Opinion ID: 164970
Heading Depth: 2
Heading Rank: 1

Heading: Denial of Long Term Disability Benefits

Text: 28 Like the district court, we must review UNUM's decision to deny benefits to Ms. Allison, and we must determine the appropriate standard to be applied. [A] denial of benefits challenged under § 1132(a)(1)(B) [ERISA] is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). There is no dispute that here the plan expressly gives UNUM, as plan administrator, the discretion to determine whether to deny a claimant insurance benefits under the plan. Aplt's. Supl.App. vol. II, at 301. Therefore, we appl[y] an `arbitrary and capricious' standard to a plan administrator's actions. Charter Canyon Treatment Ctr. v. Pool Co., 153 F.3d 1132, 1135 (10th Cir.1998). In reviewing a plan administrator's decision under the arbitrary and capricious standard, we are limited to the `administrative record'—the materials compiled by the administrator in the course of making his decision. Hall v. Unum Life Ins. Co. of Am., 300 F.3d 1197, 1201 (10th Cir.2002). 29 There is no question that the district court applied the straightforward arbitrary and capricious standard of review to the Plan Administrator's denial of benefits. See Aplt's Supl.App. vol. II, at 282 (The court may only reverse [UNUM]'s decision if the decision was not grounded on `any reasonable basis.') (quoting Kimber v. Thiokol Corp., 196 F.3d 1092, 1098 (10th Cir.1999) (holding no conflict of interest and applying the arbitrary and capricious standard of review)). However, the district court did not take into consideration UNUM's apparent conflict of interest, as insurer of the Plan and Plan Administrator. When there exists such a conflict of interest, we undertake a sliding scale analysis, where the degree of deference accorded the Plan Administrator is inversely related to the seriousness of the conflict. Chambers v. Family Health Plan Corp., 100 F.3d 818, 825 (10th Cir. 1996); see Jones v. Kodak Med. Assistance Plan, 169 F.3d 1287, 1291 (10th Cir.1999). 30 In Fought v. Unum Life Insurance Co. of America, 379 F.3d 997, 1004 (10th Cir.2004) (per curiam), we further addressed the question of  how much less deference ought a reviewing court afford under the sliding scale analysis. In Fought, as here, UNUM has admitted an inherent conflict of interest, serving both as plan administrator and as third party insurer. Id. at 1004. In Fought we stated that [w]hen the plan administrator operates under ... an inherent conflict of interest,.... the plan administrator bears the burden of proving the reasonableness of its decision pursuant to this court's traditional arbitrary and capricious standard. Id. at 1006. 31 In such instances, the plan administrator must demonstrate that its interpretation of the terms of the plan is reasonable and that its application of those terms to the claimant is supported by substantial evidence. The district court must take a hard look at the evidence and arguments presented to the plan administrator to ensure that the decision was a reasoned application of the terms of the plan to the particular case, untainted by the conflict of interest. 32 Id. at 1006. We apply this standard to our consideration of UNUM's denial of benefits.
33 The policy at issue here, as noted above, includes the following language relevant to this appeal: You have a pre-existing condition if: 34 —you received medical treatment, consultation, care or services including diagnostic measures, or took prescribed drugs or medicines in the 6 months just prior to your effective date of coverage; or you had symptoms for which an ordinarily prudent person would have consulted a health care provider in the 6 months just prior to your effective date of coverage; and 35 —the disability begins in the first 24 months after your effective date of coverage unless you have been treatment free for 12 consecutive months after your effective date of coverage. 36 Aplt's Supl.App. vol. II, at 48. The plan also requires that, in some instances, additional materials may be requested by UNUM, and must be supplied by the insured. 37 In some cases, you will be required to give UNUM authorization to obtain additional medical information and to provide non-medical information as part of your proof of claim, or proof of continuing disability. UNUM will deny your claim, or stop sending you payments, if the appropriate information is not submitted. 38 Id. at 32.
39 Ms. Allison contends that UNUM unreasonably sought her medical records dating back to 1996—long before the July 1, 1997, start date of Ms. Allison's six-month pre-existing condition exclusion period. She argues that UNUM, upon discovering it applied the incorrect time frame for calculating her coverage, should have asked for records only since July 1, 1997, consistent with its previous request. Ms. Allison contends that UNUM was dissatisfied with its initial analysis, having concluded that she did not seek treatment for MEN-I from August 1, 1997 through February 1, 1998. See id. at 118 (Pre-Existing Condition Medical Review, dated Nov. 7, 1999) (No evidence of treatment for related problems during the dates in questions of 8/1/97 to 1/31/98); id. at 95 (in its initial review, UNUM states Ms. Allison was treated by Dr. Johnson on 1/30/98 for a condition which caused, contributed to or resulted in the condition for which [she is] now claiming disability). She contends that UNUM's request backtracks from this conclusion and is essentially a fishing expedition without foundation. At oral argument, appellate counsel also emphasized that the blanket medical release authorization Ms. Allison completed in June 1998 was identical to the newly requested release form. 40 In support of its argument, UNUM, in turn, relies upon various references to treatment from other doctors that appear in the medical records, as well as Ms. Allison's somewhat confusing responses in her disability applications. UNUM points out that Ms. Allison received treatment for MEN-I related conditions, including the removal of her parathyroid, which predated her coverage period by nearly two years. Furthermore, Dr. Schiller's February 3, 1998 report stated that she had been previously diagnosed with MEN-I. 41 UNUM stresses that Ms. Allison's failure to include Dr. Robert Gagle, who treated her in June 1998, on her LTD claim form as a treating physician was a deliberate omission. UNUM states that [t]he preponderance of the medical evidence indicated that Plaintiff was diagnosed with MEN-I years before her claim for disability, Aple's Br. at 23, and implies that this condition may have been captured by the pre-existing condition exclusion. 42 UNUM repeatedly insists that Ms. Allison has been deceitful by providing misleading information. Id. at 22. For example, UNUM asserts that she claimed that she had pancreatic tumors which were inoperable and that her condition was terminal. Id. at 22-23. UNUM also casts aspersions upon Ms. Allison, stating that she apparently changed jobs in 1997, and her health insurance did not become effective until January 1, 1998. As soon as Plaintiff received coverage, she sought treatment for her MEN-I related symptoms. Id. at 23. 43 We cannot draw the same conclusions as UNUM: Although the malignancy of the tumors had been disproved at the time Ms. Allison completed her short-term disability claim, see Aplt's Supp.App. vol. II, at 265 (Disability Claim dated June 25, 1999), a Physician's Statement that post-dated Ms. Allison's claim also indicated she suffered from pancreatic abnormalities and pancreatic tumors. Id. at 219 (Physician's Statement dated August 19, 1999). UNUM appears to fault Ms. Allison for confusing inoperable pancreatic abnormalities with inoperable pancreatic tumors. We also note that Ms. Allison's LTD disability claim form no longer referenced the pancreatic lesions. 44 Based upon the above, without more, we might be unable to conclude that UNUM could have justified a denial of benefits based on the record before it, especially noting its own miscalculations of the pre-existing condition exclusion period. However, because UNUM diligently sought information to round out its pre-existing condition inquiry, we must also analyze this section of the Plan's language.
45 The policy authorizes UNUM to request additional information from a claimant. UNUM maintains that the additional records were relevant to another aspect of the Plan's definition of a pre-existing condition, whether there were symptoms for which an ordinarily prudent person would have consulted a health care provider in the 6 months just prior to [the] effective date. Id. at 48. Thus, UNUM argues it had no way to gauge whether or not Ms. Allison acted as a reasonably prudent person, and as such, its request for additional medical releases and records was reasonable. 46 First, we note we can discern no apparent need for the additional releases, as the form was a standard one used repeatedly by UNUM in its initial review. Notwithstanding this redundancy, as UNUM points out, a plan administrator may request additional medical information, and the Plan here explicitly anticipates such a need. Id. at 32. 47 The cases upon which UNUM and the district court rely, Sandoval v. Aetna Life & Casualty Insurance Co., 967 F.2d 377 (10th Cir.1992) and Kimber v. Thiokol Corp., 196 F.3d 1092 (10th Cir.1999), are instructive. In both Sandoval and Kimber, the plaintiffs had been recipients of disability benefits. In each, the plan administrator conducted a periodic review and requested additional medical information to confirm the existence of a continuing disability. In Sandoval, the claimant had the opportunity to submit additional evidence of physical or other disability to the Review Committee but declined to do so. 967 F.2d at 382. We held that the Plan Administrator had given the claimant a full and fair review. Id. In Kimber we rejected the claimant's suggestion that the Plan Administrator was unauthorized to reopen its disability determination and to request new evidence. 196 F.3d at 1099. 48 Here, UNUM miscalculated the date of the pre-existing condition period and needed a more complete picture of Ms. Allison's medical history before it could fully evaluate her request to review the denial of her claim. As part of the proof of claim, UNUM was justified in requesting additional medical and non-medical information. UNUM sent several letters and made repeated telephone calls to Ms. Allison's attorney. 49 Although UNUM's request for information dating back nearly two years before the coverage period might appear far-reaching, Mr. Belote did not protest. He did not write a letter explaining what physicians, if any, his client had seen during that time, or even during the pre-existing exclusion period. He did not indicate that his client had previously provided all the requested information, which would have likely terminated the inquiry. He did not write back and indicate his refusal to comply with the extensive request; rather, he merely indicated during one conversation that a newly executed medical release form was in the mail. He did little but ignore and evade UNUM's repeated attempts to contact him. 50 Without offering comment on the scope of the request, we hold that UNUM has established that its requests for additional documentation were reasonable, and that Ms. Allison's repeated failure to respond to the requests resulted in the denial of her claim. Because UNUM was unable to pinpoint whether the disabling condition was a pre-existing condition and because UNUM diligently attempted to obtain such information, we hold that its denial of benefits was based on a reasoned application of the terms of the Plan that is supported by substantial evidence. Fought, 379 F.3d at 1006.