Geiger v. Aetna Life Ins. Co.

• Decision Date: 06 January 2017
• Docket Number: No. 16-2790,16-2790
• Citation: 845 F.3d 357
• Parties: Donna GEIGER, Plaintiff-Appellant, v. AETNA LIFE INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

845 F.3d 357

Donna GEIGER, Plaintiff-Appellant,

v.AETNA LIFE INSURANCE COMPANY, Defendant-Appellee.

No. 16-2790

United States Court of Appeals, Seventh Circuit.

Argued December 5, 2016

Decided January 6, 2017

Mark D. DeBofsky, Attorney, DeBofsky & Associates, P.C., Chicago, IL, for Plaintiff-Appellant.

Moyenda Mutharika Knapp, Attorney, MWH Law Group LLP, Chicago, IL, for Defendant-Appellee.

Before Wood, Chief Judge, Easterbrook, Circuit Judge, and Shadid, District Judge.^*

Shadid, District Judge.

Plaintiff-appellant Donna Geiger's long term disability insurance benefits were terminated after Aetna Life Insurance Company ("Aetna"), the insurer and administrator of her employee welfare benefit plan ("the Plan"), found that she no longer met the Plan's definition of total disability from any gainful occupation. After unsuccessfully appealing the termination decision, Geiger brought an action seeking reinstatement of her benefits in the United States District Court for the Northern District of Illinois. The district court denied Geiger's request to conduct limited discovery and ultimately granted summary judgment in favor of Aetna and against Geiger, holding that Aetna's decision was not arbitrary and capricious or a product of a conflict of interest warranting discovery. We affirm.

I. Background

Geiger was an account executive for Sprint Nextel ("Sprint") from 2001 to 2009. As a Sprint employee, she received group long term disability insurance coverage under the Plan issued and underwritten by Aetna. On October 6, 2009, Geiger stopped working at Sprint and claimed short term disability precipitated by lumbar back pain and an L5-S1 discectomy from 2007, as well as bilateral ankle pain caused by avascular necrosis of the talar bones.¹ Sprint approved Geiger's disability claim later that same month.

Geiger had surgery on both ankles in January 2010 and underwent a left ankle arthroscopy and full ankle replacement in December 2010. During that time, Aetna determined that Geiger was disabled from her occupation as an account executive under the Plan and approved her claim for long term disability benefits. Aetna reasoned that Geiger was disabled from her own occupation "due to bilateral avascular necrosis in ankles, which caused [Geiger] severe pain," and "she is unable to perform occupational duties as an account executive because [she] is unable to do the required walking and driving for this occupation." Geiger received benefits in the amount of $4,012 per month, equal to 50% of her predisability earnings. Upon her approval for Social Security disability benefits, this amount was reduced to $784.

The Plan provided Geiger with benefits for up to 24 months if she continued to be disabled from her own occupation. After 24 months, the Plan requires a claimant to be unable to work at any reasonable occupation, which the Plan defines as "any gainful occupation for which you are, or may reasonably become, fitted by: education; training; or experience; and which results in; or can be expected to result in; an income of more than 60% of your adjusted predisability earnings."

Aetna reviewed Geiger's claim as the end of the initial 24-month period approached and investigated whether she met the more stringent "any reasonable occupation" definition of disability. As part of the investigation, Aetna invoked its right under the Plan to have Geiger examined by a physician of its choice, and on May 31, 2012, Dr. White examined Geiger and found her capable of performing sedentary work with minimal walking or standing. Aetna also placed Geiger under surveillance on two occasions in May 2012, where she was observed driving and visiting multiple stores. On August 20, 2012, Aetna informed Geiger that she no longer met the Plan's definition of disability and terminated her benefits.

Geiger appealed Aetna's determination in February 2013. As part of the review, Aetna obtained peer reviews from two independent physicians, Drs. McPhee and Cirincione. Dr. McPhee concluded that Geiger's ankle condition would not preclude her from sedentary work. Dr. McPhee also consulted Geiger's anesthesiologist, Dr. Bukhalo, who agreed that Geiger was capable of sedentary work. Dr. Cirincione reached the opposite conclusion, finding that Geiger could not perform sedentary work.

On May 1, 2013, Aetna reinstated Geiger's benefits, finding "sufficient medical evidence to support a functional impairment which precluded the employee from performing the material duties of her own occupation," and concluding that Geiger met the more stringent standard of "being totally disabled from any gainful occupation" necessary to continue benefits beyond the 24 month period.

Because the Plan required proof of continued disability, Aetna began a subsequent review of Geiger's disability claim in December of 2013 and January of 2014 by conducting physical activity surveillance on four occasions. The surveillance videos showed Geiger climbing into and driving an SUV, shopping at multiple stores, and carrying a bag. Aetna also requested an "Attending Physician Statement" ("APS") from four of Geiger's physicians, but only Dr. Roy responded. On January 17, 2014, Dr. Roy completed the APS, confirmed Geiger's diagnoses, and opined that she was unable to work.

Aetna considered Dr. Roy's evaluation in conjunction with the previous peer review reports it received from Drs. White, McPhee, and Cirincione, and informed Geiger that it had submitted her medical file claim report for a comprehensive clinical review on April 7, 2014. Aetna first obtained a clinical review from an in-house nurse, Ms. Judy Tierney. Ms. Tierney concluded that the record supported Dr. McPhee's assessment that Geiger was capable of sedentary work.

On April 24, 2014, Aetna's in-house vocation consultant, Janet Clifton, conducted a "Transferrable Skills Assessment" ("TSA") to determine whether reasonable sedentary occupations existed for Geiger. The TSA included occupations within a 100 mile radius with a mean wage greater than $30.16 per hour that matched Geiger's training, education, and work history. The TSA limited results to jobs with sedentary work for an 8 hour day, lifting or carrying 10 pounds occasionally, and standing, walking, or crouching occasionally. Based on the above criteria, the OASYS software produced two "fair" matches: Job Development Specialist and Commission Agent. Ms. Clifton's TSA concluded that these two occupations matched Geiger's capabilities, skills, and reasonable wage, and that a viable labor market existed.

On May 28, 2014, Aetna informed Geiger that it had again decided to terminate her long term disability benefits. Included in the letter was a summary of the surveillance, Dr. Roy's APS and the prior independent peer reviews, the comprehensive clinical review, and the TSA. Geiger appealed her termination of benefits on November 21, 2014. In support of her appeal, Geiger submitted witness statements, medical records, and physician reports, including reports from Dr. Feldmann, a pain specialist, Dr. Roy, her primary care physician, and Dr. Foroohar, a neurosurgeon. Dr. Feldmann declined to opine on Geiger's functional capacity but noted that Geiger reported improvements in her physical functioning. Dr. Foroohar reported that Geiger suffered from cervical spondylosis but did not restrict her from working.

Aetna retained Dr. Gutierrez, a board certified neurosurgeon, to conduct an independent physician peer review of Geiger's claim. On January 20, 2015, Dr. Gutierrez issued an initial peer review report. As part of his review, Dr. Gutierrez attempted to contact Drs. Roy, Feldmann, and Foroohar multiple times, but was unable to reach them. Dr. Gutierrez's review considered Geiger's prior medical history relating to her ankle and spine, video surveillance, reported physical exam findings and diagnostic testing results. He concluded that Geiger "does not have any profound functional impairments that are conclusively shown" and that "the medical documentation supports the claimant could sit, stand, use hands/arms/fingers to function consistently for 8-hour day."

On January 21, 2015, Aetna sent Drs. Roy, Feldmann, and Foroohar the peer review report by Dr. Gutierrez and the surveillance videos and asked them to respond with any points of disagreement or commentary. Dr. Feldmann provided the sole response, which stated that Geiger's activity in the surveillance video was the result of substantial amounts of pain medication, her restrictions on standing and walking should be more severe, and the impact of Geiger's recent cervical radiculopathy was not addressed in the report.

On February 16, 2015, Dr. Gutierrez completed another physician review report noting the concerns expressed by Dr. Feldmann. Dr. Gutierrez unsuccessfully attempted to contact Dr. Feldmann twice in February 2015. His second report reached the same conclusion as the first. On February 24, 2015, Aetna informed Geiger that after reviewing her appeal it agreed with the original decision to terminate Geiger's benefits.

On April 30, 2015, Geiger brought an action in the United States District Court for the Northern District of Illinois seeking reinstatement of her long term disability benefits. Geiger asserted that Aetna's decision was arbitrary and capricious because: (1) her benefits were terminated in the absence of medical improvement and did not give consideration to her worsening medical condition when she challenged the benefit denial; (2) Aetna disregarded the impact of her severe pain on her ability to work; and (3) Aetna improperly relied on inconclusive surveillance evidence. After Plaintiff's request to conduct limited discovery was denied, the parties cross-moved for summary judgment.

Judge St. Eve denied summary judgment for Geiger and granted summary judgment for Aetna, finding that Aetna's decision was not arbitrary and capricious. Specifically, the court found that Aetna: (1) minimized any conflict of interest stemming from its...