Life Insurance Company Of North America (CIGNA) wrongfully denies disability benefits to a Kentucky repairman

This case is a sad example of how a disability claimant can battle a disability insurance company in an ERISA lawsuit for several years and then have a Judge give the insurance company another opportunity to wrongfully deny disability benefits.

As an employee of Philips Lighting Company, 55-year-old Ronald E. Cox had been a repairman and tradesworker for nearly 24 years. While he had earned his GED, he had never graduated from high school. His job’s duties included installing, repairing, constructing and maintaining plant facilities and equipment. He fabricated and installed frames and supports for the tanks, kilns and other equipment in the plant facilities.

He also read the meters on all of the equipment. This was the only part of his job that did not require serious physical effort. In general, he handled 50 to 80 pounds anywhere from 25 to 50% of his shift. The job was physically demanding, and on November 2, 2007 he left work because of incapacitating neck, shoulder, back, hip and leg pain that made it impossible to continue handling this level of physical labor.

LINA determines Kentucky repairman is not permanently disabled.

On April 1, 2008, Cox filed a claim under the group life insurance plan he had participated in at Philips held with Life Insurance Company of North America (LINA) also known as CIGNA. In his claim, he filed for total and permanent disability benefits (TDP). In order to qualify under the terms of the plan, the insurance company had to determine that Cox was unable to do any work for wage or profits for the rest of his life.

His claim was sent to Nurse Case Manager Jean Kozik-Kulis. In order to evaluate his claim more accurately, Kozik-Kulis asked for additional information from Cox’s chiropractor, Dr. Cindy Thoroughman. Dr. Thoroughman provided information on the restrictions she had placed on Cox’s activities. Using this information, Kozik-Kulis recommended that Life Insurance Company of North America (LINA) deny Cox’s claim. LINA denied his claim for disability benefits on May 13, 2008.

Appeal of total and permanent disability denial includes medical evidence.

On July 7, 2008, Cox filed his first appeal. Included with the appeal was a letter from Dr. Brian Ellis, plant physician at Philips Lighting. Dr. Ellis had treated Cox since 2001. He also provided the results from his June 23, 2008 MRI.

In response, LINA asked Medical Director Dr. Norton Hall to conduct a medical record review. They also requested that their in-house vocational expert conduct a transferable skills analysis. After seeing the medical record review results and the transferable skills analysis, LINA chose to uphold its first denial, on August 21.

Disability insurance attorney assists with second appeal.

Cox hired a disability insurance attorney to help him with his second appeal, which he filed on November 25, 2008. The disability attorney presented restriction letters which he had prepared and asked Drs. Thoroughman and Ellis to fill out. LINA asked Dr. Charles McCool to review this information, and based on his recommendation, LINA denied Cox’s claim for total and permanent disability benefits on January 27, 2009.

Cox’s disability attorney filed suit on his behalf in Boyle Circuit Court. The suit sought disability benefits beginning November 2, 2007; pre- and post-judgment interest pursuant to the terms of the plan; cost; and attorneys fees. Because the insurance plan was governed by the Employee Retirement Income Security Act (ERISA), the case was transferred on March 11, 2009, to the United States District Court, Eastern District of Kentucky, Central Division in Lexington Kentucky to be heard by Chief Judge Jennifer B. Coffman.

LINA and disability attorney agree on standard of review.

Both Cox’s disability insurance attorney and LINA agreed the plan’s language granted LINA discretionary authority to determine who would be eligible for benefits. This meant that both sides agreed that the court should review LINA’s decision under the arbitrary and capricious standard of review. If the court found that LINA had used a deliberate and principled reasoning process to reach their decision and had adequate supporting evidence for their decision, Cox’s denial would be upheld by the court.

The court would review the quality and quantity of the medical evidence and the opinions expressed by both sides. Cox’s disability attorney claimed that LINA had acted arbitrarily and capriciously because the insurance company had disregarded the opinions of Cox’s two treating physicians, and had not based their decision on a comprehensive review of Cox’s medical records.

Disability attorney argues evidence supporting arbitrary and capricious denial by LINA.

To support this allegation, Cox’s disability lawyer pointed to the first denial letter Cox received. This letter recited some technical contents from the medical reports provided by Cox, but failed to provide a meaningful analysis of why this information demonstrated why he was not qualified for total and permanent disability benefits. In addition to this, LINA misquoted results from his lumbar spine MRI performed on February 6, 2007 and didn’t even mention the results of his cervical spine MRI performed the same day. The denial letter also failed to mention information from the Medical Request Form and Physical Ability Assessment Form that they had asked Dr. Thoroughman to fill out.

It should be noted that Dr. Thoroughman had responded to the questions about Cox’s physical restrictions as follows: “Mr. Cox is unable to work without injuring himself”¦ He is unable to lift or pull, cannot stand, sit or walk long periods of time. He is unable to carry or squat due to his loss of feeling in the left leg, and he is very unstable, constantly trip and catch self on wall or doorways.”

In the denial letter, LINA gave no explanation to why they ignored this information, or the information provided by Dr. Ellis, who had treated him at Philips since 2001. Dr. Ellis had actually written the following note on a prescription pad: “Cox is unable to perform function of the job requirements at Philips Lighting. This is a permanent situation and will not improve enough for him to return.” They also failed to address Dr. Thoroughman’s opinion that Cox suffered from severe multilevel degenerative disc disease and multilevel degenerative joint disease. It was this doctor’s opinion that Cox deserved his disability status.

In short, LINA had dismissed all of the evidence that Cox provided to demonstrate his disability in one sentence: “According to the medical information on file, the medical evidence submitted does not support an impairment to preclude you from working for wage or profit for the rest of your life as defined in the policy.” It should be be noted that disability policies requiring permanent disability are very rare.

The Court reviews the evidence supporting LINA’s arbitrary and capricious decision.

The Court generally recognizes that plan administrators do not have to give special deference to the opinions of the treating physicians. They also don’t have to explain why they give more credit to reliable evidence from another source. However, the Court does expect a disability insurance plan administrator to give credit to reliable evidence from a claimant’s treating physicians.

So what evidence had LINA considered that could hold equal weight to the evidence submitted by Cox? Judge Coffman found that the ERGOS Functional Capacity Evaluation (FCE) conducted October 10, 2007, at LINA’s request, was the only comparable evidence. The FCE summary indicated that Cox did not meet the physical requirements for work as a tradesman but that much of his performance fit the description of medium and heavy physical demand levels as defined by the U.S. Department of Labor. Legally, LINA had no obligation to explain why they gave more weight to the FCE, but LINA did have a legal obligation to provide an explanation of the reasons the insurance company was denying Cox’s claim. One sentence was inadequate.

The second denial letter of August 21, 2008, explained in one paragraph that LINA was upholding the first denial because there wasn’t any medical evidence of a severe impairment. This was based on in-house Medical Director Dr. Hall’s evaluations of Cox’s MRIs. This doctor felt the quantified clinical findings failed to support the imposed restrictions. His analysis was brief, roughly 40 words, leaving it uncertain as to what records he had reviewed.

Judge Coffman also found a mere file review, even when conducted by a qualified physician, raises questions about the thoroughness and accuracy of the disability insurance company’s denial of benefits, especially when the file review is given more weight than the opinion of consulting physicians. Judge Coffman’s concern was that these two treating physicians had examined Cox over many years, while the doctor reviewing Cox’s file may not have even had complete medical documentation on which to form his opinion.

It was even more troubling when Judge Coffman considered the fact that the second denial letter claimed that there was no “documented motor, strength, sensory, or range of motion difficulties, and no abnormalities noted with your upper or lower extremities.” This contradicted Dr. Thoroughman’s letter of May 7, 2008 which gave details of Cox’s difficulties in these areas. Judge Coffman also found it troubling that an inter-office memo in the file observed that there were no transferable occupations into which Cox could transfer. This letter also failed to address why Cox’s answers on LINA’s Disability Questionnaire and Activities of Daily Living form were not being considered.

Judge Coffman moved on to consider the third and final denial letter of January 27, 2009. This letter did include a little more information about the reason for the denial. LINA informed Cox that his medical information had been reviewed by a medical doctor. This doctor evaluated the MRIs and entered the conclusion that they only showed degenerative changes and not HNP. As far as he was concerned, Cox was “basically suffering from mechanical back pain.”

In addition, LINA referred to office notes from Cox’s January 28, 2008 visit with Dr. Ellis which did not mention any range of motion deficits or provide results from strength testing that showed a functional loss. They also mentioned Cox’s February 6, 2007 MRI and a May 7, 2008 letter from Dr. Thoroughman which detailed the progress of the degenerative nature of his condition and her concerns that he posed a safety risk to himself and others if he continued working.

When Judge Coffman reviewed the three denials, she observed that each denial repeated the same precise language. “(A)lthough you have complaints of pain, there are no exam findings or test results to preclude you from performing in any occupation.” If exam findings and test results were required, why had LINA failed to tell Mr. Cox what exams or tests were required?

Judge concludes that LINA’s decision was arbitrary and capricious; yet does not award disability benefits!

Judge Coffman reached the following conclusion. Even if LINA’s determination could have been supported by the medical evidence, the disability insurance provider had failed to provide acceptable explanations of their reason for denying benefits to Cox, a basic ERISA requirement. In addition, the quality of the medical reviews was questionable because both physicians failed to demonstrate that the information supplied by Cox had been considered. Further, LINA did not dispute that Cox was unable to continue in his position as the tradesworker at Phillips. Yet they denied him total and permanent disability benefits even though they were unable to show that there was work for wage or profit that Cox was capable of undertaking.

LINA had failed to demonstrate a deliberate and principled reasoning process in reaching its denial of benefits decision. And the disability insurance company had also failed to demonstrate that it’s decision was supported by substantial evidence. Judge Coffman ordered LINA to conduct a full and fair inquiry. Judge Coffman had the discretion to order LINA to pay disability benefits, but the Judge gave LINA another opportunity to review the claim. After years of litigating this case Cox has still not received any benefits and there is a good chance that LINA will deny his claim again.

As to the motion filed by Cox’s disability insurance attorney for the award of reasonable attorney fees and costs, Judge Coffman found that although LINA had failed to comprehensively review Cox’s medical records, this did not indicate that Cox’s benefits were denied in bad faith. Under ERISA guidelines, Judge Coffman denied an award of attorneys fees. In ERISA disability cases, Judges have discretion to award attorney fees. This case demonstrates another reason that ERISA is a horrible law. I hope LINA does the right thing and approves Cox’s disability benefits.