Gessling v. Group Long Term Disability Plan for Employees of Sprint/United Management Company, 2010 U.S.Dist.LEXIS 24334 (S.D.Ind. March 16, 2010)(Issue: Pain).  After initially denying summary judgment and urging the parties to investigate the effect of Hartford’s structural conflict of interest on its evaluation of Robert Gessling’s claim for disability benefits, the court revisited the merits of the claim.  Although the court determined there were no unusual mitigating or aggravating factors based on the conflict, the court found “the conflict itself remains a factor in the analysis.” And overall, the court found the insurer abused its discretion because “Hartford Life unreasonably discounted Gessling's treating physician's and his own assessments of his pain and limitations. The reliance on the surveillance did not rationally support the decision to terminate benefits, and Hartford Life's consulting doctors did not provide a reasoned basis for discounting the evidence from Gessling and his treating physician showing he had been struggling with severe and disabling pain.” *2-*3. Accordingly, the court ordered benefits reinstated. 

Gessling, who had worked as an account executive for Sprint, which entailed extensive travel, alleged he became disabled due to degenerative spinal injuries initially caused by a traffic accident in 2002 when his car was hit from the rear by a semi-tractor trailer while he was stopped at a traffic light.  Although Gessling initially appeared uninjured in the accident, he shortly thereafter developed severe back and neck pain.  Fortunately, initial treatment was able to significantly relieve the pain, but by 2005, the spinal injuries worsened and the excruciating pain returned.  Extensive treatment failed to improve the pain, and Hartford approved Gessling’s long-term disability claim as of August 2005.  However, in early 2006, Hartford conducted surveillance over a four-day period that yielded only eight and a half minutes of video showing limited physical exertion.  Gessling was then interviewed by a Hartford investigator who reported the plaintiff failed to display any cognitive difficulties even though he complained he was experiencing pain at a level of 7/10.  Gessling also refused without speaking to an attorney to sign a statement prepared by Hartford’s investigator that asked him to agree to Hartford’s summary of the surveillance results.   At that time, Hartford also obtained a report from an independent medical examination performed as part of a lawsuit Gessling had filed against the trucking company that owned the truck involved in his 2002 accident.  The evaluating physician gave Gessling a 16% permanent impairment using the Guides to the Evaluation of Permanent Impairment.  Hartford then asked Gessling’s physician to comment on the surveillance and advised that unless he disagreed, Hartford would find Gessling capable of full-time work.  Although the doctor disagreed and reported that Gessling was getting worse, Hartford still terminated benefits based on a file review performed by Dr. Marcos Iglesias on Hartford’s behalf.  Dr. Iglesias found Gessling had the ability to work full time without any restrictions or limitations based on the surveillance video and his conclusion that Gessling's "neck and shoulder complaints are subjective and there are no objective findings to corroborate them."

Gessling appealed and submitted additional evidence of progression of his spinal impairments, along with reiterated opinions from the treating doctor finding the plaintiff incapable of returning to his occupation.  After two more file reviews, though, the insurer upheld its determination.

The court reversed, finding that the surveillance and interview observations did not provide a reasoned basis for Hartford’s determination.  The surveillance showed less than nine minutes of minimal physical activities that were not inconsistent with the alleged limitations.  The court then turned to the medical opinions and the evaluation of pain.  The court began by noting,

It is difficult, of course, for anyone but the subject to determine the subject's level of pain because of the unavailability of objective medical tests for pain. To manage this difficult problem in the Social Security context, courts have looked to other indicia of the patient's credibility and to the accuracy and consistency of the administrative law judge's analysis. See, e.g., Sarchet v. Chater, 78 F.3d 305, 307-08 (7th Cir. 1996) (reversing denial of benefits because the ALJ made a number of errors in evaluating the claimant's testimony). Here, Hartford Life and the doctors it hired unreasonably relied on the surveillance of and the in-person interview with Gessling to discount his credibility. *21-*22.

The court also relied on Hawkins v. First Union, 326 F.3d 914 (7^th Cir. 2003).  There, the court rejected a disability benefit denial, finding that although the plaintiff had engaged in some activity, he did so because of his "unfortunate choice in life is between succumbing to his pain and fatigue and becoming inert, on the one hand, and on the other hand pushing himself to engage in a certain amount of painful and fatiguing activity." Id. at 918. The court ruled the ability to undergo pool therapy and perform some other basic activities was not a sufficient basis to disallow benefits.

Here, too, the court characterized the surveillance as a “bust,” yet Hartford unreasonably relied on the surveillance and on an interview that took place at a public library to constitute grounds for finding Gessling capable of working.  The court found neither ground sufficient to constitute substantial evidence sufficient to support the conclusion reached.  As to the reviewing physicians, since they did not examine Gessling, the court found “they simply had no reliable way to evaluate Gessling's account of his pain and his limitations.” *23.  The court deemed Dr. Iglesias’s opinion “conclusory,” since it failed to “come to grips” with the long history of treatment, and the court added, “The reliance on a few minutes of the many hours of surveillance failed to address the real issue of the ability to work on a full-time basis.” *24.

As to the second reviewing doctor, his generalization that others with the same injury were capable of working ran afoul of the Seventh Circuit’s criticism in Hawkins on reasoning based on other patients.  Nor did any of Hartford’s doctors address the key point that it was the combination of the physical and resultant mental problems that developed on account of chronic pain that resulted in disability. 

Given the record of extensive pain treatment, the court determined that such evidence cannot be reconciled with Hartford’s conclusion that Gessling was exaggerating or lying about his pain.  Hence, the court concluded, “At the very least, a mere record review is not sufficient to provide a reasonable basis for discounting Dr. Walker's and Gessling's accounts of his pain and resulting limitations.” *27.

The court was clear, though, that it was not suggesting that it was creating a rule of deference to the treating physician’s opinion which Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003) disallows.  Instead, the court ruled, “to disagree with an apparently sound opinion of a treating physician, a plan administrator needs something much more solid than the consulting physicians provided in this case.” *27.  The problem here was that “the reviewing physicians failed to come to grips with the real problem, the whole person, and the history that corroborated his complaints of pain.” Id.  Thus, the benefit termination lacked reasonable evidentiary support.

The court then discussed Hartford’s conflict of interest and the insurer’s request for continued confidentiality of information produced in discovery pursuant to a protective order.  The court found there was no longer a basis for maintaining confidentiality and pointed to several reasons why the information should be made public:

First, after Glenn, the institutional conflict of interest is an important feature of judicial review of ERISA benefit decisions. Second, this type of evidence will be relevant in a host of cases involving every significant player in the disability insurance business. This type of information will circulate publicly for all of them. Third, ERISA regulations provide that plan participants and beneficiaries should have access to information that lets them evaluate the fairness of the plan. See 29 C.F.R. §§ 2560.503-1(b)(5), (h)(2), (j)(3), (m)(8).

The court then detailed the evidence:

·        Reviewing Physicians.  The court found that two of the reviewing physicians were hired through a review organization called UDC. Hartford Life paid UDC a total of $ 3.6 million in 2005, $ 2.5 million in 2006, and $ 1.3 million in 2007.  Dr. Iglesias was hired through Medical Advisory Group. Hartford Life paid MAG $ 1.1 million in 2005, $ 1 million in 2006, and $ 610,000 in 2007. Dkt. No. 79, Ex. 3.  Over three years, one of the treating doctors, Dr. Marks, performed 303 file reviews for Hartford and was paid $425,000.  Dr. Iglesias performed 10 reviews, and Dr. Smith, a psychologist, performed 133 reviews and received $133,000.

Nonetheless, the court declined to accept the plaintiff’s argument that these statistics demonstrated a specific incentive to deny claims and refused to “assume a sinister motive from routine professional service transactions, which is all this record shows.” *40.

·        Hartford Employees.  The plaintiff also argued that Hartford’s bonus program, which was tied to profitability, encouraged claim denials.  The plaintiff also pointed to the individuals involved in terminating the claim and showed that they received both salary increases and bonuses the year the benefits were terminated.

The court disagreed, finding “it is too great a leap to assume from Hartford Life's employee compensation package and structure that individual employees would -- or did -- deny claims because they thought that doing so would have a direct impact on their salaries or their bonuses.” *43.  Nor did a notation in one employee’s performance appraisal that he was aggressive in facilitating return to work convince the court of bias.

·        Other Hartford Cases.  Here, too, the court was unconvinced.  Although there have been some decisions finding abuse of discretion, other cases have upheld Hartford’s determinations.  Thus, the compilation of cases was found to have “little value for the immediate question before the court, which is whether Hartford Life abused its discretion in its denial of Gessling's claim.”

Hence, without a “smoking gun” or evidence of a systematic denial of benefit claims, the court found the conflict “was not so grave as to have unduly influenced its decision to deny Gessling's benefits.” *46.

Consequently, while the court found Hartford’s “decision was unreasonable on its merits,” it did not find the conflict a significant factor.

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