Court Criticizes Disability Insurer for Relying on Doctors With Inappropriate Training and Experience

Long-term disability insurer, Life Insurance Company of North America (“LINA”), was recently ordered by a federal court to cover long-term disability benefits for an employee who sustained a herniated disc to her spine. The court, in issuing its decision, laid out several reasons why the insurer had abused its discretion when the insurer denied the employee’s long-term disability claim. Of particular significance was the court’s focus on the insurer’s selection of doctors to review the employee’s disability claim.  The case is McGuire v. Life Ins. Company of North America, Case. No. SACV 20 01901 CJC, 2022 WL 4368140 (C.D.Cal. Sept. 21, 2022).

In McGuire, several years ago, an employee fell backwards and injured her spine. Over time, her symptoms worsened to the point where she could no longer continue with her job as a community relations manager for a waste disposal company. The employee worked for 12 years following her injury; however, she began experiencing intense chronic pain in her neck, stabbing pain in her shoulders and tingling and numbness in her right arm, hand and leg. The pain affected her ability to do things she enjoyed like walking, traveling and playing golf. 

The employee’s doctors diagnosed her with cervical radiculopathy and an MRI report showed a very large herniated disc in her cervical spine. The doctor recommended surgery; however, he noted its potential complications and the approximate 10% chance that her symptoms would not improve. Eventually, her doctor concluded she was totally disabled unless her employer was able to provide accommodations.

Eventually, the employee made a claim for long-term disability coverage. The insurer denied the claim and did so in part by relying on the opinions of doctors the insurer hired to review her claim.  One of the insurer’s doctors concluded that the employee was not functionally limited; however, he reached this opinion by only conducting a review of the medical records. The doctor never physically examined the employee.  The employee appealed the insurer’s denial decision. However, a second doctor hired by the insurer to review this claim concluded there were no correlating clinical findings to support a disability claim.

The employee eventually sued her insurer in federal court, and the judge presiding over the case agreed with the employee, finding that the insurer abused its discretion when denying her claim.  In laying out its analysis, the court explained LINA hired doctors board certified in occupational and family medicine. The court compared the insurance doctors’ experience to the issues presented by the employee – pain in the neck, back and extremities and spinal abnormalities.  The court noted the employee’s injuries were “best suited to neurologists, orthopedists and pain specialists, such as [the employee’s treating physicians].”

This case reminds of how important it is to challenge an insurer’s claim denial, in every respect. Here, the judge recognized that the insurer denied the claim using doctors whose practice and background were not an ideal fit for the employee’s medical condition. Because the insurer relied on doctors who were not “best suited” for the employee, the employee prevailed and eventually received disability benefits. 

Tags:  “Herniated disc” “ERISA disability plans” “employer sponsored disability” “disability lawyer” “ERISA attorney” “Life Insurance Company of North America” “Cervical radiculopathy” “defense doctors”