Long Term Disability Law Blog
Multiple Sclerosis is a disabling condition that can unfortunately has symptoms that become chronic and worsen overtime. LINA appears to have not understood how MS in a disabling condition for an attorney that worked for BP. In Margaret Kreeger vs Life Insurance Company of North America; BP Welfare Plan Trust-III’s Insurance Plan, the plaintiff’s California disability lawyer filed an action against the Life Insurance Company Of North America (LINA) in the California Federal Court seeking benefits under the BP long term disability plan which were wrongfully denied. Let us examine the case in more detail.
The Facts Of The Case Against LINA/ CIGNA
The plaintiff Margaret Kreeger was formerly a Senior Managing Attorney at BP. Her job required her to work under stressful conditions, managing other attorneys, training thousands of employees, and coordinating multi-million dollar class action lawsuits. Since 1988, the plaintiff was diagnosed with Multiple Sclerosis. Nevertheless, the plaintiff continued to work until December 13th 2005 when her attending physician recommended that she be placed on three months of disability.
Subsequently, the plaintiff submitted a claim for long term disability to LINA, the insurer for her employer’s disability plan. On April 19th 2006, LINA received the plaintiff’s claim and hired a third party vendor to assist the plaintiff in her Social Security Application. The Plaintiff was approved for benefits during the own occupation period, which was the first 24 months of benefits.
Review Of Disability Status Under “Any Occupation” Standard
In January 2008, LINA informed the plaintiff that it was reviewing her disability under the “any occupation” standard. As part of the review process, LINA requested updated medical reports from the plaintiff’s attending physician. LINA also requested the Plaintiff complete a “Disability Questionnaire,” which requested information regarding her daily activities.
In February 2008, LINA started to investigate the plaintiff for potential fraud because due to the fact that she reported on the Disability Questionnaire that she performed yoga at home and purportedly conducted “business.” LINA’s Special Investigations Unit conducted a Field Investigation of the plaintiff and produced a report that nullified any fraud on the plaintiff’s part.
In April 2008, LINA engaged MCMC, a peer review vendor, for a neurological paper review of the plaintiff’s claim. The file reviewer conducted a one hour review of the plaintiff’s claim and concluded that the plaintiff could return back to work as she could lift fifty pounds occasionally, twenty-five pounds frequently, stand or walk for up to six hours per day, bend, stoop, and squat, and use her upper extremities.
Wrongful Termination of Disability Benefits BY LINA / CIGNA.
On May 8th 2008, LINA informed the plaintiff that it was terminating her benefits effective April 30th 2008 on the ground that the review of her status did not “…support that [Plaintiff is] unable to perform [her] occupation with BP Corporation.”
ERISA Appeals To LINA’s Decision To Terminate Benefits
On July 11th 2008, Plaintiff submitted her appeal letter to LINA with supporting medical reports. LINA then, on August 20th 2008, requested another paper review of the plaintiff’s file. The file reviewer hired by LINA concluded that “restrictions from regular work duties are not medically supported on the basis of cognitive and/or physical limitations.” The plaintiff was later informed on August 22nd 2008 that LINA has been unable to decide on her appeal. Subsequently, in October 2008, LINA requested a neuropsychological peer review of the plaintiff’s file.
The review concluded that there was no medical evidence substantiating the presence of cognitive impairment. Thus, on October 29th 2008, LINA informed the plaintiff that it was affirming its previous denial of benefits.
On March 19th 2009, the plaintiff appealed again to LINA. The plaintiff was advised that LINA cannot consider her appeal unless she submits new medical information. Finally, on November 12th 2009, the plaintiff filed legal action against LINA.
Standard of Review by the Court
Because the language of the Plan explicitly stated that LINA “shall have the authority, in its discretion, to interpret the terms of the Plan, to decide questions of eligibility for coverage or benefits under the Plan, and to make any related findings of fact.“, the Court applied the abuse of discretion standard in the review of the plaintiff action.
The Court held that because LINA suffers from a structural conflict of interest, the abuse of discretion standard is applied in a different way. The court had to look at other factors like:
- The quality and quantity of medical evidence.
- Whether the Claims Administrator subjected the claimant to an in-person medical evaluation or relied on a paper review.
- Whether the Claims Administrator provided its independent experts with all of the relevant evidence.
- Whether the Claims Administrator considered a contrary Social Security Administration disability determination.
Findings and Conclusion of the Court
The Court found that:
- LINA’s expert reviewer spent only a single hour reviewing the record and made a recommendation based on surveillance of a failed fraud investigation rather than a reasoned assessment of the relevant medical record.
- LINA failed to present its in-house doctor with all of the relevant medical records.
- LINA failed to provide the physicians conducting the peer reviews the proper form for measuring plaintiff’s emotional and psychiatric functioning.
- LINA refused to authorize an independent medical examination of Plaintiff.
- LINA refused to give any weight to the Social Security disability award.
Balancing all of the factors above and reviewing LINA’s decision under a conflict of interest, the Court concluded that LINA abused its discretion in its denial of the plaintiff’s claim.