Alice in Wonderland – “I give myself very good advice, but I very seldom follow it.”
In a recent ERISA case, Magistrate Judge David Baker explained that if an insurer uses a doctor to deny a claim, it has to also follow the doctor's advice. (See Schultz v. Aetna life Ins. Co. et al, 2017 WL 4803806 (M.D. Ala. 2017). Should be common sense, right? Except this is ERISA, also known as Wonderland where things can sometimes get “curiouser and curiouser.”
Overview of Case
- Schultz was a field engineer when he was stricken by bladder cancer that was accompanied by chronic blood clotting in his lungs, complications from surgery, chronic fatigue and memory loss.
- Schultz filed a claim for short-term disability benefits through his employer. Aetna paid the claim based on its own medical guidelines and a treating doctor's opinion.
- Sadly, Mr. Schultz never regained his health, nor his ability to return to work.
- Aetna's long-term disability claim department found that he was disabled from performing his occupation of field engineer.
- As required by Aetna's plan, Schultz applied for Social Security disability, which was awarded. 
- In December 2014, Aetna informed Schultz that the definition of disability in his plan would change effective October 2015 from disability as to his own occupation to disability as to any occupation.
- Aetna informed Schultz' treating physicians that he had full time functional capacity based on ALL medical records, misleading the treating physicians' to believe that there was evidence contrary to their findings and leading them to agree with Aetna's assessment.
- Aetna obtained a transferable skills analysis and terminated benefits in June 2015, four (4) months ahead of their earlier notice that the definition would change in October 2015.
- Schultz appealed Aetna's decision. When his treating physicians realized they had been misled, they retracted their assessments and provided further support for his ongoing disability.
Aetna obtained another transferable skills analysis and, this time, found Mr. Schultz could work as a help desk supervisor, which had the same physical demands as his original occupation. Aetna also sought an opinion from a regularly utilized physician review company called MLS Group. Its doctor, without ever seeing Mr. Schultz, determined that he could work full-time every day. Schultz's treating physicians submitted letters to the contrary, so the MLS doctor revised her determination, finding that neuropsychological tests should be administered. Aetna ignored that part of the report. Aetna denied the appeal, and a lawsuit followed.
The court easily found Aetna's decision deficient, as Aetna ignored its own doctor's recommendation for cognitive testing. Further, the court noted the absurdity of Aetna finding that Schultz was capable of working full time when his medical records reflected a huge, inoperable hernia, inoperable pulmonary emboli, chronic fatigue, a leaking stoma, limited mobility, limited physical ability, its own previous determination of disability, and a Social Security determination of disability from performing any gainful occupation.
The court held, “Aetna, by its own admission, determined that the prior occupation, from which plaintiff was unquestionably disabled, was the direct equivalent of the ‘reasonable occupation' Aetna used to terminate those same LTD benefits.”
Given the lack of a fully developed record, the court remanded the matter to Aetna (and thus gave Aetna another bite at the apple). Maybe Mr. Schultz will fare better providing full information for the claim record. While it is unfortunate that the saga will continue, such is the nature of ERISA claims. Benefits are paid monthly. Even if the court had ruled outright for the plaintiff, benefits would only be paid through the date of the latest medical records. The court would still remand the matter to Aetna to continue to evaluate the claim.
It is not uncommon for lawsuits to be filed multiple times during the course of the same long-term disability claim. Nonetheless this case illustrates that there are limits to what a court will allow, even under the arbitrary and capricious standard of review. This is why it is crucial that claimants retain experienced ERISA counsel as early as possible.
 Some people may assume that Mr. Schultz was now making more money on disability than when working. After all he was receiving two disability benefits. However, he was actually receiving about 60% of what he used to earn from both sources. His long-term disability benefit was reduced, dollar for dollar, by the Social Security disability benefit.