Sedgwick Claims Management Services, also known as Sedgwick CMS, is a large third-party administrator that works on behalf of companies that self-insure their employee’s disability insurance policies – often short-term or long-term claims. In this role, they act to decide the eligibility for benefits to be paid out by the entity that has hired them.
Sedgwick was founded as a regional claims administrator in 1969 and is today a global company, like many of the multi-national companies it serves. The company has an unfortunate history of biased claim administration when considering claims it has administered for various employers, like JP Morgan Chase and AT&T. In this regard, numerous courts have identified significant problems with how claims are handled.
Sedgwick is not a disability insurance company. It is a third-party administrator, meaning it takes over all of the claims processes for short-term and long-term disability insurance claims. Many of its clients are self-insured name-brand companies, like JP Morgan Chase, Qualcomm, 3M, and AT&T. These companies pay Sedgwick to manage their claims processes and determine eligibility for coverage, but when benefits are paid, the self-insured companies are the ones who pay out benefits.
As a result of this relationship, you can easily see that Sedgwick has an interest in “managing” the claims so their clients can minimize their payments. If not, these clients will look to outsource to some other entity with better claims management “practices.”
The following cases illustrate the approaches that Sedgwick takes to disability claimants.
A New York case, Delprado v. Sedgwick Claims Mgmt. Servs., 2015 U.S. Dist. LEXIS 51263 (N.D.N.Y. 2015) serves to highlight the bias concerns which are readily formulated in theory.
This case underscored Sedgwick’s bias as guiding its claim handling conduct. The Court noted Sedgwick’s reliance upon a paper reviewing doctor, and the Court was troubled by the failure to properly consider the opinions of the treating physician – despite the treating relationship offering credibility to the support.
Other cases revealing Sedgwick’s claim handling flaws include McMillan v. AT&T Umbrella Plan, 2018 WL 3854023, *9 (10th Cir. 2018). The Court stated that the “determination” was “arbitrary and capricious because it is based on a scintilla of evidence that no reasonable mind could accept as sufficient to support the conclusion.” In looking to develop evidence against a claimant, rather than reviewing and considering the evidence fairly, Sedgwick’s conduct was exposed.
Another recent case found in favor of a claimant who had been subjected to Sedgwick’s parsimonious claim handling.
Godmar v. Hewlett-Packard Co., 631 Fed. Appx. 397 (6th Cir. 2015), revealed that the Sixth Circuit Court of Appeals found Sedgwick to have committed similar problems to other cases finding them flawed. The Court noted that “file reviews are particularly troubling when the administrator’s consulting physicians – who have never met the claimant – discount the claimant’s limitations as subjective or exaggerating.”
The problems which often exist in Sedgwick managed claims is their strong reliance upon these paper-only reviewing doctors, who tend to be anti-claimant. In addition, the decision revealed that Sedgwick engaged in an unsupported interpretation of the record evidence, and failed to engage in a “deliberate, principled reasoning process.”
Similarly, in Shaw v. AT&T Umbrella Plan, 795 F.3d 538 (6th Cir. 2015), another Court determined that Sedgwick acted in an arbitrary and capricious manner when it considered the claim, finding specific problems, such as ignoring claimant favorable evidence, failing to develop evidence to support the claim, and failing to engage in a deliberate, principled manner. The Court noted that “an administrator acts arbitrarily and capriciously when it engages in a selective review of the administrative record to justify a decision to terminate coverage.” Id. at 549.
The Court was further troubled by Sedgwick’s reliance upon paper-only doctors, and noted that such doctors “may have an incentive to make a finding of ‘not disabled’ in order to save their employers money and to preserve their own consulting arrangements.” We think this financial incentive in the peer doctor review relationship is of grave concern to claimants – it impacts the ability to get a fair review of claims.
Because of the egregious nature of Sedgwick’s conduct, the Court noted that due to the flagrant errors in the claim handling, any other finding other than arbitrary and capricious “would essentially turn judicial review of these matters into a rubber stamp.”
The result was similar in May v. AT&T Umbrella Plan, 2014 U.S. App.LEXIS 16368 (9th Cir. 2014), where the Court issued a decision stating “we are left with a definite and firm conviction that a mistake was committed when Sedgwick terminated May’s short-term disability benefits.” The Court noted that the conclusion reached “was without support in inferences that may be drawn from the facts in the record.”
This collection of cases reveals how Sedgwick acts – and all too often not to the benefit of claimants.
Once you learn that your disability claim is going to be administered by Sedgwick, our advice is to contact our office as soon as possible. The company has been strong-arming claimants for a long time, and it is likely that your claim will receive the same poor treatment as so many others. We have worked with many disability claimants who have been put in a terrible situation by Sedgwick’s decisions to delay, deny or terminate their claims.
Despite the company’s website mottos of caring and concern, the company is repeatedly lambasted on consumer websites for the poor customer care, the failure to follow up, the failure to return phone calls or provide accurate information, and a general disregard for the problems that the company’s poor customer treatment causes for people. One of the tactics frequently employed is insisting that claimants see their doctors, even when people have well-document medical records detailing their disability. The doctors paid by Sedgwick invariably decide that the disabled person is not impaired or is not so badly impaired that they are not able to return to work.
Another thing to be aware of is that Sedgwick employees are either completely untrained or the company understaffs the claims department because customer service is its lowest priority. Records are routinely lost, so make sure to follow up immediately after emailing or faxing any documents. Never, ever, send any originals, even if you use an express mail service that requires a signature. There is no guarantee that you will ever see those documents again.
If you have already been denied or if benefits have been terminated, you should immediately contact the Law Office of Justin Frankel. We have represented many people against Sedgwick and know how the company works to minimize paying out claims for its big company clients. Call our office at 888-583-4959 for a free consultation and learn how we can help you.