By Peter Casciano, Esq.
As many of you who read my blog regularly know, there is an inherent conflict of interest when an insurance company both decides whether you are disabled and is responsible for the payment of Long-Term Disability (LTD) benefits. This conflict is counter-balanced by a series of safeguards contained in the Employee Retirement Income Security Act (ERISA).
For group disability insurance policies, ERISA regulations require that insurance companies provide plan participants with a Full and Fair Review. Congress has left it up to our federal court system to interpret just what that Full and Fair Review should look like.
The fourth circuit of the federal courts (composed of Maryland, Virginia, West Virginia, North Carolina, and South Carolina) recently issued a decision on Full and Fair Reviews and expanded requirements for insurance companies when processing administrative appeals.
Harrison v. Wells Fargo
Harrison v. Wells Fargo is an opinion issued in the fourth circuit in December, 2014. When Wells Fargo decided to appeal in this case, they used a common tactic of hiring medical file reviewers to review all evidence in the case and issue an opinion about whether the claimant was disabled from work.
As a part of the file reviewing process, the file reviewer will sometimes reach out to the claimant’s treating physicians and ask them follow up questions; sometimes they choose not to contact the treating physician. As you can probably guess, courts who review the opinions of file reviewers generally give file reviewers more credibility when they go the extra mile to contact the treating physicians directly.
In the Harrison case, a file reviewer contacted one of the treating physicians. That treating physician told the file reviewer that the second treating physician had additional material related to the claimant’s disability. The file reviewer ignored the instruction to contact the second treating physician and issued his opinion that the claimant was not disabled.
ERISA Regulations for Insurance Carriers
The claimant prevailed once the case was reviewed by the federal court, but only in part due to the mistake made by the file reviewer. Compounding the issue, the insurance carrier failed to inform the claimant that additional medical records were missing that were needed to determine the claim. While it is true that burden of proof is on the claimant to provide all evidence of disability, the carrier still must work with the claimant by informing them of what is needed and what is missing. Some courts have referred to this back and forth as a “meaningful dialogue.”
In the end, the fourth circuit found that the carrier simply did not do enough to learn about the key aspects of Harrison’s medial picture. In fact, the court criticized the carrier for choosing to remain “willfully blind” during the process of reviewing the appeal.
Did Your Carrier Provide You with a Fall and Fair Review?
This case represents an important step forward, especially for the fourth circuit, in that more due diligence will now be required by the carrier. If we are going to leave the administrative adjudication of disability cases up the carrier, then we must ensure that the carrier performs their review within the strictures set up by ERISA.
Hopefully this expansion of the Full and Fair Review requirement will lead to more uniform appeal adjudications by insurance companies. If you have a question about whether your carrier has provided you with a “full and fair review” or are considering taking your long-term disability case to court, please contact me: