In Black & Decker Disability Plan v. Nord, 123-S.-Ct. 1965 (2003), the Supreme Court overturned the Ninth’s Circuit’s application of the “treating physician rule” to ERISA disability cases

(the Third, Sixth, and Eighth Circuits had also adopted this rule). The Court unanimously ruled that plan administrators are not required to either:

• give special deference to the opinion of a claimant’s treating physician; or
• provide an explanation as to why the treating physician’s opinion was rejected in favor of other reliable evidence.

The Treating Physician Rule

The treating physician rule was originally developed by the courts to review Social Security disability determinations, and was later incorporated in the Social Security regulations. The rule requires the administrative law judge in Social Security disability cases to give more weight to a treating physician’s opinion and to provide good reasons for the weight given.

The Ninth Circuit, in Regula v. Delta Family-Care Disability Survivorship Plan, 266 F.3d 1130 (9th Cir. 2001), concluded that the treating physician rule should similarly govern ERISA-covered plans because, in part, it would increase the accuracy of disability determinations. In its reasoning, the Ninth Circuit expressed concern that physicians retained by benefits plans have an inherent conflict of interest.

Nord’s Claim

After the plan’s initial denial of Nord’s claim for disability, Nord appealed and submitted documentation from his treating physicians showing that he suffered from degenerative disc disease and chronic pain that rendered him unable to work. The plan administrator referred Nord to a neurologist who concluded that Nord could perform his job with the aid of pain medication. The plan administrator’s eventual denial of Nord’s claim prompted the lawsuit. Based on its holding in the Regula case that the treating physician rule applies to ERISA-covered plans, the Ninth Circuit granted Nord’s motion for summary judgment because the plan administrator had failed to provide adequate justification for rejecting the opinion of Nord’s treating physicians.

The Supreme Court’s Ruling

The Supreme Court vacated the Ninth Circuit’s decision and remanded the case for further proceedings. In explaining its reasoning for rejecting the application of the treating physician rule to ERISA-covered plans, the Supreme Court noted the following:

• Nothing in ERISA requires the use of the treating physician rule.
• The Department of Labor had not incorporated the treating physician rule in its regulations, and argued against the judiciary adopting such a rule.
• The question of whether the treating physician rule increases the accuracy of disability determinations is best left to the legislature or the Department of Labor.
• The characteristics of the Social Security disability program that make the treating physician rule appropriate are not present in ERISA-covered plans. Social Security is an obligatory nationwide program in which disability determinations are made by measuring a claimant’s conditions against a uniform set of federal criteria. The treating physician rule serves the need to administer this very large benefits program uniformly and efficiently. In contrast, ERISA-covered plans are neither mandated nor uniform, and disability determinations are made by interpreting the provisions of these individually designed plans. Furthermore, deference is due the Department of Labor’s view that ERISA is best served by preserving the flexibility in designing and operating a plan’s claims processing systems.

The Impact on Plan Administrators

While the Black & Decker case clarified that a plan administrator need not give special deference to a claimant’s treating physician or provide a detailed explanation why a treating physician’s opinion was discounted, the Supreme Court also noted that a plan administrator still must credit a claimant’s reliable evidence, including the opinions of a treating physician. Consequently, while plan administrators have a duty to weigh conflicting evidence, making a determination contrary to the opinion of the treating physician is not arbitrary and capricious if supported by other reliable evidence.

Without the treating physician rule, claimants may have a difficult time prevailing in court. In ERISA benefits cases, courts already weigh the evidence with deference to the plan administrator’s decision, provided that the terms of the plan give the administrator discretion to grant or deny benefit applications. For example, in a case decided shortly after Black & Decker, a district court using a deferential standard of review stated it was “constrained” to affirm the insurer’s decision even though the court may have made a different determination regarding the claimant’s disability (see LeStrange v. Fortis Benefits Ins. Co., 2003 WL 21372162 (N.D. Iowa June 13, 2003)). In this case, the court credited the reviewing physician’s opinion as reliable and discounted the opinion of a treating physician who, without explanation, changed his opinion on whether the claimant could return to work only after the claimant was denied benefits.

Of course, the deference granted plan administrators is not unlimited. In a Seventh Circuit case decided shortly before the Black and Decker case, Judge Posner rejected the treating physician rule but still ruled in favor of the claimant who suffered from fibromyalgia (see Hawkins v. First Union, 326 F.3d 914 (7th Cir. 2003)). The Seventh Circuit found the reasoning of the plan’s medical consultant to be so inadequate that it was unreasonable for the plan administrator to make a determination contrary to the treating physician’s opinion.