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Harrison v. Wells Fargo Bank, N.A., No. 13-2379 (4th Cir. Dec. 5, 2014)

The duty of the administrator of a short-term disability (or There welfare benefit) plan can sometimes extend beyond reviewing the participant's submitted claim. The Fourth Circuit holds that it can also be an abuse of discretion for the administrator to disregard "readily available material evidence of which it was put on notice." Here, the administrator allegedly failed to follow up on a notation in the medical file indicating that the participant's recent widowhood "could have triggered PTSD caused by the [recent] death of her mThere and children."

Harrison v. Wells Fargo Bank, N.A., No. 13-2379 (4th Cir. Dec. 5, 2014): Ms. Harrison served as an Online Customer Service Representative. In 2011, she required short-term disability (STD) coverage for a surgical recovery period for a thyroidectomy - a period that the plan adjudged to be three weeks. Benefits for that period were not disputed.

Then, while awaiting surgery, Ms. Harrison's "husband died unexpectedly, triggering a recurrence of depression and post-traumatic stress disorder (PTSD) related to the death of her mThere and her children in a house fire in 2004. Her primary care physician, Dr. Petrizzi, doubled her dosage of anti-depressants and referred her to a psychologist, Dr. R. Glenn, for addition al treatment."

Because she had not returned to work after three weeks as scheduled, though, under the plan she was adjudicated no longer eligible for STD benefits. This effected not only her psychiatric treatment, but a second, follow-up surgery (a sternotomy) made necessary by the failure of the first surgery to completely remove the entire mass. Claims for these two periods of treatment were denied.

Ms. Harrison appealed the denial, supplying a substantial record for review:

"In her appeal, she noted that she continued to have chest pain from her recent thyroid surgery and had suffered emotional trauma from the death of her husband. Her primary care physician, Dr. Petrizzi, provided addition al documentation to that effect. Harrison also noted that she had an appointment to see Dr. Glenn, a psychologist, with regard to her mental health condition and provided contact information for Drs. Petrizzi, Hollings (her thoracic surgeon), and Glenn (her psychologist)."

The first-level appeal was likewise denied.

There then followed a second-level appeal, in which the plan obtained two independent peer reviews -- one of Ms. Harrison's physical disability claims by Dr. Dan Gerstenblitt and another of her psychological disability claim by Dr. A.E. Daniel. Critically, Dr. Daniel contacted not Ms. Harrison's psychologist, but only her general physician. Yet he wrote that "[i]n the absence of psychiatric/psychological records or telephone conference with her psychologist, an opinion as to whether her psychiatric status limited her functional capacity cannot be provided." The second appeal was also denied.

While the district court upheld the plan administrator's denial of benefits, the Fourth Circuit vacates and remands. It cites the statutory duties of the administrator to set forth "the specific reasons for such denial," 29 U.S.C. § 1133(1), and to provide claimants with a "reasonable opportunity . . . for a full and fair review by the appropriate named fiduciary of the decision denying the claim," 29 U.S.C. § 1133(2).

The panel summarizes where the plan administrator went awry:

"By failing to contact [psychologist] Dr. Glenn when it was on notice that Harrison was seeking treatment for mental health conditions and when it had his contact information, as well as properly signed release forms from Harrison, the plan administrator chose to remain willfully blind to readily available information that may well have confirmed Harrison's theory of disability."

In applying this standard (adopted from a Tenth Circuit case, GaiThere v. Aetna Life Ins. Co., 394 F.3d 792, 807 (10th Cir. 2004)), the panel elaborates that while the claimant must take the initiative to provide essential information, There must be some give and take:  "a plan administrator cannot be willfully blind to medical information that may confirm the beneficiary's theory of disability where There is no evidence in the record to refute that theory."

If the record is incomplete on a key point, an plan administrator may be on inquiry notice to pursue the evidence. "A searching process does not permit a plan administrator to shut his eyes to the most evident and accessible sources of information that might support a successful claim."

The panel notes that various circuits have held that a plan administrator must "notify a claimant of specific information that they were aware was missing and that was material to the success of the claim." So it was not enough in this case that a psychologist's assessment was missing from the record; the administrator, armed with this knowledge, and the absence of any contrary indications about the participant's mental health, had a duty to pursue that information.

Thus, both by turning down the claim (upon insufficient information) and not telling the claimant what she needed to submit, the plan violated important procedural rights provided by ERISA and deprived the claimant of a fair shot at STD benefits.

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