s self-reported symptoms limitations. Our circuit recently joined the 7th Circuit in recognizing that trigger-point test findings consistent with fibromyalgia constitute objective evidence of the disease. Johnson v. Metro. Life Ins. Co., 437 F.3d 809 (8th Cir. 2006). See also Brosnahan v. Barnhart, 336 F.3d 671, 678 (8th Cir. 2003) (‘Brosnahan’s testimony and reports to the SSA are supported by objective medical evidence of fibromyalgia-consistent trigger-point findings….’); Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 919 (7th Cir. 2003) (‘Pain often and in the case of fibromyalgia cannot be detected by laboratory tests. The disease itself can be diagnosed more or less objectively by the 18-point test…’). Chronister’s medical condition consequently does not rest primarily on self-reported symptoms.”

Accordingly, the district court’s determination that the self-reported illness limitation was inapplicable to Chronister’s claim was upheld and the case was remanded to Unum.

The court’s ruling on the church plan issue is very instructive since there are so few decisions on the issue of what constitutes a church plan. Following this ruling, it would seem the only hospitals that would fit within the church plan exemption from ERISA are those that are governed by denominations that have hierarchical governance and which financially support the institution.

With respect to the self-reported illness issue, this is the first appellate ruling that has considered the applicability of such policy limitations that have become relatively common in the past few years. In Russell v. UNUM Life Insurance Co. of America, 40 F.Supp.2d 747 (D.S.C. 1999), a court reached the same conclusion that a physician’s detection of ”trigger points” on physical examination removed a diagnosis of fibromyalgia from the real of a ”self-reported illness,” for which the policy limited benefit payments to a maximum of two years. Also see, Morgan v. Unum Life Insur.Co. of America, 2002 U.S.Dist.LEXIS 17663 (D.Minn. 9/16/02), aff’d Morgan v. Unum Life Insur.Co. of America, 346 F.3d 1173 (8th Cir. 2003) (the issue was only discussed in the district court ruling, though); McArdle v. Unum, 2001 U.S.Dist.LEXIS 20541 (D.Minn. 2001). A contrary ruling was issued in Robinson v. Unum Life Insur.Co. of America, 2003 U.S.Dist.LEXIS 4023 (D.N.H. 3/12/03).

One point the court failed to mention, though, was that it is generally the case that ”The burden of proving that a claim falls within an exclusion rests squarely on the insurer.” Hurst-Rosche Eng’rs, Inc. v. Commercial Union Ins. Co., 51 F.3d 1336, 1342 (7th Cir. 1995).

Faced with such a burden, even with discretionary authority, it could not be disputed that the fibromyalgia diagnosis using a standard clinical examination fell outside of the policy limitation.

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

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