In Kuntz v Aetna, 2013, the Federal Court found that for Aetna abused its discretion in having based its disability claim denial in a mental health impairment case on a paper review of the Claimant’s medical records. Other courts have referred to denials based on such paper reviews as being arbitrary and capricious if not flat out unethical.
This decision, once again, shows that federal judges will not always interpret an insurers discretionary authority in an ERISA case as a rubber stamp for claims denials.
Paper reviews in situations where the insurer disregards the opinions of treating physicians are problematic in all cases, not just discretionary authority ERISA cases. I have seen situations in which an insurer has denied LTD claims for disabilities as serious as AIDS based on in-house paper reviews by a nurse who did not even bother to speak with the claimant or any of the treating doctors. These cases have very substantial punitive and other extra contractual damage value in a non-ERISA context. But that fact has little deterrent effect in the sad world of ERISA Preemption.
The worst that can happen to an insurer in an ERISA context is for it to be ordered to give the one claimant what was stolen from him in the first place. So far as Congress is concerned apparently the rest of the victims can just hit the food stamp line.