Strategies Used Insurance Companies to Deny Benefits

The clients I most often see are clients who were approved for benefits by the insurance company but shortly thereafter the plan terminates their benefits.  The most common arguments raised by the plan are:

•         * The Claimant’s medical condition has improved

•         * The Claimant is not receiving adequate medical care

•         * Surveillance by a private investigator found that Claimant is not disabled

The Claimant’s Medical Condition Has improved

The initial approval by the plan has legal significance.

 

In order to deny benefits at a later time the plan has to show a major change in circumstances.  In McOsker v. Paul Revere Life Ins. Co., 279 F.3d 586 (8th Cir., 2002) The Court of appeals held:

“We have recently had occasion to remark that in determining whether an insurer has properly terminated benefits that it initially undertook to pay out, it is important to focus on the events that occurred between the conclusion that benefits were owing and the decision to terminate them. See Walke v. Group Long Term Disability Ins., 256 F.3d 835, 840 (8th Cir.2001). When we turn to the record in this case with that principle in mind, we are left with “a definite and firm conviction that a mistake [was] committed.”

After having been approved for benefits, Walke, the plaintiff whose case was cited by the 8th circuit, tried to resume his duties but could only do so on a part-time basis. Initially Reliance granted Total Disability Plan benefits, accepting the Attending Physician’s Statement that stress-related tachycardia rendered Walke unable to perform the material duties of his regular occupation as hospital administrator. With the elimination of his job stress, Walke improved, and his disabling symptoms subsided.  His physician cautioned him not to return to work, as it may be detrimental to his health to continue as a hospital administrator. Based on these facts the WalkeCourt stated, “Nothing in the claims record justified Reliance’s decision that a change of circumstances warranted termination of the benefits it initially granted. The only change was that Walke resigned from the stressful position that had disabled him. There is no evidence that he recovered the ability to perform that job;” Walke v. Group Long Term Disability Ins., 256 F.3d 835 (8th Cir., 2000)

 

The Claimant  Is Not Receiving Adequate Medical Care

In Walke v. Group Long Term Disability Ins., 256 F.3d 835 (8th Cir., 2000), the case we have just cited, Reliance also argued that benefits were properly terminated because Walke was no longer under a physician’s “regular care”. The Court  disagreed. They noted that Walke’s physician reported, on a form supplied by Reliance, thatWalke was under his care, was taking prescribed medications, and had visited the doctor’s office. “Reliance did not request an additional medical examination, and there is no evidence “that additional doctor visits would have influenced the progression of [Walke’s] disability.” Rowan v. UNUM Life Ins. Co. of Am., 119 F.3d 433, 437 (6th Cir. 1997). This was not a valid basis for terminating benefits.

 

 Surveillance By A Private Investigator Found That Claimant Is Not Disabled

In Montour v. Hartford Life & Accident Insurance Company, No. 08-55803 (9th Cir. 9/14/2009), the 9th circuit remanded a case, which was denied by Hartford following a video surveillance that was interpreted by Hartford to indicate that Claimant can work.

In November and December 2005 Hartford hired two outside companies to conduct surveillance on Montour over the course of four nonconsecutive days. Video footage from this surveillance depicted Montour driving his car to perform occasional errands, such as picking up his grandchildren from school, going to the pharmacy, and getting a haircut. He was observed once bending at the waist to reach into his car.  Plaintiff was observed over forty daylight hours on four days. During this time, he was observed making two twenty minute trips to pick up or drop off his grandchildren from school and one trip of about two and a half hours conducting errands at various stores. He was also observed to be away from his home on two occasions for about an hour and forty minutes. During this time, he was observed bending once at the waist and picking up a small bag of medication.

The Court rejected Hartford’s claim that the observed activity which was brief and consistent with Plaintiff’s self-reported limitations, in anyway proved that Claimant can return to work.

“Hartford strung together a laundry list of discrete activities observed over the course of four days, suggesting that Plaintiff was capable of sustaining those activities throughout the day, as would be required in a sedentary occupation. However, that Plaintiff could perform sedentary activities in bursts spread out over four days does not indicate that he []is capable of sustaining activity in a full-time occupation.”

The Court was also critical of Hartford’s deliberate over emphasizing of the results of the surveillance, by advocating its results to its “neutral” examining physicians.

“Hartford’s attempts to obtain information from Plaintiff’s physicians were marred by             this overstatement of the surveillance findings, as well as apparent advocacy for the position that Plaintiff was not disabled. In the letter sent to Drs. Park and Kengla, Hartford again strung together discrete activities observed in short bursts over several days…In other words, Hartford’s bias infiltrated the entire administrative decision making process, which leads us to accord significant weight to the conflict.”

Under ERISA, Claimant must only prove that he cannot perform the essential duties of his job.  Claimant does not need to be so disabled that he cannot even meet his essential daily activities.  Yet in Social Security cases the Administrative Law Judge often finds the Claimant  not disabled because he was able to engage in some non strenuous activities. In one of my cases before the District Court the Court noted:

“After considering the evidence in the record, the ALJ found Plaintiff’s statementsabout “the intensity, duration and limiting effects” of her symptoms “not credible”. The ALJ relied heavily on Plaintiff’s reported daily activities to find her not credible. The ALJ reported generally that Plaintiff accomplished major household chores and outings.  The ALJ noted Plaintiff did laundry, cleaning, meal preparation, grocery shopping, walked her dog, went to therapy, sewed dresses and took her teenage sons to their activities.”

The mere fact that a claimant engages in activities such as grocery shopping and driving a car “does not in any way detract from her credibility as to her overall disability. One does not need to be utterly incapacitated in order to be disabled.”Vertigan v. Halter, 260 F.3d 1044, 1050 (9th Cir.2001) see also Cooper v. Bowen, 815 F.2d 557, 561 (9th Cir.1987) (a claimant need not “vegetate in a dark room” to be eligible for benefits). Daily activities may only form the basis of an adverse credibility finding if the claimant is able to spend “a substantial part of his day engaged inpursuits involving the performance of physical functions that are transferable to a work.”

 

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