S.D. Texas Notes Split Re the Meaning of "Full and Fair Review" Under ERISA Regulations
Per Boldt v. Dow Chemical Co. Voluntary Group Acc. Ins. Plan, Slip Copy, 2007 WL 2329873 (S.D. Tex. Aug 15, 2007) (NO. 6:06-CV-25):
The Eighth Circuit found one of the core requirements of "full and fair review" is providing the claimant an opportunity to engage in "meaningful dialogue" with the administrator. Id. While this court agrees that the claimant is entitled to know what evidence was relied upon by the administrator and respond to that evidence, there is a distinction between Abram and the present case. Unlike Abram, the claimant in this case did not attempt at all during the administrative proceeding to engage in any dialogue with the administrator. In addition to not presenting any evidence to refute AIG's initial denial, the Plaintiff did not even request Dr. Hubbard's report until three months after the final decision had been rendered. It appears to the court that the Plaintiff was not interested in meaningfully participating in the administrative process, but only now seeks to use this technical violation as a means to reopen her case.
Further, the Tenth Circuit also recently addressed this issue and came to the opposite conclusion. In Metzger v. UNUM Life Ins. Co. of Am., 476 F.3d 1161 (10th Cir.2007), the court addressed whether the administrator violated ERISA regulations by "failing to make [the] reviewers' reports available prior to a final decision on appeal." Id. at 1162. Similar to the present case, the administrator sent claimant's complete file for review to two medical professionals who had not been involved in the original denial of benefits. Id. at 1163. The reports analyzed the new medical evidence submitted on appeal, but "they contained no new factual information and recommended denial on the same grounds as the initial claim determination." Id. The court found that reports generated during the appeals process did not have to be disclosed to a claimant until after the conclusion of the administrative appeal. Id. at 1166. In support of its decision, the court noted that in subsection (h)(3)(iii) of the applicable regulations, an administrator is required to consult with a health care professional in "deciding an appeal of any adverse benefit determination that is based in whole or in part on a medical judgment." 29 C.F.R. § 2560.503-1. Because this regulation mandates consultation with a health care professional on appeal, the court concluded that "[p]ermitting a claimant to receive and rebut medical opinion reports generated in the course of administrative appeal-even when those reports contain no new factual information and deny benefits on the same basis as the initial decision-would set up an unnecessary cycle of submission, review, re-submission, and re-review." Id. Further, the court relied on the Department of Labor's description of the disclosure regulation. The Department stated it believed the disclosure of the relevant documents would "serve the interests of both claimants and plans by providing clarity as to the plans' disclosure obligations, while providing claimants with adequate access to the information necessary to determine whether to pursue further appeal." Id. at 1167 (citing ERISA Claims Procedure, 65 Fed.Reg. 70,246, 70,252 (Nov. 21, 2000) (emphasis added)). The court reasoned that requiring reports generated on appeal to be disclosed prior to the final decision would belie the Department's description because access to these documents "would not aid claimants in determining 'whether to pursue further appeal,' because claimants would not yet know if they faced an adverse decision." Id. The court held "[s]o long as appeal-level reports analyze evidence already known to the claimant and contain no new factual information" disclosing an appeal-level report after the final decision is consistent with full and fair review. Id.
As there seems to be a split in circuit reasoning, this court is not inclined to adopt the hard and fast rule established in Abram without further guidance from the Fifth Circuit. Further, while the Fifth Circuit has not addressed this issue directly, it has more generally held that despite technical noncompliance with ERISA procedural requirements, if the purpose of ERISA section 1133 is fulfilled then only substantial compliance with the regulations is required. Lacy v. Fulbright & Jaworski, 405 F.3d 254, 256 (5th Cir.2005); Robinson v. Aetna Life Ins. Co., 443 F.3d 389, 392 (5th Cir.2006) ("Challenges to ERISA procedures are evaluated under the substantial compliance standard."). Under § 1133(2), "full and fair review" has been interpreted to mean that the claimant should know what evidence the decision-maker relied upon, have an opportunity to address the accuracy and reliability of the evidence, and have the decision-maker consider the evidence presented by both parties prior to reaching and rendering its decision. Sweatman v. Commercial Union Ins. Co., 39 F.3d 594, 598 (5th Cir.1994).