Opinion ID: 2543
Heading Depth: 3
Heading Rank: 2

Heading: McCauley's Appeal of the First Denial to First Unum

Text: In support of his appeal to First Unum, McCauley submitted a letter challenging First Unum's findings. He made clear that he was not disabled because of active cancer but as a result of the drastic measures used to effect a cure. Further, McCauley submitted additional evidence of his current medical issues in the form of a memorandum that he asserted was submitted with his physician's full knowledge and approval. Specifically, McCauley's memorandum lists his medical issues as (1) chronic diarrhea, (2) chronic and acute renal impairment, (3) progressive vascular sclerosis, (4) high cholesterol, (5) insomnia, and (6) incisional scarring and pain. With regard to his diarrhea, the memorandum states that McCauley is only able to control bowel movements by carefully timing his food ingestion and lists a number of ways in which this limits his daily activities. Respecting his renal impairment, the memorandum explains that McCauley has chronic blood in the urine and pain in the kidney area and that he forms a kidney stone every two weeks. As a result, his physician recommends that he not sit for long periods of time. Moreover, the memorandum states that during the acute phase of his renal impairment, it is impossible for the patient to perform at any level. As to his vascular sclerosis, the memorandum explains that McCauley's vascular system was permanently damaged by the chemotherapy treatments and that he suffers severe chronic headaches at the base of the skull, resulting in an inability to focus eyesight and a lack of concentration. His insomnia is described as chronic and recurring, resulting in a general feeling of lethargy and malaise and leaving him with a need to take naps during the day. The memorandum also states that McCauley is in pain on an almost constant basis and takes Percocet, an opiate, to manage that pain. After receiving this information, First Unum again rejected McCauley's application. The nurse reviewing McCauley's file stated that [n]o new medical ha[d] been submitted and that the memorandum was not an official document from [an] attending physician. However, when communicating this decision to McCauley, First Unum stated that it had rejected the health problems listed in McCauley's memorandum because these conditions were acknowledged by your physician on the initial application and in his narrative letter of March 1995. The reason First Unum gave to McCauley for rejecting the information provided in McCauley's memorandum was unreasonable and deceptive. Even the most cursory comparison with McCauley's earlier submission by a competent reviewer would have revealed the myriad of details about his condition, absent from the earlier submission, severely affecting his ability to work. And contrary to First Unum's representation, it appears the information was afforded little if any weight by the nurse considering his appeal because the memorandum was not signed by a physician. The rejection mischaracterizes the quality and detail of the evidence McCauley had submitted on appeal. This is so particularly because the new submission purported to be information that the physicians at Sloan-Kettering believed justified McCauley's request for disability. First Unum never told McCauley that the absence of a physician's signature was a reason for rejecting his information. See Juliano v. Health Maint. Org. of N.J., Inc., 221 F.3d 279, 289 (2d Cir.2000) (finding an insurer's failure to communicate the reason for denying coverage sufficient evidence to warrant de novo review of the administrator's decision under our old standard). First Unum's response to McCauley implies that it would have been pointless to undertake any efforts to sort out the obvious and facial discrepancies in his record. Hiding behind a terse initial response to a set of questions it posed three months earlier, First Unum blithely ignored detailed descriptions constituting clear proof of total disabilityapparent even to a lay personpurporting to be the views of McCauley's physicians. Taken in combination, these factors are plainly exacerbated by First Unum's conflict of interest, as both administrator and payor, for what else would have influenced First Unum to avoid following up on simple inquiries prompted by McCauley's June submission? For example, had McCauley been informed that his physician's signature at the bottom of the memorandum was what was needed for First Unum's nurse to consider the information, he could have easily cured that defect. Additionally, McCauley's physician clarified in a deposition that he agreed with the health issues and limitations set forth in the memorandum, finding it to be a very appropriate review of [McCauley's] medical status. Had he been apprised of them, McCauley plainly would have had no trouble addressing First Unum's undisclosed and uninvestigated concerns. First Unum argues that it considered the information McCauley submitted, although it admits the nurse assigned to evaluate the claim on its medical merits did not consider the information. According to First Unum, the memorandum was accounted for by the claims appeal specialist, whose rejection of the memorandum was reasonable in light of McCauley's physician's earlier letter indicating that McCauley was only restricted from extreme workload and physical exertion. However, that letter, which simply provided brief answers to First Unum's medical questionnaire, differs starkly from the severe limitations and conditions depicted in the memorandum, which McCauley's physician later confirmed as accurate. The memorandum flatly contradicts First Unum's finding that McCauley was capable of performing a sedentary occupation and completing the ordinary tasks of a tax attorney. Instead, the memorandum stated that McCauley (1) was in constant pain, (2) had no control of his bowels, (3) was discouraged from sitting for long periods of time, (4) was unable to read for long periods of time, (5) required naps in the middle of the day, (6) passed two kidney stones per month at which time he would be unable to perform at any level, and (7) was required to take an opiate to manage his pain. First Unum never explained how McCauley could continue to perform the material duties of a tax lawyer despite these restrictions. Although First Unum stated that these issues described in the memorandum were considered in the original denial, the record plainly reflects that they were not. The district court found that First Unum reasonably believed that McCauley's physician was aware of the conditions described in the memorandum at the time he set out McCauley's limitations in his letter to First Unum, and thus, that the document did not constitute new information. McCauley, No. 97 Civ. 7662, 2006 WL 2854162, at . For the reasons stated above, we disagree. It was unreasonable for First Unum to conclude that the conditions described in the memorandum were equivalent to those described in McCauley's first application. It was also unreasonable for First Unum to conclude that the conditions described in the memorandum did not render McCauley disabled from performing his regular occupation. In sum, we do not believe that a rational claims administrator could have reviewed the limitations and symptoms listed in the memorandum and found that the physician's earlier narrative comported with those medical conditions. At a minimum, further investigation was required. Instead, First Unum seized upon the earlier questionnaire and ignored the memorandum. This kind of wholesale embrace of one medical report supporting a claim denial to the detriment of a contrary report that favors granting benefits was determined in Glenn to be indicative of an administrator's abuse of discretion. See 128 S.Ct. at 2352. The Glenn Court noted that there the insurance company unreasonably emphasized a certain medical report that favored a denial of benefits [and] had deemphasized certain other reports that suggested a contrary conclusion. Id. The Court went on to find that this factor, in combination with the presence of a conflict of interest and other serious concerns, warranted setting aside the administrator's discretionary decision. Like the Court in Glenn, we find First Unum's reliance on the earlier narrative to be indicative of an abuse of discretion. First Unum compounded its deception by representing to McCauley that the records submitted in support of his claim including the memorandum were reviewed by First Unum's on-site physician, who concluded that the restrictions and limitations would not preclude McCauley from performing his occupation. In fact, no records were reviewed by a physician at First Unum. These deceptions constitute additional powerful evidence that First Unum's denial of McCauley's appeal was arbitrary and capricious.