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In a huge victory for ERISA plaintiffs, the 3rd U.S. Circuit Court of Appeals has awarded long-term disability benefits to a woman with multiple sclerosis, holding that insurers cannot consider such a disease to be a “pre-existing condition” if the worker was merely receiving treatment for symptoms but had not yet been formally diagnosed. “It is simply not meaningful to talk about symptoms in the abstract,” Senior U.S. Circuit Judge Edward R. Becker wrote in McLeod v. Hartford Life and Accident Insurance Co. “Seeking medical care for a symptom of a pre-existing condition can only serve as the basis for exclusion from receiving benefits in a situation where there is some intention on the part of the physician or of the patient to treat or uncover the underlying condition which is causing the symptom,” Becker wrote in an opinion joined by U.S. Circuit Judges Samuel A. Alito Jr. and Michael Chertoff. The ruling reverses a decision by U.S. District Judge Cynthia M. Rufe, who held that a broadly worded pre-existing condition exclusion clause in Hartford’s disability policy barred coverage for plaintiff Shirley McLeod even in the absence of an MS diagnosis since there was proof she received medical treatment for a “symptom” or “manifestation” of the condition sometime in the 90-day period before the policy went into effect. Rufe found that the exclusion applied because McLeod was treated for numbness in her arm as early as February 1999 and was referred to two neurologists before the policy took effect in April 1999. But Becker noted that McLeod was not diagnosed with MS until August 1999. Rufe erred, he said, in holding that Hartford could “read back” a pre-existing condition for purposes of excluding coverage before the condition itself had been diagnosed. “Neither she [McLeod] nor her physicians either knew or suspected that the symptoms she was experiencing were in any way connected with MS,” Becker wrote. Instead, Becker concluded that Hartford’s decision was subject to a “heightened standard of review” — since it both funds and administrates the benefit plan — and that its reading of the policy language should have been rejected as “strained.” “Hartford would have us hold that receiving medical care ‘for symptoms’ of a pre-existing condition encompasses receiving care for symptoms that no one even suspected were connected with the later diagnosed ailment but which were later deemed not inconsistent with it,” Becker wrote. “A heightened standard of review will not countenance such a strained interpretation,” Becker wrote. Becker is also the author of the 3rd Circuit’s seminal 2000 decision in Pinto v. Reliance Standard Life Insurance Co. in which the court first announced the heightened standard. The Pinto court held that while benefits decisions are ordinarily entitled to “deferential” review, the standard must be adjusted where an insurer both funds and administers benefits because it is “generally acting under a conflict that warrants a heightened form of the arbitrary and capricious standard of review.” Pinto instructed trial judges to apply a “sliding scale” approach and called for “intensifying the degree of scrutiny to match the degree of conflict.” Now, in McLeod’s case, Becker has significantly elaborated on the Pinto standard. “In a case of heightened review, where the plan administrator is not afforded complete, freewheeling discretion, we must be especially mindful to ensure that the administrator’s interpretation of policy language does not unfairly disadvantage the policyholder,” Becker wrote. Under Hartford’s interpretation of the policy, Becker said, “any symptom experienced before the excludable condition is diagnosed could serve as the basis for an exclusion so long as the symptom was not later deemed inconsistent with that condition.” As an example, Becker said, a policyholder who suffered a heart attack could be denied long-term disability coverage under Hartford’s proposed analysis if there was proof that the policyholder had been treated for shortness of breath before the policy took effect — even if doctors at the time diagnosed the condition as nothing more than a “very bad cold.” Under Hartford’s interpretation, Becker said, the insurer “would then be able to claim that the original shortness of breath was a ‘symptom or manifestation’ of the underlying, and undiagnosed, heart disease, rendering the heart disease a ‘pre-existing’ condition.” The ruling is a victory for attorney Barry L. Gross of Stief Waite Gross Sagoskin & Gilman in Newtown, Pa., who argued that since McLeod’s condition was misdiagnosed by several doctors, it cannot be considered a pre-existing condition. According to court papers, McLeod worked for Valley Media Inc., stocking videocassettes in a warehouse, a job that involved long periods of standing. After she was diagnosed with MS, McLeod was at first awarded short-term disability but was later denied a claim for long-term disability after Hartford learned that she had been treated by several doctors for the numbness in her arm during the “look-back period” — the 90-day period that ended the day before the effective date of coverage. Beginning in February 1999 and during the next several months, McLeod saw several doctors about the numbness and underwent several neurological evaluations and MRIs. But Becker noted that none of those doctor visits “produced a diagnosis of MS or even a suspicion that MS was a possible cause of the numbness and other complaints.” It was only after the August 1999 diagnosis, Becker said, that McLeod’s doctor attributed her earlier symptoms to MS. Becker concluded that Hartford’s decision to deny benefits was simply wrong. “The problem with using this type of ex post facto analysis is that a whole host of symptoms occurring before a ‘correct’ diagnosis is rendered, or even suspected, can presumably be tied to the condition once it has been diagnosed,” Becker wrote. “Thus, any time a policyholder seeks medical care of any kind during the look-back period, the ‘symptom’ that prompted him to seek the care could potentially be deemed a symptom of a pre-existing condition, as long as it was later deemed consistent with symptoms generally associated with the condition eventually diagnosed.” Becker found that the case turned on the interpretation of two key words — “for” and “symptom” — neither of which was explicitly defined in the policy. The 3rd Circuit has already ruled on the meaning of “for,” Becker noted, citing the 2002 decision in Lawson v. Fortis Insurance Co. in which the court awarded benefits to a woman who was diagnosed with leukemia just one week after a policy took effect, rejecting the insurer’s argument that coverage was barred because the woman was taken to the emergency room two days before her insurance policy became effective, for what was initially diagnosed as a respiratory tract infection. Becker said the Lawson court concluded that treatment cannot be “for” a condition unless that condition is diagnosed. But McLeod’s case adds a new twist, Becker found, since the language in her policy was “more precise” and defined a pre-existing condition to include medical care received for any “manifestations, symptoms, findings, or aggravations” related to the disability. Hartford’s lawyer, Brian P. Downey of Pepper Hamilton, emphasized the difference in the policy language, arguing that “unlike the plan in this case, the Lawson policy’s definition of pre-existing condition did not encompass treatment for symptoms of a sickness.” Rufe agreed with that argument, saying the policy “does not require that a participant’s disabling condition be diagnosed within the look-back period in order for it to be considered a ‘pre-existing condition’; rather, it merely requires that a participant receive medical care for a symptom or manifestation of the condition during the look-back period.” Becker disagreed, saying. “A ‘symptom’ is a meaningful term only because it is a ‘symptom’ in relation to something else.” McLeod’s numbness symptom, Becker said, “became relevant … only once it was deemed a ‘symptom of MS.’ If it were just a random ‘symptom’ of some undiagnosed ailment, then Hartford would not be concerned with it.” As a result, Becker found that the logic of the Lawson decision would still apply since Hartford’s policy also included the word “for.” “The Hartford plan still bases the exclusion on ‘symptoms … for which you received medical care.’ … This construction simply begs the obvious question: symptoms of what? Hartford offers no satisfactory answer to this question,” Becker wrote. Becker said the Lawson court, in dicta, offered a warning about the consequences of allowing insurers to deny coverage on the basis of treatment for the symptoms of a not-yet-diagnosed condition. “To permit such a backward-looking reinterpretation of symptoms to support claims denials would so greatly expand the definition of pre-existing condition as to make that term meaningless: any prior symptom not inconsistent with the ultimate diagnosis would provide a basis for denial,” the Lawson court said. Now Becker has effectively converted that dicta into law. “While this statement [in Lawson] is dicta, it was considered dicta, which we find persuasive,” Becker wrote. “Consistent with Lawson‘s persuasive reasoning … we hold that the phrase ‘symptoms … for which you received medical care’ in the Hartford policy necessarily connotes an intent to treat or uncover the particular ailment which causes that symptom (even absent a timely diagnosis), rather than some nebulous or unspecified medical problem,” Becker wrote. A contrary ruling, Becker said, “would vitiate any meaningful distinction between symptoms which are legitimately moored to an ‘accidental bodily injury, sickness, mental illness, pregnancy, or episode of substance abuse,’ and those which are not.”

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