The opinion of the court was delivered by: Savage, J.
In this action brought pursuant to § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B) (2010), Carol Harper challenges Aetna Life Insurance Company's ("Aetna") denial of her claim for long-term disability benefits ("LTD"). She contends that Aetna wrongfully terminated her benefits. The issue is whether Aetna acted arbitrarily and capriciously when it processed and denied her claim.
After a thorough examination of the administrative record and applying a deferential standard of review, we find that Aetna's determination that Harper was not impaired from performing her job duties as an executive assistant is not supported by substantial evidence. Consequently, we conclude that Aetna acted arbitrarily and capriciously when it denied Harper's LTD benefits. Therefore, judgment will be entered in favor of Harper and against Aetna, awarding Harper retroactive reinstatement of her LTD benefits.
Harper worked as an executive assistant with CSL Behring, L.L.C. beginning in 2004. As part of her employment, she was covered under a long-term disability plan ("Plan") governed by ERISA.
On June 19, 2008, Harper injured her lower back and was placed on short-term disability. The following month, she returned to work on a part-time basis with restrictions.
Her primary care physician, Dr. Ranette Schurtz,*fn1 limited her to sedentary work four hours per day, three days a week, provided she stand and stretch every hour. Harper continued to work part-time until September 2008, when Dr. Schurtz placed her on full disability.
Harper received short-term disability benefits from June 23, 2008 through December 18, 2008.*fn2 Aetna denied her application for LTD benefits, relying on a record review performed by one of its staff physicians, Dr. James Wallquist. Based on its in-house physician's review, Aetna determined that there was insufficient "medical information supporting disability to be considered eligible for long-term disability benefits." According to Aetna, Harper was "not totally disabled from performing [her] duties" as an executive assistant.
Harper appealed Aetna's decision, claiming that her "severe low back pain and symptoms" prevent her from engaging in any gainful employment. In support of her appeal, she provided various medical documents, including treatment notes and letters from Dr. Schurtz, Dr. Howard Richter, and Dr. Matthew Budway.
On February 2, 2010, citing a record review by Dr. Judith Esman, Aetna denied Harper's appeal. It concluded that there was "insufficient medical evidence" to support Harper's request for LTD benefits. It conceded that she was disabled for up to six months following her May 14, 2009 lumbar fusion surgery; but, Aetna concluded she was not covered under the Plan at that time because she was no longer employed by Behring.
The parties have filed cross-motions for summary judgment. Harper claims that Aetna's decision was arbitrary and capricious, and seeks an award of LTD benefits. Aetna argues, of course, that substantial evidence in the administrative record supported its decision.
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 may not substitute its judgment for that of the administrator. Vitale v. Latrobe Area Hosp., 420 F.3d 278, 286 (3d Cir. 2005) (quoting 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." Doroshow v. Hartford Life & Accident Ins. Co., 574 F.3d 230, 234 (3d Cir. 2009).
In conducting the review, we examine the structural and the procedural components of the decision-making. Miller v. Am. Airlines, Inc., 632 F.3d 837, 845 (3d Cir. 2011). The structural inquiry looks at how the plan is funded to determine if there is a financial incentive to deny claims. Id. The procedural inquiry focuses on how the administrator processed the claim to insure that the procedure was fair and impartial. Id. (citations omitted).
A financial conflict arising from the administrator's dual role as evaluator and payor of claims no longer may be used to raise the level of scrutiny. Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 115 (2008). See Doroshow, 574 F.3d at 233-34; Schwing v. The Lilly Health Plan, 562 F.3d 522, 525 (3d Cir. 2009). Nevertheless, it remains a factor to consider along with other factors in determining whether there has been an abuse of discretion. Ellis v. Hartford Life and Accident Ins. Co., 594 F. Supp. 2d 564, 566-67 (E.D. Pa. 2009).
Here, there is no dispute that Aetna, as insurer for the Plan, both funded and administered the award of disability benefits. Therefore, we shall consider the conflict as one, but not significant, factor in determining whether there has been an abuse of discretion.
In addition to the structural inquiry, we review procedural factors in the administrator's processing of the claim. Miller, 632 F.3d at 845; Post v. Hartford Ins., Co., 501 F.3d 154, 164 (3d Cir. 2007). Procedural irregularities in the review process cast doubt on the administrator's impartiality. Miller, 632 F.3d at 845. Procedural anomalies that call into question the fairness of the process and suggest arbitrariness include: reversing a decision to award benefits without new medical evidence to support the change in position, id. at 848; relying on the opinions of non-treating over treating physicians without reason, Kosiba v. Merck & Co., 384 F.3d 58, 67-68 (3d Cir. 2004); Ricca v. Prudential Ins. Co. of Am., No. 08-257, 2010 WL 3855254, at *7 (E.D. Pa. Sept. 30, 2010); 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); failing to comply with the notice requirements of § 503 of ERISA by not giving specific reasons for the denial, Miller, 632 F.3d at 852; conducting self-serving paper reviews of medical files, Post, 501 F.3d at 166; failing to address all relevant diagnoses before terminating benefits, Miller, 632 F.3d at 853; relying on favorable parts while discarding unfavorable parts in a medical report, Post, 501 F.3d at 165; denying benefits based on inadequate information and lax investigatory procedures, Porter v. Broadspire, 492 F. Supp. 2d 480, 485 (W.D. Pa. 2007); ignoring the recommendations of an insurance company's own employees, Post, 501 F.3d at 165; imposing requirements extrinsic to the plan, Miller, 632 F.3d at 849; and, failing to consider the claimant's specific job requirements under an "own occupation" policy, id. at 855.
A procedural anomaly may also arise if an insurer provides its outside consultant, who is offered as independent, with information that "alert[s] him to what [the insurer] had decided and why" so that he knows where the insurer was heading. Morgan v. Prudential Ins. Co. of America, __F. Supp. 2d__, No. 10-1000, 2010 WL 4665951, at *7 (E.D. Pa. Nov. 18, 2010).
The claims process is viewed in its entirety. Each factor is evaluated in the context of the case. Any one factor may, but not always, compel a finding of arbitrariness. More than one irregularity suggests a biased process. Thus, we must weigh all factors together. Glenn, 55 U.S. at 117.
Evidence Available to Aetna
On December 10, 2008, Harper's LTD claim was reviewed by an Aetna staff physician, Dr. James Wallquist, a board certified orthopedic surgeon. He reviewed Harper's medical records, including those of her treating physicians. These records included: Dr. Schurtz's physician statements from July 6 and August 13, 2008, diagnosing Harper with a disc herniation and restricting her to sedentary work three days a week, four hours per day, and advising that she must stand and stretch every hour; Dr. Schurtz's physician statements from September 12 and October 9, 2008, diagnosing Harper with a disc herniation and finding that she has no work capacity; an October 23, 2008 letter from neurosurgeon Dr. Howard Richter to Dr. Schurtz reporting "no significant disc herniation," but finding that Harper had a grade one spondylolisthesis and mild stenosis at L4-L5; an X-ray image from September 10, 2008, showing a "grade 1 anterolisthesis of L4 on L5," "mild disc space narrowing at L4-L5 and L5-S1," and "[d]egenerative change" in the "sacral iliac joints"; and, an MRI dated June 23, 2008, finding, among other things, that there is no herniated disc, but "L4-L5 levels show diffuse bulging annulus fibrosis with posterior joint hypertrohy causes peripheral stenosis." After reviewing Harper's medical records and talking to Dr. Schurtz, Dr. Wallquist wrote that "there were insufficient quantitative physical ...