Hot off the Press

The following is from McCandless v. Std. Ins. Co., 2012 U.S.App. Lexis 26235 (6th Cir. 2012):
Standard relied on the Policy’s “Care of a Physician” provision in denying McCandless benefits. That provision provides:

You must be under the ongoing care of a Physician in the appropriate specialty as determined by us during the Benefit Waiting Period. No [long-term disability benefits] will be paid for any period of Disability when you are not under the ongoing care of a physician in the appropriate specialty as determined by us.

Standard’s reliance on this provision is problematic. Both Drs. Dickerman and Ingram faulted McCandless for failing to see a rheumatologist. But Standard never told McCandless that she would be ineligible for benefits if she did not see a rheumatologist. Further, Dr. Engelmann explained in his letter that he advised McCandless that there would be little difference between his treatment and the treatment a rheumatologist would provide. The one potential difference would have been Enbrel, a costly and potentially risky form of treatment that McCandless was hesitant to try. Standard’s decision to deny benefits, based in large part on the fact that McCandless did not see a rheumatologist, is suspect, particularly considering that it did not exercise its authority under the Policy to have a rheumatologist conduct an independent medical evaluation of McCandless.
Because Standard both evaluates and pays claims on the Policy, we must take into account its incentive to cut costs. Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108, 128 S. Ct. 2343, 171 L. Ed. 2d 299 (2008). Although our review in ERISA actions is deferential, the arbitrary and capricious standard is not a “rubber stamp [of] the administrator’s decision.” Kovach v. Zurich Am. Ins. Co., 587 F.3d 323, 328 (6th Cir. 2009) (alteration in original ) (citation and internal quotation marks omitted). In this case, Standard is operating under a conflict of interest, which “is a red flag that may trigger a somewhat more searching review.” Schwalm v. Guardian Life Ins. Co. of Am., 626 F.3d 299, 312-13 (6th Cir. 2010). Applying that review, we cannot say that Standard’s benefit determination was the result of a deliberate and principled decision-making process. See Balmert, 601 F.3d at 501 (citation omitted).
We conclude that the decision to reject McCandless’s claim without having a rheumatologist conduct an independent medical examination was arbitrary and capricious. . . .

In a similar circumstance we observed “[a]s this court has repeatedly found, . . . where an administrator exercises its discretion to conduct a file review, credibility determinations made without the benefit of a physical examination support a conclusion that the decision was arbitrary.” Helfman v. GE Group Life Assur. Co., 573 F.3d 383, 395-96 (6th Cir. 2009); Calvert v. Firstar Fin., Inc., 409 F.3d 286, 295 (6th Cir. 2005) (“[T]he failure to conduct a physical examination—especially where the right to do so is specifically reserved in the plan—may, in some cases, raise questions about the thoroughness and accuracy of the benefits determination.”).
For these reasons, we REVERSE and REMAND to the district court with instructions to remand to the plan administrator for a full and fair review of McCandless’s claim, which presumably will include a rheumatology evaluation.

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About tngadisabilitylawyer
Disability Lawyer in Tennessee and Georgia.

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