Court Holds That Aetna’s Denial of Benefits Was Reasonable

Case Name: Armando Mercado v. Federal Express Corporation and Aetna Life Insurance Company

Court: United States District Court Southern District of Florida

Type of Claim: Long Term Disability

Insurance Company: Aetna Life Insurance Company

Claimant’s Employer: Federal Express Corporation “Fed Ex”

Claimant’s Occupation / Job Position: Operations Manager

Disabilities: Plaintiff suffered from avascular necrosis in his hips, back pain, spinal stenosis, obstructive sleep apnea, and gastroesophageal reflux disease. Plaintiff underwent surgeries on his ankles and elbows. Plaintiff also suffers from polyneuropathy in his lower extremities and requires the use of a machine to deal with his obstructive sleep apnea.

Definition of Disability: The Plan defines Disability for LTD purposes for the first two years as:
“the employee has an ‘Occupational Disability’ under the LTD Plan that prevents a disabled employee from ‘perform[ing] the duties of his regular occupation.”
The Plan allows an employee to receive LTD benefits beyond two years if the employee:
“[has] a ‘Total Disability’ . . . that prevents him from working in ‘any compensable employment’ for at least twenty-five hours a week.”

Benefits Paid? Plaintiff received short-term disability benefits from April 2012 to October 2012. Plaintiff received long-term disability benefits from October 2012 to October 2014 based on Aetna’s determination that there were “significant objective findings” that Mercado had an “Occupational Disability” as defined under the Policy.

Procedural history: Plaintiff was approved for long-term disability benefits from October 2012 to October 2014, at which point Aetna decided to cease Plaintiff’s long-term disability benefits after his two-year benefits period expired. Plaintiff appealed Aetna’s decision and received a denial of his appeal in November 2014. Aetna informed Plaintiff that he did not meet the definition of “Total Disability” based on the Policy’s definition of long-term disability after the first two years of benefits.

Key Physician Opinions: Plaintiff had various physicians offer their assessment of Plaintiff’s condition during his claim’s process for long-term disability. The Social Security Administration found in February of 2014 that Plaintiff was “able to stand and/or walk 1 hour total in an 8-hour work day, [and] sit 4 hours total in an 8-hour work day.” The Veteran Affairs Outpatient Clinic, Plaintiff’s primary treating facility, opined that Plaintiff’s degenerative arthritis in his ankles would prevent “physical . . . but not sedentary employment.” Additionally, the Clinic determined that Plaintiff’s back condition would “prevent all physical and sedentary employment.”
Aetna utilized two peer review physicians to analyze Plaintiff’s medical records and relative conditions. Dr. John-Paul Rue found that while Plaintiff did in fact suffer from various conditions and diseases in his lips and legs, his “medical conditions [were] controlled and not contributing to his overall functional impairment.” He concluded that Plaintiff’s medical records contained insufficient evidence severe enough to meet the Policy’s definition of Total Disability, in that Plaintiff would be able to engage in any compensable employment for a minimum of twenty-five hours a week. The second peer review physician Aetna utilized, Dr. Martin Mendelssohn, opined that despite Plaintiff’s past and potential surgical procedures and pain management regiment, Plaintiff’s medical records contained insufficient evidence to reveal that Plaintiff’s functional impairments would “preclude the claimant from engaging in any compensable employment for a period of 25 hours per week provided with sedentary or light physical exertion level.”

Issues: The Court addressed several issues within Aetna’s determination that the Court found did not meet the required arbitrary and capricious standard. (1) Whether Aetna improperly ignored the Social Security Administration’s findings. (2) Whether Aetna properly respected the Veteran Affairs Clinic physician’s findings during Plaintiff’s compensation and pension review. (3) Whether the peer review physicians’ reports relied upon by Aetna in issuing its denial of benefits were consistent and clear, and supported the information contained in Plaintiff’s medical records.

Holdings: The Court granted Defendant’s Motion for Summary Judgment and affirmed Defendant’s denial of continued long-term disability benefits to Plaintiff. The Court held the record supported Aetna’s contention that Plaintiff was no longer entitled to LTD benefits because he failed to meet the definition of “Total Disability” as defined by the Policy, and that Aetna’s decision to do so was neither arbitrary or capricious.
(1) The Court held that based on the Social Security Administration and Aetna’s different respective definitions of “Total Disability,” Aetna’s assessment of Plaintiff’s limitations was reasonable in light of the Policy’s definition of “Total Disability.”
(2) The Court held that Aetna did not act unreasonably in considering the Veteran Affairs Clinic’s findings during Plaintiff’s compensation and pension review.
(3) The Court determined that nothing in the peer review physician’s reviews suggested that they ignored Plaintiff’s medical records and treating physicians’ conclusions and that Aetna’s decision to agree with such reports was reasonable.

Summary: “Under the arbitrary and capricious standard, review is limited to whether reasonable grounds existed to support Aetna’s denial of benefits to [Plaintiff] based on the administrative record before it. See Townsend v. Delta Family-Care Disability and Survivorship Plan, 295 F. App’x 971, 976 (11th Cir. 2008). The Court held that Aetna reasonably concluded that Plaintiff was no longer entitled to long-term disability benefits and that their decision process was neither arbitrary nor capricious. The Court granted Defendant’s Motion for Summary Judgment and denied Plaintiff’s Motion for Summary Judgment. Aetna’s denial of continued long-term disability benefits was affirmed.