NMR (Network Medical Review's) relationship with Liberty Life Assurance Company of Boston

As most you know, NMR (Network Medical Review, Inc.) and its sister company/subsidiary perform a large number of "independent" medical reviews at the request of various insurance companies.

In Denmark, the Plaintiff's counsel, Jonathan M. Feigenbaum [JonF@Phillips-Angley.Com] propounded discovery on Liberty Life to learn how much it pays to NMR each year and how may cases NMR reviewed at Liberty's request and how many NMR actually found were disabled.

Liberty provided this information under a protective order so neither side could disclose it.

Despite finding for Liberty, the Court did disclose the following:

The supplemental evidence shows that Liberty paid over two million dollars ($2,004,656.00 to be exact) to Network Medical Review--Elite Physicians from 2001 through 2003. While this amount shows that NMR certainly has a financial interest in maintaining its medical consulting business with Liberty, any reviewing physician or network of physicians hired by an administrator/insurer has the potential to be affected by the inherent pressure of giving conservative opinions in order to receive more consulting contracts. To demand greater scrutiny on review, there must therefore be something more.


Denmark v. Liberty Life Assur. Co. of Boston, 2005 WL 3008684, * 11 (D.Mass. Nov. 10, 2005). Although the Court did not believe the dollar amount in and of itself was enough to show conflict I believe the Court is wrong. For that kind of money there will be a lot of competition to get the business. There cannot be too much competition on price since the cost of these reviews is relatively cheap. This is true in light of the Court's further disclosure that, during the 2001 - 2003 time frame, Liberty referred 1,204 files to NMR. Denmark, 2005 WL 3008684, *11. This is an average cost per case of $1,665. Thus there is not a lot of room to lower the price and still stay in business.

The Court did draw an inference in favor of the plaintiff as a sanction for not following a court order. The Court ordered Liberty to tell the court how many times (out of that 1,204 opportunities) NMR found in favor of the claimant and not in Liberty's favor. As the Court said,

"I also ordered Liberty to stipulate the number of cases where "they [NMR] have accepted a claim", which Liberty understood to mean stipulating "the number of claims accepted or granted and rejected or denied after a review by a physician retained through NMR and/or Elite Physicians, Ltd." Without moving to modify my order, Liberty refused to make such a stipulation claiming that it was "unable to provide this information ... due to the very substantial burden and expense that would be involved in retrieving and manually reviewing the over 1,200 claims files that were referred to NMR physicians from 2001 to 2003." "

Denmark, 2005 WL 3008684, *11.

As a sanction for refusing to provide the information, the court drew the inference that NMR decided all 1204 claims in Liberty's favor. Ibid. However, it turned out not to be much of a sanction. Instead of closely scrutinizing Liberty's decision, the Judge stated he would give close scrutiny only to the NMR's report. Thus, the Court applied the very lax abuse of discretion standard of review to Liberty's decision and the evidence that Liberty obtained from all sources other than NMR. The Judge should have applied the abuse of discretion standard of review with more bite (closer scrutiny) to all evidence Liberty obtained. If it was willing to contract with a company who always finds in its favor, as the Court inferred as a sanction, then the Court should have cast a jaundiced eye on Liberty's evidence and its behavior.

The Court also accepted the opinion of a nurse over a Harvard rheumatologist. Nurse Kaye...also questioned the usefulness of Dr. Schur's opinion in assessing the Plaintiff's condition for the past six months because his report only provides information for the particular date of the independent medical exam.

Denmark, 2005 WL 3008684, *4.

The next time your insurance company relies upon an IME (or one day of video surveillance) you to quote Nurse Kay's opinion that the opinion is not useful since it is only one point in time.

Allowing a nurse to overrule a doctor is something the Court, in a case in which i was the lawyer, found troubling. As Judge Hoyt noted:


"...when an administrator relies on nurses to override highly trained physicians, the court should decrease the level of deference afforded the administrator. Research reveals no published case directly on point, but indicates that other courts, at least in the context of determining medical necessity, have been wary of giving nurses broad deference. See C.N.S., Inc. v. Conn. Gen. Life Ins. Co., 9 F.Supp.2d 194, 198 (E.D.N.Y.1998); Pritt v. United Mine Workers of Am., 847 F.Supp. 427 (S.D.W.Va.1994).


Gellerman v. Jefferson Pilot Financial Ins. Co., 376 F.Supp.2d 724, 735 -736 (S.D.Tex. 2005).

Mr. Feigenbaum made the argument but the Court did not even mention it.