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In Eden Surgical Ctr. v. Cognizant Tech. Sols. Corp., No. 16-56422, 2018 U.S. App. LEXIS 10597 (9th Cir., Apr. 26, 2018), the U.S. Court of Appeals for the Ninth Circuit upheld the District Court’s Order dismissing the Complaint of an out-of-network healthcare provider attempting to pursue its patient’s rights under an ERISA plan based on an assignment of benefits. The defendant health plan’s claim administrator, Aetna, determined that benefits were not payable under the plan because the patient had not satisfied the plan’s deductible. Plaintiff brought this action on behalf of its patient challenging that benefit determination. The Ninth Circuit found that the plaintiff’s Complaint was properly dismissed by the district court because the patient’s health benefit plan did not permit assignments.
Continue Reading Ninth Circuit Rejects Arguments Challenging the Enforceability of an ERISA Plan Anti-Assignment Provision

Deciding an issue of first impression, the U.S. Court of Appeals for the Second Circuit recently held that a plaintiff’s claim under ERISA § 502(c)(1) was barred by Connecticut’s one-year statute of limitations for an action seeking to collect a statutorily-imposed civil penalty. Brown v. Rawlings Fin. Servs. LLC, (2d. Cir., 8/22/17) (Jacobs, Leval, Raggi, Js.).

Plaintiff, a plan participant, had filed suit against Rawlings, Aetna, and the William W. Backus Hospital claiming that they had failed to timely respond to her request for documents concerning her healthcare benefit plan. The defendants moved to dismiss her complaint on the ground that the suit was not timely filed, and the District Court granted the motion. Plaintiff thereafter appealed to the Second Circuit, arguing that the District Court had applied the incorrect limitations period.
Continue Reading ERISA § 502(c)(1) Claim for Statutory Penalties is Barred by One-Year Statute of Limitations, Second Circuit Holds

In Williams v. FedEx Corporate Servs., 849 F.3d 889 (10th Cir. 2017), plaintiff sued FedEx for violating the Americans with Disabilities Act (ADA) by requiring him to enroll in the company’s substance abuse and drug testing program. He also sued Aetna, FedEx’s STD insurer, for breach of fiduciary duty for reporting to FedEx that plaintiff had filed a disability claim for substance abuse. The district court granted summary judgment for defendants on both claims.

The Court reversed the ADA decision, and remanded to the district court for further evaluation of one of FedEx’s defenses.
Continue Reading Insurer Did Not Breach Fiduciary Duty by Disclosing Substance Abuse Claim to Employer

In Geiger v. Aetna Life Ins. Co., 845 F.3d 357 (7th Cir. 2017), Aetna initially determined that plaintiff qualified for disability benefits due to bilateral avascular necrosis in her ankles, which prevented walking and driving. When the definition of disability was about to change, Aetna conducted an Independent Medical Exam, which found her capable of sedentary work, and had plaintiff surveilled, which showed her driving and visiting multiple stores. Aetna terminated benefits. On appeal, Aetna reinstated benefits in May 2013, after one of two peer reviewers determined  she was not capable of sedentary work.

Aetna later conducted additional surveillance, again showing plaintiff driving and shopping, and terminated benefits again in May 2014, based on a nurse’s clinical review and a Transferrable Skills Analysis. On appeal, Aetna had obtained a third peer review, which concluded that plaintiff could perform sedentary work. Aetna also sent the peer review and surveillance to plaintiff’s doctors; only one responded, and said that the surveilled activities were the result of substantial amounts of pain medication. A follow up peer review did not  change the initial conclusion.
Continue Reading Disability Plan Administrator Can Reasonably Change its Mind About Sufficiency of Evidence

In Milby v. MCMC LLC, 844 F.3d 605 (6th Cir. 2016), the plaintiff had her claim for disability benefits terminated following a peer review by a doctor engaged through MCMC. The plaintiff lived in Kentucky, and the peer reviewer was not licensed there. Accordingly, the plaintiff sued MCMC for negligence per se for practicing medicine in Kentucky without a license. The district court granted defendants’ motion to dismiss, and the Sixth Circuit affirmed.
Continue Reading ERISA Preempts Negligence Claim Against Disability Peer Reviewer

Following the 2016 decision of the Second Circuit Court of Appeals in Halo v. Yale Health Plan, 819 F.3d 42 (2d Cir. 2016), in which the Second Circuit rejected the doctrine of “substantial compliance” with ERISA claim regulations in favor of a much stricter interpretation, courts within the Second Circuit have increasingly held insurers and other claims fiduciaries to a high standard of compliance with the claim regulations, regardless of the type of benefit at issue.

Under Halo, a plan’s failure to comply with the claims-procedure regulations will result in that claim being reviewed de novo, unless the plan has otherwise “established procedures in full conformity” with the regulations and can show that its failure to comply with the regulations was both inadvertent and harmless. We have previously written about this here and here.

Most recently, in Schuman v. Aetna Life Ins. Co., 2017 U.S. Dist. LEXIS 39388 (D. Conn. Mar. 20, 2017), the U.S. District Court for the District of Connecticut ruled that Halo compelled de novo review of a denial of long-term disability benefits, despite the grant of discretion in the plan. The plaintiff (plan participant) alleged several violations of the claims-procedure regulations, including: failure to adequately consider a vocational assessment submitted by the plaintiff; improper deference to the initial decision on appeal; failure to provide copies of internal policy guidelines upon request; and lack of adequate safeguards to ensure that claims decisions were made in accordance with the applicable plan document.
Continue Reading District of Connecticut Rules that Violations of Claims Procedure Regulations Result in Loss of Discretion