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Stafford v. Anthem Life Insurance Co.

United States District Court, S.D. Indiana, Indianapolis Division

March 17, 2017

JILL A. STAFFORD, Plaintiff,



         This matter is before the Court on the parties' cross-motions for summary judgment (Filing No. 21; Filing No. 23). Plaintiff Jill A. Stafford (“Stafford”) brought this claim under the Employee Retirement Income Security Act (“ERISA”) against Defendants Anthem Life Insurance Company (“Anthem”), and affiliate WellPoint Flexible Benefit Plan (collectively, “Defendants”). On summary judgment, Stafford alleges that Anthem failed to provide her with a full and fair review of her claim for benefits, rendering Anthem's decision to terminate her benefits arbitrary and capricious. Anthem argues that it possessed a rational basis and explanation for terminating Stafford's benefits. For the reasons set forth below, the Court denies Stafford's motion and grants Anthem's motion.

         I. BACKGROUND

         Stafford worked as a Senior Vendor Audit Coordinator for Anthem, Inc. (formerly WellPoint). (Filing No. 20-2 at 8.) Her position required typing, note-taking, and answering telephones. (Filing No. 20-2 at 15.) She earned approximately $60, 000.00 per year. (Filing No. 20-2 at 8.) On December 7, 2012, Stafford suffered a non-work-related injury when she fell in her backyard. (Filing No. 20-2 at 16.) She fractured her right arm in multiple places, and underwent open reduction and internal fixation (“ORIF”) surgery. (Filing No. 20-5 at 29.) Six weeks after surgery, she developed complex regional pain syndrome (“CPRS”), and received treatment including steroids, bone growth stimulator, and physical therapy. (Filing No. 20-5 at 31.) Stafford is right-handed, so the injury affected her dominant hand. (Filing No. 20-7 at 51.) Stafford applied for and received short-term disability benefits, which she was awarded for the maximum period of time, 180 days. (Filing No. 20-5 at 33.)

         Stafford is also covered by a long-term disability (“LTD”) benefit program, provided as part of the Anthem Flexible Benefit Plan (“the Plan”). (Filing No. 20-5.) Under the LTD component of the Plan, a claimant is “disabled” during the first 24 months of any period of disability when, because of her injury or sickness, all of the following are true: (1) “[she is] unable to do the mental and substantial duties of [her] own occupation;” (2) “[she is] receiving regular care from a doctor for that injury or sickness;” and (3) “[her] disability work earnings, if any, are less than or equal to 80% of her indexed pre-disability earnings.” (Filing No. 20-1 at 231.) Stafford applied for LTD benefits on April 10, 2013, (Filing No. 20-7 at 51), and Anthem approved those benefits to run from June 5, 2013 through June 4, 2015, (Filing No. 20-5 at 19). Stafford also applied for Social Security Disability Insurance benefits (“SSDI benefits”), and the Social Security Administration (“SSA”) approved her claim in July 2013.

         As required, Stafford provided periodic updates to Anthem regarding her continued treatment. She informed Anthem by letter dated June 6, 2013 that she would need further orthopedic surgery on her upper arm/shoulder, (Filing No. 20-7 at 52), and she underwent an ORIF revision surgery in July 2013, (Filing No. 20-4 at 48.) Michael Ferrell, M.D. provided a Supplemental Physician's Statement of Disability form on December 19, 2013, in which he described Stafford as having continued pain in her right arm. (Filing No. 20-4 at 49.) He also indicated that she was restricted from lifting more than 10 pounds and from all repetitive overhead movements and all climbing through February 3, 2014. (Filing No. 20-4 at 48-49.) In another letter dated January 14, 2014, Dr. Ferrell described Stafford as having continued right upper arm pain and intermittent right hand pain. (Filing No. 20-3 at 55.) He described Stafford as having “no use of the right arm” through July 13, 2014. (Filing No. 20-3 at 55.)

         Under the terms of the Plan, after the initial two-year LTD period, the standard for disability changes. Under the new standard, a claimant is disabled if she is unable to perform the material and substantial duties of “any gainful occupation” for which she is or might become reasonably qualified by education, training, or experience; is under the regular care of a doctor for the injury or sickness; and is earning less than or equal to 80% of her pre-disability earnings. (Filing No. 20-1 at 231.) This is known as the “any occupation” standard of disability. (Filing No. 22 at 3.) The Certificate of Coverage governing the LTD benefit states that Anthem will stop paying benefits on the earliest of a list of possible dates, including “the date you are no longer disabled according to this plan, ” and “the date you fail to provide proof of continuing disability.” (Filing No. 20-1 at 244.)

         Lisa Puckett, Lead Disability Case Manager at Anthem, sent Stafford a letter dated March 3, 2015 informing Stafford that her claim would transition to the “any occupation” standard as of June 5, 2015, and requesting updated information on her condition. (Filing No. 20-2 at 48-49.) Stafford responded and informed Anthem that she had not seen Dr. Ferrell since January 2014 (because he moved out of state), and that her last physical therapy appointment was in October 2014. (Filing No. 20-3 at 59.) Stafford submitted office visit notes from Robert Prince, M.D., a pain management physician dated April 16 and April 30, 2015. (Filing No. 20-2 at 83-89.) Dr. Prince noted that Stafford reported a “constant ache, ” which worsened with movement in her right upper arm. (Filing No. 20-2 at 83.) Stafford reported her pain as, at worst, 9/10. (Filing No. 20-2 at 87.) On physical examination, Dr. Prince observed a “slightly reddish unit” to the upper extremity and that “she is weak in all muscles tested there.” (Filing No. 20-2 at 85.) Dr. Prince diagnosed her with CPRS and ordered a Functional Capacity Evaluation (“FCE”). (Filing No. 20-2 at 85.)

         Stafford also submitted the results of the FCE, conducted by Joanne McDowell, (“McDowell”), a licensed practitioner nurse. In her examination, McDowell noted that Stafford's forearm and hand were darker in color, that swelling was visible in her forearm and wrist, and there was tenderness in the humeral region. (Filing No. 20-3 at 1-3) McDowell also noted decreased grip and pinch strength in Stafford's right hand. (Filing No. 20-3 at 6.) McDowell noted that “[c]onstant use of the [right] and for any activity is not recommended. Frequent use for fine motor is also not recommended due to the required small repetitive movements at the shoulder.” (Filing No. 20-3 at 2.) McDowell limited Stafford to occasionally (1%-33%) performing, among others, the following activities: bilateral pinching, bilateral simple grasping, right hand fine manipulation, and twisting/hand. (Filing No. 20-3 at 1.) She indicated that Stafford could perform frequent (34%-66%) bilateral simple grasping. (Filing No. 20-3 at 1.) McDowell also concluded that Stafford met the sedentary and light physical demand levels (with height restrictions). (Filing No. 20-3 at 1.)

         Anthem also received an Attending Physician's Statement (“APS”) from Dr. Prince dated May 26, 2015. (Filing 20-2 at 82.) The Statement was based on Dr. Prince's April examinations of Stafford, along with the results of the FCE. Dr. Prince indicated that Stafford was not totally disabled from her current job. (Filing No. 20-2 at 82.) He reported that she could return to work at that time, but with, among others, the following restrictions: no lifting/pushing/pulling/carrying greater than 10 pounds up to a maximum of 2 times per hour; no climbing or overhead work; and no repetitive motions, including hand grasp, wrist motion, and elbow flexion. (Filing No. 20-2 at 82.)

         Anthem provided these records to an internal vocational rehabilitation consultant to conduct a transferable skills assessment. (Filing No. 20-2 at 46-47.) The assessment concluded that Stafford could perform the duties of gainful occupations that were available in her geographic area including those of a claims administrator, office manager, and insurance information clerk. (Filing No. 20-2 at 47.)

         After reviewing the submitted materials, Anthem informed Stafford by letter dated June 1, 2015 that she was not eligible for continued LTD benefits after June 4, 2015. (Filing No. 20-2 at 43-45.) Anthem concluded that Stafford would no longer meet the Plan's definition of disability as of June 5, 2015. (Filing No. 20-2 at 43.) The letter stated that based on Stafford's restrictions and limitations, she could perform the three gainful occupations identified in the transferable skills analysis: claims administrator, office manager, and insurance information clerk. (Filing No. 20-2 at 44.)

         The occupational requirements of a claims administrator include handling and fingering occasionally. (Filing No. 20-2 at 35.) A claims administrator position requires finger and manual dexterity in the 11th to 33rd percentile. (Filing No. 20-2 at 35.) A claims administrator position requires “using [a person's] hands to handle, control, or feel objects, tools, or controls” about 50% of the time. The mean annual salary is $52, 650.00. (Filing No. 20-2 at 44.) An officer manager position is classified as a “Chief Executive” job with supervisory and managerial functions. (Filing No. 20-2 at 57-58.) Wage data estimates an annual salary of $195, 000.00. (Filing No. 20-2 at 57.) An information clerk position requires “using [a person's] hands to handle, control, or feel objects, tools, or controls” about 50% of the time. (Filing No. 20-2 at 70.) The occupational requirements include handling and fingering occasionally, (Filing No. 20-2 at 71), and it requires finger and manual dexterity in the 11th to 33rd percentiles, (Filing No. 20-2 at 72). The mean annual salary is $33, 800.00. (Filing No. 20-2 at 44.)

         Stafford then provided her FCE and physical therapy notes to Anthony Mimms, M.D., a physical medicine and rehabilitation specialist, for review. (Filing No. 20-7 at 30.) Dr. Mimms reviewed those records but did not conduct a physical examination of Stafford. (Filing No. 20-7 at 32.) On an Attending Physician's Statement dated July 18, 2015, Dr. Mimms found that Stafford suffers from a “severe limitation of functional capacity” and is “incapable of minimum (sedentary) activity.” (Filing No. 20-7 at 32.) Dr. Mimms concluded that Stafford is totally disabled from her job, but wrote that he was “not sure” whether Stafford was totally disabled from any other work. (Filing No. 20-7 at 33.) He opined that she is incapable of performing clerical duties and has trouble typing and using the computer. (Filing No. 20-7 at 33.) Dr. Mimms concluded that Stafford was unable to work for an indefinite period because of continuing pain. (Filing No. 20-7 at 33.) Among other restrictions, Dr. Mimms found that she could perform left-hand work only, and no repetitive motions with the right upper extremity (including hand grasping, wrist motion, and elbow flexion). (Filing No. 20-7 at 33.)

         Stafford appealed the denial of LTD benefits on August 3, 2015. Kali McCloud (“McCloud”), a Senior Quality Improvement/Compliance Analyst who had not previously been involved with Stafford's claim, was assigned to handle the appeal. Stafford provided Anthem ...

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