MS Victim Entitled to LTD Despite Treatment

June 25, 2004 (PLANSPONSOR.com) - A federal appeals court has ruled that a woman afflicted with multiple sclerosis (MS) was entitled to long-term disability (LTD) benefits despite a "pre-existing condition" clause even though she had been treated for MS symptoms.

The U.S. 3 rd Circuit Court of Appeals ruled that insurers can’t consider a disease like MS to be an excludable¬†“pre-existing condition”¬† if a worker had been treated for resulting symptoms but where the underlying ailment hadn’t yet been formally diagnosed, according to a Legal Intelligencer report.

“It is simply not meaningful to talk about symptoms in the abstract,” Senior U.S. Circuit Judge Edward Becker wrote in McLeod v. Hartford Life and Accident Insurance Co. ruling. “”Seeking medical care for a symptom of a pre-existing condition can only serve as the basis for exclusion from receiving benefits in a situation where there is some intention on the part of the physician or of the patient to treat or uncover the underlying condition which is causing the symptom,”

The appeals ruling reverses a decision by U.S. District Judge Cynthia Rufe, who held that a broadly worded pre-existing condition exclusion clause in Hartford’s disability policy barred coverage for plaintiff Shirley McLeod even in the absence of an MS diagnosis. Rufe based the ruling on what she said was proof McLeod received medical treatment for a “symptom” of the MS sometime in the 90-day period before the policy went into effect. Rufe found that the exclusion applied because McLeod was treated for numbness in her arm as early as February 1999 and was referred to two neurologists before the policy took effect in April 1999.

The appeals ruling said Rufe’s lower-court decision was mistaken in saying that Hartford could “read back” a pre-existing condition for purposes of denying disability benefits coverage before the condition itself had been diagnosed. Becker noted that McLeod was not diagnosed with MS until August 1999.

Rufe erred, he said, in holding that “Neither [McLeod] nor her physicians either knew or suspected that the symptoms she was experiencing were in any way connected with MS,” Becker wrote

“Hartford would have us hold that receiving medical care ‘for symptoms’ of a pre-existing condition encompasses receiving care for symptoms that no one even suspected were connected with the later diagnosed ailment but which were later deemed not inconsistent with it,” Becker wrote. “A heightened standard of review will not countenance such a strained interpretation.”

“In a case of heightened review, where the plan administrator is not afforded complete, freewheeling discretion, we must be especially mindful to ensure that the administrator’s interpretation of policy language does not unfairly disadvantage the policyholder,” Becker continued.

Under Hartford’s approach, Becker said, “any symptom experienced before the excludable condition is diagnosed could serve as the basis for an exclusion so long as the symptom was not later deemed inconsistent with that condition.”As an example, Becker said, a policyholder who suffered a heart attack could be denied long-term disability coverage under Hartford’s proposed analysis if there was proof that the policyholder had been treated for shortness of breath before the policy took effect – even if doctors at the time diagnosed the condition as nothing more than a “very bad cold.”

According to court papers, McLeod worked for Valley Media Inc., stocking videocassettes in a warehouse, a job that involved long periods of standing. After she was diagnosed with MS, McLeod was at first awarded short-term disability but was later denied a claim for long-term disability after Hartford learned that she had been treated by several doctors for the numbness in her arm during the “look-back period” – the 90-day period that ended the day before the effective date of coverage.

The ruliing is at http://www.ca3.uscourts.gov/opinarch/031744p.pdf .

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