A Court in Nevada has determined that Sedgwick Claims, a third party claim administrator for Long Term Disability Insurance claims for United Health Group, abused its discretion and acted in an arbitrary and capricious manner in how it handled the claim of an insured suffering from orthopedic problems including a pinched nerve and arthritis. The claimant, a telemonitor nurse – performing her work largely from a sitting position – was unable to perform her work functions due to these medical difficulties.
Sedgwick Claims had a nurse review the medical documentation, and determined that the documentation “did not substantiate” the severity of her impairment. To reach that determination, the nurse for Sedgwick Claims asserted that the condition had existed for some period of time, and there was no indication of what had changed in the claimant’s condition to cause impairment. Despite the fact that her physicians had provided an articulation of the functional limitations and deficits, Sedgwick Claims rejected such medical support. On Appeal, the claimant submitted additional medical documentation, and test results, as well as hospital records from an admission due to a severe exacerbation of her condition. Sedgwick Claims than utilized one of its regular third party vendors, Network Medical Review (NMR) to perform a paper only review of the medical evidence.
Relying upon the paper review, Sedgwick Claims continued to deny benefits. On a further appeal, Sedgwick Claims engaged Dr. David Knapp, a well known insurance pandering physician to review records again. Sedgwick Claims never sought to have the claimant examined in person. Based upon Dr. Knapp’s conclusions, the claim continued to be denied.
The Court determined that Sedgwick Claims failed to act appropriately, in arbitrarily discrediting the opinions of the claimant’s doctors, and in requiring objective medical evidence despite conditions existing where no such evidence could ever be submitted. The Court also determined that Sedgwick Claims failed to engage in a meaningful dialogue, as it failed to properly advise the claimant what documentation it required with any specificity. Lastly, the Court took issue with Sedgwick Claims failing to apply the plan’s disabled definition, instead, imposing requirements upon the claimant which were not grounded in the policy terms.
As a result, the Court remanded the claim back to Sedgwick to perform a “full and fair review.”
Elson v. United Health Group