Another court has offered insight into how to determine when a claim administrator acts in an arbitrary and capricious manner. A Federal Judge in Michigan determined that Sedgwisk, a third party administrator of claims for General Motors, abused its discretion, by adopting the opinions of a hired medical reviewer, over the well supported opinions of the claimant’s treating providers. The Court found the hired doctor’s opinions to be conclusory, failed to properly consider the objective support for the claimant’s impairment, and lacked substantial support. Another factor noted by the Court was the fact that the hired doctor submitted an addendum at the urging of Sedgwick, deciding that such supplemental report was entitled to very little weight, as it was clear that the second report was issued to satisfy the requests of the insurer.
We see this type of conduct often, where insurers seek “addendums” from their hired paper reviewing physicians, where the initial report is either equivocal or not supportive of a claim termination or denial.
The Court was also concerned that the insurer relied upon a well known insurance doctor, who “cherry picked” the medical evidence to support his conclusions.
Blajei v. Sedgwick Claims Management Services (E.D. Mich. 2010).