Articles Tagged with Sedgwick

O’Ryan Law Firm, on behalf of Plaintiff Jo Ellen W., recently filed a lawsuit against Sedgwick Claims Management Services, Inc. (“Sedgwick”). The Plaintiff was employed as a Labor and Delivery Clinical Nurse with Franciscan Alliance which made her eligible for disability benefits under the Franciscan Alliance, Inc. Short-Term and Long-Term Disability Benefit Plans (the “Plan”).

In Jo Ellen W. v .Franciscan Alliance, Inc. Short-Term and Long-Term Disability Plans and Sedgwick Claims Management Services, the Plaintiff filed a lawsuit to gain the long term disability benefits she was entitled to under the terms of the Franciscan Alliance Plan.

Facts of the Case

As one of the largest employers in Indiana, Eli Lilly covers thousands of employees under their Extended Disability Plan (“Lilly EDL Plan”). The Lilly EDL Plan is self-insured, a rarity in the long term disability world. Just a few years ago, Anthem was the claims administrator for the Lilly EDL Plan but in the spring of 2012, Lilly hired Sedgwick to administer extended disability claims under the EDL Plan. Shortly after this time, our office began receiving calls from Lilly employees whose EDL benefits had been terminated or were under investigation by Sedgwick.

One of the calls we received was from the former Executive Director of Human Resources at Lilly who had worked for Lilly for over 25 years. Unfortunately, her diagnosis of Fibromyalgia worsened over the years until she was forced to leave Lilly and apply for short and long term disability benefits in December 2007. Fibromyalgia is a disease the Seventh Circuit has characterized as “common, but elusive and mysterious.” Sarchet v. Charter, 78 F.3d 305, 306 (7th Cir. 1996). In evaluating fibromyalgia in the context of a disability claim, the court in Sarchet described the disease as:

Its cause or causes are unknown, there is no cure, and, of greatest importance to disability law, its symptoms are entirely subjective. There are no laboratory tests for the presence or severity of fibromyalgia. The principal symptoms are “pain all over,” fatigue, disturbed sleep, stiffness, and–the only symptom that discriminates between it and other diseases of a rheumatic character–multiple tender spots, more precisely 18 fixed locations on the body (and the rule of thumb is that the patient must have at least 11 of them to be diagnosed as having fibromyalgia) that when pressed firmly cause the patient to flinch.

Based on the severity of her fibromyalgia condition, our client was approved for EDL benefits in May 2009 and she received those benefits for over 3½ until Sedgwick abruptly terminated those benefits.
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Sedgwick Claims Management Services (“CMS”) is a third party claims administrator hired by insurance companies and employee benefit plans to manage disability claims. If your employee benefit plan uses Sedgwick CMS as a claims administrator, then Sedgwick CMS is responsible for deciding whether your disability claim is approved or denied. As well as processing and adjudicating disability claims, Sedgwick holds itself out as providing the following services:

The company specializes in workers’ compensation; disability, FMLA, and other employee absence; managed care; general, automobile, and professional liability; warranty and credit card claims services; fraud and investigation; structured settlements; and Medicare compliance solutions (website last visited August 16, 2014).

Sedgwick CMS is headquartered in Memphis, Tennessee and is one of the largest third party administrators in the nation. Many Indiana employers hire Sedgwick CMS to serve as their claims administrator for employee benefits. Employee benefit plans that currently use or previously used Sedgwick CMS include Eli Lilly & Company, AT&T, Comcast, Walgreens, Franciscan Alliance Inc., SPX Corporation, Ascension Health, Hewlett-Packard, PepsiCo Inc., International Paper, UnitedHealth Group, and many others. If employees of these companies apply for short term or long term disability benefits, Sedgwick CMS is responsible for processing the claims and deciding whether benefits should be paid. As a third party administrator, Sedgwick CMS does not actually pay the disability benefits. Rather, the employee benefit plan or insurance company pays disability benefits if Sedgwick CMS approves the claim. Often, the employee benefit plan has little involvement in the disability claims process, if any.

Like disability insurance companies, Sedgwick initially reviews a disability claim by obtaining medical records, requiring the claimant’s treating physician to complete questionnaires, and having in-house staff (nurses, doctors, vocational analysts, claims analysts) review the claimant’s file. If the claim is denied and the claimant appeals, then Sedgwick’s review of the appeal will likely include the use of contracted record reviewing physicians. If the claim is approved, Sedgwick may call or write to the claimant frequently in efforts to obtain more information. Sedgwick may also require the claimant to undergo an “Independent Medical Examination” or “Functional Capacity Evaluation.”
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The Employee Retirement and Income Security Act (“ERISA”) mandates that insurance companies and claims administrators provide claimants with the specific reasons for the denial or termination of employee benefits and the reasons for the denial must be in writing. See Militello v. Cent. States, Se. and Sw. Areas Pension Fund, 360 F.3d 681, 688 (7th Cir. 2004), cert. denied, 543 U.S. 869 (2004). The Department of Labor has promulgated regulations under ERISA which require certain information to be contained in a denial or termination of benefits letter. Specifically, 29 C.F.R. §2560.503(g) states:

Manner and content of notification of benefit determination.

(1)….The notification shall set forth, in a manner of calculated to be understood by the claimant –

(I) Reference to the specific plan provisions on which the determination is based;

(II) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;

These requirements ensure that when a claimant appeals a denial to the plan administrator, he or she will be able to address the determinative issues and have a fair chance to present his case. Halpin v. W.W. Granger, 962 F.2d 685 (7th Cir. 1992). Describing the additional information needed, as required by this section, enables a claimant to gain a better understanding of the inadequacy of his claim and to gain a meaningful review by knowing with what to supplement the record. Wolfe v. J.C. Penney Co., 710 F.2d 388 (7th Cir. 1983).
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One of the most disabling symptoms for our disability clients at the O’Ryan Law Firm is chronic, severe pain. The type of pain that keeps you awake most of the night or forces you to lay down most of the day in order to alleviate the pain just a little bit. The pain that results from degenerative disc disease, fibromyalgia, neuropathy and failed back surgeries among other medical conditions. Disability insurance companies are loath to pay disability benefits when the most significant symptom is disabling pain. Oftentimes, the insurance company will discount considerable evidence that the chronic pain is a significant factor in the disability claim because many of the objective medical testing is “normal.” There are no x-rays, MRIs or CT scans that are able to document chronic, severe pain. However, many courts have held that a disability claimant can prove the severity of their pain by showing, with their medical records, repeated attempts to treat the pain including steroid injections, prescription medications, surgery, physical therapy and acupuncture. These treatment methods can show that a claimant is suffering from severe pain.

In this area, when there is an absence of testing to establish the source of pain, a claimant can show that they are disabled by chronic pain by proving that the claimant has diligently sought out treatment for the pain. The Seventh Circuit Court of Appeals has held that “medical science confirms that pain can be severe and disabling even in the absence of ‘objective’ medical findings, that is, test results that demonstrate a physical condition that normally causes pain of the severity claimed by the [plaintiff].” Carradine v. Barnhart, 360 F.3d 751, 753 (7th Cir.2004). Thus, while objective medical evidence must support a finding of an underlying impairment, subjective evidence can be used to demonstrate that the pain associated with that condition is disabling. Carradine, 360 F.3d 753; see also Hawkins v. First Union Disability Plan, 326 F.3d 914, 919 (7th Cir.2003) “Taken in the light most favorable to the plaintiff, the evidence of [plaintiff’s] repeated attempts to seek treatment for his condition supports an inference that his pain, though hard to explain by reference to physical symptoms, was disabling.” Diaz v. Prudential Ins. Co., 499 F.3d 640, 645 (7th Cir. 2007). In Sandell v. Prudential Ins. Co., 2007 WL 4404487, *7 (S.D. Ind. Dec. 13, 2007), the court found that a record review commissioned by the plan administrator was not persuasive, in large part because the reviewing physician failed to consider the claimant’s subjective pain symptoms or address whether the claimant’s pain made it impossible for the plaintiff to hold full-time gainful employment. Similarly in Gessling v. Group Long Term Disability Plan for Employees of Sprint/United Management, 693 F. Supp.2d 856, 866 the Court held:

The record here also shows that Gessling aggressively pursued for several years a range of therapies for his pain, including the rhizotomies, acupuncture, epidural injections, and even hypnosis. Those efforts are hard to reconcile with a theory that Gessling was exaggerating or lying about his pain. See Diaz v. Prudential Ins. Co. of America, 499 F.3d 640, 646 (7th Cir.2007) (reversing summary judgment for plan under de novo review; efforts at therapy supported credibility of claimant’s complaints of pain); Carradine v. Barnhart, 360 F.3d 751, 755 (7th Cir.2004) (remanding denial of Social Security disability benefits based on subjective pain complaints where claimant had undergone extensive, varied, and intrusive pain therapies).