O’Ryan Law Firm recently settled a lawsuit against American United Life Insurance Company (“AUL”) on behalf of a client whose long term disability benefits were prematurely terminated by AUL. AUL is headquartered in Indianapolis and has their main office in downtown Indianapolis in the AUL building. The client, Candace, is actually a New Jersey resident so naturally it would make sense to file the claim in New Jersey. However, the O’Ryan Law Firm was able to represent Candace in Indiana because of the fact that AUL is incorporated under Indiana law. As a result, AUL may be sued in Indiana and the lawsuit was therefore filed in the federal district court for the Southern District of Indiana.
Case Against AUL
Candace was employed as an accounts manager for an insurance brokerage company from 2008 until she became disabled in December 2012. She became unable to work due to lumbar radiculopathy and moderately severe cervical stenosis, both of which resulted in chronic pain and fecal incontinence. Her treating physicians provided objective medical proof that the she was unable to continue working due to these medical impairments.
AUL issued the disability insurance policy to Candace’s employer agreeing to pay disability benefits to employees who became unable to work due to injury or illness. Although AUL was the insurer, the policy was actually administered by Disability RMS. AUL paid all of Plaintiff’s short term disability benefits and then two years of long term disability benefits. AUL then terminated Plaintiff’s long term disability benefits after 24 months, claiming that Plaintiff ‘s disability was limited to a mental impairment, thereby limiting her benefits to a 24-month period. AUL’s policy allows them to unfairly terminate the benefits after 24 months if the disabling medical condition is considered a “mental impairment.” However, the medical records establish that Plaintiff suffers from severe chronic cervical and lumbar back issues resulting in significant pain and also fecal incontinence.
Plaintiff submitted two internal appeals to Disability RMS contesting the impropriety of their termination of her disability benefits and provided Disability RMS with further medical support for her claim showing that her restrictions and limitations were due to a physical disability and not a mental impairment. She submitted the following objective proof of her disabling conditions:
4/7/15 MRI Cervical Spine Impression: At C5-C6 and C6-C7 moderate spinal stenosis and biforaminal narrowing secondary to disc osteophyte complex and osteoarthritic change.
6/22/15 Lumbar MRI Impression: Abnormal signal intensity and extra-axial postcontrast enhancement at L5-S1; multiple levels of disc desiccation and disc herniations at the lower lumbar spine with varying degrees of central canal or neuroforaminal narrowing.
9/14/15 EMG Testing: Abnormal Electro diagnostic Study: L4 Radiculopathy.
On both appeals, Disability RMS utilized the same record reviewing physician, Dr. Stewart Russell, to deny the appeals. The O’Ryan Law Firm has seen Dr. Russell’s record reviews in numerous claim files; he is a regular for the insurance industry. The Plaintiff argued that AUL violated the ERISA regulations by not providing for a review by the appropriate specialist for these type of medical conditions since Dr. Russell is not an orthopedic specialist nor a gastroenterologist. It was also improper for AUL to utilize Dr. Russell as a record reviewer on both of the appeals. According to the ERISA regulations, it is improper for a plan administrator to rely on the same physician’s opinion in the initial determination and in the administrative appeals. 29 C.F.R. §2560.503-1(h)(3)(v). This regulation exists to avoid bias in the appeal process. In this case, AUL relied exclusively on Dr. Russell’s opinions to justify the denial of both appeals and ultimately sided with Dr. Russell in both the first and second appeal. As recognized by the Fifth Circuit, “While the same doctor can participate in (rather than conduct) both administrative appeals, exclusive reliance on the opinion of the same doctor in both appeals runs afoul of §2560.503-1(h)(3)(ii).” Lafleur v. Louisiana Health Service and Indem. Co., 563 F.3d 148, 157 (5th Cir. 2009). AUL’s heavy reliance upon Dr. Stewart’s opinions in both the first and second appeals indicates that AUL failed to provide the Plaintiff with a full of fair review of the termination of her disability benefits during the appeal process.
Lawsuit Filed Against AUL
After AUL, through Disability RMS, denied both of the Plaintiff’s appeals, the Plaintiff filed a lawsuit in the federal courthouse in Indianapolis. The Plaintiff argued that the Plaintiff’s physicians reported to AUL that Plaintiff suffers from lumbar radiculopathy, moderately severe cervical stenosis, chronic pain and fecal incontinence. Plaintiff’s treating physicians submitted multiple documents providing objective medical evidence outlining her disability and her inability to return to work. That evidence included a Capsule Endoscopy Report; MRIs of the Cervical and Lumbar spine showing spinal stenosis and osteoarthritic changes and multiple levels of disc desiccation and herniations, as well as an abnormal EMG that indicated L4 radiculopathy. Plaintiff’s treating physicians’ opinions were dismissed by AUL in favor of a contracted physician, Dr. Stewart Russell, who had never met or examined Plaintiff.
At the pretrial conference in this case, the judge scheduled a settlement conference ordering AUL to appear with a representative in order to attempt to resolve the case before further litigation. The parties all met at the federal courthouse for the settlement conference and with the efforts of the magistrate judge were able to successfully resolve the Plaintiff’s claims against AUL. All of the claims were settled to the mutual satisfaction of the parties. The Plaintiff then dismissed her lawsuit against AUL.
If your disability benefits have been denied or terminated by AUL, please contact the O’Ryan Law Firm for a free consultation.