In ERISA Cases, Who Gets the Last Word on the Evidence in the Administrative Record?
By William A. Chittenden III and Joseph R. Jeffery
Chittenden, Murday, & Novotny LLC, Chicago, Illinois
Every lawyer likes to have the last word. It is not surprising, therefore, that plaintiffs in ERISA benefit-denial cases increasingly assert they are entitled to have the “last word” on the evidence that goes into the administrative record for their benefit claims. According to these plaintiffs, an individual who appeals the denial of a claim for benefits is entitled, before the plan makes its final benefits decision, to review and rebut any new evidence gathered by the plan during the appeal. They argue that any plan failing to afford a claimant the right to rebut that evidence denies the claimant a “full and fair review” of her claim as required by ERISA. Three circuit courts have considered this issue and are split as to whether claimants are entitled to rebut their plans’ medical opinion evidence prior to a final decision on appeal. However, decisions from one of the two circuits that hold a claimant is not entitled to supplement medical opinion evidence also suggest claimants may be entitled to rebut newly obtained factual evidence when it is material to a claimant’s appeal.
In the typical ERISA benefit-denial case, a participant in an employee benefit plan sues the plan for denial of benefits. The lawsuit usually follows an administrative appeals process in which the plan denies the plaintiff’s initial claim for benefits and the plaintiff appeals pursuant to the plan’s internal review procedures. The plaintiff may have submitted additional evidence as part of the appeal and the plan, after reviewing the newly submitted evidence, may have gathered additional evidence of its own before upholding its denial of the plaintiff’s claim. The materials gathered and relied upon by the plan administrator throughout the administrative process comprise the administrative record. In most cases, a plaintiff does not have the opportunity to review or comment on the evidence the plan gathered during the appeal. In fact, most plaintiffs probably do not learn about the evidence until they receive a letter explaining why their appeals were denied. By that time, the administrative remedies are exhausted and the only option is to sue in federal court and ask the court to supplement the administrative record with the rebuttal evidence.
An important consideration in any benefit-denial case is whether the court will limit its review of the plan’s decision to the evidence in the administrative record. Where it does, the court reviews the plan’s decision based on the plan’s unrebutted evidence.
ERISA requires plans to establish a process by which claimants are afforded a “full and fair review” of the denial of their claims. 29 U.S.C. §1133. Among the procedures required for a full and fair review is the ability to address the accuracy and sufficiency of the evidence considered by a plan in denying benefits. A plaintiff arguing for the right to rebut newly-gathered materials usually founds her argument on the right to a “full and fair review.”
The Eighth, Tenth, and Eleventh Circuits are the only circuits to have addressed this issue. The Eighth Circuit in Abram v. Cargill, Inc., 395 F.3d 882 (8th Cir. 2005), held that the plan administrator’s refusal to allow the plaintiff to review and rebut the opinion of the plan’s independent medical examiner denied her a “full and fair review” of her claim. According to the court, to constitute a “full and fair review” under ERISA, the administrator had to give the plaintiff an opportunity to review and respond to the plan’s medical opinion evidence before issuing its final ruling on the plaintiff’s appeal. Id. at 886.
More recently, the Tenth and Eleventh Circuits ruled that ERISA’s regulations reserve to plans the “last word” on an administrative record’s medical opinion evidence. Metzger v. UNUM Life Ins. Co. of Am., 476 F.3d 1161 (10th Cir. 2007); and Glazer v. Reliance Std. Life Ins. Co., 524 F.3d 1241 (11th Cir. 2008). In Metzger, the Tenth Circuit observed that ERISA regulations require plans to consult with an appropriate health care professional any time the outcome of an appeal turns in whole or in part on a medical judgment. Thus, if the plaintiff were given the opportunity to submit additional medical evidence that rebutted the plan’s medical evidence, the plan would, under the regulations, have to obtain another set of medical opinions from another qualified health care professional. Thus, the plaintiff’s approach would create “an unnecessary cycle of submission, review, re-submission, and re-review” that “would undoubtedly prolong the appeal process” and unnecessarily increase the costs of appeals. Id. at 1166-67. Accordingly, the court concluded the plan administrator was not required to make available for review and rebuttal the medical reports it relied on to decide the plaintiff’s appeal.
Notwithstanding Metzger’s holding as to medical evidence, claimants may have a right to comment on new factual evidence relied upon by plans during appeals. The Metzger court observed in dicta that the plan need not give claimants an opportunity to rebut the plan’s evidence “[s]o long as appeal-level reports analyze evidence already known to the claimant and contain no new factual information or novel diagnoses.” Id. at 1167. The Tenth Circuit clarified the extent of that exception in Forrester v. Met. Life Ins. Co., 232 Fed. Appx. 758 (10th Cir. 2007). In that case, the court determined that the exception only applied where the plaintiff’s inability to address the new facts materially prejudiced the viability of her claim. Id. at 760-61. If the plaintiff’s claim was so prejudiced, the record should be supplemented and the matter remanded for reconsideration by the plan. Id. at 761.
One possible exception to this rule is waiver. It seems likely that a claimant who withholds relevant evidence on appeal could waive her right to rebut new factual evidence gathered by her plan during her appeal. It is, after all, the claimant’s burden to supply her plan with evidence establishing her right to plan benefits. Ruttenberg v. United States Life Ins. Co., 413 F.3d 652, 663 (7th Cir. 2005). Thus, if the plan’s original letter denying benefits put the claimant on notice of the type of factual information needed to establish her right to benefits and the claimant failed to submit that evidence on appeal, the claimant may have waived the right to rely on the evidence in a subsequent lawsuit against the plan.
The foregoing cases explain the state of the law as it exists today. Due to the significance in benefit-denial cases of limiting court review to the administrative record, one can safely predict that parties and the courts will continue to litigate this issue for the foreseeable future.
William A. Chittenden III (email@example.com)
Joseph R. Jeffery (firstname.lastname@example.org)
Chittenden, Murday, & Novotny LLC