Often the most common divide between a participant claiming disability benefits and the claim administrator evaluating the claim is the weight to be given the opinion of a treating physician. Time was that a claimant argued that the administrator must defer to the treating physician, like the Social Security Administration does. That argument, at least in its basest form, has been eliminated in ERISA cases. Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834, 123 S.Ct. 1965, 1972, 155 L.Ed.2d 1034 (2003) (“courts have no warrant to require administrators automatically to accord special weight to the opinions of a claimant’s physician”).

Often the argument is now made in a more limited fashion, or couched in different language. It might be argued that the administrator should have conducted an independent medical examination (suggesting that the opinion of a doctor who lays hands on the patient necessarily is better). It might be argued that some claims are particularly inhospitable to “paper reviews,” such as claims based on a mental illness or pain. Even where the treating physician argument does not explicitly surface, there is often an undercurrent running through disability claims in which the treating physician is placed on a somewhat higher plane than a physician who is compensated by the claim administrator. There is often the unexpressed notion that treating physicians are unbiased reporters of medical facts, while the motivation of a reviewing physician might not be equally pure.

There are, however, rulings by several courts that allow those who represent administrators to shade some of the glow enveloping treating physicians.
Continue Reading Examining the Treating Physician

In Schorsch v. Reliance Standard Life Ins. Co., — F.3d — ,  2012 WL 3667977 (7th Cir. Aug. 28, 2012), the court “considered here whether the content of a termination notice, specifically the absence of particular information, caused the beneficiary’s failure to exhaust and whether [he is]  estopped from taking advantage of that failure.” The court found that the district court did not abuse its discretion in concluding that “the beneficiary offered no evidence of reasonable reliance on the absent information and that even if the notice was deficient, the alleged deficiencies were not material.”
Continue Reading Failure to Exhaust Administrative Remedies Not Excused Even When Termination Notice Is Defective

ERISA claim practitioners generally have the concept of exhaustion of administrative remedies engrained in our thought process. They know well that claimants are required to exhaust their administrative remedies before they can sue over a benefit determination. Given the focus on this exhaustion requirement, it may surprise some to know that, in many circuits, the statute of limitations clock can begin to run well before administrative remedies are exhausted.
Continue Reading Statute of Limitations Can Start Running Before Claim Accrues

In Aschermann v. Aetna Life Ins. Co., — F.3d. –, 2012 WL 3090291 (7th Cir. Jul. 31, 2012), the Seventh Circuit gave a clear ruling that an ERISA claim administrator can delegate its discretionary authority to a substitute, as long as the plan does not expressly prohibit delegation.

The plan at issue was funded by a disability policy issued by Lumbermens Mutual Casualty Company. Lumbermens was withdrawing from the insurance business, and signed an Administrative Services Agreement under which Aetna undertook “all of Lumbermen’s day-to-day duties and discretion.”

The Court held that the question whether Lumbermens effectively delegated discretion to Aetna “can be decomposed into two questions: first, is a written delegation essential; second, is this particular delegation authorized?”

Continue Reading Seventh Circuit Holds that Claim Administrator Has Inherent Power to Delegate Discretionary Authority, Unless Plan Prohibits It

The Seventh Circuit has recently considered whether surveillance evidence can be relied upon in deciding ERISA-governed disability claims. Marantz v. Permanente Med. Group, Inc. Long Term Disability Plan, 2012 WL 2764792 (7th Cir. July 10, 2012), involved a de novo review of the claim determination. The claimant was a pulmonologist who developed back pain. After paying benefits for about four years, the claim administrator began to look more closely at the claim, and its investigation included surveillance. As the Seventh Circuit described it:

The surveillance video shows Dr. Marantz running across a busy street in heeled boots; shopping at Home Depot, Neiman Marcus, Loehmann’s, and Nordstrom Rack; lifting heavy items into her car; riding a stationary bike in a group exercise class at a health club; and, after the second day of the evaluation, shopping at a fur store and Petco. The investigators followed Dr. Marantz for five days, but only recorded activity on three of those days. Dr. Marantz testified that one of the surveillance days was unusual in that she was hosting a friend who was visiting Chicago from out-of-town.

Dr. Marantz argued that surveillance was “inherently unreliable.” The Seventh Circuit disagreed, but identified several situations when surveillance “is of limited utility”: “when the recorded data does not conflict with the applicant’s self reports of limitations, or when the surveillance catches limited bursts of activity that might be anomalous.”

The First Circuit has also expressed the same notion more simply: “weight given to surveillance in these sorts of cases depends both on the amount and nature of the activity observed.” Maher v. Massachusetts Gen. Hosp. Long Term Disability Plan, 665 F.3d 289, 295 (1st Cir. 2011).

Marantz held that the activities caught on tape were inconsistent with Dr. Marantz’s statements about what she could and could not do. Marantz also held that, because she engaged in these inconsistent activities after she had worked in her part-time job or had spent several hours in rigorous physical therapy, the activity “cannot be explained by a ‘good days/bad days’ scenario.”

Because the devil is in the details on these kind of issues, a discussion of other Circuits’ evaluation of surveillance evidence is in order.

Continue Reading Looking in on Surveillance