Warden v. Metropolitan Life Insurance Company

Mr. Warden suffered from severe back, neck, and shoulder pain.  In July of 2005, Mr. Warden’s treating physician, Dr. Stark, submitted a treating physician statement to MetLife recommending that Mr. Warden have an MRI and EMG conducted and diagnosing Mr. Warden with lumbar stenosis, radiculopathy, spondylolisthesis, osteoarthritis, and degenerative disc disease. Warden v. Metropolitan Life Ins. Co., 574 F. Supp. 2d 838, 842 (M.D. Tenn. 2008).  Dr. Campbell, a neurologist with Vanderbilt Medical Group, found evidence of radiculopathy in Mr. Warden’s EMG.  Dr. Stark referred Mr. Warden to Dr.Klekamp, who also diagnosed him with cervical radiculopathy. Id.  Dr. Klekamp performed surgery on August 22, 2005. Id.  Although the surgery decreased Mr. Warden’s pain, he continued to experience back pain and weakness and numbness in his arms and shoulders. Id.

After receiving benefits for two years, Met Life cut off Mr. Warden’s benefits claiming that his condition was subject to the neuromusculoskeletal and soft tissue exception which limited benefits to two years.  This exception limited benefits when a claimant was disabled due to a neuromusculoskeletal and soft tissue disorder including any disease or disorder to the spine or extremities and their surrounding soft tissue, including sprains and strains of joints and muscles, unless the claimant provided objective evidence of radiculopathies (among other exceptions not at issue here). Id. at 841.

After Mr. Warden appealed this denial, MetLife referred his file for review to Dr. Freedman, an orthopedic surgeon for Physician’s Consultants Review. Id. at 843.  Although Dr. Freedman found some evidence of radiculopathy, he found there were insufficient findings to support a lumbar radiculopathy. Id.  Dr. Freedman opined that to further evaluate Mr. Warden’s radiculopathy, Mr. Warden would need repeated EMG and Nerve Conduction Studies. Id.  MetLife never requested that Mr. Warden undergo either of these tests. Id.  Despite proposing additional testing and despite acknowledging that Mr. Warden’s knee and lower back arthritis significantly limited him, Dr. Freedman asserted that Mr. Warden’s conditions were subject to the two year limitation. Id.  Based on Dr. Freedman’s opinion, MetLife upheld its denial in January 2009.

Mr. Warden then came to us to help him get his benefits back.  We submitted medical records from both Dr. Stark and Dr. Klekamp which further supported that Mr. Warden had radiculopathy, spondlylolisthesis, stenosis, and disk degeneration. Id. at 844.  Dr. Freedman again reviewed Mr. Warden’s file in May of 2006. Id. at 845.  Dr. Freedman agreed with Dr. Stark’s assessment of Mr. Warden’s disability but found that there was no objective evidence of radiculopathy causing the disability. Id.  In October of 2006, Dr. Schlosser, a neurosurgeon, examined Mr. Warden and found significant degenerative disk disease and spondylolisthesis. Id.  MetLife never acknowledged this opinion. Id. at 846.

Because the long-term disability plan at issue clearly granted MetLife the discretion to determine claim eligibility, the court reviewed MetLife’s denial of benefits under the arbitrary and capricious standard of review. Id.  We argued that MetLife should be subject to stricter scrutiny, since it both determined whether benefits were due and paid benefits.  The court explained:

‘There is an actual, readily apparent conflict…, not a mere potential for one’ where a company both funds and administers an LTD policy, because ‘it incurs a direct expense as a result of the allowance of benefits, and it benefits directly from the denial or discontinuation of benefits.’…Because the [insurance company] maintains such a dual role, ‘the potential for self-interested decision-making is evident.’

Id. (quoting Evans v. UnumProvident Corp., 434 F.3d 866, 876 (6th Cir. 2006)).  Because a successful claim for LTD benefits would be a significant expense for MetLife, the court agreed that MetLife had a conflict of interest. Id.  However, an insurance company’s conflict of interest does not change the standard of review but rather may be a factor that warrants less deference if the claimant proves that the insurance company was motivated by self-interest or bad faith. Id. at 847 (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S.101, 115 (1989); Peruzzi v. Summa Medical Plan, 137 F.3d 431, 433 (6th Cir. 1998)).

Even though the arbitrary and capricious standard of review is quite deferential, it “inherently includes some review of the quality and quantity of the medical evidence.” Id. (quoting McDonald v. Western-Southern Life Ins. Co., 347 F.3d 161, 172 (6th Cir. 2003)).  The administrator’s decision must still be “based on reasonable interpretation of the plan” and a reasoned explanation of the evidence. Id. (quoting Evans, 434 F.3d at 876).  Actions that may make an administrator’s decision arbitrary and capricious include—denying a claim for lack of objective evidence even though the claimant’s disabling condition is one that cannot be objectively determined (see Brooking v. Hartford Life & Accident Ins. Co., 167 Fed.Appx. 544, 549 (6th Cir. 2006); Mitchell v. Eastman Kodak, 113 F.3d 433, 442-43 (3d Cir. 1997); Kosiba v. Merck & Co., 384 F.3d 58, 62 n. 3 (3d Cir. 2004); Green—Younger v. Barnhart, 335 F.3d 99, 108 (2d Cir. 2003); Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 381-82 (6th Cir. 1996)); hand-picking among the medical evidence (Smith v. Continental Cas. Co., 450 F.3d 253, 261 (6th Cir. 2006); Glenn v. MetLife, 461 F.3d 660, 671-72 (6th Cir. 2006); relying on consultants who only review the paper file (Kalish v. Liberty Mutual, 419 F.3d 501, 508 (6th Cir. 2005); failing to conduct a physical examination when the plan allows the administrator to do so (Calvert v. Firstar Fin., Inc., 409 F.3d 286, 292 (6th Cir. 2005); denying  a claim based on the explanation of a doctor employed by the insurance company (Kalish, 419 F.3d at 507); relying on a non-examining consultant who disagrees with claimant’s treating physician (McDonald, 347 F.3d at 170).

Following the precedent of Iley v. MetLife, the court held that MetLife could require objective clinical findings of radiculopathy. Id. at 848 (citing Iley v. Metropolitan Life Ins. Co., 261 Fed.Appx. 860, 864 (6th Cir. 2008)).  However, the court found the Dr. Klekamp’s review of the MRI and Dr. Stark’s opinion of Mr. Warden’s EMG reflect two objective tests evidencing post-surgery radiculopathy. Id. at 849.  MetLife acted arbitrarily by not requiring their consultant, Dr. Freedman, to examine Mr. Warden in person and by not having Mr. Warden submit to EMG and Nerve Conduction Studies as Dr. Freedman suggested. Id.  In its denial, MetLife relied on the fact that Dr. Klekamp did not expressly mention radiculopathy in his April 13th notes. Id.  However, Dr. Klekamp made multiple other diagnoses that fell under the plan’s definition of radiculopathy. Id. at 850.  Therefore, the court held that Mr. Warden was entitled to benefits. Id.

The court also exercised its equitable powers to grant Mr. Warden pre-judgment interest on the benefits that MetLife wrongfully withheld. Id.  The court explained that its grant of prejudgment interest would incentivize MetLife to have actual medical examinations performed on claimants rather than merely rely on file reviews and to have claimants undergo the diagnostic tests suggested by doctors and consultants. Id.  Finally, the court granted attorney’s fees, because MetLife’s “failure to exercise a clear right under the Plan for medical testing” was culpable, MetLife can easily afford an award of attorney’s fees, and the award will discourage MetLife from making similarly arbitrary denials. Id. at 851.