Court: District Court, W.D. Pennsylvania; March 25, 2014; Federal District Court
The Complaint in this case was filed on November 15, 2012, and assigned to Magistrate Judge Lisa Pupo Lenihan for pretrial proceedings. The Magistrate Judge’s Report and Recommendation, issued on February 21, 2014, partially granted the Plaintiff's Motion for Summary Judgment, denying it only regarding the reversal and retroactive reinstatement of long-term disability benefits, while granting it in other aspects. It recommended denying the Defendant’s Motion for Summary Judgment, vacating Aetna’s decision to terminate the Plaintiff's long-term disability benefits, and remanding the case for further consideration.
All parties were notified of the Report and Recommendation and given 14 days to file objections. The Defendant filed objections on March 7, 2014, to which the Plaintiff responded on March 19, 2014. The Court reviewed the objections, the Plaintiff’s response, and the Defendant’s reply and found that the objections did not undermine the Report and Recommendation’s reasoning. The Court addressed the Defendant's claim regarding an erroneous finding about an MRI test, noting that the MRI results were not relied upon in the Report and that they were not considered in the Defendant’s communications with the Plaintiff.
The Court observed that the Defendant's objections failed to confront its administrative process's shortcomings, specifically regarding the language of the Long-Term Disability (LTD) Policy. The policy excludes coverage for disabilities primarily caused by mental health conditions after 24 months, except for those with demonstrable structural brain damage. The Defendant’s letters labeled the Plaintiff’s condition as a "mental health" issue without adequately addressing whether it involved demonstrable structural brain damage, thus failing to apply the policy's exclusion correctly.
The Defendant failed to adequately consider the medical and legal submissions provided by the Plaintiffs, particularly regarding the application of a Policy exclusion. The administrative record lacks evidence of the Defendant's thorough evaluation of relevant medical literature that supports an organic connection to the Plaintiff's condition. Instead, the Defendant relied on a generalized reference to the DSM classification of the Plaintiff's afflictions as "mental," which does not address the core issue. The Defendant’s reliance on its own self-generated list of diagnosis codes further indicates a lack of consideration for the specifics of the Plaintiff's case, compounded by the undisclosed nature of this list to participants under the Policy. The court adopted the Chief Magistrate Judge's Report and Recommendation, which correctly identified these failures.
The court ordered that the Plaintiff's Motion for Summary Judgment be granted in part and denied in part; it was denied concerning retroactive reinstatement of long-term disability benefits but granted in all other respects. The Defendant's Motion for Summary Judgment was denied, and Aetna's decision to terminate the Plaintiff's long-term disability benefits was vacated, remanding the case to the Plan Administrator for further consideration based on the Report and Recommendation. The court confirmed its jurisdiction under ERISA and proper venue in the District.
Jason Berkoben was employed by Dell, Inc. as a computer programmer and participated in a long-term disability (LTD) plan insured by Aetna Life Insurance Company. The plan grants Aetna discretionary authority to determine benefits eligibility and interpret policy terms, with a standard of review ensuring Aetna's actions are not arbitrary or capricious. Berkoben began his employment on May 2, 2007, and was a covered beneficiary under the plan. He stopped working on March 3, 2010, due to Schizoaffective Disorder and Bipolar Disorder, as recommended by his psychiatrist, Dr. Lekhwani. Aetna informed Berkoben about a 24-month limitation on LTD benefits for mental illness on July 15, 2010. He received short-term disability benefits for six months, followed by approval for long-term disability benefits starting August 29, 2010, amounting to $3,230 per month. After being awarded Social Security Disability Indemnity (SSDI) benefits on December 8, 2010, his LTD benefits were adjusted to $2,080 per month due to the offset.
From August 2010 to June 2012, Dr. Mary Galonski, Berkoben’s psychiatrist, submitted multiple clinical statements to Aetna, consistently stating he was unable to work due to his condition, which Aetna has never disputed. His treatment involved medication management and psychotherapy, with records indicating diagnoses related to his mental health issues, while physical ailments noted were GERD, high cholesterol, and pneumonia. Berkoben's symptoms included major depression, hallucinations, delusions, suicidal ideation, and signs of psychosis and mania. He confirmed that his disability was solely due to his mental health diagnosis.
Berkoben reported that his barriers to returning to work were solely "mental issues" without any accompanying physical impairments. On March 2, 2012, Aetna notified him of a 24-month limitation for mental health claims, stating his benefits would end on August 28, 2012. Although Berkoben mentioned a brain MRI on May 14, 2014, intended for review, it was unrelated to his schizoaffective or bipolar disorders and was not submitted to Aetna. He has not provided any medical evidence indicating structural brain damage. Dr. Galonski noted on May 20, 2012, that Berkoben needed to demonstrate brain damage to continue receiving benefits, reiterating on June 6, 2012, that he had no physical problems. On June 14, 2012, Berkoben's lawyer submitted an Intent to Appeal to Aetna, contesting the 24-month limitation and requesting the claims file. Aetna consulted Dr. Mendelssen on July 9, 2012, who confirmed that Berkoben's schizoaffective disorder was not excluded from the 24-month limitation list. Jeffrey Burdick from Aetna's Behavioral Health Unit concurred, leading to Aetna's termination letter on July 10, 2012, stating that Berkoben's benefits would cease on August 28, 2012, due to the mental health limitation. Aetna provided Berkoben with the option to appeal and submit additional relevant information regarding his condition. Aetna also noted that Berkoben's SSDI award, which was based on different standards, did not significantly influence their decision. Berkoben appealed the termination on September 20, 2012, with the appeal focusing solely on whether his schizoaffective disorder was subject to the 24-month limitation.
Berkoben submitted medical literature and a summary from Dr. Galonski to argue that Schizoaffective Disorder and Bipolar Disorder are biological brain diseases, exempting them from Aetna's 24-month mental health benefits limitation. However, he failed to provide diagnostic studies or evidence of structural brain damage. Aetna referred Berkoben's case to independent physicians, including Dr. Stephen Gerson and Dr. Stuart Rubin, for review. Their assessments noted Berkoben's ongoing treatment for his conditions, cognitive issues, and awareness of his delusions. Aetna ultimately denied Berkoben’s appeal on November 2, 2012, citing the classification of his conditions as mental nervous conditions per the DSM, which supported the original termination of his benefits as of August 29, 2012. After exhausting administrative remedies, Berkoben filed a lawsuit against Aetna under ERISA seeking Long-Term Disability (LTD) benefits. The court has ordered both parties to file cross motions for summary judgment, which are now under review. Summary judgment is deemed appropriate if there are no genuine material facts in dispute and the movant is entitled to judgment as a matter of law.
The moving party must initially demonstrate the absence of a genuine issue of material fact. Once this is accomplished, the nonmoving party must present specific facts to show a genuine issue for trial; otherwise, the court will accept the moving party's factual record and enter judgment as a matter of law. A genuine issue exists only if reasonable jury evidence could support a verdict for the nonmoving party. In cases with cross-motions for summary judgment, the court evaluates each motion separately to determine if judgment can be entered based on undisputed facts and applicable law. If no genuine issue of material fact is found, judgment is entered for the deserving party.
In terms of the relevant plan language, after 24 months of disability benefits, the test of disability requires that the individual cannot perform their own occupation due to an illness, injury, or pregnancy-related condition, with earnings at 80% or less of adjusted predisability earnings. Furthermore, the plan stipulates that benefits may cease after 24 months if the disability is primarily caused by a mental health condition or substance abuse.
Regarding medical evidence, Dr. Mary Galonski, the plaintiff's treating psychiatrist, provided a letter asserting that schizophrenia and bipolar disorder are biological brain diseases. She has treated the plaintiff since March 2010 and diagnosed him with schizoaffective disorder, which includes symptoms of both schizophrenia and mood disorder episodes.
Plaintiff exhibits ongoing symptoms including visual and auditory hallucinations, paranoia with ideas of reference, sleep disturbances, and fluctuating energy levels, alternating between high and low energy. He experiences difficulty concentrating on multiple projects, alongside intermittent suicidal and homicidal thoughts, and struggles with anger and rage. Dr. Galonski notes that the Plaintiff is significantly impaired by these symptoms, which sometimes necessitate staying home or leaving public spaces when his anger or delusional thoughts intensify.
Dr. Galonski asserts that the Plaintiff meets the DSM-IV criteria for schizophrenia, characterized by persistent hallucinations and delusions resulting in significant social and occupational dysfunction for over six months, even during stable mood periods. Additionally, the Plaintiff meets criteria for mixed bipolar illness, showing symptoms of both mania and depression.
The Plaintiff has tried various medications, including Zyprexa, which improved psychotic symptoms but caused fatigue and weight gain; Lithium and Risperdal, which had limited benefits; and Ability, which increased his anger.
Dr. Galonski references research indicating a correlation between schizophrenia and brain damage, noting that brain scans (CAT and MRI) show larger ventricles in individuals with schizophrenia, suggesting neuronal damage. PET scans indicate lower metabolic activity during psychotic episodes. There is evidence of increased D2 receptor presence in the brains of those with schizophrenia, indicating involvement of neurotransmitters such as dopamine, serotonin, glutamate, NMDA, and gamma-aminobutyric acid in the disorder's symptoms.
Regarding bipolar disorder, Dr. Galonski highlights brain alterations, noting heightened activity in the left prefrontal-cortical and subcortical systems during manic phases, and reduced activity in the orbito-prefrontal area during depressive phases. Subjects with bipolar disorder also show lateral ventriculomegaly and volumetric deficiencies in prefrontal cortical areas. Dr. Galonski cites the DSM-IV-TR, asserting its authority as the standard reference for mental disorders, and quotes it concerning laboratory findings associated with schizophrenia, emphasizing the consistent finding of hypofrontality.
Functional abnormalities in the brain are increasingly recognized as widespread, affecting cortical-subcortical circuitry rather than being confined to specific regions. Laboratory findings associated with manic episodes reveal various abnormalities, including polysomnographic irregularities and elevated cortisol levels. Neurotransmitter systems implicated include norepinephrine, serotonin, acetylcholine, dopamine, and gamma-aminobutyric acid. Dr. Galonski asserts that schizophrenia and bipolar disorder, relevant to Jason's case, are broadly accepted as biological diseases of the brain.
To support this assertion, Dr. Galonski referenced several medical articles, including "Schizophrenia is a Disorder of the Brain" and "Evidence That Schizophrenia is a Brain Disease," among others. These studies emphasize that advancements in brain imaging have established that both schizophrenia and manic-depressive disorder are brain disorders, with evidence of reduced gray matter volume, particularly in the temporal and frontal lobes. Patients demonstrating significant brain tissue loss also exhibit severe symptoms, such as hallucinations and delusions. Additionally, those with schizophrenia typically present with enlarged brain ventricles and neurological abnormalities that impair cognitive functions, including information processing and verbal memory. The literature collectively underscores that modern imaging techniques have documented structural differences in the brains of individuals with schizophrenia, confirming it as a biological disease similar to Alzheimer’s disease and bipolar disorder.
Dr. Galonski's submission provides multiple articles indicating a correlation between brain damage and schizophrenia. Key findings include:
1. A study by Golden et al. (1981) using CT scans revealed lower density in the anterior left-hemisphere of schizophrenia patients compared to healthy individuals.
2. Cazaban's research highlights widespread structural connectivity abnormalities in the brains of those with schizophrenia.
3. Fujii and Ahmed (2004) assert that current evidence supports schizophrenia and other psychoses as brain disorders.
4. Parkar et al. (2006) confirmed the existence of brain damage linked to schizophrenia.
Subsequently, Aetna requested a medical record review from Dr. Stephen Gerson, a board-certified psychiatrist, regarding a plaintiff's appeal of terminated long-term disability (LTD) benefits. Dr. Gerson reviewed various documents but did not directly examine the plaintiff. He noted that while emerging evidence supports a neurobiological basis for schizophrenia and bipolar disorders, conventional classifications in the DSM-IV still categorize them under "mental nervous" conditions. He acknowledged impairment due to schizoaffective disorder up to June 6, 2012, despite lacking clinical evidence for impairment from August 30 to November 5, 2012.
Additionally, Aetna sought a review from Dr. Stuart Rubin, a board-certified physical medicine specialist, who also did not examine the plaintiff but evaluated the same set of medical records and documentation.
On October 11, 2012, Dr. Rubin consulted with Dr. Galonski regarding Berkoben's condition, noting symptoms of hallucinations, sedation, and poor concentration, while indicating that pain was not a concern. Dr. Rubin reviewed Berkoben's treatment history and responded to Aetna's inquiries about functional impairments from August 28, 2012, to October 24, 2012. He concluded that there were no musculoskeletal impairments during this period but acknowledged a severe schizoaffective disorder that prevented the claimant from working. Dr. Rubin classified the claimant’s condition as a mental health issue that could also be viewed as a medical condition, but not a musculoskeletal one.
Aetna referenced its internal "Mental/Nervous Limitations and Exclusions List" effective January 1, 2008, to justify applying a 24-month limitation to Berkoben’s long-term disability (LTD) benefits. The list includes ICD-9 and DSM-IV codes for various mental disorders, specifically mentioning several types of schizophrenia but not including schizoaffective disorder, which was identified as Berkoben's primary disabling diagnosis. Jeffrey Burdick from Aetna's Behavioral Health Unit concluded that the 24-month limit should apply due to this classification. Aetna sought confirmation from Dr. Elena Mendelssen, who verified that schizoaffective disorder is not listed as an exclusion, reinforcing the decision to impose the limitation.
Additionally, the excerpt outlines the ERISA standard of review, stating that while ERISA allows challenges to benefit denials in federal court, it does not specify the review standard to be applied, referencing a Supreme Court ruling on the matter.
Review of benefit plan decisions is subject to a de novo standard unless the plan grants discretionary authority to the administrator or fiduciary for determining eligibility or interpreting the plan's terms. In this instance, Aetna possesses such authority, thus the arbitrary and capricious standard applies to its decision to terminate Berkoben’s long-term disability (LTD) benefits. Under this standard, a court can only overturn the administrator's decision if it is unreasonable, lacks substantial evidence, or is legally erroneous. A decision is considered supported by substantial evidence if reasonable persons could agree with it, and the reviewing court cannot replace the administrator's judgment.
If a structural or procedural conflict of interest exists, this must be taken into account when assessing whether the administrator abused its discretion in denying benefits. The significance of this conflict varies based on specific case circumstances. Following the Supreme Court's ruling in Glenn, the appellate court has maintained that a deferential abuse-of-discretion standard should be applied in cases of conflict of interest, treating such conflicts as one factor among others in the abuse of discretion analysis. The prior "sliding scale" approach has been deemed invalid. Additionally, when ample evidence supports the claim denial, conflicts of interest or procedural irregularities are less likely to influence the determination of whether discretion was abused. A structural conflict arises when the entity responsible for determining eligibility also pays the benefits, creating financial incentives that may affect impartiality.
The Supreme Court has indicated that the significance of a structural conflict of interest diminishes when an administrator implements measures to mitigate bias and enhance accuracy, such as separating claims administrators from financial interests and instituting management checks that penalize inaccurate decisions. Procedural conflicts of interest arise from irregularities in the claims process, focusing on the treatment of the individual claimant. Such irregularities can lead to doubts about the administrator’s fiduciary neutrality and may include actions like reversing a decision without new evidence, selectively interpreting medical reports, ignoring staff recommendations for benefits, and requesting unnecessary medical examinations.
Examples of procedural bias noted include failing to adhere to notification requirements for benefit denials, selectively using medical expert reports, and denying benefits based on insufficient medical information and inadequate investigation.
In the case at hand, the plaintiff, Berkoben, seeks summary judgment on the grounds that Aetna abused its discretion in terminating his long-term disability (LTD) benefits, citing a structural conflict of interest since Aetna both funds and administers the benefit plan. Berkoben asserts that Aetna committed multiple procedural irregularities, specifically: ignoring a report from Dr. Galonski that recognizes schizoaffective disorder and bipolar disorder as biological conditions, overlooking its own psychiatrist’s conclusion about the biological basis of Berkoben’s condition, and disregarding its policy terms.
Aetna acknowledges the potential for a conflict due to its dual role but argues it still deserves deference under the arbitrary and capricious standard. Aetna contends that Berkoben must prove not only the existence of a conflict but also its significant influence on the decision-making process, which Aetna claims the administrative record does not support.
Aetna asserts that it has implemented procedural safeguards and quality control measures to ensure fair claims review, independent of plan funding, and to consistently pay claims according to benefit provisions. The company emphasizes the separation of claims personnel from financial interests to avoid conflicts. In support, Aetna presents an affidavit from Phillip Syphers, a Claim Manager, which the Court finds persuasive. The Court concludes that any structural conflict has minimal impact on Aetna's discretion in terminating the Plaintiff's long-term disability (LTD) benefits, particularly as the Plaintiff has not provided counterarguments or evidence against Aetna’s position.
The Plaintiff, Berkoben, alleges procedural irregularities in Aetna's termination of his benefits, claiming it selectively focused on mental health disabilities without considering exceptions to the 24-month limitation. He cites Aetna’s July 10, 2012 termination letter, which classified his diagnosis of Schizoaffective Disorder under the 24-month limitation for mental health conditions. Berkoben argues that his conditions, including schizoaffective disorder and bipolar disorder, should be recognized as biological diseases of the brain, exempting them from this restriction. He references Dr. Galonski’s report asserting that these conditions are biological and submits related medical literature to support his argument. Despite this evidence, Aetna denied his appeal, maintaining its position based on the classification of his conditions, which Berkoben claims demonstrates a misunderstanding or disregard of his appeal's focus regarding the exception to the 24-month limit.
Aetna's selective use of Dr. Stephen Gerson's peer review report is challenged by Plaintiff Berkoben, who argues that Aetna misinterpreted the central issue in his case. Aetna asked Dr. Gerson two questions regarding the claimant’s functional impairments and the nature of his disabling condition but failed to inquire whether Berkoben's mental health condition involved demonstrable, structural brain damage, as suggested by Dr. Galonski’s report. Berkoben asserts that had Aetna recognized the significance of Dr. Gerson's agreement with Dr. Galonski, it would have reversed its decision to deny his long-term disability (LTD) benefits. Instead, Aetna justified its denial by citing the DSM classification of the conditions as mental/nervous, which Berkoben contends does not address his claim that his disability includes structural brain damage.
Aetna counters that Berkoben's claims of procedural irregularities lack factual basis, asserting that all relevant documents and reports, including Dr. Galonski’s narrative and medical literature, were duly reviewed by independent physicians. Aetna reiterates that Dr. Gerson acknowledged the biological basis of mental health conditions while still classifying Berkoben's diagnosis as a mental health issue, which limits benefits to a maximum of 24 months. However, the Court finds Aetna's defense unpersuasive, emphasizing that the critical question is whether Aetna's decision to terminate benefits is supported by substantial evidence, rather than simply whether all evidence was considered. The Court will examine Aetna's termination and final denial letters to determine the validity of its decision.
Aetna's final denial letter asserts that the Plaintiff's schizoaffective disorder and bipolar disorder are classified as mental/nervous conditions by the DSM, thus subjecting them to a 24-month limitation for long-term disability (LTD) benefits, which ended on 8/28/12. Despite mentioning independent peer reviews in psychiatry and physical medicine, Aetna fails to disclose their results and does not reference relevant medical literature or Dr. Gerson’s opinion. Aetna acknowledges emerging evidence of a biological basis for these conditions but maintains that they still fall under the DSM's mental/nervous classification.
The letter misrepresents Plaintiffs counsel's argument, suggesting it claims the disorders are not mental health conditions, whereas counsel contends that the conditions have an organic basis while still being classified as mental health issues. Counsel's appeal explicitly highlights that the conditions are associated with neurochemical and structural brain deficits, referencing studies and the DSM-IV-TR. This positions Aetna to consider an exclusion from the 24-month limitation based on structural brain damage, which Aetna disregards in its decision.
Furthermore, Aetna's stance contradicts its internal guidelines, which recognize that certain mental/nervous conditions, including schizophrenia, with structural brain damage are excluded from the 24-month limitation. Ultimately, Aetna's conclusion fails to account for the Plaintiff's argument that schizoaffective disorder is distinguished by structural brain damage, thereby making the application of the 24-month limit unreasonable.
Aetna's claim file indicates that it consulted Jeffrey Burdick, LCSW, and Dr. Mendelssen regarding the Plaintiff's diagnosis of schizoaffective disorder (ICD Code No. 295.7) to determine if it was included in Aetna's internal List. However, Aetna's termination and final denial letters did not mention these consultations or the internal List, which is significant since Aetna relied on them to terminate benefits. The Plaintiff argues this omission violates Section 503 of ERISA (29 U.S.C. 1133), which mandates that plan participants receive adequate written notice detailing the specific reasons for benefit claim denials, stated clearly for understanding, and proper opportunity for review. The Secretary of Labor's regulations further specify the content required in notifications, including the reasons for denial, references to plan provisions, necessary additional information, and the review procedures available to claimants. The case of Grossmuller v. International Union emphasizes that a plan's fiduciary must consider all relevant information, provide clear communication regarding denials, disclose the evidence relied upon, and allow the participant to review that evidence and submit rebuttals.
Aetna asserts it is not obligated to disclose every piece of evidence used in its decision-making but must provide specific reasons for benefit denials, relevant plan provisions, and necessary information for claim perfection according to DOL regulations. Aetna claims to have provided the Plaintiff with a complete file, including diary entries related to Dr. Mendelssen and Mr. Burdick, but does not specify when this occurred. The record indicates Aetna failed to meet ERISA notice requirements by not informing Berkoben of crucial reasons for terminating his benefits, specifically its reliance on an internal List and the opinions from Burdick and Mendelssen. Aetna also did not allow the Plaintiff the opportunity to review this evidence or submit rebuttal information.
While Aetna correctly notes it need not detail every piece of evidence, its omission of critical evidence contravenes 29 C.F.R. 2560.503.1(g)(1), which mandates that administrators provide participants with copies of internal policies or guidelines relied upon, including the List. Aetna admits it only provided the List after the initial briefing, denying the Plaintiff a chance to respond during the administrative review. Furthermore, Aetna failed to adequately describe what additional materials were needed to perfect the Plaintiff's claim, in violation of ERISA Section 503. Aetna argues that the Plaintiff should have known the necessary information to submit based on treatment notes from Dr. Galonski, but the regulations require specific communication of such needs. The failure to inform the Plaintiff about reliance on the List and consultations with external experts raises questions of whether Aetna abused its discretion in terminating benefits, as noted in relevant case law.
Aetna contends that Dr. Galonski’s report from September 5, 2012, and accompanying medical literature were reviewed by two independent physicians. Dr. Gerson's psychiatric review acknowledged that while many mental health conditions may have biological underpinnings, they are still classified as mental health conditions. Aetna asserts that its final denial letter on appeal adequately addresses the medical literature and Dr. Gerson’s findings. However, this assertion is challenged as it mischaracterizes Dr. Gerson's opinion, which was specifically in response to whether the plaintiff's schizoaffective disorder or bipolar disorder constitutes a disabling medical condition or a mental/nervous condition, the latter being subject to a 24-month limitation. Dr. Gerson confirmed that schizoaffective disorder is classified as a mental/nervous condition in the DSM-IV, despite acknowledging its neurological basis.
Aetna's interpretation, suggesting that Dr. Gerson’s classification implies no structural brain damage, is deemed unreasonable since the relevant question was not posed. Additionally, Dr. Gerson noted that there is emerging evidence supporting a biological basis for schizophrenia and bipolar disorder, aligning him with Dr. Galonski’s opinion. The Court finds that Aetna failed to adequately justify why it discounted Dr. Galonski’s findings and did not follow up appropriately with Dr. Gerson regarding structural brain damage, indicating bias in Aetna’s decision-making process.
Dr. Galonski, who had treated the plaintiff for nearly two years, was not contradicted by other physicians as they were not asked to address the same issue. The absence of medical evidence undermining Dr. Galonski’s conclusions suggests procedural irregularities that support the claim of Aetna abusing its discretion in terminating the plaintiff's long-term disability (LTD) benefits. The Court will consider these irregularities when evaluating Aetna's arguments in their motion for summary judgment, where Aetna maintains that the plaintiff bears the burden of proving he is disabled and that his disability is not classified as mental, given the limitations in the plan.
Aetna argues that in response to its termination letter, which requested additional evidence from the Plaintiff, the Plaintiff provided minimal documentation, including psychotherapy notes and a letter from his psychiatrist, Dr. Galonski, along with medical literature on biological bases for schizophrenia and bipolar disorder. Aetna claims the Plaintiff did not provide evidence of physical impairment or structural brain damage, despite the presence of diagnoses for schizoaffective disorder and bipolar disorder, which are classified as mental or psychological conditions. Aetna notes that the classification of these conditions does not determine the outcome of the case.
Aetna asserts that for the first time in this federal action, it argues the absence of evidence for structural brain damage as a reason for terminating benefits, although this was not part of the original termination rationale. Furthermore, Aetna did not inform the Plaintiff about what proof would be necessary to demonstrate structural brain damage. Dr. Galonski's treatment notes indicated a requirement for proof of brain damage for continued benefits, but did not clarify what specific evidence would suffice, highlighting a lack of communication from Aetna regarding acceptable proof.
Additionally, Dr. Galonski’s report and supporting literature suggest a biological connection between schizophrenia and schizoaffective disorder, which Aetna acknowledges in its own documentation. Notably, schizoaffective disorder, which includes criteria for both schizophrenia and mood disorder episodes, is not listed among conditions exempt from Aetna's 24-month benefit limitation, raising questions about Aetna's rationale. Aetna attempts to diminish Dr. Galonski’s findings, suggesting uncertainty in her conclusions and the literature provided.
The medical literature indicates a confirmed biological connection to schizophrenia, contradicting Aetna's assertion that such a connection was merely possible. Aetna criticized Dr. Galonski for not demonstrating that the Plaintiff's diagnoses involved structural brain damage, a claim directly contradicted by Dr. Galonski’s report. When confronted with this inconsistency, Aetna shifted its argument to claim that Dr. Galonski did not diagnose the Plaintiff with brain damage or refer him to specialists, which is irrelevant since Aetna did not state that the lack of such evidence was the reason for terminating benefits. Aetna is barred from justifying its decision on grounds not previously disclosed to the Plaintiff during the administrative process.
Furthermore, Aetna's internal List of mental disorders does not require evidence of structural brain damage for conditions like schizophrenia, raising concerns about the arbitrary exclusion of schizoaffective disorder, which is a recognized form of schizophrenia. This discrepancy undermines Aetna's rationale for denying the Plaintiff's claim since all conditions listed are categorized as mental/nervous, yet Aetna's sole reason for termination was that the Plaintiff's condition fell into this category. Aetna also contended that it was not obligated to prioritize the opinion of the Plaintiff’s treating physician over its consultants. However, Dr. Gerson's report aligns with Dr. Galonski's opinion, and Aetna’s consultations with Dr. Mendelssen and Mr. Burdick lacked formal documentation, consisting only of a phone call without a generated report.
Dr. Mendelssen and Mr. Burdick were not asked to evaluate whether the medical literature in Dr. Galonski’s Report supports the claim that schizoaffective disorder involves structural brain damage or why it was excluded from Aetna’s List despite having a schizophrenia component. Their confirmation of the absence of ICD Code No. 295.7 from Aetna's List does not contradict Dr. Galonski's or Dr. Gerson's reports. Aetna's sole basis for terminating the Plaintiff's benefits was its internal List, which it did not explicitly reference in its termination letter nor provide to the Plaintiff. While Aetna is authorized to set policies for claims processing, it committed a procedural error by relying on an internal policy that lacks medical or scientific authority regarding the mental disorders included in the exclusions list. Aetna’s List does not constitute “medical evidence,” and its exclusion of unfavorable psychiatric opinions and relevant medical literature was deemed unreasonable. Aetna argues that courts typically uphold an administrator's reasonable interpretation of plan terms, even with differing interpretations, citing several cases that are not binding and factually distinguishable from the current case. Notably, in four cited cases, there was no exclusion for mental conditions with demonstrable structural brain damage, which differs from the present situation. Other cases mentioned by Aetna, such as Hurse v. Hartford Life, only share superficial similarities and involve distinct factual circumstances. In Hurse, the claimant's disabilities were evaluated, and specialists concluded there was no evidence of structural brain damage.
The claimant asserted that his symptoms resulted from structural brain damage linked to Hepatitis A and B vaccinations, particularly a mercury-based preservative. However, the administrator determined that the claimant did not provide credible evidence of such brain damage. In contrast to the Hurse case, the Veryzer case included substantial medical evidence indicating no presence of mercury poisoning. Aetna referenced Doe v. Hartford Life and Accident Insurance Co., claiming it involved a similar mental illness limitation provision. The court disagreed, noting that the disabling condition in Doe was bipolar disorder, which was argued to have a biological basis. The claimant's supporting evidence was weak, primarily relying on a physician's changed opinion, which conflicted with other medical professionals' views that bipolar disorder is psychiatric. Additionally, in Doe, the administrator had to interpret a specific policy definition that excluded structural brain damage, a factor not present in Aetna's Plan. Furthermore, the Doe plaintiff did not claim his condition fell within the structural brain damage exception, making the court's comments about the lack of evidence for such damage mere dicta. Regarding whether the claimant should provide evidence of structural brain damage, some courts have ruled that such proof is not necessary when no testing can confirm the diagnosis. In Fitts v. Unum Life Ins. Co. of America, the court held that the administrator's requirement for brain studies to diagnose bipolar disorder was unreasonable, as such a diagnosis cannot be confirmed through brain scans.
Bipolar disorder is recognized as an organic brain disorder, yet there is no definitive test to confirm its diagnosis, making it unreasonable to require the claimant to provide non-existent evidence to support her case. The district court, relying on medical expert testimony, including that of Dr. Goodwin, concluded that the claimant suffers from bipolar disorder, which can lead to significant cognitive decline over time, particularly during depressive episodes due to neurotoxic effects. Dr. Galonski also indicated that the claimant is disabled due to both schizoaffective disorder and bipolar disorder, reinforcing the notion of structural brain damage associated with bipolar disorder. The court found that Aetna's termination of the claimant's long-term disability (LTD) benefits lacked substantial evidence and constituted an abuse of discretion. The appropriate remedy for this improper termination involves either remanding the case to the plan administrator for a thorough review or reinstating benefits. The Third Circuit's precedent suggests reinstatement is warranted in cases of improper benefit termination to restore the claimant's status quo. Therefore, the court recommends reinstating the claimant's benefits following Aetna's unlawful termination.
Procedural irregularities regarding the Section 503 notice raise concerns about whether the Plaintiff can demonstrate disability under the “any reasonable occupation” standard, leading the Court to recommend vacating Aetna's decision and remanding the case to the plan administrator for further evaluation based on the Court's report. Regarding attorney's fees, the Plaintiff claims entitlement under Section 502(g)(1) of ERISA due to Aetna's arbitrary termination of his long-term disability (LTD) benefits, necessitating legal counsel for reinstatement. Although the statute allows for the award of attorney’s fees at the court's discretion, the Plaintiff did not adequately argue how the relevant policy factors favor such an award. Consequently, the Court declines to grant attorney's fees at this time but permits the Plaintiff to file a separate motion with supporting arguments if the District Judge rules in his favor on his summary judgment motion.
In conclusion, the Court finds that Aetna abused its discretion in terminating the Plaintiff's LTD benefits, recommending that the termination be vacated and the case remanded. The Plaintiff's Motion for Summary Judgment is partially granted and denied, specifically denying retroactive reinstatement of benefits, while the Defendant's Motion for Summary Judgment is denied. The parties are allowed fourteen days to file objections to this Report and Recommendation, with a failure to do so resulting in a waiver of appellate rights. Additionally, the Defendant criticizes the Chief Magistrate Judge for not striking an affidavit from the Plaintiff deemed outside the administrative record.
Defendant does not request equal treatment for its affidavit asserting a lack of conflict of interest during the review process, which was considered by the Chief Magistrate Judge. The Report and Recommendation does not depend on the Plaintiff’s affidavit for its conclusions. While the Court adopts the Report and Recommendation, it expresses uncertainty regarding the reinstatement of benefits pending administrative remand, noting a significant oversight in evaluating the relevant policy language. The Court suggests that the Defendant should provide continued benefits during the remand due to this oversight, citing Miller v. American Airlines, Inc. Furthermore, the Court observes that Dr. Galonski, the Plaintiff’s treating physician, did not adequately connect her observations about the Plaintiff's condition to the medical literature she referenced. Given the medical documentation, the Court deems it prudent to remand for prompt administrative review, as recommended by the Chief Magistrate Judge. The document makes references to the "Diagnostic and Statistical Manual of Mental Disorders" (DSM) and acknowledges that Dr. Gerson recognized the neurobiological basis of many mental/nervous conditions listed in the DSM, which aligns with the Plaintiff's condition. The majority of the parties' factual statements are undisputed; however, the Court disregards statements labeled as "facts" that are argumentative or unsupported by record citations. The excerpt also highlights various medical literature attached to the Plaintiff's appeal, and notes Aetna's claim of copyright over a document listing mental/nervous limitations and exclusions, without specifying the sources used to determine which disorders were included. Additionally, there are inconsistencies in the spelling of Dr. Mendelssen's name within the claims file.
The Court assumes the spelling of the name is correct. Under Section 3(21)(A) of ERISA, a fiduciary is defined as a person who exercises discretionary authority or control in managing a plan or its assets, or has discretionary responsibility in its administration. This includes individuals designated under section 1105(c)(1)(B) of Title 29 (29 U.S.C. 1002(21)(A)). The arbitrary and capricious standard aligns with the abuse of discretion standard. In Miller, the court indicated that the "sliding scale" approach used previously was invalidated by the Supreme Court’s decision in Glenn, yet factors historically considered in arbitrary and capricious reviews remain relevant. Aetna's citation to 29 C.F.R. 2560.503(1) is incorrect. The Court notes that on June 14, 2012, Plaintiff's counsel requested Aetna's full file, which Aetna presumably provided afterward. The Court finds Aetna's List lacks medical evidence as it does not include authoritative support for the inclusion of certain mental disorders. Plaintiff claims he did not receive notes regarding Dr. Mendelssen or Mr. Burdick, or the List until preparing for summary judgment. Aetna mischaracterizes Dr. Gerson's findings by inaccurately suggesting uncertainty in his opinion. Dr. Gerson stated there is emerging clinical evidence of a biological basis for schizophrenia and bipolar illness, and acknowledged that many mental disorders in the DSM-IV have a neurobiological basis, ultimately classifying the condition as a 'mental nervous' disorder according to conventional nomenclature.
