A California District Court finds Hartford violated ERISA when it wrongfully denied benefits to a California woman suffering from Stage three ovarian cancer. Lisa Schwarz suffered from recurring stage three ovarian cancer and related complications for eight years before receiving long-term disability benefits from Hartford. When Hartford terminated her benefits and rejected her appeal, Ms. Schwarz filed a lawsuit in federal court. After determining Hartford violated ERISA, the Court sent Ms. Schwarz’s long-term disability claim back to Hartford for reconsideration.
The Claim and Appeal
Ms. Schwarz submitted a claim for long-term disability benefits in January 2017 due to symptoms of her cancer and chemotherapy treatment, which Hartford approved and began paying. The same month, Ms. Schwarz underwent surgical intervention to remove an enlarged lymph node. Although the main node and others removed did not show signs of cancer, her surgeon noted in the medical records that the cancerous node was too deep to see during surgery. In March, Ms. Schwarz began seeing a therapist regularly due to major depression and chronic pain from her medical condition.
A year and a half later, Hartford’s in-house physician reviewed Ms. Schwarz’s records and determined that she was able to return to work from an oncology standpoint. The reviewing doctor deferred Ms. Schwarz's mental health issues to a psychiatry reviewer, which Hartford never followed through with. Instead, Hartford terminated benefits in August 2018 and Ms. Schwarz timely appealed that decision.
During its review of Ms. Schwarz’s appeal, Hartford had two consulting physicians -- a psychiatrist and an oncologist -- review Ms. Schwarz records. The records reviewed by Hartford’s consulting psychiatrist were incomplete missing notes from multiple treating behavioral health providers. Hartford’s consulting oncologist cherry-picked the records and took several parts of Ms. Schwarz’s medical notes out of context. Both consulting doctors concluded Ms. Schwarz could return to work without restrictions. Hartford sent its consulting physicians’ reports to Ms. Schwarz’s treating doctors, but refused to provide the reports to her attorney prior to making a final decision despite multiple requests. When Ms. Schwarz’s doctors did not respond to the reports, Hartford rejected her appeal for benefits.
As a result, Ms. Schwarz filed suit against Hartford asking the court to either (1) review the missing medical information not considered by the insurance company, or (2) send the claim back so that the full medical records can be considered in a benefits determination.
Hartford’s Procedural Violations
Under ERISA, a claims administrator shall afford a reasonable opportunity to a claimant whose benefits have been denied for a “full and fair review”. This includes, in part:
- Providing any new or additional evidence considered, relied upon, or generated by the plan when reviewing the claim;
- Providing the information to the claimant, free of charge;
- Providing the information as soon as possible;
- Providing the information in advance of when a decision is to be made;
- Giving the claimant a reasonable opportunity to to respond to the information prior to when a decision must be made;
- Asking for additional information, if the plan believes it is needed to make a decision;
These are just some of the obligations a disability insurance company has under ERISA when reviewing a claim or appeal for benefits.
The Court’s Decision
Upon consideration of Ms. Schwarz’s case and the record, the Court found that Hartford failed to adequately investigate the claim. Hartford failed to engage in a meaningful dialogue with Ms. Schwarz, which it was required to do as a fiduciary under the plan if it believed more information was needed to make a reasoned decision. In fact, Hartford must ask for the additional information before making a decision. When Hartford’s first physician reviewer deferred to a psychiatry review of Ms. Schwarz’s mental health, it should have engaged with a consulting physician.
The court also found that Hartford violated ERISA when it failed and refused to provide its consulting physicians’ reports to Ms. Schwarz’s counsel because the regulation explicitly states plan administrators must send relied-upon evidence to the claimant.
As a result, the Court sent Ms. Schwarz’s claim back to Hartford so she could benefit from a “full and fair review” as required by law and a proper benefits determination could be made based upon a complete record.
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