Denied Sight-Unseen: Why Are Non-Examining Doctors So Prevalent In The Disability Insurance Industry?

• Published date: 17 April 2023
• Subject Matter: Employment and HR, Insurance, Retirement, Superannuation & Pensions, Insurance Laws and Products
• Law Firm: DeBofsky Law
• Author: Martina Sherman

Clients whose disability benefits have been denied frequently ask, "How can the insurance company terminate my benefits without having examined me?" The answer can be traced to a 2003 Supreme Court decision, Black & Decker Disability Plan v. Nord, 538 U.S. 822, 825, 123 S. Ct. 1965, 1967 (2003), which held that an ERISA plan administrator is not required to defer to the opinions of a treating physician. In the 20 years since Nord was decided, the medical review industry has exploded. But courts are increasingly questioning the independence of these reviews, and the pendulum may be swinging back in favor of independent medical examinations (IMEs).

The Nord Decision and Its Aftermath

The Nord decision is often cited to justify the use of file-only medical reviews in ERISA disability cases, but the Nord case did not actually involve file-only reviews. Rather, Kenneth Nord was examined by a doctor for his disability plan administrator prior to the plan's denial of his LTD benefits.

Nord challenged that decision in court, arguing that his disability plan was obligated to defer to the opinion of his treating physician, who endorsed disability. Nord cited the Social Security Administration's now rescinded "treating physician rule," which required that the SSA give "controlling weight" to the opinion of a treating physician, subject to certain conditions. See 20 CFR ' 404.1527(d)(2), 416.927(d)(2) (2002).

The Supreme Court rejected Nord's argument, ruling that ERISA plan administrators "are not obliged to accord special deference to the opinions of treating physicians." 538 U.S. at 825. In reaching that conclusion, the Court relied on administrative law principles, ruling that the U.S. Department of Labor, which is charged with interpreting the ERISA statute, could have adopted the SSA's treating physician rule but didn't. The Court concluded:

Plan administrators, of course, may not arbitrarily refuse to credit a claimant's reliable evidence, including the opinions of a treating physician. But, we hold, courts have no warrant to require administrators automatically to accord special weight to the opinions of a claimant's physician; nor may courts impose on plan administrators a discrete burden of explanation when they credit reliable evidence that conflicts with a treating physician's evaluation.

Id. at 834.

Courts have interpreted Nord to condone the practice by ERISA plan administrators of relying on the opinions of non-examining doctors to deny disability...