A plan administrator could not terminate an employee’s long-term disability benefits despite covert surveillance video showing the employee driving, walking, jogging, bending over, flying a kite and lifting her 3-year-old child, the 1st U.S. Circuit Court of Appeals has ruled.

The plan administrator argued that the evidence presented during multiple administrative hearings conclusively showed the employee was not totally disabled.

But the 1st Circuit disagreed after finding that the plan’s reviewing doctors improperly emphasized the inconsistency between the employee’s self-reported limitations and the surveillance video.

“[M]ost of the surveillance, far from contradicting [the employee]’s disability, seems to confirm her lifestyle as generally housebound with occasional, limited activity,” Judge Michael Boudin wrote for the court. “[T]his is far from a situation in which a video conclusively disproves the disability claim.”

Rather than reinstating the employee’s benefits, however, the 1st Circuit ordered a remand to the plan administrator.

In dissent, Judge Kermit V. Lipez argued that a judgment for the employee should have restored her benefits.

“Based on a close, de novo review of the administrative record, I am persuaded that [her] abdominal pain and related symptoms effectively prevent her ‘from performing any and every duty of any occupation or employment, for which [she] is reasonably qualified by education, training or experience,’” Lipez stated.

The 46-page decision is Maher v. Massachusetts General Hospital Long Term Disability Plan.

Dig deep

Robert J. Rosati of the California ERISA Group represented the plaintiff. He said the plan’s reviewing doctors looked at the evidence, including the surveillance tape, and improperly concluded that the employee was not disabled.

“It would be one thing if we were talking about a case where the surveillance showed my client doing things that she said she couldn’t do,” he said. “But what you see her doing on the surveillance is completely consistent with her activities of daily living statements. And the fact is, the court found that the doctors did not honestly evaluate the evidence in front of them.”

Although it is difficult to reverse an administrative decision under an abuse of discretion standard, Rosati said, the only reasonable conclusion that could be reached based on the evidence presented during the administrative process was that his client was incapable of returning to work.

“Notwithstanding the treatment she was receiving, the doctors chose to look at the evidence in a way that supported their economic self-interest,” he said. “The key holding in the case is that the court, under an abuse of discretion review, can only defer to those opinions if there’s a reasonable basis for them. Clearly, there was none here.”

Rosati, who argued the case with M. Katherine Sullivan of Boston’s Rosenfeld, Rafik & Sullivan, said he plans to ask the 1st Circuit, in a petition for en banc review, to immediately re-impose the employee’s benefits as recommended in Lipez’s dissent.

Laurie F. Rubin of Boston, counsel for the defendant, called the decision “a curious one” in that three different reviewing bodies had assessed the evidence and concluded that the employee did not meet the definition of disability under the statute.

Although courts are required to apply a deferential standard to such cases, the 1st Circuit inexplicably deviated from that practice, said Rubin, who practices at Prince, Lobel, Tye.

“This really creates a great deal of uncertainty as to when the court is going to step in and do its own independent assessment,” she said. “The court gave lip service to the idea that it was a deferential standard of review, but then they went on and dug a little deeper than we’re used to seeing in deferential standard of review matters.”

Benefits gained and lost

Plaintiff Deborah Maher, a registered nurse, began working at Massachusetts General Hospital in August 2001.

She stopped working a few months later, and in February 2002, she began receiving disability benefits through the hospital’s long-term disability plan due to chronic abdominal pain and related symptoms.

Though never “entirely clear” on the cause, her physicians attributed her symptoms to chronic pancreatitis, chronic pain syndrome or fibromyalgia. Over time, joint pain added to her woes, and Maher received “impressive amounts of narcotics” to manage her pain, which caused some negative side effects.

In February 2007, Liberty Life Assurance Co. of Boston, the plan’s claims processor, terminated Maher’s benefits, stating that she was no longer “totally disabled.”

Maher pursued administrative appeals with Liberty and ultimately with Partners HealthCare System Inc., the plan’s administrator. Partners formally denied her last appeal in January 2008. At that point, she sought review of her benefits termination in federal court under the Employee Retirement Income Security Act.

When U.S. District Court Judge Rya W. Zobel in Boston entered summary judgment upholding the termination of benefits, Maher appealed.

Inconsistent review

In vacating Zobel’s ruling, Boudin said it was clear Maher suffers from significant medical afflictions and uses narcotics to combat pain.

“So obviously she has serious symptoms,” he said. “But the question remains whether they are disabling, and this brings us to the heart of the problem.”

The critical issue identified by the majority, he said, was whether the chronic pain and narcotics use rendered her incapable of performing the sedentary nursing jobs suggested by Liberty’s consultant in a “transferrable skills analysis.”

Those jobs included full-time sedentary work as a telephonic triage nurse, nurse case manager or utilization review nurse.

The court made note of “a fairly impressive set of objections” to Maher’s disability claim raised by examining physicians.

“[B]ut there are two aspects that concern us and, taken together, warrant remand for further consideration,” Boudin wrote. “The first, and most important, rests on the fact that at every stage of Maher’s administrative appeal, Liberty and Partners’ reviewing doctors emphasized the inconsistency between her self-reported limitations and the surveillance video.”

The plaintiff reported that her activity varied based on the extent of her pain, nausea and opportunity to pre-medicate for activities, but that she generally spent most of her days in bed.

“In over 90 hours of surveillance, the most damning evidence the MGH Plan can identify is 15 minutes during which Maher carried a bucket or flower pot and 30 minutes during which Maher played with her three-year-old son in the park,” Boudin said.

The judge also noted that on 10 of the 19 days on which surveillance video was available, Maher engaged in no activity, while on other days, she was shown sitting or standing outside her house with her husband for about 20 minutes.

“For the brief periods of slightly more vigorous activity, Maher may have pre-medicated or may have simply been having a ‘good day’ — either of which would be consistent with her reported limitations,” Boudin said.

On the other hand, she may have been housebound by choice, he said.

“We cannot say with assurance that the MGH Plan denied Maher benefits to which she was entitled,” he said, “but even according deference we are also not confident that its analysis has fully justified its decision.”

In his dissent, Lipez said he was persuaded that the employee’s symptoms — chronic pain, nausea, vomiting and food intolerance — would prevent her from performing the duties of the jobs identified by the plan.

“Maher’s recurring acute attacks of abdominal pain would, at a minimum, result in frequent absences from work, which would be prohibitively disruptive of any attempt to maintain regular employment,” he said. “Though Maher may occasionally run errands, contribute to household chores, or even recreate with her family for short periods of time, there is a sharp ‘difference between a person’s being able to engage in sporadic physical activities and her being able to work eight hours a day five consecutive days of the week.’”

Tom Egan contributed to this story.