After paying disability benefits for five years to a OB/GYN doctor whose diminished use of her left arm left her unable to perform surgery and uninsurable, Unum terminated her benefits. This decision was reversed by the Sixth Circuit in Kramer v. Paul Revere Life Insurance Company, No 07-1557 (April 8, 2009). The court observed that "there is no explanation for the decision to cancel benefits that had been paid for some five years based upon the initial determination of total disability in the absence of any medical evidence that the plaintiff's condition had improved during that time."
Dr. Lois Kramer, an OB/GYN, had disability insurance policies with Paul Revere Life Insurance Company and Provident Life and Accident Insurance Company (which later were acquired by Unum). Beginning in the mid-1990's Dr. Kramer began experiencing back and spinal cord problems, eventually undergoing a C6-C7 laminectomy. Further treatment including nerve root injections proved ineffective and she eventually lost full use of her left arm. As a result, she struggled to perform routine office tasks and could not perform surgery and related procedures. Her claim was approved and she began receiving disability benefits in late 1998.
Unum paid the benefits through 2003. In the interim, at least two medical file reviewers reviewed Dr. Kramer's file and affirmed that she remained disabled and entitled to benefits. Nonetheless, in late 2003, Unum terminated payment of the benefits based on two more reviews, one by a Dr. Phillip Mayer and another by a Dr. Geron Brown, both of whom opined that Dr. Kramer could resume working as a OB/GYN. Dr. Kramer appealed the termination of her benefits, presenting additional medical evidence along with evidence that she could not obtain medical malpractice insurance because of her disability.
Kramer filed suit for reinstatement of her benefits. The district court ruled applied a de novo standard of review to the termination of benefits under the Provident policy and reinstated her benefits. However, the district court applied an arbitrary and capricious standard to the Paul Revere policy and affirmed the termination of benefits.
The Sixth Circuit ruled that Unum's termination of the benefits under the Paul Revere policy was arbitrary and capricious. The court was disturbed by Unum's disregard for the opinions of numerous treating physicians and rejected its reliance on the opinions of the file reviewers it had hired:
there is no explanation for the decision to cancel benefits that had been paid for some five years based upon the initial determination of total disability in the absence of any medical evidence that [Kramer's] condition had improved during that time. The best that can be said of the opinions of Dr. Mayer and the other company consultants is that they support the proposition that Dr. Kramer was, in fact, never disabled from her 'own occupation.' But that conclusion flies in the face of all the other evidence in the record, and the plan administrator's reliance upon it can only be described as arbitrary and capricious.
