A thoughtful examination of the underpinning of a disability benefit termination resulted in a reversal of the insurer's decision in Anderson v. Nationwide Mut.Ins.Co., 2009 U.S.Dist.LEXIS 1859 (S.D.Iowa Jan. 12). The claim arose when the plaintiff had to cease working after failed back surgery. Before her claim was approved, Nationwide had Anderson undergo an independent medical examination which supported the benefit claim. The independent physician reported that Anderson was incapable of working at any job because pain prevented her from sustaining a position for a long enough time to accomplish any productive tasks.

About a year later, though, the same doctor examined Anderson again, but this time, the physician reported he could find no anatomic cause for the severe pain and diagnosed a somatoform pain disorder which he deemed insufficient to preclude the performance of a sedentary job. Subsequently, one of Anderson's treating doctors completed an attending physician statement that stated she was not totally disabled from work, but the doctor nonetheless refused to release her to work due to the complexity of the case. The treating doctor pointed out that Anderson's limitations were based on subjective pain complaints that could not be measured but which the doctor believed were honestly reported. Nationwide rejected that finding, though, and terminated Anderson's benefits.

Anderson appealed, submitting a list of her medications, a report from her treating doctor stating that she could not maintain work over an eight-hour day, part of a psychological evaluation, and a rheumatology report signed by a physician's assistant diagnosing symptoms of fibromyalgia and early osteoarthritis. Upon receipt of the appeal, Nationwide had Anderson undergo a functional capacity evaluation, which concluded she was capable of working at the light level of exertion for an eight-hour day, but that she was ''self-limited'' in performing tasks, which the examiner acknowledged could have been due to pain. The FCE report was sent to the independent examiner for his opinion; and he concurred that the results showed Anderson could return to her prior work. Subsequently, the appeal was denied.

Anderson then filed suit, and Nationwide presented a motion seeking summary judgment. The court applied the abuse of discretion standard of review, taking Metro.Life Ins.Co. v. Glenn, 128 S.Ct. 2343 (2008), into consideration. Based on that ruling, the court found Nationwide was acting under a conflict based on its dual role as insurer and plan administrator. Although the court could find no factors that specifically evidenced financial bias, the court found several procedural errors. The court focused on Nationwide's denial letter and found it inadequate. The court determined the letter failed to adequately articulate the basis of the denial or set forth sufficient facts to explain why the claimant's evidence was unpersuasive. In particular, the plaintiff provided evidence showing that she could not physically perform job tasks for eight hours a day, nor could she maintain sufficient attention and concentration, yet the plan failed to explain how that evidence was considered and why it was rejected.

The court explained: ''In this case, the Committee should explicitly address, given the challenges she faces in sitting and concentrating, whether Anderson is able to perform the positions listed in the Labor Market Report.''

The court then turned to the key deficiency — ''the Committee's apparent failure to consider the effect of Anderson's pain, depression, and medications on her ability to work.''

The court faulted Nationwide for its failure to investigate and gather information as to all aspects of the claimed disability. The court remarked, ''Though potentially difficult to diagnose, chronic pain, depression, and complications due to medications may be disabling alone, or in combination, and the plan administrator has a duty to investigate such claims.'' The court found that Nationwide completely failed to address those aspects of the claim even though Anderson's appeal raised those issues. Despite the FCE and the independent doctor's comments, both reports were found deficient because they failed to ''discuss how Anderson's pain, medications, and psychological state would affect Anderson's ability to work in the type of administrative or clerical position noted in the Labor Market Report.''

The court further explained, ''While the final termination letter stated that the Committee had reviewed all the documents in Anderson's medical file, the letter made no mention of Anderson's pain, medications, and psychological state and relied solely on the FCE, which did not address the complicating factors or any bearing they might have on Anderson's capacity to work. Further, none of the other letters from the Committee or Nationwide's claim representatives acknowledge or provide any reasoning for rejecting the potentially disabling effects of Anderson's pain, depression, or medications. In sum, the record contains no evidence that the Committee considered whether a person with Anderson's complaints of pain and inability to concentrate could be employed in the positions listed in the Labor Market Report.''

Although Nationwide tried to argue that it had the discretion to choose amongst competing medical opinions, the court reframed the issue, and ruled: ''A plan administrator's choice to adopt the conclusion of a restricted medical assessment while ignoring a more encompassing medical assessment, which is supported by other evidence in the record, is not one to which a reviewing court should defer.'' Thus, the court remanded the matter for further consideration of all aspects of the alleged disability, especially pain and the ability to maintain concentration.

This ruling is a useful example of why the Supreme Court repeatedly cited to Universal Camera Corp. v. NLRB, 340 U.S. 474, 490, 71 S. Ct. 456, 95 L. Ed. 456 (1951), in the Glenn decision. That case instructs lower court judges that they are ''not to abdicate the conventional judicial function.'' In making that statement, the Supreme Court was advising lower courts adjudicating administrative claims that deference is not the equivalent of a rubber stamp, and that judges are required to carefully examine all aspects of the claim to ascertain whether the administrative agency reached the correct conclusion. Although ERISA cases are not subject to administrative law, the Universal Camera citation was plainly intended to be instructive by analogy since administrative law principles are commonly used to adjudicate benefit disputes.

That point is reinforced by the Supreme Court's careful wording in Glenn. Instead of instructing lower courts to examine the reasonableness of claim determinations, the Supreme Court repeatedly remarked that claim determinations must be ''lawful.'' When coupled with Glenn's admonition that ERISA plan administrators are subject to ''higher-than-marketplace quality standards'' to assure accurate claim decisions based on the fiduciary obligations imposed by ERISA (128 S.Ct. at 2350), it is evident that the court in Anderson heeded that obligation by pointing out where the defendant fell short of meeting its obligations.

The court was obviously cognizant that evaluating pain as a disabling factor imposes a difficult duty on plan administrators. Indeed, the Social Security Administration has wrestled with the issue, promulgating both a regulation and interpretive guidance as to how to assess complaints of pain. 20 C.F.R. § 404.1529; Social Security Ruling 96-7p. Although Social Security regulations are not binding on ERISA plan administrators, the concepts developed in Social Security disability determinations have nonetheless been deemed ''instructive'' in ERISA cases. Halpin v. W.W. Grainger Inc., 962 F.2d 685, 695 n.11 (7th Cir. 1992).

The overriding point to be made, though, is that pain can itself be disabling and may not be ignored. The American Medical Association's Guides to the Evaluation of Permanent Impairment (6th ed. 2008) mandate that pain complaints must be considered in evaluating disability; and another AMA text titled, Disability Evaluation (Stephen L. Demeter and Gunnar Andersson eds., 2d ed. 2003) also points out the need to consider pain complaints in assessing disability. Thus, the court in Anderson was entirely correct in not taking the functional capacity evaluation at face value and finding the test results insufficient to support for the claim decision. Despite the test's conclusion that Anderson could work, the therapist who performed that test failed to explain how Anderson could sustain work activity in the face of severe pain that prevented her from performing many of the physical tasks that comprised the test. Nor was any consideration given to Anderson's claims of impaired concentration and the side-effects of the medication she was prescribed to control her pain. Thus, despite performing a deferential review, the court appropriately fulfilled its duty as set forth in Glenn to assess the entire record to determine whether the claim determination was properly supported. Given the crucial importance of employee benefits, we expect nothing less from our courts.