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An ERISA insurer’s decision to deny disability benefits is not entitled to court deference if it grounded its denial on a “selective” reading of the medical evidence and ignored its own experts’ requests for additional testing, a federal judge has ruled. In Ferguson v. Hartford Life and Accident Insurance Co., U.S. District Judge Timothy J. Savage granted summary judgment in favor of the plaintiff after finding that the insurer gave too little weight to the findings and opinions of the plaintiff’s treating physicians. “The treating physician rule requires that the opinions of a treating physician who is in a unique position to assess his patient’s health as a result of having treated him over time are entitled to substantial and at times controlling weight,” Savage wrote. “Hartford was confronted with evaluating the opinions of numerous physicians, some of whom had treated Ferguson and others who had examined him or reviewed medical records at Hartford’s request. It chose to accept the opinions of the doctors it had hired and preferred over those of Ferguson’s doctors,” Savage wrote. The ruling is a victory for attorneys Ara Richard Avrigian and Larry Bendesky of Philadelphia-based Saltz Mongeluzzi Barrett & Bendesky who filed the suit on behalf of a man who claimed he became totally disabled from working due to the worsening of a sleep disorder he had battled for years. According to court papers, plaintiff Ronald E. Ferguson began working at Occidental Chemical Corp. in 1986 as a division manager. In 1992, he was promoted to human resources manager and relocated from Texas to Pennsylvania. Ferguson has a history of treatment for a sleep disorder. He began suffering sleepiness and fatigue in his mid-20s. In 1986, at age 36, when his condition worsened, he saw a sleep specialist who diagnosed a sleep disorder and prescribed stimulants, according to court papers. By 1991, Ferguson was under the care of Dr. Ismet Karacan, the director of the Sleep Disorders Center at Baylor College of Medicine. Karacan diagnosed Ferguson with central nervous system idiopathic hypersomnia, a sleep disorder, and prescribed stimulant treatment. After his transfer to Pennsylvania, Ferguson continued treatment with Dr. Calvin Stafford of the Sleep Disorders Center at Crozer Chester Medical Center, according to court papers. As the effectiveness of the stimulant therapy decreased, Ferguson’s condition deteriorated, and Stafford prescribed several different stimulants to combat Ferguson’s increased tolerance to his medication and his worsening symptoms. Medical records show that as Ferguson’s condition continued to decline, Stafford found that his patient was having increased problems with concentration and memory lapses. Although the stimulants alleviated the daytime drowsiness, they were ineffective for remediating Ferguson’s cognitive impairments. In March 1996, Ferguson claims his sleep disorder had worsened to the point that he felt he was unable to perform his job duties. After consulting with Stafford, Ferguson resigned from his position at Occidental and filed a disability claim with Hartford. Hartford denied the claim, advising Ferguson that he was “not totally disabled” as defined in the policy. Ferguson filed suit in U.S. District Court after Hartford denied his appeal of the original decision. Judge Savage found that courts must apply a deferential standard of review when considering the denial of benefits under an ERISA plan. Ordinarily, Savage said, application of that standard means that a court will not reverse the administrator’s decision unless it was “without reason, unsupported by substantial evidence or erroneous as a matter of law.” But courts employ a “heightened standard or review,” Savage said, whenever “the evidence raises a question of the plan administrator’s impartiality or there is an inherent conflict of interest.” Since Hartford both funded and administered the plan, Savage found that a heightened standard of review was mandated under the 2000 decision of the 3rd U.S. Circuit Court of Appeals in Pinto v. Reliance Standard Life Insurance Co. As a result, Savage said, “our inquiry focuses on whether the insurance company was arbitrary and capricious in its interpretation of the plan’s eligibility requirements and its application of the facts presented.” Savage found that Ferguson submitted two reports from doctors who had treated him over five years. Hartford ordered Ferguson to undergo three medical examinations. In the first, a doctor concluded that there was insufficient reliable medical evidence to support a diagnosis of idiopathic hypersomnia, and that the cause of Ferguson’s symptoms was his chronic dependence on amphetamines and stimulants, and associated psychological and emotional factors. Two neuropsychologists later concluded that Ferguson had a lifelong learning disability coupled with chronic fatigue which resulted in attention, concentration and memory deficiencies. In the third exam, a doctor concluded that it was unclear whether Ferguson suffered from a sleep disorder, but said he could not rule it out. In its original denial of Ferguson’s disability claim, Hartford said it found that the reports of his treating physicians were “not substantiated by the information we have reviewed.” In his appeal, Ferguson submitted a letter from his treating doctor that explained his findings and rebutted some of those of Hartford’s examiners. During the appeal process, Hartford had Ferguson’s records evaluated by a diplomate of the American Board of Sleep Disorders from the Medical Review Board of America who said he believed that Ferguson’s earliest diagnoses were no longer reliable because medical knowledge of sleep disorders had evolved during the seven years since the original testing. But Savage found that even that doctor did not rule out that Ferguson had a sleep disorder, but instead recommended addition testing. In April 1998, Hartford denied the appeal, saying it had concluded that Ferguson was still physically able to perform his occupation and had left Occidental due to his poor work performance, according to court papers. Savage found there were “significant procedural anomalies” in Hartford’s handling of Ferguson’s claim that called for a heightened abuse of discretion standard. “The record reveals that Hartford selected and relied on those portions of the record which supported denial of the claim while ignoring those parts which sustained Ferguson’s position; it dismissed or gave little weight to the findings and opinions of Ferguson’s treating physicians and his experts; and, it ignored its own experts’ requests for additional testing which they deemed necessary to reach a final decision regarding Ferguson’s disability,” Savage wrote. Savage found that Hartford violated the treating physician rule because it was “obvious” that the insurer “did not give any weight, let alone substantial or controlling weight, to Dr. Stafford’s or Dr. Karacan’s findings and conclusions.” If the rule had been applied, Savage said, Hartford “would have explained the basis for its choosing its own doctors’ opinions and would have addressed Dr. Stafford’s rebuttal to the reports of the Hartford doctors.” In its original decision to deny the claim, Savage said, Hartford relied on the reports of three doctors who had never treated Ferguson, but had only examined him for Hartford — none of whom were experts in sleep disorders. Savage found that Hartford also failed to explain why it had rejected the conclusions of the treating doctors. “Not only did Hartford afford less deference to the reports of Ferguson’s treating physician than those of the non-treating physicians, Hartford glossed over them, simply stating that they were not substantiated,” Savage wrote. Savage also found that Hartford’s “selectivity” of what medical evidence it accepted and what it rejected “invites a closer scrutiny of the decision making process.” “An anomaly occurs where the administrator relies on part of the advice in a medical report while discarding other findings in it,” Savage wrote. The “most troubling” example of Hartford’s selectivity, Savage said, occurred when it cited one of its own doctors’ observation that the sleep evaluations performed on Ferguson by his treating doctors were inadequate to support the diagnosis of narcolepsy. Hartford said its doctor had concluded that Ferguson’s symptoms were of insufficient severity to prevent him from performing his job. But Savage found that the doctor “does not state these conclusions with the certainty Hartford claims he does.” Instead, Savage noted, the doctor cautioned that “from a neuropsychiatric perspective it is unclear whether [Ferguson] suffers from a sleep disorder, which, if present, would account for the depressive and probably state dependent subjective cognitive difficulties leading to decreased work performance.” Savage found that Hartford “ignored this significant caveat.” In his order, Savage ruled that Ferguson is entitled to summary judgment. He ordered the lawyers to submit a proposed order by June 20 awarding Ferguson relief. “If the parties cannot agree on a proposed order, they shall file separate proposed orders accompanied by explanations not to exceed three pages,” Savage wrote. Hartford was represented by attorneys Barbara A. O’Connell of Sweeney & Sheehan in Philadelphia and David B. Winkler of Cherry Hill, N.J.

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