The opinion of the court was delivered by: Savage, J.
In this action brought pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), Anne C. Kaufmann ("Kaufmann") challenges Metropolitan Life Insurance Company's ("MetLife") denial of her claim for long term disability benefits. After a thorough examination of the administrative record and applying a deferential standard of review, we conclude that MetLife acted arbitrarily and capriciously when it terminated Kaufmann's disability benefits. The evidence does not support its determination that her medical condition did not prevent her from performing the duties of her own occupation. Therefore, judgment will be entered in favor of Kaufmann.
Kaufmann was employed by Siemens Corporation as a senior project manager. As part of her employment benefits, Kaufmann was covered under a group long term disability plan, which qualified as an "employee welfare benefits plan" under 29 U.S.C. §1102. The policy gives MetLife, which both funded and administered the plan, discretionary authority to interpret the terms of the plan and to determine eligibility for benefits.
Kaufmann stopped working on May 26, 2006, after her treating physician, Daniel T. Rubino, M.D., advised her that she was unable to work. By that time, she had unsuccessfully undergone a diskectomy and a laminectomy. Her history revealed that she had progressive pain, disc protrusion and herniation, spinal stenosis and radiculopathy that led her to undergo several unsuccessful surgical procedures. Ultimately, after several orthopedists and a neurosurgeon could not find a solution, she was referred to Dr. Rubino to manage her chronic pain.*fn1
After initially paying disability benefits, MetLife terminated benefits effective November 9, 2007. In its denial letter, MetLife advised Kaufmann that her physicians had failed to provide evidence that she remained disabled from performing her "own occupation." The case manager wrote, "In conclusion, the IPC [the consultant hired by MetLife] documented that the medical information, along with your restrictions, supports a sedentary level of functionality." R. 508. Kaufmann contends that MetLife's conclusion that she is not prevented from performing her occupation as a senior project manager is based on inadequate medical records reviews and the mischaracterization of her light duty job as a sedentary one.
The denial of benefits under an ERISA qualified plan is reviewed using a deferential standard. Where the plan administrator has discretion to interpret the plan and to decide whether benefits are payable, the exercise of its fiduciary discretion is judged by an arbitrary and capricious standard. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111 (1989). A court is not free to substitute its judgment for that of the administrator. Abnathya v. Hoffman-LaRoche, Inc., 2 F.3d 40, 45 (3d Cir. 1993). Accordingly, in deference to the plan administrator, the decision will not be reversed unless it is "without reason, unsupported by substantial evidence or erroneous as a matter of law." Id. at 45.
Kaufmann urges us to apply a heightened standard of review using the sliding scale approach set forth in Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377 (3d Cir. 2000). That standard has recently been rejected by the Supreme Court. Metropolitan Life Ins. Co. v. Glenn, 128 S.Ct. 2343 (2008). See Doroshow v. Hartford Life and Accident Ins. Co., 574 F.3d 230 (3d Cir. 2009). The financial conflict arising from the administrator's dual role as evaluator and payor of claims does not raise the level of scrutiny. Nevertheless, it is a factor to consider along with other factors in determining whether there has been an abuse of discretion.
The effect of a financial conflict as clarified in Glenn is summarized as follows:
. . . recognizing that the conflict creates a motive to deny a claim does not raise the level of scrutiny. It becomes a part of the review analysis. Where there is evidence of procedural bias, the conflict factor takes on more significance. It may reinforce a finding of a procedural bias because it supplies a motive for the administrator to engage in a faulty procedure. In other words, the presence of a conflict informs, but does not determine, the procedural inquiry. In sum, the sliding scale approach weighs the conflict. It does not heighten the standard of review.
Therefore, a heightened standard, as urged by Kaufmann, will not be applied. Nevertheless, the inherent financial conflict will be considered in the analysis of how MetLife handled the claim and made its decision.
Procedural bias in the review process is another factor to examine. Kosiba v. Merck & Co., 384 F.3d 58, 67-68 (3d Cir. 2004). Procedural anomalies that call into question the fairness of the process and suggest arbitrariness include: relying on the opinions of non-treating over treating physicians without reason, Kosiba, 384 F.3d at 67-68; failing to follow a plan's notification provisions, Lemaire v. Hartford Life & Acc. Ins. Co., 69 F. App'x 88, 92-93 (3d Cir. 2003); conducting self-serving paper reviews of medical files, id. at 93; relying on favorable parts while discarding unfavorable parts in a medical report, Pinto, 214 F.3d at 393-94; denying benefits based on inadequate information and lax investigatory procedures, Friess v. Reliance Std. Life Ins. Co., 122 F. Supp. 2d 566, 574-75 (E.D. Pa. 2000); and, ignoring the recommendations of an insurance company's own employees, Pinto, 214 F.3d at 394.
Evidence Available to MetLife
When it considered Kaufmann's claim, MetLife had the medical records and reports from her treating physicians, test results, physical capacity evaluations completed by her physicians, the Social Security Administration Notice of Award, and her employer's job description.
As the records in MetLife's possession reflect, Kaufmann has a history of chronic back pain that has worsened and will not improve. She underwent surgeries that gave her little or no relief. She has treated with several physicians in a quest to find a solution. Yet, her condition remains insoluble.
In his narrative report of February 4, 2008, Dr. Rubino reported that his patient "cannot sit or stand for longer than 15 minutes without changing positions due to chronic pain impulses. She has severely decreased concentration ability, preventing her from having gainful employment, not to mention her physical limitations." R. 413. He concluded that "as of August 21, 2007, Nancy was no longer able to perform her pre-injury job with Siemens Corporation on a full-time sustained basis." R. 413. He reiterated that after having "thoroughly evaluated her clinically over numerous meetings [he was able] to confidently state that Nancy cannot adequately perform her pre-disability job." R. 413.
Multiple diagnostic tests and several clinical examinations have confirmed the severity of her spinal pain, which is accompanied by bilateral upper and lower extremity radicular symptoms. Dr. Richard Balderston, an orthopedic surgeon, opined that surgery could make her situation worse. He concluded that the best course of treatment was pain management. R. 618. Dr. Howard Richter, a neurosurgeon, diagnosed "chronic and worsening left leg pain of uncertain origin." R. 631. He, too, concluded that surgery would not be a benefit and pain management was the only answer. R. 631.
When her physicians concluded that additional surgical intervention was not an option, she was referred to a specialist in pain management. In April, 2006, Kaufmann came under the care of Dr. Rubino, who is board certified in pain management.
In the Attending Physician Statement accompanying the Long Term Disability Claim Form, dated December 4, 2006, Dr. Rubino reported that Kaufmann could not sit, stand or walk continuously for more than a half hour; could not perform repetitively fine finger movements of her dominant right hand; could lift and carry up to twenty pounds only occasionally; and had limited ability to climb. He concluded that she was unable to perform her job duties due to severe pain secondary to degenerative joint disease. As a result of his findings, he advised Kaufmann to cease working at her occupation, and recommended occupational and physical therapy with pain management. R. 578-580.
MetLife submitted documentation to Frank Nisenfeld, M.D., who reviewed the records and did not examine Kaufmann. Using a standard Reed Review Services ("RRS")*fn2 form presenting questions calling for short answers, Nisenfeld agreed with the treating physicians that Kaufmann's condition will not improve and that there are "no surgical or medical answers." R. 527. Additionally, he opined that medications would cause functional impairment and/or safety risks. Nevertheless, accepting MetLife's classification of Kaufmann's job as sedentary, he advised that these permanent restrictions and limitations do not prevent her from performing sedentary work. R. 524-527. In his report three weeks earlier, Dr. Nisenfeld had conceded that the medical ...