California Insurance Lawyer Blog

Our client Gloria Archuleta worked as a customer service representative, a job that require sitting for hours at a time. Ms. Archuleta began to experience severe pain and sudden attacks on her right side, making sitting impossible for more than brief periods. Although Ms. Archuleta underwent surgery, her pain remained. She was subsequently prescribed strong pain medication, which left her feeling “sleepy” and “fuzzy-headed,” and further interfered with her ability to perform her job functions. Nevertheless, her ERISA insurance carrier Reliance Standard Life Insurance Company terminated her benefits.

The trial court held, in a published opinion, that Reliance Standard acted in an arbitrary and capricious manner when it ignored Ms. Archuleta’s reports of pain and failed to investigate or consider the side effects of her pain medication. Archuleta v. Reliance Standard Life Ins. Co., 504 F.Supp2d 876 (C.D. Cal. 2007).

“A claims decision that does not consider the effects of narcotic medication on the ability of one to perform an occupation has been held to be arbitrary and capricious under the strict deferential review standard,” wrote the court.

The Archuleta court relied on case law to reach its decision. In Gaither v. Aetna Life Insurance Company, 394 F.3d 792 (10th Cir. 2004), the 10th Circuit found that a fiduciary cannot shut its eyes to readily available information that suggests evidence will support the claim. In that case, Aetna should have investigated the effects of the claimant’s narcotic medication.

In addition, the court cited Adams v. Prudential Insurance Company of America, 280 F. Supp.2d 731 (N.D. Ohio 2003), which found the insurer’s failure to consider the side effects of Oxycontin was arbitrary and capricious.

While courts have become friendlier to arguments proving the disabling side effects of medications, not everyone is comfortable with the fact that medicine which makes you feel better can also keep you from being normally productive. As a result, patients and doctors are not documenting the effects of medications as fully as necessary for insurance purposes. We’ve noticed a few reasons why.

First, when patients finally get pain relief, or know that medicine is keeping them alive, they may not want to appear ungrateful by complaining about feeling dizzy or nauseous. They may determine they have to live with the side-effects, even when the side-effects begin to seriously affect work performance or quality of life, such as being unable to drive a car.

Second, some doctors don’t want to acknowledge that the treatment or cure is worse than the disease, or may trade one set of problems for another. They are in the business of healing, and as long as the medication is performing its major function of alleviating pain or suppressing other symptoms, they tend not to probe too deeply.

Third, pharmaceutical companies – even though they publish long lists of potential side effects as legal disclaimers – stand behind the abilities of their drugs once they reach FDA approval. To focus too heavily on side effects could undermine consumer confidence in their products.

Nonetheless, it is critical that people suffering from disabling side-effects of medications fully report and document their symptoms, particularly when the effects are so severe that working or even functioning normally becomes impossible. Medical doctors should include these complaints in their office notes and in their communications to insurance companies explaining their diagnoses and recommendations, particularly if the patient has tried every other treatment but can only find relief with the medication that produces serious side-effects.

Kantor & Kantor LLP filed a lawsuit this month against Unum Life Insurance Company of America after the carrier denied client Louis Wilkins’ appeal. A resident of Moreno Valley, California, Mr. Wilkins has two UNUM Long Term Disability (LTD) disability insurance policies, an individual plan and a group plan through his employer. The group plan is subject to a federal law called ERISA, the Employee Retirement Income Security Act, which often complicates a policyholder’s ability to receive benefits.

Mr. Wilkins became disabled in May 2008 after falling down a flight of stairs. In addition to continuing neck and back pain, Mr. Wilkins doctor diagnosed him with post-concussion syndrome. One month later, he was involved in a motor vehicle accident which exacerbated his disabilities. When Mr. Wilkins applied for benefits from UNUM, he was initially approved for benefits under both policies. He was also approved for government Social Security benefits.

Less than a year later, UNUM revoked the benefits under the group ERISA policy because, after an “independent” medical review, UNUM determined Mr. Wilkins was no longer disabled and could return to his previous occupation as an assistant sales manager. Inexplicably, UNUM continued to consider Mr. Wilkins disabled under the individual policy and to pay him those benefits.

Mr. Wilkins retained our law firm to appeal the denial. The firm found no difference in the terms of the two policies that would explain the conflicting decisions, other than arbitrariness on UNUM’s part.

According to Mr. Wilkins lawyer Glenn Kantor, “Disability carriers cannot coordinate group coverage and individual coverage. As such, he would be entitled to receive benefits from both. The key point is that the policy which is subject to a punitive damage award if improperly denied is being paid. The ERISA governed policy, which has no potential for extra-contractual damages, has been denied.”

UNUM denied Mr. Wilkins appeal and we have filed a lawsuit in federal court on his behalf. We question how the same insurance carrier can determine Mr. Wilkins is disabled for purposes of one policy, but not disabled for purposes of another. Incidentally, the group policy pays more than twice what the individual policy pays.

This is yet another example of an insurance carrier delaying and denying coverage, forcing its policyholder to file a lawsuit to obtain benefits. We believe Mr. Wilkins will prevail and that Unum cannot have it both ways: avoiding bad-faith punitive damages on the one hand while denying benefits on the other.

If your insurer has denied your benefits, call us at (800) 446-7529. We can help.

Scientists from the National Institutes of Health have published a report showing a connection, but not necessarily a causal connection, between a known virus and Chronic Fatigue Syndrome (CFS). This was not a study designed to replicate the connection between XMRV and CFS, and in fact, no XMRV was found in the study subjects.

In a commentary accompanying the study, the University of Alberta's Dr. Andrew Mason suggested that one way to settle the question would be to test anti-retroviral drugs in patients with CFS. Dr. Mason opined that if the CFS patients given anti-retrovirals improved a better connection could be implied, and that the benefits of such a study may outweigh the risks.

The results from the latest study were published online by the Proceedings of the National Academy of Sciences.

People who are unable to work due to serious and painful conditions that do not have objectively measurable symptoms or tests may face difficult problems when making and supporting a claim for disability insurance benefits. These hurdles are common to people who suffer from conditions like fibromyalgia, chronic fatigue syndrome (“CFS”), or chronic pain conditions like complex regional pain syndrome (“CRPS”).

While Kantor & Kantor’s experience has shown us that many short term disability and long term disability insurance companies capitalize on these difficulties to deny or terminate disability benefits (as typified publicly by the UNUM/Provident scandal written about by Professor John Langbein), recently the Seventh Circuit Court of Appeals acknowledged these difficulties and chastised the conduct of Metropolitan Life Insurance Company (“MetLife”) for trying to take advantage of the absence of objective measurements of disabling pain and fatigue that the claimant, Lanette Holmstrom, suffered from. See Holmstrom v. Metropolitan Life Insurance Company, et al., 2010 WL 3024870 (7th Cir. Aug. 4, 2010).

In a lengthy decision decided under the Employee Retirement Income Security Act of 1974 (“ERISA”), the Court found MetLife’s decision to terminate Ms. Holmstrom’s disability benefits to be wrong, and MetLife’s conduct in reaching that decision to have been arbitrary and capricious. MetLife was faulted for conduct that Kantor & Kantor has seen time and again with major disability insurance carriers, including:

● claiming that some “normal” or “negative” test results proved that the claimant was not disabled - without recognizing that these results are not inconsistent with the disabling condition or explaining why the test results identified were of any significance other than being “normal”

● speculating, without any indication in the record to support the speculation, that the functional capacity evaluation (“FCE”) or independent medical evaluation (“IME”) results supporting the claimant’s disability were not reliable because the claimant may not have provided full effort or was faking poor function

● ignoring the Social Security Administration’s determination to award Social Security disability benefits which were only awarded after a finding that the claimant was disabled and unable to work not only from their own occupation but from any occupation

● speculating that a claimant’s heavy regimen of pain medications does not support the existence of genuine pain (and instead these medications were feeding drug-seeking behavior)

● discounting the evidence of cognitive impairment resulting from the claimant’s pain medications

● providing no guidance as to what testing or documentation the claimant should provide to support their disability, including no guidance as to how and by whom this testing should be done

● relying upon the opinions of doctors who never actually saw the claimant over the opinions of doctors who had actually examined the claimant - especially in the absence of evidence of malingering or drug-seeking behavior

● repeatedly “moving the target” during the course of the claim by inviting additional evidence to establish disability, but when that evidence was provided, finding the new evidence was not sufficient under new standards or expectations that had not been communicated to the claimant

If you have had your claim denied or terminated, Kantor & Kantor’s experience in helping those disabled by subjective symptoms of pain and fatigue overcome these wrongful, yet all to common, practices may be of help to you. If you have been the victim of conduct similar to that listed above, do not give up the fight - continue to send the insurance company the FCEs, your treating doctor’s opinions, your treatment records showing your consistent struggles and diagnoses, the surgeries you’ve endured, the medications you take, the neurocognitive testing you’ve undergone, the Social Security (or other entities) findings which all support your non-“objective” pain and/or fatigue you experience.

If you need help fighting, we can fight the fight for you. Consultations are free. 1-800-446-7529

Our client, let's call him Michael, had disability insurance through MetLife. Michael was also diagnosed with Type 2 diabetes, glaucoma, congestive heart failure and high blood pressure, none of which alone usually prevent a person from working. His doctor provided a letter to MetLife listing Michael’s symptoms as shortness of breath, vision impairment and fatigue.

Michael, who was taking 14 medications each day -- including eye drops, two different insulin shots and 30 pills – had accumulated 118 pages of information regarding the side effects of the medications, such as fatigue, dizziness, blurred vision, nervousness, chest pain, confusion and headaches.

The medications, however, were keeping Mr. Walker alive. Nevertheless, he had a relatively high level of functioning for decades, continuing to work despite his longstanding affliction, until he could work no more.

MetLife refused to consider the side-effects as a contributing factor to Michael’s disabling condition, even after he cogently argued that to return to work he would be forced “to curtail the current medication regimen and have the diabetes, glaucoma, congestive heart failure and high blood pressure controlled or cured without drugs. If anyone can figure a way to do this, I’ll be the first in line to try it.”

The district court found that, among other things, MetLife’s failure to consider the effects of the multiple medications Michael took on a daily basis to maintain even his current level of function suggested a biased claims investigation.

In its opinion, the court relied on federal case law from other states supporting the consideration of medications in determining disability. In Godfrey v. BellSouth Communications, 89 F.3d 755, 759 (11th Cir. 1996), the 11th U.S. Circuit Court of Appeals held that the insurer’s decision to deny benefits was arbitrary when it ignored the side effects of drowsiness caused by medication.

“It seems to the court that the only rational explanation for the failure of the defendant’s physicians to follow up on the evidence they did have and to ignore the effects of the medications that the plaintiff was taking is that they knew in fact that the plaintiff was disabled and following up leads and considering the effect of the medications would only confirm what any reasonable doctor would have already known,” wrote the court (emphasis in original).

The court also cited with approval Flanigan v. Liberty Life Assur. Co. Of Boston, 277 F.Supp.2d 840, 844 (S.D. Ohio 2003), which found that “[t]he fact that Plaintiff is on many strong medications is objective evidence that she is indeed chronically disabled,” and Conrad v. Reliance Standard Life Ins. Co., 292 F.Supp.2d 233, 241 (D. Mass. 2003), in which the court determined that the insurer denied the claimant a full and fair review by only inquiring into the claimant’s ability to sit, stand, walk, etc., without considering the effects of the claimant’s potent pain medications.

Disability Insurance Q&A With Glenn Kantor

Q: Do insurance companies normally reinstate a policy after reversing an earlier benefit denial or do they offer a lump-sum settlement?

A: If you win your pre-litigation appeal, they will reinstate your benefits and continue to pay your benefits under the terms of your plan. At some time in the future, if the carrier determines that nothing will change in your status, it might offer you a lump sum buyout, which will most certainly include a significant discount from the true value of your future benefits.

If your appeal is denied, and you enter into litigation, and the matter settles before trial, the result will typically be a buyout of your claim. If you proceed to trial, and you prevail, the Court is limited to reinstating your benefits. Once again, if benefits are reinstated by the Court, at some time down the road, the carrier may offer to buy out your claim.

“Fighting with a health plan over a denied claim can leave people feeling they’ve been injured all over again,” writes New York Times reporter Michelle Andrews. “The options for challenging an insurance company’s decision are limited. Appeals can be slow and cumbersome, if they are available at all, and most patients are barred from suing for damages resulting from denials and delayed treatments.” See “For Denied Claims, a Bit of Help in the Health Law.”

From our perspective as ERISA lawyers, truer words were never spoken.

Andrews points out, however, that the recent health care overhaul provides policyholders contesting denied claims a new independent state-review process, something not previously available to people with employer-provided coverage. This is good news for the more than half of all covered workers in “self-funded” plans, says Andrews, but only if the plan was funded after the March 23, 2010, passage of the legislation.

It also doesn’t help when punitive damages or recovery for pain and suffering is appropriate. Federal law doesn’t provide for such damages, only recovery for the cost of the benefit the health plan denied.

“Under the current system, health plans must have an internal appeals process,” writes Andrews. “Usually the process has more than one level of appeals, but a study by researchers at Georgetown University’s Health Policy Institute found that the original denial is typically upheld.”

Most states already provide appeal mechanisms, particularly for people with individual policies, and external reviewers tend to rule for policyholders about half the time, Andrews says. But few people take advantage of the external review.

That could be because some states require policyholders to pay as much as half the cost of the review and some allow the insurer to discontinue coverage during the process, which can take months or even years, time most ill people can’t afford to waste fighting their insurance company.

California law does provide for punitive damages and damages for emotional or financial distress resulting from the bad faith conduct of an insurance company. However, such remedies do not apply to plans governed by ERISA (ERISA applies to all employer provided benefits with exceptions for religious or governmental employers). For non-ERISA insurance claims, reviews may be available through the Department of Insurance or Department of Managed Health Care.

Does all this sound like an uphill battle, even with the federal government’s intervention (moderate as it is)? The answer is yes. If you are persistent and able, and can put together a well researched and well supported appeal of your claim denial, you may succeed in get the denial overturned. If not, we have a great deal of experience fighting insurance companies and health plans on behalf of consumers, and may be able to help you. Consultations are always free. Call us at (800) 446-7529.

In most of the country, state insurance authorities have little to no power to regulate insurance rates, reports the Los Angeles Times. “In many states, it is the insurance industry that largely controls the regulatory process, funneling money to key state lawmakers and squelching efforts to expand government oversight of premiums,” writes business reporter Noam N. Levey. More alarming than that, some state lawmakers have themselves blocked legislation that would reform the insurance industry. See “Lawmakers in Most States Have Little Control Over Healthcare Premiums.”

Part of the problem is that the insurance industry has a powerful, highly financed lobbying effort and has contributed more than $42 million to campaign contributions to lawmakers who sit on committees that regulate the industry. If that sounds to you like consumers are not getting the oversight from elected officials they’ve counted on, you are probably right.

In California, Assemblymember Dave Jones, who is running for California Insurance Commissioner, is trying for the third time to pass legislation that will give the commissioner prior-approval of rate increases. Last time, the bill was blocked by members of the Senate Health Committee, who according to Consumer Watchdog, received campaign donations from the state’s largest health insurers and their trade associations. Jones won’t accept campaign contributions from anyone in the insurance industry chain regulated by the California Department of Insurance.
It’s clear consumers need someone at the state capital protecting their interests. That’s why we endorse Dave Jones for California Insurance Commissioner.

This post comes from a recent forum discussion Q&A with Glenn Kantor:

Q: My policy states that I can go to arbitration if I disagree with the answer to my appeal of a Long Term Disability claim. But the insurance company only mentioned a civil suit as my option if I want to dispute their denial. What’s the difference between going to arbitration and bringing a civil suit? Won’t arbitration cost less and be less complicated?

A: Bringing a civil suit means filing a lawsuit in U.S. District Court and having a Federal Judge decide your case. Arbitration is outside the judicial system and is private. It can be binding or non-binding, binding with a right to appeal, or totally binding with a waiver of any appeal rights.

In a Federal Court action, other than a filing fee, there are no “costs” associated with proceeding to Judgment -- at least no costs which need to be paid to the Court.

A private arbitrator will expect to be paid. Sometimes the insurance carrier or employer will agree to pay the arbitrator. However, do you want to take part in a proceeding where the party deciding the case knows that someone else paid his bill? (Although arbitrators should not have such information, they often do.) The desire for repeat business from the insurer or employer MIGHT impact the decision, even if only subconsciously.

In the world of ERISA litigation, outcomes frequently depend on the judicial temperament of the Judge. If I could PICK the judge to whom my client’s case was to be assigned, I would always suggest a Federal lawsuit. In most jurisdictions, however, cases are randomly assigned to a judge from a pool that can be as small as two Judges or, if you are in a city such as Los Angeles, more than 30 Judges. For that reason, if the defendants are willing to select an arbitrator I have agreed to, I might be inclined to advise my client to agree to arbitration.

No lawyer could decide which option is better without a lot more information about the particulars of the case, and even then, there are so many variables involved that it is impossible to know for sure which dispute resolution methodology will more likely result in your receiving benefits.

If you are at the stage where your appeal has been denied, and you need to either file suit or agree to arbitration, please don’t make any decisions until you have discussed the matter with counsel.

At Kantor & Kantor, almost all of our cases involve helping a person sue an insurance company that has wrongfully denied his or her claim for benefits. Recently, however, we won an important victory in a case involving two insurance companies – both of whom claimed they had no obligation to pay benefits.

In our case, we represented a commercial real estate salesman, let's call him Mr. David, who derived his entire income from commissions. In 2003, Mr. David became ill due to a variety of medical conditions, and although he continued to go to work, his income plummeted because he was unable to close deals. In early 2004, Mr. David submitted a claim for long term disability benefits to MetLife under his employer’s disability benefit plan, indicating on his claim form that his disability began in 2003. MetLife denied Mr. David’s claim on the ground that he did not meet the plan definition of disability. We filed suit on his behalf.

During litigation, however, MetLife came up with a new argument. It argued that on January 1, 2004, Mr. David’s company had changed insurers from Unum to MetLife, and because Mr. David’s disability began prior to January 1, 2004, MetLife claimed if anyone had to pay, it was Unum. Eventually we were forced to bring Unum into the lawsuit as well, which resulted in two giant insurance companies pointing fingers at each other.

Kantor & Kantor won at trial, with the federal trial judge finding both that Mr. David was disabled under the MetLife insurance policy, and that MetLife had waived its argument regarding Unum by not raising that argument at the outset when it denied Mr. David’s claim. MetLife appealed, but the Ninth Circuit Court of Appeals recently upheld the trial court’s ruling in a published decision.

The Ninth Circuit found that (1) the MetLife policy covered Mr. David; (2) Mr. David was disabled under the MetLife policy; (3) MetLife did not timely raise its defense regarding Unum’s coverage; and (4) MetLife did not raise a proper claim against Unum during the litigation. As a result, Mr. David is now entitled to the benefits he deserves from MetLife under his employer’s disability plan.

Although it was a long road, it sure is nice when the courts do the right thing and force insurer's to pay the disability benefits they owe.