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Berkoben v. Aetna Life Insurance Co.

United States District Court, W.D. Pennsylvania

March 25, 2014

JASON BERKOBEN, Plaintiff,
v.
AETNA LIFE INSURANCE CO., Defendant

Order Filed: February 21, 2014

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[Copyrighted Material Omitted]

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For JASON BERKOBEN, Plaintiff: Marc Snyder, LEAD ATTORNEY, Rosen, Moss, Snyder & Bleefeld, L.L.P., Jenkintown, PA.

For AETNA LIFE INSURANCE COMPANY, Defendant: Peter D. Post, LEAD ATTORNEY, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Pittsburgh, PA.

Mark R. Hornak, United States District Judge. Chief Magistrate Judge Lisa Pupo Lenihan.

OPINION

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MEMORANDUM ORDER

Mark R. Hornak, United States District Judge.

The Complaint in the above captioned case was received by the Clerk of Court on November 15, 2012, and was referred to United States Magistrate Judge Lisa Pupo Lenihan for pretrial proceedings in accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1), and Local Rules of Court 72.C and 72.D.

The Magistrate Judge's Report and Recommendation (ECF No. 35), filed on February 21, 2014, recommended that Plaintiff's Motion for Summary Judgment (ECF No. 21) be granted in part and denied in part. The Report and Recommendation recommended that Plaintiff's Motion for Summary Judgment be denied to the extent it seeks reversal and retroactive reinstatement of his long-term disability benefits, and be granted in all other respects. The Report and Recommendation further recommended that Defendant's Motion for Summary Judgment (ECF No. 22) be denied, and that Aetna's decision to terminate Plaintiff's long-term disability benefits be vacated and the case remanded to the plan administrator for further consideration in light of the Report and Recommendation.

Service of the Report and Recommendation was made on all counsel of record via electronic mail. The parties were informed that in accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1)(B) and (C), and Rule 72.D.2 of the Local Rules of Court, that they had fourteen (14) days to file any objections. Defendant filed objections to the Report and Recommendation on March 7, 2014 (ECF No. 36). Plaintiff filed a response to the objections on March 19, 2014 (ECF No. 37). The Court also permitted, and has considered, a reply brief in support of the Objections filed by the Defendant. (ECF No. 40).

This Court has carefully considered the Defendant's Objections in light of the Report and Recommendation, the Plaintiff's response to those Objections, the Defendant's Reply Brief, and its own review of the administrative record filed on the docket of this Court, and concludes that they do not impeach or otherwise undercut the reasoning of the Report and Recommendation. In particular, this Court would note the following.

The Defendant objects that the Chief Magistrate Judge made an erroneous " finding" regarding the reasons that the Plaintiff did not submit to the Defendant the results of an MRI test because such reasons were not in the administrative record. That MRI test is simply not relied upon in the reasoning and analysis portion of the Report and Recommendation, and second, it had nothing to do with this

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Court's adoption of it. Further, it does not appear that the MRI, the absence of its results, the reasons for that, or anything else about an MRI was considered in any of the decisional communications from the Defendant to the Plaintiff.[1]

As to the balance of the Objections, they each/all suffer from the same core deficiency, namely they do not confront the failure of the Defendant, in the administrative process, to address the actual and complete language of its own Long-Term Disability (" LTD" ) Policy (" Policy" ), and in particular, the specific language of the coverage exclusion upon which the Defendant focused and relied in terminating the Plaintiff's coverage after twenty-four (24) months.

Under the relevant provisions of that Policy, a disability is excluded from coverage after twenty-four (24) months if it is primarily caused by " [a] mental health or psychiatric condition. . . but excluding conditions with demonstrable, structural brain damage ; . . ." . Policy at 87 (emphasis added). The problem with the Objections is that they fail to address the reality that in each of the denial/appeal denial letters prepared and transmitted by the Defendant to the Plaintiff or his counsel, the Defendant recites that the Plaintiff's condition is a " mental health" issue, although the Defendant also acknowledged the growing weight of medical authority that Plaintiff's condition had an organic genesis. The Defendant's administrative actions never specifically address or state that Plaintiff's " mental health" condition was (or was not) one with " demonstrable, structural brain damage" . Thus, those administrative decisions did not address the application of that proviso to the exclusion, and therefore failed to address the Policy exclusion relied upon by the Defendant in toto. This is compounded by the record fact that the medical and legal submissions made to the Defendant on the Plaintiff's behalf do raise the application of that Policy exclusion proviso, and also provided substantial medical literature as to its application here. The administrative record does not reflect the necessary consideration of those matters by the Defendant.[2]

In addition, when the Defendant's administrative decisions and related communication did acknowledge the referenced medical literature that would support an

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organic or structural relationship to Plaintiff's condition, rather than analyzing or even explaining the consideration and any rejection of it, the Defendant's position instead reverted to a generalized reference to the fact that the DSM [3] considers the Plaintiff's afflictions to be " mental", a point that Plaintiff does not seem to contest.

The problem is that that point that is not the point of the issue. This is particularly problematic, in that the Defendant's seemingly categorical resort to the DSM classification, and to its consideration of its own self-generated listing (the " List" ) of what diagnosis codes it will consider to be non-excluded and those which it will not, also demonstrates a failure to consider the specific situation that the Plaintiff's case presents. This is exacerbated by the undisclosed nature of the List to participants under the Policy, one not cured by essentially oblique references to it in certain portions of the administrative record, nor by its disclosure to Plaintiff's counsel relatively late in the game.

For these reasons, and those set forth in greater detail in her Report and Recommendation, the conclusions and reasoning of the Chief Magistrate Judge will be adopted by this Court because they are correct. Therefore, after a de novo review of the pleadings and documents in the case, together with the Report and Recommendation, the Defendant's Objections and Plaintiff's Response thereto, along with the Defendant's Reply, the following Order is entered:

AND NOW, this 25th day of March, 2014,

IT IS HEREBY ORDERED that Plaintiff's Motion for Summary Judgment (ECF No. 21) is granted in part and denied in part. Plaintiff's Motion for Summary Judgment is DENIED to the extent it seeks reversal and retroactive reinstatement of his long-term disability benefits, and is GRANTED in all other respects.

IT IS FURTHER ORDERED that Defendant's Motion for Summary Judgment (ECF No. 22) is DENIED.

IT IS FURTHER ORDERED that Aetna's decision to terminate Plaintiff's long-term disability benefits is VACATED and the case is REMANDED forthwith to the Plan Administrator for further prompt and complete consideration in light of the Report and Recommendation,

IT IS FURTHER ORDERED that the Report and Recommendation (ECF No. 35) of Chief Magistrate Judge Lenihan, dated February 21, 2014, is adopted as the Opinion of the Court.

REPORT AND RECOMMENDATION

LISA PUPO LENIHAN, Chief U.S. Magistrate Judge.

I. RECOMMENDATION

It is respectfully recommended that Plaintiff's Motion for Summary Judgment (ECF No. 21) be granted in part and denied in part. It is recommended that Plaintiff's Motion for Summary Judgment be denied to the extent it seeks reversal and retroactive reinstatement of his long-term disability benefits, and be granted in all other respects. It is further recommended that Defendant's Motion for Summary Judgment (ECF No. 22) be denied. It is further recommended that Aetna's decision to terminate Plaintiff's long-term

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disability benefits be vacated and the case remanded to the plan administrator for further consideration in light of this Report and Recommendation.

II. REPORT

Currently before the Court for disposition are cross-motions for summary judgment in this ERISA action brought under 29 U.S.C. § 1132(a)(1)(B) for review of a termination of long-term disability benefits. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132(e). Venue in this District is proper pursuant to 28 U.S.C. § § 1391(b)(1) & (c)(2).

A. STATEMENT OF RELEVANT FACTS [1]

Plaintiff, Jason Berkoben, was employed by Dell, Inc. as a computer programmer. As an employee of Dell, Berkoben was a participant in a long-term disability plan (" Plan" ), which was insured by an insurance policy (" Policy" ) issued to Dell by Defendant, Aetna Life Insurance Company (" Aetna" ). The Plan grants Aetna discretionary authority to " determine whether and to what extent eligible employees and beneficiaries are entitled to benefits and to construe any disputed or doubtful terms under this Policy, the Certificate or any other document incorporated herein." (Berkoben Policy 074.) The Policy and Plan further provide that Aetna " shall be deemed to have properly exercised such authority unless we abuse our discretion by acting arbitrarily and capriciously." Id. Aetna also reserved the " right to adopt reasonable policies, procedures, rules, and interpretations of this Policy to promote orderly and efficient administration." Id.

Berkoben commenced employment with Dell on or about May 2, 2007, and at all material times, was a covered beneficiary under the Plan. On or about March 3, 2010, Berkoben ceased working due to Schizoaffective Disorder and Bipolar Disorder. (LTD 36-37, 322.)[2] His treating psychiatrist at the time, Dr. Lekhwani, recommended that he stay home from work due to a " psychiatric illness." (STD 170.)[3] Berkoben informed Dell that his " illness is mental in nature." (STD 166.)

On July 15, 2010, Aetna notified Berkoben about the 24 month limitation on LTD benefits for mental illness. (LTD 18.)

Berkoben was initially approved for short term disability benefits for 180 days, and beginning on August 29, 2010, his claim for long-term disability (LTD) benefits was approved by Aetna. Dell's Group Long Term Disability Plan provides for payment of 60% of an employee's salary in the event of total disability, less offsets, including any Social Security benefits paid. On August 29, 2010, Berkoben began receiving from Aetna monthly LTD benefits in the amount of $3,230.00. On or about December 8, 2010, Berkoben was notified that he was approved for Social Security Disability Indemnity (" SSDI" ) benefits. Following receipt of the SSDI award, Berkoben's LTD benefits were offset by his SSDI benefits, and he received $2,080 in monthly LTD benefits from Aetna.

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From August 2010 until June of 2012, Berkoben's treating psychiatrist, Mary Galonski, M.D., provided Aetna with multiple Behavioral Health Clinical Statements, contemporaneous office notes and disability forms, in which she consistently opined that Berkoben was unable to work due to Schizoaffective Disorder. (LTD 343-44, 350-51, 366-68, 369-71, 380-82, 403-05.) Aetna has never questioned that Berkoben suffers from Schizoaffective Disorder.

Throughout this time period, Berkoben's treatment consisted exclusively of medication management and individual psychotherapy. (LTD 145, 152, 155, 161-62, 171-72, 320-23, 326-29, 330-33, 337-42, 344, 346-48, 351-55, 376-79, 382, 405, 651, 658.) Medical records regularly refer to Berkoben as being treated for " schizoaffective disorder," " unspecified psychosis," and " observation of other suspected mental condition" with ICD-9 code numbers of 295.7, 298.9 and V71.09, respectively. (LTD 170, 321-22, 327, 331-32, 341, 347, 353, 357, 360, 363, 373, 377, 390, 396, 400, 597.) Also during this period, Berkoben was taking prescription anti-psychotic and mood stabilizing medications, including Abilify, Lithium, Risperdal and Zyprexa to control his symptoms of schizoaffective disorder (LTD 321, 327, 331, 340, 347, 353, 356, 362, 372, 376, 389, 395, 399), although at times he was not compliant with his medication as prescribed (LTD 321, 362, 396, 399). He also took Prilosec and was prescribe Zocor to treat high cholesterol. (LTD 372.)

Berkoben's symptoms were mental in nature, including episodes of major depression, auditory and visual hallucinations, delusions, flight of ideas, suicidal ideation, anxious and fearful thoughts, depressed mood and signs of psychosis and mania. (LTD 320, 389-402.) The only physical diagnoses indicated in the treatment notes or on physician statements completed for Aetna included GERD, high cholesterol, and pneumonia. (LTD 322, 332.) Berkoben confirmed that his disability was only due to his mental nervous diagnosis. (LTD 162.) He stated that his obstacles to returning to work consisted of " mental issues" and maintained that he had no physical impairments accompanying his mental illness. (LTD 129, 145.)

On March 2, 2012, Aetna again notified Berkoben of the impending 24 month limitation period for mental health conditions and informed him that the claim would be closed effective August 28, 2012. (LTD 292.)

Although Berkoben notified Aetna on May 14, 2014 that he had recently had a brain MRI and intended to forward it for review (LTD 172-73), the MRI had nothing to do with his schizoaffective or bipolar disorders, but rather, was prescribed for a problem he was having with black outs, and therefore, Berkoben never forwarded the MRI to Aetna. To date, Berkoben has not produced any diagnostic studies, clinical findings, or other medical evidence showing that he personally suffers from " demonstrable, structural brain damage." Dr. Galonski's May 20, 2012 treatment note indicates that Berkoben would be required to show brain damage in order to continue to receive benefits (LTD 394),[4] and on June 6, 2012, Dr. Galonski stated that Berkoben had " no physical problems" (LTD 399).

On June 14, 2012, Berkoben's counsel submitted a representation and Intent to Appeal letter to Aetna, challenging the applicability of the 24 month mental health limitation and requesting a copy of the entire claims file. (LTD 579-82.) On July

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9, 2012, Aetna consulted Dr. Elena Mendelssen, M.D., for clarification as to whether Berkoben's condition fell within the 24-month limitation period. (LTD 193.) Dr. Mendelssen opined that Berkoben's diagnosis of schizoaffective disorder did not appear on Aetna's Mental Nervous Limitations and Exclusions List, and therefore, was not excluded from the 24-month mental illness limitation. (LTC 193, 781-782.) Jeffrey Burdick, LCSW, from Aetna's Behavioral Heal Unit, reviewed this information and agreed with Dr. Mendelssen that Berkoben's diagnosis of schizoaffective disorder, ICD-0 code no. 295.7, did not appear on Aetna's Mental nervous Limitations and Exclusions List, and that the 24-month mental illness limitations applied. (LTD 186, 199.)

On July 10, 2012, Aetna sent a letter to Berkoben's counsel, informing him that Berkoben's LTD benefits were being terminated effective 8/28/12 (" termination letter" ):

A view of your file shows you became disabled on 3/2/2010. Your entitlement for LTD benefit (sic) began on 8/29/10, and we find you disabled thru 8/28/2012, the maximum 24 months end of benefit [ ] date, as described in the above contractual provision. The diagnosis of Schizoaffective Disorder is considered a mental health or psychiatric condition and therefore has 24 month max benefit duration. You will not be eligible for benefits beyond 8/28/2012.

(LTD 302.) In its termination letter, Aetna also advised Berkoben of his right to appeal and to submit additional information, including but not limited to, a detailed narrative report beginning 8/28/2012 through present; physician's prognosis; proof of confinement as an inpatient in a hospital or treatment facility; diagnostic studies; clinical findings; and any other relevant information or documentation specific to his schizoaffective disorder. (LTD 302.) Aetna also distinguished Berkoben's SSDI award based upon the difference in standard, lack of an explanation of the decision or information upon which it was based, and therefore, it was unable to give the SSDI award significant weight. (LTD 302.)

Berkoben's Administrative Appeal

By letter dated September 20, 2012, Berkoben appealed Aetna's termination of his LTD benefits. (LTD 297-99.) Inasmuch as Aetna was not contesting Berkoben's disability status, the sole issue on appeal was whether Berkoben's disability, i.e., Schizoaffective Disorder, fell outside the Plan's 24 month limitation for a mental health disability. Berkoben attached to his appeal medical literature [5] and documentation, including a narrative summary from Dr. Galonski, to support his position that Schizoaffective Disorder and Bipolar Disorder are biological diseases of the brain, and thus fall outside Aetna's 24 month mental health limitation under the Plan. (LTD 457-566.) He did not provide Aetna with any diagnostic studies, clinical findings, or other medical evidence showing

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the he had demonstrable, structural brain damage.

In considering Berkoben's appeal, Aetna forwarded his file for further review to independent physicians specializing in Physical Medicine and Psychiatry. (LTD 296.) In particular, Aetna had the claims file reviewed by Stephen Gerson, M.D., board certified in psychiatry, on October 31, 2012, and Stuart Rubin, board certified in physical medicine, on October 25, 2012. (LTD 307-311, 314-316.) Aetna also requested a peer-to-peer telephonic consultation with Dr. Galonski, which was conducted by Dr. Rubin on October 11, 2012. Berkoben LTD File 000296. Aetna also noted that the medical records submitted for its review indicated that Berkoben was receiving treatment for Schizoaffective Disorder and Bipolar Disorder, and Dr. Galonski observed that he appeared aware of his delusions and was struggling against them, was withdrawn and exhibited destructive thoughts towards his neighbors, and showed indications of cognitive issues. Id.

Aetna denied Berkoben's appeal by letter dated November 2, 2012 (" final denial letter" ), in which the following explanation is provided by the senior appeal specialist for Aetna:

In your appeal request letter, submitted on behalf of your client, you provide your opinion that Mr. Berkoben's LTD benefits should not be subject to the 24 month maximum benefits, because his disabling condition [is] biological and not mental nervous condition. We agree that there is emerging clinical evidence that the conditions of schizophrenia and bipolar illness have a biological basis. However, the Diagnostic and Statistical Manual of Mental Disorders (DSM) published by the American Psychiatric Association still classifies these conditions as mental nervous conditions.

Based upon our review of the information you provided, and as explained in more detail above, we have determined that Mr. Berkoben's conditions continue to be classified as mental nervous conditions, as of March 2, 2010 and August 29, 2012. Therefore, the original decision to terminate your client's LTD benefits, due to the policy maximum, effective August 29, 2012, has been upheld. . . .

(LTD 295-296.)

Berkoben exhausted the administrative remedies provided by the Plan. He then instituted the present action against Aetna on November 15, 2012 under Section 502(a)(1)(B) of the Employee Retirement Income Security Act (" ERISA" ), 29 U.S.C. § 1132(a)(1)(B), seeking LTD benefits from the Plan. The Court ordered the parties to file cross motions for summary judgment, along with a certified copy of the administrative record. The parties have complied and thus, the motions are ripe for review.

B. STANDARD OF REVIEW--CROSS-MOTIONS FOR SUMMARY JUDGMENT

Summary judgment is appropriate if, drawing all inferences in favor of the nonmoving party, " the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56 (c). Summary judgment may be granted against a party who fails to adduce facts sufficient to establish the existence of any element essential to that party's case, and for which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

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More specifically, the moving party bears the initial burden of identifying evidence which demonstrates the absence of a genuine issue of material fact. Once that burden has been met, the nonmoving party must set forth " specific facts showing that there is a genuine issue for trial " or the factual record will be taken as presented by the moving party and judgment will be entered as a matter of law. Matsushita Elec. Indus. Corp. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e)) (emphasis added by Matsushita court). An issue is genuine only " if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

When the parties have filed cross-motions for summary judgment, as in this case, the summary judgment standard remains the same. Transguard Ins. Co. of Am., Inc. v. Hinchey, 464 F.Supp.2d 425, 430 (M.D.Pa. 2006). " When confronted with cross-motions for summary judgment, . . . 'the court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the summary judgment standard.'" Id. (quoting Marciniak v. Prudential Fin. Ins. Co. of Am., No. 05-4456, 184 F.Appx. 266, 270 (3d Cir. June 21, 2006)). " If review of [the] cross-motions reveals no genuine issue of material fact, then judgment may be entered in favor of the party deserving of judgment in light of the law and undisputed facts." Id. (citing Iberia Foods Corp. v. Romeo, 150 F.3d 298, 302 (3d Cir. 1998)).

C. RELEVANT PLAN LANGUAGE

The Plan provides in relevant part:

Test of Disability

After the first 24 months of your disability that monthly benefits are payable, you meet the plan's test of disability on any day that:

o You cannot perform the material duties of your own occupation solely because of an illness, injury or disabling pregnancy-related condition; and

o Your earnings are 80% or less of your adjusted predisability earnings.

After the first 24 months of your disability that monthly benefits are payable, you meet the plan's test of disability on any day you are unable to work at any reasonable occupation solely because of an illness, ...


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