weight of evidence
The way in which the court resolved all of the issues offers a very thoughtful and helpful guidance to claimants with disability benefit claims.
Regula involved an employee of Western Airlines who maintained a successful work record from 1971 until he sustained a serious on the job injury to his neck, right shoulder, and right arm in 1985. Regula was subsequently approved to receive short term, and then long term disability benefits which were reviewed periodically and continued until 1995, when benefits were subsequently terminated even though two treating doctors supported Regula's ongoing disability. In response to those reports, Delta arranged for Regula to be examined by a physiatrist who determined he was capable of "performing some type of work." A psychiatric evaluation also determined Regula was able to return to work, which formed the basis for the benefit termination.
Regula then appealed, submitting additional medical records and reports, none of which convinced Delta to overturn its decision; and litigation ensued. In the district court, the court found in favor of Delta, ruling that the disability plan had discretion to determine eligibility, and based on the examination reports, Delta had an adequate basis to terminate benefits and did not abuse its discretion.
The Court of Appeals reversed. Central to the court's ruling was the importation from Social Security disability law of a doctrine known as the "treating physician rule." That doctrine requires that deference be given to the opinions of the treating doctor since "he is employed to cure and has a greater opportunity to know and observe the patient as an individual." *7 (citation omitted) (the court also distinguished between applying the treating physician rule to health benefit claims, where the doctor has a financial incentive to assert that treatment is necessary, and disability benefits, where payments are made to the insured, not the doctor.*10). Although the court noted in footnote 5 to the opinion that other federal circuits do not apply the treating physician rule (Delta Family Care Disability & Survivorship Plan v. Marshall, 258 F.3d 834 (8th Cir. 2001) and Elliott v. Sara Lee Corp., 190 F.3d 601 (4th Cir. 1999), the Ninth Circuit disagreed with those rulings, pointing out that deference to the treating doctor's opinion is not absolute and can be overcome by contrary clinical and objective findings. The court added that the treating physician's opinions can be overcome if there are specific, legitimate reasons for doing so.
Crucial to the court's ruling as well was its rejection of the proposition that disability determinations under ERISA are made almost exclusively based on plan language. On the contrary, "the key issue in determining whether a claimant is entitled to benefits is not the language of the plan, but the facts of a particular case." *8. Thus, according to the court, the treating physician rule would assist courts in "enforcing the accuracy of disability determinations under ERISA." Id. The court added that because the abuse of discretion standard of review is a relatively undefined concept, the treating physician rule would help tailor that standard to determine disability. Moreover, because the ERISA law was intended to protect the rights of participants, the treating physician rule is consistent with that goal by "helping plan administrators make fair and accurate disability determinations."
In contrast to the treating physician rule, the court noted that it was troubled by "the conflict of interest inherent when benefit plans repeatedly hire particular physicians as experts." *11. Such doctors have an incentive "to preserve their own consulting arrangements."
The court then turned to the applicable standard of review. Although the court found the plan language granted broad discretionary authority, the language alone is not conclusive. Pointing out that when the plan operates under a conflict of interest, it is a factor to be considered and can reduce the discretion granted. In Regula, Delta was both the payor and administrator of the plan, and since Delta funds the plan and would be benefited by claim denials, the inherent conflict was present. Where such potential conflicts are present, the court is to first consider whether there is evidence showing a plan's self-interest influenced the decision. If so, the plan then has the burden of proving the conflict of interest did not affect the decision.
Utilizing those factors, the court was troubled by the Delta plan's sudden and abrupt termination of benefits without any change in Regula's condition after benefits had been paid continuously for eight years. The court also questioned the validity of medical reports obtained by the plan in response to the plaintiff's medical evidence, which contradicted the treating doctors' diagnoses without providing specific reasons for doing so.
Finally, it is important to note there was a dissent disagreeing with the application of the treating physician rule.
