Koning V United Of Omaha: LTD Insurer Abuses Discretion By Failing To Address Treating Physician’s Opinion And Not Scheduling IME

Disclaimer: This was not a case handled by disability attorney Nick A. Ortiz. The court case is summarized here to give readers a better understanding of how Federal Courts decide long term disability ERISA claims.

Case Name: Koning v. United of Omaha Life Insurance Company

Court: United States Court of Appeals for the Sixth Circuit. On appeal from the United States District Court for the Western District of Michgan.

Type of Claim: Long Term Disability insurance benefits.

Insurance Company: United of Omaha Life Insurance Company (hereinafter “United of Omaha”).

Claimant’s Employer: American Metal & Plastics, Inc..

Claimant’s Occupation / Job Position: Human Resources Manager.

Disabilities: The claimant suffered from numerous neck and back problems, including:

  • Spinal stenosis
  • Degenerative disc disease L3-4, L4-5, L5-S1
  • Degenerative disc disease C4-5, C5-6
  • Post laminectomy pain syndrome
  • Lumbar spondylosis with radiculitis
  • Lumbosacral spondylosis
  • Cervical spondylosis with radiculitis
  • C7-8 radiculopathy
  • Large central disc protrusion L4-5
  • Disc Bulge L5-S1
  • Bilateral L5 radicular syndrome
  • Lumbar canal stenosis C4-5
  • Spondylosis C2-3, C4-5, C5-6
  • Chronic cervicalgia due to facet arthropathy at the 4th, 5th and 5th cervical segments; and
  • Cervicogenic headaches.

Mrs. Koning underwent spine surgery in 2002; followed by a lumbar laminectomy and discectomy at L4-5 on January 25, 2005; and a right posterior cervical lymph node excision on August 12, 2005. Despite surgical intervention, courses of physical therapy, epidural injections, cervical facet injections, nerve root block and rhizotomies, Mrs. Koning continues to experience:

  • Chronic and severe back pain;
  • Chronic and severe neck pain;
  • Bilateral lower extremity pain;
  • Bilateral shoulder and arm pain;
  • Pain that radiates into her back buttocks and legs;
  • Inability to sleep due to her physical pain.
  • Unable to sit, stand and/or bend for any significant period of time.

Definition of Disability: 
To be eligible for Long Term Disability insurance benefits under the subject Plan, an employee must have, because of “an injury or sickness, a significant change in . . . mental or physical functional capacity” such that she is “prevented from performing at least one of the material duties of [her] regular occupation on a part-time or full-time basis . . . .” After a benefit has been paid for 24 months, the definition of “disability and disabled” means “you are unable to perform all of the material duties of any gainful occupation. Disability is determined relative to your ability or inability to work. It is not determined by the availability of a suitable position with your employer.”
The Plan reads as follows:

Definition of Disability: Disability and Disabled means that because of an Injury or Sickness, a significant change in Your mental or physical functional capacity has occurred in which You are:

  • Prevented from performing at least one of the Material Duties of Your Regular Occupation on a part-time or full-time basis; and
  • Unable to generate Current Earnings which exceed 99% of Your Basic Monthly Earnings due to that same Injury or Sickness.

After a Monthly Benefit has been paid for 24 months, Disability and Disabled mean You are unable to perform all of the Material Duties of any Gainful Occupation. Disability is determined relative to Your ability or inability to work. It is not determined by the availability of a suitable position with your employer.

Benefits Paid? United of Omaha Life Insurance Company denied the LTD claim from the beginning.

Issue: Whether United of Omaha Life Insurance Company failed to adequately evaluate the medical evidence presented.

Holding: Yes, for the following reasons:

Ignoring Favorable Evidence from Koning’s Treating Physicians

The Court stated,

“[P]lan administrators are not obliged to accord special deference to the opinions of treating physicians.” Black & Decker Disability Plan v. Nord, 538 U.S. 822, 825 (2003). However, they “may not arbitrarily refuse to credit a claimant’s reliable evidence, including the opinions of a treating physician.” Id. at 834. “[A] plan may not reject summarily opinions of a treating physician, but must instead give reasons for adopting an alternative opinion.” Shaw v. AT&T Umbrella Benefit Plan No. 1, __F.3d__, 2015 WL 4548232 (6th Cir July 29, 2015), Op. 13, citing Elliott v. Metro. Life Ins. Co., 473 F.3d 613, 620 (6th Cir. 2006). In Shaw, this Court found that the Plan acted arbitrarily and capriciously where a claimant’s medical records and functional capacity evaluation showed that he was unable to sit or stand for more than 30 minutes, and had to lie down to recuperate. The Court explained that a Plan cannot ignore favorable evidence from a treating physician, but must ‘“give reasons” for rejecting a treating physician’s conclusions”’. Id., citing Hayden v. Martin Marietta Materials, Inc. Flexible Benefits Program, 763 F.3d 598, 608-09 (6th Cir. 2014) (finding that the plan acted arbitrarily and capriciously in denying benefits for a mental disorder in part because the plan failed to ‘“give reasons’ for rejecting a treating physician’s conclusions.”).”

Selectively Reviewing Treating Physician Evidence

“This Court has held that a plan administrator acts arbitrarily and capriciously when it “engages in a selective review of the administrative record to justify a decision to terminate coverage.” Metro. Life Ins. Co. v. Conger, 474 F.3d 258, 265 (6th Cir. 2007) (internal quotation marks omitted). Here, the Plan’s file reviewers engaged in a selective review when they concluded that Koning was not disabled, without adequate medical evidence to refute her treating physician’s diagnoses. The records review specifically discounts her pain.”

Failing to Conduct its Own Physical Evaluation

“[T]here is nothing inherently improper with relying on a file review, even one that disagrees with the conclusions of a treating physician.” Calvert v. Firstar Fin. Inc., 409 F.3d 286, 297 n.6 (6th Cir. 2005). However, we have held that the failure to conduct a physical examination, where the Plan document gave the plan administrator the right to do so, “raise[s] questions about the thoroughness and accuracy of the benefits determination.” Helfman v. GE Grp. Life Assurance Co., 573 F.3d 383, 393 (6th Cir. 2009) (quoting Calvert, 409 F.3d at 295).”

Significant Change in Physical Functional Capacity

“The district court below concluded that the Koning did not carry her burden to prove that she has suffered a significant change in her physical functional capacity, stating “plaintiff must establish more than a change in her subjective experience of a long-term problem with back pain; rather she must demonstrate some real, objective change in her actual capacity.” [citation omitted]. However, Koning may be able to meet this burden.”

Summary: United of Omaha Life Insurance Company ignored favorable evidence submitted by her treating physician(s), selectively reviewed the evidence it did consider from the treating physicians, failed to conduct its own physical examination, and heavily relied on non-treating nurses and other non-physicians.

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