Appellate Court Upholds Liberty’s Denial of Long-Term Disability Benefits

In Damon Zaeske v. Liberty Life Assurance Company of Boston, Zaeske stopped working on April 4, 2014, due to chronic back pain. His initial application for long-term disability benefits was approved with the caveat that his medical condition would be subject to periodic evaluation. He began receiving benefits on July 6, 2014.

In late October 2014, Liberty asked for updated medical records from Zaeskes three treating physicians, but received no response. Liberty informed Zaeske that he had until December 11 to submit updated records. As of December 12, he had not done so, so Liberty denied him further benefits.

Finally, on December 15, Liberty received medical records from the three treating physicians which showed treatment from May 9 to November 7 2014. Liberty sent these records for review by its independent medical consultant, Dr. Glassman. Glassman called all three treating physicians, but none of them responded.

Glassman concluded that although his medical record review confirmed Zaeske had lumbar degenerative disk disease and chronic pain, he could still perform his job duties, so Liberty terminated Zaeske’s benefits. Zaeske appealed and submitted more medical evidence. Liberty had another consultant, Dr. Reecer, review the medical records. Dr. Reecer determined that Zaeske’s spinal stenosis should not keep him from doing his job, so on June 1, 2015, Liberty again denied Zaeske’s claim.

After exhausting his administrative remedies, Zaeske filed an ERISA lawsuit in an Arkansas Federal Court. That Court held that Liberty abused its discretion in denying benefits and ordered Liberty to pay back benefits to Zaeske.

Liberty appealed. The Appellate Court agreed with Liberty and reversed the decision of the lower court. Zaeske lost the case and lost his long-term disability benefits.

The District Court Decision

The District Court determined that it was an abuse of discretion for Liberty to rely on the opinions of two reviewing physicians who “ignored” proof from Zaeske’s medical file that he suffered from several back and spinal problems, including spinal stenosis, that made it impossible for him to do his job. The Court specifically found Dr. Glassman’s review “unreliable” in that he ignored proof in the medical records that Zaeske suffered from side effects of medication.

That Court also found Dr. Reecer’s report unreliable since he ignored evidence in Zaeske’s medical record when he gave his opinion that Zaeske did not suffer from side effects of medication. The District Court held that Liberty abused its discretion when it accepted “Dr. Reecer’s apparent view that back pain treated with medication would not preclude [Zaeske] from working.” The District Court ordered Liberty to pay back benefits and Liberty appealed.

The Appellate Court Decision

The Appellate Court carefully reviewed all of the medical evidence and the detailed reports submitted by Drs. Glassman and Reecer. It concluded that, “The opinions of Dr. Glassman and Dr. Reecer were sufficiently reliable to provide a reasonable basis for Liberty Life’s denials of Zaeske’s claim. While another interpretation of Zaeske’s medical records could support his eligibility for benefits, the assessments of Dr. Glassman and Dr. Reecer were not outside the range of reasonableness, and it was not an abuse of discretion for Liberty Life to rely on them.”

This case was not handled by our office, but we believe it can be instructive on the importance of treating physicians to provide updated medical records when asked to do so by insurance companies. If you have any questions about this, or any other aspect of your disability claim, contact one of our disability attorneys at Dell & Schaefer for a free consultation.