Insurance companies and plans are very aware that different circuits have more tolerance for conflict of interest discovery when review is for abuse of discretion. Since insurance companies know that conflict of interest discovery often leads to evidence which undermines reasons for denial or termination of claims, where courts allow reasonable discovery, claimants have better chances of winning and therefore insurance companies are more likely to settle. There can be no question that the availability of discovery in ERISA cases is a very important part of the calculation insurance companies and plans make when they decide whether to pay a claim or fight a claim in litigation.
Second, any genuine analysis of your claim relative to a particular carrier or plan cannot be made without a review of your complete administrative record. There are elements within every claim, such as the identity and track record of the reviewing physician(s), the adjustor’s communications with you and other company personnel, or the claims handling processes engaged in, which can alert the experienced reviewer to issues to which a particular carrier or plan may be sensitive. For instance, the company may have been strongly admonished by a court about the errors of a particular reviewing doctor- the use of the same doctor to review you file might give your appeal real weight; the adjustor handling the file may appear in many files for the sole purpose to denying the claim; your state Department of Insurance may be investigating the carrier/plan for the precise conduct being engaged in on your case.
Thus, your record may contain a roadmap of how to unmask the carrier’s or plan’s efforts to unreasonably deny your claim. Based on a careful review, your lawyer can develop a strategy to compel your carrier, whether Lincoln, Aetna, Cigna, The Hartford, etc., or a self-insurance plan, to reinstate your benefits or fairly buy you out.
So, when evaluating ERISA benefits claims in appeal and for litigation, it’s not enough to ask whether you, the claimant, are disabled. The questions you must ask are far more subtle and much more nuanced. What is the standard of review? If review is for abuse of discretion, you can be disabled and still lose if the insurance company’s or plan’s decision was reasonable. You must also ask how strong and convincing is the medical evidence supporting and opposing the claim for benefits. Did your doctors merely state their conclusion or did they explain them; a conclusion without reasoning is often not very persuasive. Are the defense doctors’ opinions credible? Did they make factual errors in their analysis? Are they “liars -for- hire” repeatedly used by the same insurance company? If so, will you be allowed to prove so? Has the court where venue is proper for your claim been responsive to claims of your type? Or have claimants with similar conditions routinely lost? Are there other venues that might be proper with more favorable law? Is the plan or the insurance company hiding something that discovery will disclose? And many more questions.
Finally, it is important to consider the condition and status of the parties: the insurance company or plan and you. Let’s face it, as a practical matter the insurance company or the plan has lots of money; it can afford to lose; therefore, it doesn’t have to settle. You, on the other hand, are disabled and undoubtedly financially stressed. Can you afford to lose? How much risk can you tolerate? It is one thing to fight a case when there is no alternative because no settlement offer has been made, but if the insurance company or plan makes a poor offer, can you afford to say no and run the risk of losing and getting nothing? All these questions, and usually many more, need to be asked and need to be discussed in the course of an ERISA benefits claim. We are happy to swing for the fences and go for the big win if that’s what you want. But if you follow baseball you undoubtedly know that most home run hitters strike out a lot. So we will always tell you that ERISA benefits lawsuits are easy to lose.