Blogging Employee Benefits

April 6, 2006

In-House MD OK for Disability Claims

Filed under: Disability, Litigation — Fuguerre @ 7:20 am

The singular fact of working in-house does not disqualify a doctor from rendering an independent opinion any more than does paying an outside doctor to do the same….

The district court misapplied the arbitrary and capricious standard by undervaluing the opinion of a long-term disability plan administrator's in-house doctors, according to a 7th Circuit decision reversing the district court to grant summary judgment for the plan in denial of disability benefits. [Davis v. Unum, Nos. 05-2001 and 05-2165] Rejecting the argument that in-house doctors pose an inherent conflict of interest, the appellate court saw no need for the plan administrator to verify the in-house doctors' conclusions with outside doctors as long as the in-house decision was reasonable and the in-house doctors had no specific stake in the outcome.

The appellate court also faulted the district court for expecting the plan administrator's in-house doctors to conduct a personal examination of the claimant or communicate directly with his personal physicians, versus the medical file review that had been conducted. Finally, the appellate court disagreed with the district court's criticism of the brevity of the in-house doctors' reports, commenting –

[T]here is nothing in ERISA or our precedent requiring doctors to write like lawyers or plan administrators.



  1. This decision flies in the face of the agreement that the California Insurance Commissioner entered into with Unumprovident Corporation. In that the decision, Unumprovident Corporation agreed to a host of concessions, including not relying excessively on in-house physicians. In addition, relying on a paper review in connection with a psychiatric opinion has been appropriately criticized. Sheehan v. Metropolitan Life Insur.Co., 2005 U.S.Dist.LEXIS 4087 *72-*75 (S.D.N.Y. 3/17/2005). Finally, the Circuit Court’s belief that in-house physicians are not subject to pressures of their employer, or are truly “independent” is a fiction, particularly in light of the overwhleming evidence of physical disability by examining doctors.

    Comment by John Doe — April 7, 2006 @ 6:31 am

  2. See also FAQs About The UnumProvident Settlement.  While reliance on in-house physicians is not prohibited, it is clear that the reliance is to be fair and appropriate, without influence from the insurer. As I see it, the problem the appellate court had with the district court's ruling was that reliance on the in-house doctors was used as the principal basis for reversing the administrator's decision under the arbitrary and capricious standard of review without there being any evidence (although arguably the reliance solely on a file review might have constituted such evidence) that the in-house review was deficient, influenced, or conflicted. Even so, this does seem to maintain a lax hands-off level of preferential review of reliance on in-house medical opinion, versus the Settlement's rather clear identification of major problems with the practice.

    Comment by Fuguerre — April 7, 2006 @ 7:05 am

  3. The California settlement agreement with Unumprovident is more consumer oriented as compared with the settlement agreement that you linked to at the DOL. Although not applicable in Illinois, the California settlement agreement was entered into after the one with DOL. The Seventh’s Circuit decision also seems to go against the tide of the Sixth Circuit, the home of Unumprovident, which has continued to raise questions, even about outside record reviewers retained by insurers, Calvert, Kalish in 2005, and now the 2006 opinion in Evans v. Unumprovident Corp.

    Comment by John Doe — April 7, 2006 @ 11:09 am

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