United States District Court, W.D. Kentucky, Owensboro Division
MEMORANDUM OPINION AND ORDER
H. BRENT BRENNENSTUHL, Magistrate Judge.
Before the court is Plaintiff Sabrina Austin-Conrad's ("Austin-Conrad") motion for permission to undertake discovery in this case (DN 12). Defendant Reliance Standard Life Insurance Company ("Reliance") has responded in opposition (DN 13), and Plaintiff has replied (DN 14). The court, having reviewed the record and being otherwise sufficiently advised, will grant the motion in part and deny it in part.
This dispute arises from the termination of benefits under a long-term disability ("LTD") insurance policy. Austin-Conrad worked as a surgical nurse for Trover Clinic Foundation, Inc., where she was a participant in an LTD benefits plan subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. ("ERISA"), and for which she paid by payroll deduction from her salary. The plan designated Reliance as the insurer of the disability benefits and the claim fiduciary.
In 2007, Austin-Conrad made a claim for disability benefits under the plan and, after satisfying an elimination period, began receiving payments under the plan's "own occupation" disability provision, whereby she was eligible for benefits if she was unable to perform the duties of her regular occupation. After receiving benefits for a period of twenty-four months under the "own occupation" provision, her benefits payments shifted to the "any occupation" plan provision, whereby she remained eligible for benefits only if she was unable to engage in any occupation for which her education, training or experience would reasonably allow.
While receiving benefits she applied for disability benefits with the Social Security Administration ("SSA"), as required by the plan. On her second application she was awarded benefits. In light of this determination, Reliance demanded reimbursement from Austin-Conrad's SSA past due benefits award and thereafter reduced her ongoing payments to account for her SSA disability income.
In 2012 Reliance asked Austin-Conrad to undergo an independent medical examination ("IME"). Reliance utilized MES Solutions to handle the IME scheduling. MES Solutions arranged for an examination by Dr. Sean E. Samuels, who conducted a neuropsychological examination on December 4, 2012. His report is on the letterhead of Luzio & Associates Behavioral Sciences, Inc. Reliance terminated Austin-Conrad's benefits following the IME.
Austin-Conrad appealed the termination of benefits, and Reliance utilized the services of MES National Disability Service Center to schedule an IME with Dr. Jeffrey E. Hazelwood on September 26, 2013. On two separate occasions in 2013, Reliance conducted an internal Residual Employability Analysis ("REA"). Austin-Conrad notes that both REAs were completed by the same person, Jody Barach, however her title on the reports is different. On one her title is identified as "Supervisor, Rehabilitation Services" and on the other it is identified as "Manager, Medical and Vocational Services." Following Reliance's review of the Hazelwood IME and the REAs, it denied Austin-Conrad's appeal. This action follows, in which Austin-Conrad alleges Reliance's denial of benefits decision was arbitrary and capricious.
As discussed later in this order, resolution of challenges to an ERISA-regulated plan's denial of benefits is generally limited to the evidence contained in the administrative record. A limited exception exists where the plan is responsible for both determining eligibility for benefits and paying those benefits, and discovery may be allowed into whether there is a conflict of interest in the claim evaluation process. Austin-Conrad claims such a conflict of interest is present in this case and she requests permission to undertake written discovery.
Discovery related to bias in the evaluation process.
Austin-Conrad seeks information which may reveal a bias in favor of denial of benefits claims. She lists the specific topics of discovery as: (1) incentive, bonus, or reward programs or systems, formal or informal, for an employee involved in reviewing disability claims; (2) contractual connections between the conflicted administrator/payor and the vendors/reviewers utilized in plaintiff's claim; (3) statistical data regarding the number of claims files sent to the vendors/reviewers and the number of denials which resulted; (4) statistical data concerning the number of times the vendors/reviewers found claimants unable to work in at least a sedentary occupation or found that the claimants were not disabled; and (5) documentation of administrative processes designed only to check the accuracy of grants or claims.
Discovery of the claims manual and related internal policies.
Austin-Conrad contends that Reliance should have included in the administrative record any manuals or policies upon which it relied in the determination of her claim. She also complains that Reliance's records employ abbreviations or codes for which there is no corresponding explanation, as well as documents which are difficult to read, and Reliance should either supplement the record or she should be permitted to conduct discovery on these items.
Subpoena duces tecum to independent medical examiners.
In addition to discovery from Reliance, Austin-Conrad also requests permission to issue subpoenas duces tecum to IME Drs. Samuels and Hazelwood. She proposes to inquire of the doctors the number of IMEs they perform in comparison to the number of non-IME patients they see, with particular emphasis on those relating to complaints of fibromyalgia, chronic fatigue syndrome, polyneuropathy and associated depression and anxiety. She also proposes inquiring into the compensation they receive for conducting IMEs in comparison to what they receive in other aspects of their medical practices, production of IRS 1099 forms for work for insurance companies or medical examination companies, lists of publications related to IMEs, lists of ...