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Medical Records - Consideration Or Explanation

Medical records tell the story of someone’s medical history

When filing for long term disability benefits, the medical records are the most important factor. The Life Insurance Company of North America (“LINA”) recently lost a case because they failed to explain why they did not credit some of the medical records in the file. While the claim was being reviewed, the disabled man applied for social security disability benefits with LINA’s assistance as required in the policy.

Mr. Calhoun had a policy through LINA. He filed for long term disability benefits (“LTD”) based on his disabling condition. His claim for LTD benefits was initially approved. He received benefits for 15 months. LINA then informed Mr. Calhoun that he would only continue to receive benefits past 24 months if he was unable to perform in any occupation.

LINA conducted a functional capacity evaluation (“FCE”), two rounds of surveillance, and a transferrable skills analysis. They then informed Mr. Calhoun that he would continue to receive benefits beyond 24 months. Also, his claim for social security benefits had been approved.

LINA made disability benefit payments to the claimant for 27 months before deciding to terminate his benefits. In terminating the claimant’s benefits, LINA relied on a third round of surveillance, a peer review of the medical record, and a second transferrable skills analysis. Mr. Calhoun appealed LINA’s decision to terminate his benefits.

His appeal was denied. They based that denial upon a second peer review and a third transferrable-skills analysis. He then filed a lawsuit.

LINA acted unreasonably by terminating benefits

The court found LINA’s decision was “not the product of reasoned decision-making and was not supported by substantial evidence.”

First, the court noted that LINA was wrong in encouraging and assisting Mr. Calhoun in applying for social security benefits. LINA financially benefited from such assistance which the Court found unfair. But LINA also failed to explain why it reached a different conclusion than the social security administration.

LINA’s position in its denial letters was that it had considered the social security administration’s award of benefits but rejected it. LINA stated it had new medical evidence but failed to identify this new medical information. It also failed to explain why that evidence should be credited over the other evidence in the record.

Second, the court expressed concerns over LINA’s reliance on the peer reviews and file reviews. The reviewing physicians made conclusions as to Mr. Calhoun’s credibility without ever physically examining him. The court also found that the reviewing physicians failed to adequately explain why the FCE results were unreliable. And they did not explain why they believed that the medical evidence did not support disability.

The court also stated that the transferable skills analyses relied upon by LINA should be discounted because they were based solely on the file reviews which were inadequate to explain the termination.

Ultimately, the court held that LINA acted arbitrarily and capriciously when it denied the claimant’s claim without an explanation as to why some medical records were credited over others. Thus, LINA was ordered to reinstate the claimant’s long term disability benefits.