Opinion
File No. 4:03-CV-138.
January 24, 2005
OPINION
This action challenging the discontinuation of long-term disability benefits is before the Court on the parties' cross-motions for judgment on the administrative record. For the reasons that follow the Court affirms the plan administrator's decision.
I.
Plaintiff Darnell Scott was born in 1943. In 2001 he was employed as an insurance salesman for Mutual of Detroit Insurance Company ("Mutual of Detroit"). Most of his job duties were performed outside the office in the homes of policy owners. The activities associated with the job include driving to customers' homes, frequently getting in and out of cars, walking, climbing steps and other uneven surfaces, and sedentary activities including writing, reading, math, and telephone communications. (AR 98). Plaintiff, as an employee of Mutual of Detroit, was a beneficiary of an employee benefit plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., which included long term disability coverage secured by a group insurance contract issued by Defendant Prudential.
In June 2001, Plaintiff began treating with Dr. Rowe for lower back pain. (AR 134). On March 20, 2002, Plaintiff underwent back surgery — a decompressive laminectomy at L4-5 — to address his spinal stenosis. (AR 133-34). On July 3, 2002, Dr. Rowe signed a disability certificate indicating that Plaintiff was unable to return to employment at that time and estimating that he would not be able to return to work for 7 months. (AR 132). Plaintiff applied for long term disability benefits on July 30, 2002. He was approved for disability on August 2, 2002, retroactive to June 18, 2002. (AR 101-02).
On September 3, 2002, Plaintiff was again examined by Dr. Rowe. Dr. Rowe reported that six months after surgery Plaintiff still had back pain despite taking Vicodin daily, and that his pain varied from 5 to 8, "8 after he does yard work, spreading mulch around, 5 if he's more calm. . . . He still takes Vicodin on average once a day, and also takes Naprosyn sporadically. . . . X-rays show that there is some lumbar spondylosis at L4-5. No significant deformity has occurred." Dr. Rowe recommended that Plaintiff avoid strenuous labor, continue to exercise and take his medication regularly. He continued Plaintiff on disability status for four more months. (AR 139).
Plaintiff attended physical therapy sessions at West Main Physical Therapy from July 17, 2002, through September 10, 2002. Upon discharge the physical therapist reported that Plaintiff's pain had reduced by 30% and was now at 6-7 on a scale of 0-10. (AR 142). The physical therapist also noted:
A ROM of the spine is showing improvement, but if the patient attempts to do some work in his yard or at home he gets a lot of tightness, stiffness, and pain. He is now able to walk 10-12 minutes on the treadmill, and about 8-10 minutes at a time when just walking. Patient has shown increase in strength of the back extensors and increased endurance to functional activity and therapeutic ex.
(AR 142).
On September 25, 2002, Prudential terminated Plaintiff's benefits effective October 1, 2002, based upon Prudential's determination that Plaintiff no longer met the policy definition of total disability. (AR 107a-c). According to Prudential, Plaintiff's documented leisure activities required a level of exertion beyond that of his own occupation, and the medical documentation no longer supported his inability to perform the material and substantial duties of his occupation. (AR 107b). By letter dated November 8, 2002, Plaintiff was notified of the three levels of appeal available under the policy. The first and second appeals are reviewed by the Appeals Review Unit. The third and final appeal is reviewed by Prudential's Appeals Committee. (AR 118). Plaintiff filed his first appeal by letter dated November 19, 2002. He advised that he could only spread mulch for 5-7 minutes at a time, that he could not do other yard work, and that he was only able to walk 12 minutes on the treadmill because he had arm supports. (AR 143).
Plaintiff's first appeal was denied by letter dated December 11, 2002. (AR 120-22). Prudential explained that although Plaintiff's back pain is increased with his activity level and although Dr. Rowe restricted Plaintiff from strenuous activity, neither Dr. Rowe nor the physical therapist identified any functional limitations that would prevent Plaintiff from performing his job duties of sitting, walking, and climbing stairs. (AR 121).
On March 5, 2003, Plaintiff underwent a functional capacity evaluation ("FCE") at his own expense. The physical therapist determined that Plaintiff could meet the job demands in the categories of lifting, carrying, stooping, crouching, kneeling and reaching, but that he was not able to meet his job demands of frequent walking, standing and sitting. (AR 168). The physical therapist concluded that "Taking into consideration the limitation of the lumbar range and weakness in the major muscle groups of Low back the Evaluee is not able to return to his job as per the description provided in Job demands or requirement." (AR 168).
On April 1, 2002, Plaintiff, through counsel, submitted the FCE in support of his second appeal. (AR 166). In a letter dated May 2, 2003, Prudential upheld its earlier decision to terminate benefits. (AR 129). Prudential advised that the FCE was insufficient to measure Plaintiff's ability to perform the duties of his own occupation because it did not measure the frequency or duration of Plaintiff's ability to perform the activities such as sitting, standing, and climbing stairs, that were required by his job. (AR 130). Prudential also advised that there appeared to be an inconsistency in the FCE because it reported that Plaintiff was too dizzy to walk or climb stairs, and yet reported that he was able to crouch, kneel, carry, stoop and push and pull without mentioning dizziness. (AR 130). The letter advised Plaintiff that he could appeal the decision to the Appeals Committee and that he could provide other comments or additional evidence that he wished to have considered. (AR 130).
Plaintiff did not file an appeal to the Appeals Committee. Instead, Plaintiff filed this action in the Kalamazoo County Circuit Court. Prudential removed the action to this Court.
II.
In an action challenging the denial of ERISA benefits under 29 U.S.C. § 1132(a)(1)(B), a plan administrator's decision is reviewed "under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan contains a clear grant of discretion to the administrator to determine benefits or interpret the plan, the plan administrator's decision to deny benefits is reviewed under the highly deferential arbitrary and capricious standard of review. Shelby County Health Care Corp. v. Southern Council of Indus. Workers Health and Welfare Trust Fund, 203 F.3d 926, 933 (6th Cir. 2000). See also Williams v. Int'l Paper Co., 227 F.3d 706, 711 (6th Cir. 2000) ("[W]here an ERISA plan expressly affords discretion to trustees to make benefit determinations, a court reviewing the plan administrator's actions should apply the arbitrary and capricious standard of review.").
The applicable standard of review depends on the relevant Plan language. The Prudential Group Insurance Contract with Mutual of Detroit for long term disability coverage, Group Contract No. DG-39608-MI, effective October 1, 2000, is found in the Administrative Record. (AR 6-78). Plaintiff does not deny that the policy contained in the Administrative Record is the governing policy between Mutual of Detroit and Prudential. Plaintiff nevertheless contends that the language contained in the letters Prudential sent to Plaintiff differs from the language of the Policy, and that Prudential should be estopped from relying on language that it did not provide to Plaintiff. Plaintiff requests the Court to strike Prudential's reply brief that attempts to straighten out the misunderstanding regarding the policy language.
In its letters to Plaintiff, Prudential stated that the Policy provides the following definition of Disability:
"Total Disability" exists when Prudential determines that all of these conditions are met:
(1) Due to sickness or accidental injury, both of these are true:
(a) You are not able to perform, for wages or profit, the material and substantial duties of your occupation.
(b) After the Initial Duration of a period of Total Disability, you are not able to perform, for wage or profit, the material and substantial duties of any job for which you are reasonably fitted by your education, training, or experience. The initial duration is equal to the first 24 months of Inbenefit.
(2) You are not working at any job for wage or profit.
(3) You are under the regular care of a Doctor.
(AR 101, 120, 129) (emphasis added).
The Group Contract contained in the administrative record provides a somewhat different definition of disability:
You are disabled when Prudential determines that:
* you are unable to perform the material and substantial duties of your regular occupation due to your sickness or injury; and
* you have a 20% or more loss in your indexed monthly earnings due to that sickness or injury.
(AR 25 57) (emphasis in original).
Material and substantial duties means duties that:
* are normally required for the performance of your regular occupation; and
* cannot be reasonably omitted or modified, except that if you are required to work on average in excess of 40 hours per week, Prudential will consider you able to perform that requirement if you are working or have the capacity to work 40 hours per week.
(AR 25 57) (emphasis in original).
Under the heading "How Long Will Prudential Continue to Send You Payments?" the Plan states:
We will stop sending you payments and your claim will end on the earliest of the following:
. . . .
3. The date you are no longer disabled under the terms of the plan.
4. The date you fail to submit proof of continuing disability satisfactory to Prudential.
(AR 31-32 64) (emphasis added).
Prudential explains that its administrator, Ms. Prosperi, erroneously quoted from an old policy that was no longer in effect in her letters dated August 2, 2002, and September 25, 2002, (AR 101-02, 107a-c), and that the applicable Plan language is the language contained in the Group Contract found in the Administrative Record. (AR 6-78).
Although there is a difference between the language of the Group Contract and the language quoted to Plaintiff in the August and September 2002 letters, the difference is not material. The operative language is the same. Both definitions of disability focus on the inability to perform the "material and substantial duties" of the covered employee's own occupation. Both the letters and the Group Contract advise that Prudential will make the disability determination. Plaintiff has not shown that he was misled or prejudiced in any manner by the incorrect definition of disability that was contained in the letters sent to him. Accordingly, in evaluating Plaintiff's challenge to the discontinuation of benefits, the Court will apply the language of the Group Contract.
The Group Contract provides that "[y]ou are disabled when Prudential determines that: * you are unable to perform the material and substantial duties of your regular occupation due to your sickness or injury;. . . ." (AR 25 57). With respect to termination of benefits, the Plan provides that Prudential will stop sending payments when "you fail to submit proof of continuing disability satisfactory to Prudential." (AR 31-32 64).
Although the simple statement that the administrator will make the determination is not enough to show discretion, the Sixth Circuit has consistently found a clear grant of discretion where the Plan language requires that proof or evidence of disability to be "satisfactory" to the insurer or plan administrator. See, e.g., Perez v. Aetna Life Ins. Co., 150 F.3d 550, 557 (6th Cir. 1998) ("right to require as part of the proof of claim satisfactory evidence"); Yeager v. Reliance Std. Life Ins. Co., 88 F.3d 376, 380 (6th Cir. 1996) (claimant required to submit "satisfactory proof of Total Disability to us"); Miller v. Metropolitan Life Ins. Co., 925 F.2d 979, 983 (6th Cir. 1991) (disability determined "on the basis of medical evidence satisfactory to the Insurance Company"). Discretion is not an all-or-nothing proposition. "[A] plan can give an administrator discretion with respect to some decisions but not others." Williams v. Int'l Paper Co., 227 F.3d 706, 711 (6th Cir. 2000).
In this case the language in the Prudential policy that requires proof "satisfactory to Prudential" for purposes of discontinuing benefits is sufficient to trigger the arbitrary and capricious standard of review.
"Review under [the arbitrary and capricious] standard is extremely deferential and has been described as the least demanding form of judicial review." McDonald v. Western-Southern Life Ins. Co., 347 F.3d 161, 172 (6th Cir. 2003). Under this standard the court is required to uphold a benefit determination if it is "rational in light of the plan's provisions." Jones v. Metropolitan Life Ins. Co., 385 F.3d 654, 661 (6th Cir. 2004) (quoting Univ. Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 846 (6th Cir. 2000)). "When it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome, that outcome is not arbitrary or capricious." Darland v. Fortis Benefits Ins. Co., 317 F.3d 516, 527 (6th Cir. 2003) (quoting Davis v. Ky. Fin. Cos. Retirement Plan, 887 F.2d 689, 693 (6th Cir. 1989)). The arbitrary and capricious standard "is not, however, without some teeth." McDonald, 347 F.3d at 172 (quoting Cozzie v. Metro. Life Ins. Co., 140 F.3d 1104, 1107-08 (7th Cir. 1998)). The court is required to exercise its review powers and not to merely rubber stamp an administrator's decision. Id.
III.
Plaintiff contends that the termination of his long term disability benefits was arbitrary and capricious because the termination procedure did not comport with due process. Plaintiff specifically complains that he was not allowed to present live testimony, that the decision was made without an independent medical evaluation, and that the decisionmaker was not neutral because it was an employee of Prudential.The lack of a hearing and the failure to use an independent medical evaluation is not per se arbitrary and capricious. This Court observed in Knapp v. Prudential, 4:02-CV-130 (W.D. Mich. April 4, 2003), that courts routinely affirm administrative decisions in ERISA cases that are made solely on the basis of document review. See, e.g., Kocsis v. Standard Ins. Co., 142 F. Supp.2d 241, 254-55 (D. Conn. 2001) ("Because the Plan does not require an independent examination, it is not per se unreasonable for Standard to deny the plaintiff benefits without requesting an independent medical examination, in light of Standard's file review by two independent medical examiners."); Robinson v. Phoenix Home Life Mut. Ins. Co., 7 F. Supp.2d 623, 632 (D. Md. 1998) (holding insurer's claim review not defective for failure to order independent medical examination ("IME") because IME in 1996 would have been only marginally relevant to plaintiff's medical condition in 1994). In Knapp we found no support for the plaintiff's argument that the document review process used by Prudential in making its benefit determination was arbitrary and capricious.
The process that is due depends on the process the parties agreed to under the Plan. The Plan requires the claimant to submit a proof of claim, provided at the claimant's own expense, which shows, among other things, appropriate documentation of the disabling disorder. (AR 37). In order to continue receiving disability benefits, the Plan may request the claimant to "send proof of continuing disability, satisfactory to Prudential, indicating that you are under the regular care of a doctor." (AR 37). The Plan at issue in this case authorizes Prudential to require examinations by doctors, medical practitioners or vocational experts at Prudential's expense, but the Plan does not require Prudential to do so. (AR 25). In other words, under the Plan that governed Plaintiff's benefits, the burden was on Plaintiff to prove continuing disability, and not on Prudential to prove that the claimant was no longer disabled.
Plaintiff is correct in noting that there is an actual conflict of interest when, as here, the insurance company/plan administrator is the insurer that ultimately pays the benefits. Killian v. Healthsource Provident Administrators, Inc., 152 F.3d 514, 521 (6th Cir. 1998). The fact that there is a conflict of interest, however, does not mean that any decision by the insurance company/plan administrator was arbitrary and capricious. It simply gives rise to a question of whether the administrator was improperly influenced by its conflict. Id. "[I]f a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a `facto[r] in determining whether there is an abuse of discretion.'" Firestone Tire Rubber, 489 U.S. at 109 (quoting Restatement (Second) of Trusts § 187, Comment d (1959)). See also Peruzzi v. Summa Medical Plan, 137 F.3d 431, 433 (6th Cir. 1998) ("the conflict of interest inherent in self-funded plans does not alter the standard of review, but `should be taken into account as a factor in determining whether the . . . decision was arbitrary and capricious.'").
Based upon the analysis above the Court rejects Plaintiff's assertion that the decision was arbitrary and capricious because the termination procedure did not comport with due process.
IV.
Finally, Plaintiff challenges the decision terminating his benefits as arbitrary and capricious because he contends that the decision was not based on substantial evidence that his condition had improved sufficiently to enable him to perform the activities of his job.
Plaintiff contends that the mere fact that he showed improvement was not sufficient to show that he was no longer disabled. Plaintiff notes that there was no evidence that his yard work involved as much ambulation as his job did. He also notes that Prudential ignored evidence that the limited yard work he engaged in exacerbated his symptoms. Plaintiff questions how Prudential could ignore his evidence of disability in the absence of any contrary evidence that he was able to work.
Underlying all of Plaintiff's contentions is his assumption that the burden was on Prudential to prove that he was no longer disabled. The burden of proof is governed by the Plan. Plaintiff's assumption that Prudential had the burden of proving that Plaintiff was no longer disabled is not supported by the Plan language. Under the Plan the burden of proving disability begins with and remains with the claimant. The Plan requires the claimant, at his own expense, to provide appropriate documentation of the disabling disorder and the extent of the disability. (AR 37). The Plan further provides that Prudential "may request that you send proof of continuing disability, satisfactory to Prudential, indicating that you are under the regular care of a doctor." (AR 37).
Plaintiff's proof of disability was not strong. Dr. Rowe's one-page office visit note from September 3, 2002, reflects that 6 months after Plaintiff's back surgery Plaintiff continued to complain about back pain, he was taking Vicodin once a day, he experienced more pain after engaging in yard work, and that although there was some lumbar spondylosis, no significant deformity had occurred. Dr. Rowe recommended that Plaintiff take his Naproxyn more regularly, that he continue his exercises, and that he avoid strenuous labor. (AR 139). Although Dr. Rowe advised that he was going to continue Plaintiff on permanent disability for another four months, none of the specific medical findings in his report indicated that Plaintiff could not perform work that did not involve strenuous labor.
Plaintiff's physical therapy discharge report similarly failed to indicate that Plaintiff could not perform his job requirements. The report indicated that although Plaintiff reported pain, discomfort and instability in his lower back, he had no pain going down his legs and he was able to walk 12 minutes on the treadmill and 8-10 minutes when just walking. (AR 142).
Prudential's September 25, 2002, letter terminating Plaintiff's disability benefits did not affirmatively state that Plaintiff was not disabled. Rather, it advised that after reviewing the recent documentation from Plaintiff's doctor and physical therapist, the medical evidence on file "no longer supports that you are unable to perform the material and substantial duties of your own occupation." (AR 107b). This letter, and the letters that followed, all invited Plaintiff to submit additional documentation. (AR 107). The burden was on Plaintiff, in response to this letter, to come forward with evidence that his condition prevented him from performing his job duties. Plaintiff attempted to meet this burden by undergoing a functional capacity exam ("FCE").
Plaintiff submitted the FCE to Prudential on March 20, 3003. (AR 146). The FCE requires special attention. The cover page of the FCE notes that no tests were performed for sitting, standing and climbing stairs, yet deficits were noted in each of these categories. (AR 147). According to the FCE the standing and climbing tests were not completed because Plaintiff became dizzy. No dizziness was noted in conjunction with the stooping, kneeling and crouching tests where no deficit was noted. (AR 149-50). No explanation was given with respect to the failure to perform the sitting test or the basis for the deficit finding on this test.
After reviewing the FCE Prudential upheld its denial of benefits. Prudential advised Plaintiff why the FCE did not support a finding of disability:
The conclusion of the FCE appears to indicate that you would not be able to tolerate your job demands such as walking, standing, and sitting frequently. However, the FCE does not appear to measure the frequency or duration of your ability to sit, climb stairs, handling/fingering both hands, sitting and standing which are the requirements of your job duties.
Despite the FCE not appearing to perform testing of the above mentioned areas, the evaluator noted that you had deficits in these areas. The evaluator noted that you also had complaints of feeling dizzy when tempting to walk or climb stairs. However, there seems to be inconsistency as you performed crouching, kneeling, carrying, stooping, and pushing and pulling a cart with no mentions of feeling dizzy.
(AR 130). Prudential advised Plaintiff that he could appeal this decision to the Appeals Committee for a final decision and that he could provide additional evidence he wanted to have considered. (AR 130).
Although Prudential advised Plaintiff of the specific ways in which his evidence failed to show disability to Prudential's satisfaction, and although Prudential gave Plaintiff the opportunity to supplement his evidence, Plaintiff did not go back to his doctor or his physical therapist for more detailed evidence addressing Prudential's concerns. Instead, Plaintiff filed this action. By doing so, Plaintiff closed the evidentiary record.
There is no question that the medical evidence of disability Plaintiff provided to Prudential was weak. The totality of the evidence consists of Dr. Rowe's one-page office report, the physical therapy discharge summary, and the report of Plaintiff's FCE. Although Plaintiff's medical providers were consistent in their conclusions that Plaintiff was disabled, their conclusions were not supported by medical findings and to the extent there were findings, they were largely contradictory. Dr. Rowe recommended that Plaintiff avoid strenuous activity, but he did not explain how Plaintiff was limited from performing his former occupation that does not involve strenuous labor. The FCE reported that the standing, sitting, and walking tests were not performed, but nevertheless found deficits in these areas. The FCE did not measure the extent to which Plaintiff was disabled from engaging in these activities. Despite the FCE's suggestion of a significant downturn in Plaintiff's abilities to the point that he could not walk or climb stairs, there is no evidence that Plaintiff ever returned to doctors, pain medication, a pain management clinic, or physical therapy. Prudential fairly alerted Plaintiff to the areas of weakness in his medical documentation and offered Plaintiff an opportunity to supplement the record. Although this Court might not have reached the same conclusion as Prudential did on this record, under the arbitrary and capricious standard of review it appears that Prudential has offered a reasoned explanation, based on the evidence, for denying long term disability benefits. Accordingly, Prudential's denial of long term disability benefits will be affirmed.
An order and judgment consistent with this opinion will be entered.