Can ERISA Plan Administrator Change Its Mind on Sufficiency of Evidence?

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In Geiger v. Aetna Life Ins. Co., 845 F.3d 357 (7th Cir. 2017), Aetna initially determined that plaintiff qualified for disability benefits due to bilateral avascular necrosis in her ankles, which prevented walking and driving. When the definition of disability was about to change, Aetna conducted an Independent Medical Exam, which found her capable of sedentary work, and had plaintiff surveilled, which showed her driving and visiting multiple stores. Aetna terminated benefits. On appeal, Aetna reinstated benefits in May 2013, after one of two peer reviewers determined  she was not capable of sedentary work.

Aetna later conducted additional surveillance, again showing plaintiff driving and shopping, and terminated benefits again in May 2014, based on a nurse’s clinical review and a Transferrable Skills Analysis. On appeal, Aetna had obtained a third peer review, which concluded that plaintiff could perform sedentary work. Aetna also sent the peer review and surveillance to plaintiff’s doctors; only one responded, and said that the surveilled activities were the result of substantial amounts of pain medication. A follow up peer review did not  change the initial conclusion.

Plaintiff argued that Aetna’s decision was arbitrary and capricious because it “relied on the same evidence it had previously considered when it reinstated her benefits, yet reached the opposite conclusion. Specifically, plaintiff claimed, the second round of surveillance observed the same activities as the first round. Plaintiff relied on a 2009 case, Leger v. Tribune Co., which held that a plan should not be allowed to relitigate what it already decided. The court rejected this argument, explaining: “Leger did not hold that a plan administrator’s prior determination in favor (or against) a claimant operates forever as an estoppel so that an insurer can never change its mind. … Indeed, ERISA does not prohibit a plan administrator from performing a periodic review of a beneficiary’s disability status. [quotation marks omitted].”

The court also rejected plaintiff’s argument that the district court abused its discretion in not allowing depositions of the peer reviewer and vocational consultant. The court approved the district court’s finding that Aetna had minimized any conflict of interest by obtaining numerous independent peer reviews; by reaching out to plaintiff’s doctors; by sending its surveillance to plaintiff’s doctors; and by previously reversing its own conclusion and reinstating benefits.