Court Finds Hartford Abused Its Discretion in Denying Attorney’s Long Term Disability Claim but Gives Hartford Second Bite at the Apple

A recent decision, O’Connell v. Hartford Life and Accident Insurance Company, No. 21-CV-10587-AK, 2023 WL 2633789 (D. Mass. Mar. 24, 2023), illustrates the great lengths an insurer will take to deny a credible claim for long term disability benefits. Plaintiff Diane O’Connell was formerly employed as an attorney for PricewaterhouseCoopers (“PWC”). PWC established a disability plan for its employees, which was insured by Hartford. O’Connell had worked for PWC for over 10 years and had always suffered from generalized anxiety. O’Connell became increasingly unable to cope as work pressures increased over time. She transferred to a new position within PWC but was still unable to perform that job as well.

Plaintiff submitted a claim for long term disability benefits to Hartford. Her claim was supported by her treating physician, a psychoanalyst. The physician stated that based on his observation, O’Connell had moderate impairment of attention, concentration, and memory. The physician did not supply his treatment notes but continued to complete forms supporting Plaintiff’s disability. Hartford retained a third-party physician, who based his opinion on the absence of information. Specifically, he noted that O’Connell had not been referred to a higher level of care, there had been no mental status examinations and no information in the record regarding the treatment she received from her employer. Hartford terminated benefits after paying the LTD claim for approximately six months.

O’Connell appealed and with her appeal included a four-page statement describing her employment situation and a report from a psychiatric independent medical examination. The IME physician concluded that while Plaintiff was functional at the time, she could not return to the high stress demands of her occupation. Plaintiff also submitted a report from a vocational expert who agreed that Plaintiff could not perform her occupation as an attorney.

Hartford then retained Dr. Joppich, who took great lengths to reject Plaintiff’s evidence.  Like the previous reviewer, Dr. Joppich also based her opinion on the “absence of evidence.” Although there was evidence of self-reported impairments, Dr. Joppich rejected this evidence because there was no “objective evidence” to support how the impairment was measured. It was “unclear” whether impairment was judged solely on self-report or if testing had been performed.

Plaintiff’s treating physician responded to Dr. Joppich’s report. He explained why psychological testing would not be helpful in Plaintiff’s case and that he had rendered his diagnosis based on several interviews in compliance with protocols specified in the DSM Disorders medical treatise. Undeterred, Dr. Joppich insisted that evidence was still lacking. Now, Dr. Joppich was critical because there was no “clear documentation” when the interviews had been completed and when it was determined that Plaintiff had limitations.

Again, Plaintiff’s physician responded. This time, he submitted the results of psychiatric testing he had conducted which showed that O’Connell had moderate to severe anxiety symptoms. Utilizing the “moving target” approach to claim evaluation, Dr. Joppich now stated that there was “no documentation” of the psychiatric testing on multiple dates, which would be “necessary” to track the severity of O’Connell’s symptoms. O’Connell’s physician submitted another statement, noting regression on the part of Plaintiff. Dr. Joppich stated that this did not alter her opinion and again relied on the absence of objective evidence establishing disability.   Hartford upheld the termination decision on appeal, reiterating Dr. Joppich’s conclusions.

Plaintiff sued and the Court determined that the abuse of discretion standard of review was appropriate. Under this standard of review, the Court considered whether Hartford’s conflict of interest as the claims administrator and payor should reduce the amount of deference it provided to Hartford’s decision. It declined to reduce its deference because: (1) Hartford had hired third party reviewers and (2) Hartford had referred the appeal to its separate Appeal Unit. (The Court did not mention that an appeal decision by a separate decision maker is actually mandated by 29 C.FR. §2560.503-1(h)(3)(ii) and (4.)) The Court stated it would apply the conflict factor only if all the other evidence was even and then, overturn the decision only if it was “unreasonable” or arbitrary and capricious.

Under this standard of review, the Court found Hartford’s decision arbitrary, but not necessarily “wrong.” Hartford failed to explain why it dismissed the opinions of Plaintiff’s treaters in favor of its own medical reviewers. Rather than just parrot its own reviewers’ opinions, Hartford should have explained why it favored those opinions over those of Plaintiff’s treaters. In addition, the Court noted that Dr. Joppich’s treatment of Plaintiff’s evidence was “superficial.” For example, when Plaintiff’s treater provided the requested testing, Dr. Joppich erroneously dismissed the evidence, stating new criteria allegedly necessary to verify the test results. The Court also addressed Hartford’s “objective evidence” criteria. Like other courts, it held that a requirement for objective evidence was troublesome for claims based on medical conditions that do not lend themselves to objective verification. The Court expressed its opinion that the testing and observed symptoms could be considered objective evidence of impairment. Hartford erred in failing to explain why that evidence was not considered objective evidence. In addition, Hartford was required to consider the subjective complaints, even in the absence of objective evidence. Hartford also erred in failing to meaningfully consider the vocational report submitted by Plaintiff. The evidence in the Record did not show that Hartford measured Plaintiff’s illness against the demands of her occupation.

Despite its criticism of Hartford’s methodology, the Court gave Hartford “another bite at the apple,” by remanding the case back to Hartford. It found an abuse of discretion because Hartford did not adequately explain its termination decision or evaluate O’Connell’s limitations against the demands of her occupation. Yet, at the same time, the Court found that O’Connell had not met her burden of proof.

The claim activities in this case are reminiscent of the “moving target” tactics criticized by the Seventh Circuit in Holmstrom v MetLife¸ 615 F.3d 758 (7th Cir. 2010). Regardless of the evidence submitted, the administrator was arbitrary in “moving the target” so that the claimant could never satisfy the insurer’s expectations. The O’Connell Court readily acknowledged that the insurer acted arbitrarily in failing to explain why the evidence submitted by the claimant was not satisfactory. Rather, Hartford continually relied on “the absence” of particular proof that was never described to the Plaintiff until the rejection of her evidence. In such circumstances, it may be that the appropriate remedy would have been to reinstate benefits so that the insured does not have to wait another 2 to 3 years for a decision on her claim. When an insurer acts arbitrarily, the claimant should not suffer the consequences.