TERMINATION OF DISABILITY BENEFITS UPHELD UNDER ARBITRARY AND CAPRICIOUS STANDARD OF REVIEW
Dr. MacNaughton was a diagnostic radiologist in Kansas. She was part owner and an employee of her radiology practice. Her duties included reading x-rays, CT scans and MRIs. Dr. MacNaughton was covered as an employee under the practice’s group LTD plan that was funded by a policy issued by Paul Revere and governed by ERISA.
Dr. MacNaughton’s claim began in September 2007 after she was confined to bed rest because of pre-term labor. Dr. MacNaughton gave birth to twins in November 2007 and shortly thereafter she reported to Paul Revere that she was suffering from a series of post birth complications including blurred vision in her left eye. The left eye blurriness would persist and ultimately become the foundation of her claim.
Thereafter, the origins of Dr. MacNaughton’s blurred vision became the subject of inquiry by almost a dozen different ophthalmologists who either treated her or reviewed her claim.
Dr. MacNaughton’s initial treating physician diagnosed her primary cause of impairment to be from convergence insufficiency, a condition which prevents the eyes from focusing together at near distances, an ability that was crucial for
Dr. MacNaughton to perform her occupation. Early on, there were challenges to her claim by Paul Revere and Northwestern Mutual, which issued an individual disability policy to Dr. MacNaughton. However, an IME directed by Northwestern Mutual supported Dr. MacNaughton’s claim based largely on the excessive malpractice risk the IME physician opined would be imposed on her practice group. An internal medical review by Paul Revere that found no disabling impairment was countered by Dr. MacNaughton’s treating physician’s finding that her convergence insufficiency was worsening. Paul Revere continued to pay benefits.
In late 2017, during a routine check in call with
Dr. MacNaughton, she reported she did not have any restrictions and limitations. A review resulted in a decision to do an IME. Before the IME was scheduled, Paul Revere reached out to
Dr. MacNaughton’s attending physician and learned that he had retired. The physician who assumed his practice told Paul Revere he was not comfortable certifying to Dr. MacNaughton’s disability, and he agreed an IME was an appropriate next step. The IME found no impairment and the claim was closed.
Dr. MacNaughton appealed and engaged the services of a new treating physician. His opinion was that Dr. MacNaughton had been misdiagnosed with convergence insufficiency. His diagnosis was that she had optic nerve damage. On appeal, Paul Revere used the services of a consulting ophthalmologist who disagreed with the new physician and the claim was closed. The fact that an appellate medical review would be undertaken was disclosed to Dr. MacNaughton and her counsel. However, no request was made to view the report.
Dr. MacNaughton sued Paul Revere in federal court in Massachusetts. Efforts to transfer venue back to Kansas were unsuccessful. 405 F.Supp.3d 203 (D. Mass. 2019). Dr. MacNaughton attempted to strike documents from the Administrative Record that supported Paul Revere’s position that the claim was subject to discretionary review and she requested depositions of Paul Revere personnel. Both requests were denied. 2021 WL 5180238 (D. Mass. 2021). The parties filed cross motions for summary judgment and the court made two findings.
First, the court agreed with Paul Revere that the claim was subject to discretionary review. Second, the court agreed with Dr. MacNaughton that Paul Revere failed to provide a full and fair review because it had not sent her a copy of the medical review conducted on appeal so she could respond to it. The court remanded the case back to Paul Revere to allow a response. 589 F.Supp.3d 129 (D. Mass. 2022). The court then awarded
Dr. MacNaughton attorney’s fees for having achieved the remand. 2022 WL 17253701(D. Mass. 2022).
On remand, Dr. MacNaughton’s physician gave a new opinion. The earlier findings of visual acuity abnormalities were gone. Dr. MacNaughton was tested with 20/20 vision in her left eye. The afferent pupillary defect was no longer present. The physician previously submitted a sworn statement testifying that such abnormalities would still be present in 50 years. However, the defect was now reported as no longer present. The post remand response to Paul Revere reflected a shifting medical analysis based on the “Qualitative” aspects of vision. This new qualitative deficiency was supported by two new tests. One for stereo vision and the other for contrast sensitivity. Paul Revere’s consulting ophthalmologist reviewed the new submissions and rejected the new information point by point. The denial was upheld.
The court granted summary judgment to Paul Revere using a somewhat less than deferential standard of review based on what the court described as “procedural unreasonableness.”
Dr. MacNaughton argued that Paul Revere should have used yet a different consulting physician during the remand. The court rejected that argument stating that the remand did not create a new appeal warranting a new physician under ERISA’s claim regulations. As to the substance of the decision on remand, the court stated that Paul Revere, using the muted discretionary standard of review, was free to credit its consulting physician over the ever-changing diagnoses provided by
Dr. MacNaughton’s physicians.
J. Christopher Collins represented The Paul Revere Life Insurance Company.
