The facts can be read from the case. The important issue in this case, is how the Court analyzed the allegation that the plan administrator abused his discretion and there was a conflict of interest with the plan administrator being both who evaluates the claims for benefits and pays benefits claims.
The Court stated that in determining whether there was an abuse of discretion, we also consider whether the plan administrator had a conflict of interest. A plan administrator has a conflict of interest if it “both evaluates claims for benefits and pays benefits claims.” However, a conflict of interest is but one factor among many that a reviewing judge must take into account. A conflict of interest should prove more important where circumstances suggest a higher likelihood that it affected the benefits decision. A reviewing court may give more weight to a conflict of interest where the circumstances surrounding the plan administrator’s decision suggest procedural unreasonableness — that is, where the method by which the plan administrator made the decision was unreasonable.
Davis argues that Aetna’s decision to terminate Davis’s long term disability benefits was procedurally unreasonable in light of its structural conflict of interest. In support, Davis avers that Aetna gave greater weight to the opinions of its peer review physicians over her treating physician, and she alleges that Aetna failed to provide peer review physicians with all of the relevant medical evidence. Davis further argues that Aetna abused its discretion by (1) relying on peer review physicians who were not properly qualified; (2) rejecting Davis’s self-reporting regarding her condition; and (3) placing improper weight on the surveillance and social media investigation evidence.
Davis asserts that Aetna, which has a structural conflict of interest in that it is both the plan administrator and insurer of the disability plan, acted in a procedurally unreasonable manner. “Procedural unreasonableness” means simply that the method used by which the plan administrator made the decision was unreasonable.
Davis alleges that Aetna’s decision was procedurally unreasonable because Aetna also favored the medical reports that supported denying her benefits and also failed to give the peer review physicians all of the pertinent medical evidence. In this case, Aetna and the social security administration (SSA) reached the same conclusion, that Davis was not entitled to benefits. Davis also asserted that the plan administrator failed to explain why it had credited a “brief form” from the claimant’s treating physician that stated she was capable of working in a sedentary position, but had ignored every single one of the treating physician’s more detailed reports that reached the opposite conclusion.
Te Court stated that Aetna did not ignore or mischaracterize the recommendations of her doctor, or rely on medical reports that ignored her diagnosis and conclusions. Rather, Aetna placed greater weight on the conclusions of Aetna’s doctors. This is clearly permissible.
While Davis is correct that a plan administrator cannot pick and choose the evidence it provides to peer reviewers in an effort to obtain a favorable report that supports its desired outcome, that is not what Aetna did. There is no evidence that Aetna withheld favorable evidence. In fact, favorable evidence to Davis is in the record.
In sum, the record does not reveal any evidence that would allow the Court to draw a reasonable inference that Aetna’s structural conflict of interest may have influenced its benefits decision.