Holzmeyer v. Walgreen Income Protection Plan for Pharmacists & Registered Nurses
Docket: No. 1:12-cv-01737-SEB-DML
Court: District Court, S.D. Indiana; September 4, 2014; Federal District Court
Plaintiff Michael Holzmeyer, a former Walgreens employee and licensed pharmacist, filed a suit under ERISA for judicial review of the denial of his long-term disability benefits. The court ruled in favor of Holzmeyer, granting his motion for summary judgment and denying the motion from the Walgreen Income Protection Plan. Holzmeyer had a significant medical history, including severe back issues originating from a 1986 automobile accident that resulted in spinal fusion surgery. He worked as a home pharmacist for Walgreens beginning in September 2009, while enrolled in the Walgreen Income Protection Plan, which defines 'disability' as the inability to perform essential job duties due to medical conditions. Holzmeyer’s treatment history includes consultations with several doctors, revealing ongoing back pain, degenerative changes in his lumbar spine, and limitations in mobility and range of motion. Subsequent imaging and evaluations indicated deteriorating conditions affecting his previous surgical interventions and overall health.
On April 23, 2010, Holzmeyer consulted Dr. Glenn Fuoco at Tampa Bay Orthopaedic Specialists, reporting significant lower back pain, rated at 7 to 8 out of 10, exacerbated by his sedentary work as a home pharmacist since September 2009. He experienced shooting pains and numbness in his right leg, necessitating him to sit with his left leg elevated due to a clotting issue, aggravating his back pain. Dr. Fuoco administered a bilateral sacroiliac joint injection, which provided only temporary relief. During a follow-up appointment, Holzmeyer indicated a return of symptoms, prompting a recommendation for a caudal epidural injection, which also yielded only short-term improvement.
On July 1, 2010, Holzmeyer visited the Laser Spine Institute, reporting an average pain level of 9 out of 10 when active and 6 to 7 while resting. Examination revealed tenderness in several vertebrae and limited motion, leading to a scheduled surgery on July 20 that included thermal ablation of paravertebral facet joint nerves, lumbar laminectomy, foramino-tomy, and an additional caudal epidural steroid injection. Despite initial improvements, Holzmeyer reported a return of pain in August, prompting another caudal epidural injection on September 1.
An MRI on September 27 indicated degenerative disc disease at the L4-5 level, with potential nerve root compression. After moving to Indiana, Holzmeyer began treatment with Dr. Ross Whitacre at Tri-State Orthopaedics on October 18, 2010. Dr. Whitacre diagnosed significant lumbar spondylosis with stenosis at L4-5, which remained symptomatic post-surgery. A CT scan confirmed no acute spinal fractures but revealed moderate to severe spinal canal stenosis. Following ineffective pain management efforts, Dr. Whitacre referred Holzmeyer to orthopedic surgeon Dr. John Grimm.
Dr. Grimm's evaluation of Holzmeyer highlighted severe low back pain at the lumbosacral junction, with bilateral radiating pain into the hips and thighs, notably worse on the left side. Holzmeyer reported difficulty walking, standing for more than 10 minutes, and sitting for about 30 minutes, while experiencing a gradual worsening of his condition. Dr. Grimm's spinal examination indicated tenderness throughout the thoracic and lumbar spine, but no deficits in motor, reflex, or sensory testing of the upper extremities. A CT scan showed moderate collapse of the L4-5 disc and deterioration of hardware from a prior fusion. Holzmeyer scored 70% on the Oswestry Disability Index.
Subsequent CT scans revealed a right laminectomy defect and moderate to severe central spinal canal stenosis at L4-L5, leading to a third back surgery by Dr. Kern, after which Holzmeyer reported resolution of preoperative back pain but developed severe buttock pain. Dr. Rupert, a pain management specialist, diagnosed Holzmeyer with 'failed back syndrome' after finding tenderness in multiple back areas. Despite initial postoperative improvement, Holzmeyer’s preoperative symptoms returned, prompting Dr. Kern to advise against further surgery and refer him back to Dr. Whitacre for pain management.
Holzmeyer continued to experience constant pain in lower back and hip areas, exacerbated by various movements. After consulting Dr. Whitacre, who noted persistent tenderness and a marked size difference in Holzmeyer’s calves, an appointment was made for a high-volume caudal epidural steroid injection.
Holzmeyer received a steroid injection on August 16, 2011, but reported to Dr. Whitacre on September 19 that the injection was ineffective, with pain returning after three days. He experienced significant limitations, with a standing tolerance of only 5-10 minutes and discomfort while sitting. Dr. Whitacre noted that Holzmeyer’s medications contributed to inattentiveness, impacting his ability to return to work. A physical examination revealed significant back pain and limited spinal motion. During a follow-up on October 24, 2011, Holzmeyer expressed concerns regarding a prior physical capacity evaluation, stating he spends 90% of his day reclined and rarely sits upright or walks, only doing so when necessary. A CT scan revealed successful lumbar decompression surgery but persistent chronic degenerative disease and scoliosis. On December 20, 2011, pain specialist Dr. Ante noted Holzmeyer’s worsening low back pain, numbness in his thighs and left ankle, and discussed the possibility of a drug pump for pain management. In a later appointment on May 3, 2012, Holzmeyer reported severe back pain and restricted motion to a nurse practitioner. Holzmeyer ceased working as a home pharmacist on April 4, 2010, applied for short-term disability benefits from Walgreens, and received these benefits from April 7 to October 3, 2010.
Holzmeyer applied for long-term benefits after his short-term benefits expired. Sedgwick initially approved his application but noted that the approval was conditional and contingent on his health. On October 4, 2010, Sedgwick granted benefits through October 19 to facilitate recovery from back surgery, requiring further documentation for ongoing benefits and mandating that Holzmeyer apply for Social Security disability benefits. Sedgwick extended his benefits multiple times, with the last extension noted being through August 31, 2011. Each extension was contingent on Holzmeyer providing current medical documentation detailing his condition and treatment.
In 2011, Sedgwick initiated functional capacity evaluations (FCEs) from Holzmeyer’s treating physicians, Dr. Rupert and Dr. Whitacre. Dr. Rupert, on July 21, 2011, assessed Holzmeyer as capable of only three hours of work per day with significant breaks, deeming these restrictions permanent. Conversely, Dr. Whitacre, on August 9, 2011, evaluated Holzmeyer as able to work a full eight-hour day under temporary restrictions, subject to reassessment.
Sedgwick also consulted two independent physicians, including Dr. Victor Parisién, who reviewed Holzmeyer’s records without an in-person examination. Dr. Parisién, after consulting Dr. Whitacre’s surgical technician, concluded that despite the imposed restrictions, Holzmeyer could perform sedentary work as a pharmacist.
Dr. Parisién reported that the patient, Holzmeyer, has undergone multiple spinal surgeries and continues to experience pain when sitting, standing, and walking, which could impact his work ability. However, he noted that Dr. Whitacre’s Functional Capacity Evaluation (FCE) indicated a lack of objective medical evidence supporting Holzmeyer’s claim of complete disability, stating that the medical records did not substantiate his inability to work. While there were signs of limited range of motion and reduced sensation, orthopedic tests were negative, and CT results did not correlate with his pain or restrict him from sedentary work.
Dr. Jamie Lee Lewis, tasked with reviewing Dr. Rupert's opinions, acknowledged Holzmeyer’s chronic low back pain but argued it should not inherently limit his work capacity. He suggested that if medication side effects caused functional impairment, the solution would be to adjust the medication rather than conclude disability. Lewis highlighted that despite Holzmeyer’s complex history of spinal stenosis, without follow-up notes from a recent surgery, he could not find objective evidence supporting disability. Instead, he concluded that Holzmeyer was capable of performing sedentary work due to lumbar spine issues.
On October 3, 2011, Sedgwick notified Holzmeyer that his long-term disability benefits were terminated as of September 20, 2011. The decision was based on a review of treatment notes from various doctors and the FCEs submitted by Drs. Rupert and Whitacre, as well as analyses from Lewis and Parisién. Sedgwick determined that Holzmeyer was capable of sedentary work, which was supported by his job as a home pharmacist, allowing for necessary breaks from sitting.
Sedgwick determined that there was no medical evidence supporting any restrictions on Holzmeyer’s ability to perform his sedentary job duties. Following the termination of his long-term disability benefits, Holzmeyer appealed in November 2011, providing new documentation, including his approval for Social Security Disability Insurance (SSDI) benefits, which the SSA granted based on a finding of disability effective April 4, 2010. Holzmeyer also submitted medical records from ongoing treatment, including appointments and procedures from 2011. Sedgwick sought further information from Walgreens’ HR, obtaining a general job description indicating Holzmeyer’s position was sedentary.
Two physicians, Dr. John Graham and Dr. Howard Grattan, reviewed Holzmeyer’s records without performing in-person examinations. Dr. Graham’s review acknowledged Holzmeyer’s chronic pain but found no clinical evidence to support his concerns about concentration issues related to pain medication. He concluded that the only documented physical limitation was a reduced range of motion, yet he opined Holzmeyer could perform his job without restrictions. Dr. Grattan also noted objective deficits in range of motion but concluded they would not prevent Holzmeyer from fulfilling his job requirements. Notably, neither physician mentioned the SSA's finding of Holzmeyer’s disability.
Dr. Grattan assessed the patient's condition, noting that the patient reported being unable to get out of a reclined chair for 90% of the day and experiencing distractibility due to medication. However, Grattan found that these self-reported side effects lacked clinical documentation. The patient demonstrated intact strength, sensation, and coordination in all extremities, with no objective deficits that would hinder him from performing sedentary duties as a home pharmacist. Grattan concluded that the patient was not disabled from his regular job as of September 20, 2011.
Sedgwick denied Holzmeyer’s appeal for long-term disability benefits termination in a letter dated February 10, 2012, which reiterated findings from Drs. Graham and Grattan. Holzmeyer was informed of the option to file a second administrative appeal, which he did on May 10, 2012, through attorney Mike Hayden. This appeal highlighted a favorable SSA disability finding and concerns about Holzmeyer’s lower extremity issues and the effects of his pain medication on job performance. Sedgwick denied this second appeal on August 22, 2012, relying on opinions from Drs. Sonne and Kaplan, who acknowledged some limitations but deemed Holzmeyer capable of performing his job. Following the second appeal's denial, Holzmeyer filed a claim under ERISA on November 27, 2012.
The legal analysis indicates that under Federal Rule of Civil Procedure 56, summary judgment is warranted when no genuine dispute exists regarding material facts, with the court favoring the non-moving party in its interpretation of the evidence. The presence of mere factual disputes or speculative doubts does not preclude summary judgment.
Plaintiffs' claims are governed by the Employee Retirement Income Security Act of 1974 (ERISA), which aims to protect the interests of employees and their beneficiaries in employee benefit plans. ERISA requires that denied claims for benefits receive written notice detailing the specific reasons for the denial in an understandable manner, as well as a procedural opportunity for a full and fair review. Administrators must act solely in the interests of plan participants and adhere to plan standards.
For the first 18 months post-employment, the Walgreens Plan defines "long term disability" as being unable to perform essential job duties due to sickness, pregnancy, or injury, while also being unable to earn over 80% of pre-disability earnings. The plan grants discretion to Sedgwick, the claim administrator, in making benefits decisions, which means courts will defer to Sedgwick's determinations unless they are deemed an "abuse of discretion" or "arbitrary and capricious." This lowers judicial scrutiny from de novo to an abuse-of-discretion standard.
Judicial review is not merely a "rubber stamp," as courts must ensure the administrator followed appropriate procedures and communicated specific reasons for its determinations. A decision may be deemed arbitrary if it lacks reasoning or fails to logically connect evidence to conclusions. A denial of benefits should be overturned if the administrator's actions are "downright unreasonable." When reviewing a denial of an appeal, the administrator must address any reliable, contrary evidence provided by the claimant to meet the standard of reasonableness.
Reviewing a plan administrator's discretion under ERISA involves evaluating the administrative record without considering extraneous evidence. In this case, the plaintiff contests Sedgwick's termination of his disability benefits and the denial of subsequent appeals. The court found Sedgwick's decisions unreasonable, particularly due to a critical failure in analyzing the opinions of record-reviewing physicians, which neglected inconsistencies with the functional capacity evaluations from the plaintiff’s treating physicians. While the reliance on record-reviewing physicians is not inherently unreasonable, the court highlighted that Sedgwick's oversight of key inconsistencies undermines procedural and substantive reasonableness mandated by ERISA. The court also noted that biases could exist in evaluations, but such concerns are generally balanced by the advocacy of treating physicians. Thus, while certain aspects of the plaintiff's arguments were not accepted, the court identified a significant flaw in Sedgwick's rationale for terminating benefits.
A claim administrator is within its rights to reject treating physicians' opinions regarding a claimant's disability or assign less weight to disability reports lacking objective support. There can be a notable discrepancy between a claimant's reported pain and the objective evidence of functional limitations. A claim administrator may choose to prioritize one physician's specific functional capacity evaluation over another's less definitive report, provided it articulates and justifies its rationale. However, the administrator cannot disregard or misinterpret evidence that favors the claimant. Functional capacity evaluations (FCEs) from the claimant’s physician must be seriously considered and cannot be dismissed solely because they are based on the claimant's subjective pain reports.
In the case presented, Dr. Rupert’s FCE indicated that Holzmeyer could only sit for one hour and perform any work for two to three hours a day, classifying these limitations as permanent. Conversely, Dr. Whitacre’s FCE suggested Holzmeyer could sit for three to four hours in an eight-hour workday, with breaks, and characterized his limitations as temporary. Dr. Jamie Lee Lewis, who reviewed Holzmeyer’s records for Sedgwick, concluded that there were no objective findings to support that Holzmeyer was unable to perform a sedentary job, despite acknowledging Dr. Rupert’s FCE. Notably, Lewis failed to address Rupert’s specific findings about Holzmeyer's limited ability to work. Dr. Victor Parisién also referenced Dr. Whitacre’s FCE in his report.
Parisién purportedly endorsed Dr. Whitacre’s functional capacity evaluation (FCE) for Holzmeyer, which established that he could sit for four hours with breaks, stand for three hours, and walk for one hour, allowing him to work an eight-hour day. However, this conclusion was questioned because Holzmeyer’s sedentary job as a home pharmacist primarily requires prolonged sitting, and Whitacre's assessment did not support an ability to sit at a computer for eight hours. Parisién acknowledged that Holzmeyer’s back pain was aggravated by sitting, standing, and lying down, with pain levels varying from 8 to 10 out of 10. Furthermore, Whitacre’s FCE suggested Holzmeyer could sit for only three to four hours daily, making Parisién's conclusion a misinterpretation of the FCE. Parisién did not consider Dr. Rupert’s FCE, which stated Holzmeyer could sit for a maximum of one hour a day, contradicting the assessments used by Sedgwick in its termination letter. Sedgwick's letter, which denied Holzmeyer’s benefits, summarized opinions from Parisién and Lewis, asserting no objective medical documentation supported restrictions preventing Holzmeyer from performing his sedentary job duties. This approach was deemed unreasonable, as it overlooked Rupert’s critical finding regarding Holzmeyer’s functional limitations, violating procedural reasonableness standards established by the Seventh Circuit.
The defendant’s physician overlooked a Functional Capacity Evaluation (FCE) questionnaire completed by another treating physician, which indicated the claimant had limited functional capacity, likely because the company did not provide the documents. MetLife relied solely on its retained physician's opinion to deny the disability claim, leading the Seventh Circuit to conclude that MetLife did not afford the claimant a full and fair review and failed to adequately address critical medical evidence. This failure is seen as a lack of reasoning. The Seventh Circuit's decisions in Leger v. Tribune Co. and Love v. National City Corp. underscore the necessity for plan administrators to provide reasonable explanations and address reliable contrary evidence, especially from treating physicians. If a plan administrator contradicts treating physicians' findings on claimant functional capacity, it must offer a clear explanation rather than merely dismissing the claimant's complaints. Sedgwick's correspondence with Holzmeyer failed to meet this requirement concerning Dr. Rupert's report, as it noted Rupert's opinion but did not engage with his findings or reconcile them with the views of reviewing physicians. The lack of a substantive explanation suggests Sedgwick dismissed Rupert’s FCE due to its reliance on subjective pain assessments rather than objective data, highlighting a critical oversight in their evaluation process.
Dismissal of a Functional Capacity Evaluation (FCE) solely for lack of “objective” evidence fails to meet the analytical standards required by ERISA, as established by the Seventh Circuit. Sedgwick's handling of Dr. Whitacre's opinions regarding Holzmeyer’s ability to perform his job as a home pharmacist shows a lack of thorough analysis of the job's functional requirements. A plan administrator's decision is deemed arbitrary and capricious if it does not adequately investigate the claimant's occupational requirements per the plan's definitions. Dr. Whitacre indicated Holzmeyer could only sit for four hours in an eight-hour workday, yet Dr. Parisién concluded this meant Holzmeyer could perform his sedentary job without further justification. Sedgwick adopted this conclusion, merely noting that the home pharmacist role is sedentary and allows for breaks. Plaintiff contends that Sedgwick acted arbitrarily by not obtaining a detailed job description for Holzmeyer, but the defendant argues that such a requirement is not mandated by ERISA but rather depends on the specific plan language. Nonetheless, general procedural reasonableness requires a connection between functional capacity findings and the disability definition. Merely classifying the job as sedentary is inadequate, as many sedentary roles may exceed the sitting limits indicated by Dr. Whitacre. Holzmeyer asserted that his position required continuous sitting and an extensive workload, further complicating Sedgwick’s justification for denying benefits. Sedgwick could have justified its decision by addressing the discrepancies between Dr. Whitacre’s findings and the actual demands of Holzmeyer’s job, but failing to do so constitutes an abuse of discretion.
A plan administrator's failure to assess the "material and substantial" duties of a claimant's sedentary job rendered its disability conclusions arbitrary and capricious, as held in Kirkpatrick. Sedgwick's initial termination decision was unreasonable, as it either ignored or misinterpreted the opinions of Drs. Rupert and Whitacre, failing to explain its disregard for their evidence, which violates ERISA's procedural standards. Chronic pain, often subjective and difficult to measure, complicates disability determinations, especially for sedentary roles where pain is a primary disability factor. Both treating physicians concluded that Holzmeyer’s ability to perform sedentary work was impaired, with Dr. Rupert stating he could sit for only one hour and Dr. Whitacre for four. Their extensive evaluations provided a better basis for assessing Holzmeyer’s credibility regarding his pain than those of Sedgwick's consultants. Holzmeyer’s medical history, including multiple imaging studies revealing significant back issues and a long history of treatment, supports his claims of disabling pain and contradicts any notion of malingering or exaggeration. The court has previously scrutinized instances where plan administrators favored their own doctors' opinions over those of treating physicians, which raises concerns about the reasonableness of disregarding established medical evidence in disability determinations.
The court found that the defendant's reviewing doctors did not adequately consider the opinions of treating physicians regarding the claimant's functional limitations due to back pain. While the court did not reinstate a requirement for special deference to treating physicians, it emphasized that a plan administrator must have strong evidence to refute a well-supported opinion from a treating physician. The reviewing doctors failed to address the claimant's overall condition and history, which supported his complaints of pain. The court concluded that Sedgwick acted arbitrarily in terminating Holzmeyer’s benefits.
Additionally, Holzmeyer argued that Sedgwick's denial of his appeal did not provide the "full and fair review" required by ERISA, particularly because it ignored the Social Security Administration's determination that he was disabled. The court agreed, noting that ERISA mandates consideration of all relevant evidence submitted by the claimant. Although the plan administrator is not bound by the SSA's disability determination, neglecting to consider it suggests arbitrary decision-making. The SSA's definition of disability is stringent, which raises concerns when the ERISA plan's criteria are less demanding. Holzmeyer had been approved for Social Security Disability Insurance (SSDI), which he was required to apply for under the plan's terms.
Holzmeyer submitted the SSA's favorable decision letter from October 22, 2011, as new evidence in his appeal to Sedgwick. His counsel, Michael Hayden, highlighted this SSA award in the appeal letter. The Plan defines disability as the inability to perform essential duties of one’s occupation, which may be less stringent than the SSA’s criteria. Sedgwick's rejection letters did not reference Holzmeyer’s SSA award or explain the discrepancy between the two standards of disability. Although SSA awards are not binding on ERISA claim administrators and the determination criteria differ, recent Seventh Circuit rulings suggest that SSA findings should be considered, particularly when the SSA standard is more stringent. Sedgwick's omission of the SSA award in its decision-making process is viewed as a failure to adequately address reliable evidence submitted by Holzmeyer. The lack of reasoning in Sedgwick’s assessment of Holzmeyer’s functional capacity evaluations and their inconsistency with his job description led to the conclusion that Sedgwick did not meet the required standard of reasonableness in its decision-making process.
Sedgwick's denial of Holzmeyer’s disability benefit appeals, without acknowledging the Social Security Administration's finding of permanent disability, raises concerns regarding its decision-making process. While Sedgwick has discretion under the plan to grant or deny benefits, it is still required by ERISA to provide clear reasoning for its decisions and to consider all relevant evidence, especially evidence favorable to the claimant. The court found that Sedgwick abused its discretion due to its inadequate reasoning, which justifies granting summary judgment in favor of the plaintiff and denying the defendant's cross-motion. The court ordered a remand for further consideration consistent with its findings, emphasizing that only in rare cases with compelling evidence should the court bypass the usual decision-making process assigned to the claim administrator. The administrative record and relevant plan documents are available in specified docket numbers. Holzmeyer’s medical history includes significant back pain following a surgical procedure, with detailed pain assessments documented in medical records. The Oswestry Disability Index, a tool for evaluating chronic back pain, indicates that Holzmeyer’s condition severely impacts his daily life, necessitating further intervention.
At the L4-L5 level, a broad-based disc protrusion is observed, accompanied by posterior osteophyte formation and a laminectomy defect on the right side, resulting in moderate to severe central spinal canal stenosis and moderate bilateral neural foraminal narrowing. Degenerative changes are noted in the bilateral facet joints. Surgical operation notes are absent, but post-operative notes from Dr. Kern provide basic details. Following a December 29, 2011 appointment, Dr. Whitacre recorded ongoing "extension-based lumbosacral junction pain" in the patient, Holzmeyer. Various records refer to "physical capacity evaluations," termed "FCE" for simplicity, indicating significant restrictions on Holzmeyer’s lifting and carrying abilities. However, these restrictions are not pertinent to his role as a "home pharmacist." Dr. Graham's mention of lacking a functional capacity evaluation from Whitacre contradicts other notes indicating he reviewed an FCE from August 9, 2011. Initially, Drs. Sonne and Kaplan assessed Holzmeyer’s disability based on his inability to perform any occupation instead of his specific role, leading Sedgwick to request clarifications which reaffirmed the "own occupation" standard. The text of the Walgreen’s Plan, defining long-term disability, is included in the record, while two of Holzmeyer’s exhibits are excluded. The plaintiff argues that reversing an initial disability finding was unreasonable, citing Leger v. Tribune Long Term Disability Benefit Plan, but the court notes that such prior benefits do not create a presumption that the plan administrator must overcome. The initial awards were linked to specific medical events, and it was not unreasonable for Sedgwick to grant benefits for limited periods while assessing permanent disability.
Sedgwick's claim procedures cited by the Plaintiff are deemed inappropriate for consideration as they are not part of the administrative record. Following Sedgwick's initial decision to terminate benefits, Dr. Whitacre partially revised his opinion, indicating that Holzmeyer had more functional limitations than previously assessed. Parisien reported contacting Dr. Whitacre's surgical technician, who suggested that Holzmeyer could perform a sedentary job with restrictions; however, this assertion does not confirm that the "home pharmacist" position qualifies as such. Sedgwick's records describe the position as sedentary with breaks, but Dr. Whitacre's functional capacity evaluation (FCE) indicated Holzmeyer could only sit for four hours in a day, raising concerns about the feasibility of an eight-hour workday.
Holzmeyer's affidavit is not part of the administrative record, and Sedgwick's decision must be evaluated based on the information available at the time of the benefits termination. This highlights Sedgwick's inadequacy in investigating and documenting Holzmeyer’s job nature. The document notes that Holzmeyer had multiple appointments with both Dr. Whitacre and Dr. Rupert, countering the Defendant’s claims that their opinions should be discounted due to infrequency of visits.
Defendant argues the limited nature of Holzmeyer’s Social Security Disability Insurance (SSDI) award letter, suggesting it should hold little weight. However, case law cited does not support the notion that an SSDI award without accompanying records is less significant. Although one case implied that an unaccompanied award letter may not outweigh substantial medical evidence, it also acknowledged that such awards generally favor a finding against arbitrary and capricious denial of benefits.
