In ERISA-governed long-term disability litigation, courts generally limit their review to the administrative record—the body of evidence considered by the plan administrator when making the final benefits decision. However, several exceptions apply. Under a de novo standard of review, courts may admit limited extra-record evidence when it is clearly necessary for an adequate review, such as in cases involving complex medical issues, expert credibility questions, or evidence that could not have been presented earlier. Additionally, across all standards of review, courts may consider outside evidence to address procedural challenges. This includes instances where the administrator failed to provide a full and fair review, committed significant procedural violations (such as withholding new evidence for rebuttal), or where there is a need to evaluate potential bias or conflicts of interest.
External sources such as an expert opinion may suffice.
In a recent LTD disability case under ERISA, the carrier denied benefits before it had the claimant’s echocardiogram results. Hegemann v. Blue Cross Blue Shield of Ill., No. 24-cv-286-wmc, 2026 BL 78572, at *5 (W.D. Wis. Mar. 9, 2026). The court record was supplemented to include the results, and the LTD carrier admitted that they should have been considered in making its initial determinations. Id. With new-found access to Hegemann’s echocardiogram results, the next question was whether these results entitled Hegemann to benefits. “Ordinarily, that question would be for defendant to determine after remand for further review under its definition of Medically Necessary. However, since the general rule that ‘a denial of benefits challenged under [29 U.S.C.]§ 1132(a)(1)(B) is to be reviewed under a de novo standard,’ Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S. Ct. 948, 103 L. Ed. 2d 80 (1989), and both parties agree that defendant’s denial should be reviewed de novo, the court will review the record independently to determine whether plaintiff has demonstrated by a preponderance of the evidence that he is entitled to benefits under the Plan.” Id. at *6 citing Ruttenberg v. U.S. Life Ins. Co. in City of New York, a subsidiary of Am. Gen. Corp., 413 F.3d 652, 663 (7th Cir. 2005) (Under de novo review, a party “seek[ing] to enforce benefits under the policy . . . bears the burden of proving his entitlement to contract benefits.”); see also Stephanie C. v. Blue Cross Blue Shield of Massachusetts HMO Blue, Inc., 852 F.3d 105, 112-13 (1st Cir. 2017) (On de novo review, “an ERISA beneficiary who claims the wrongful denial of benefits bears the burden of demonstrating, by a preponderance of the evidence, that [they] were in fact entitled to coverage.”).
In determining plaintiff’s eligibility under the Plan, the court must “employ federal common law rules of contract interpretation.” Diaz v. Prudential Ins. Co. of Am., 499 F.3d 640, 643-44 (7th Cir. 2007) (citing Life Ins. Co. of North America v. Von Valtier, 116 F.3d 279, 283 (7th Cir.1997)). Under these rules, the court will “interpret the terms of the policy in an ordinary and popular sense, as would a person of average intelligence and experience, and construe all plan ambiguities in favor of the insured. Plan language may only be deemed ambiguous where it is subject to more than one reasonable interpretation.” Santaella v. Metropolitan Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997).
Under this precedent, the Hegemann court found no dispute that the Plan expressly excludes coverage for services that are not Medically Necessary, nor that a decision on whether a service meets this definition is to be based on generally accepted medical standards. Id. at *6. Instead, the parties’ disagreement turned on whether Hegemann’s medical procedure fit within that definition, with the burden of demonstrating entitlement to this benefit resting on Hegemann. Id. citing Ruttenberg, 413 F.3d at 663.
Hegemann underwent a Patent Foramen Ovale (PFO) closure procedure to seal a small hole in the wall between the upper chambers of his heart. In support of his claim that his PFO was based on generally accepted medical standards, Hegemann primarily relied on articles which generally recommend the procedure for patients under age 60 with unexplained strokes. The court went through a detailed analysis of the articles and found to the contrary that they stated the PFO closure would put him at a higher risk of recurrent stroke and development of late atrial fibrillation.
Beyond these articles, Hegemann offered two additional facts to support his assertion that his PFO closure was “Medically Necessary” as defined by the Plan. Id. at *7. First, Hegemann highlighted that PFO closure was recommended to him by his doctors after finding no other likely cause for his stroke. Id. However, the Plan stated that recommendations from a health care provider were insufficient alone to establish that a service is Medically Necessary. Id. at *7-8. Second, Hegemann suggested that a PFO closure must have been Medically Necessary because otherwise it would violate Wisconsin’s medical malpractice laws, which prohibit the performance of medically unnecessary procedures. However, the issue before the court was whether Hegemann’s PFO closure was Medically Necessary within the meaning of the Plan, not whether Hegemann’s PFO closure was medically unnecessary in the context of Wisconsin’s medical malpractice law.
Without further evidentiary support, the remaining question was whether the PFO closure was Medically Necessary within the meaning of the LTD carrier’s PFO closure policy itself. Specifically, that PFO closure policy considers the procedure Medically Necessary when an echocardiogram confirms the presence of very specific anomalies in the heart. Here, Hegemann had two echocardiograms before undergoing the PFO closure. Unfortunately, neither satisfied the carrier’s PFO closure parameters for allowing that particular procedure.
With no echocardiograms demonstrating eligibility under the carrier’s PFO Closure Policy or evidence that the Policy itself falls outside generally accepted medical standards, Hegemann had not demonstrated entitlement to benefits under the plan. “Accordingly, the court must reluctantly grant defendant’s motion and deny plaintiff’s motion for summary judgment despite what seems a draconian result should Aspirus insist on payment of a supposedly preapproved surgery.” Id. at *8.
The Hegemann case is an example of how strictly the Court must follow the terms of the LTD policy in evaluating medical evidence external to the administrative record, no matter how severe or unjustified the penalty against the claimant.
