Source: https://constitutionallawreporter.com/2017/05/16/coventry-health-v-nevils-2017/
Timestamp: 2019-04-20 20:36:33+00:00

Document:
In Coventry Health v Nevils, 581 U. S. ____ (2017), the U.S. Supreme Court held that the State of Missouri exceeded its authority in attempting to regulate the subrogation and reimbursement provisions in the contracts of Federal Employees Health Benefits Program (FEHRA) carriers. The Court’s pre-emption decision was unanimous.
Jodie Nevils was insured under a FEHBA plan offered by Coventry Health Care of Missouri. After Coventry paid Nevils’ medical expenses for injuries suffered in a car accident, the insurer subsequently asserted a lien against part of the settlement Nevils recovered. While Nevils satisfied the lien, he subsequently filed a class action in Missouri state court. It alleged that Coventry had unlawfully obtained reimbursement under Missouri law prohibiting subrogation or reimbursement in such cases.
Coventry maintained that FEHBA preempted the state law. While the lower courts ruled in Coventry’s favor, the Missouri Supreme Court reversed. It held that because §8902(m)(1) was susceptible to diverse plausible readings, the “presumption against preemption” applied. It further concluded that the federal statute’s preemptive scope excluded subrogation and reimbursement. The Missouri Supreme Court also held that §8902(m)(1) violates the Supremacy Clause.
The Supreme Court overturned the decision of the Missouri Supreme Court. “Because contractual subrogation and reimbursement prescriptions plainly ‘relate to . . . payments with respect to benefits,’ §8902(m)(1), they override state laws barring subrogation and reimbursement,” the Court held. Justice Ruth Bader Ginsburg authored the Court’s opinion. Justice Neil Gorsuch did not participate in the case.
According to the Court, its interpretation of FEHBA “best comports with §8902(m)(1)’s text, context, and purpose.” Justice Ginsburg noted that the federal government has a strong interest in the uniform administration of the program, free from state interference, particularly in regard to coverage, benefits, and payments. In addition, the federal government also has a significant financial stake in subrogation and reimbursement.
The statute itself, not a contract, strips state law of its force. FEHBA contract terms have preemptive force only if they fall within §8902(m)(1)’s preemptive scope. Many other federal statutes found to preempt state law, including the Employee Retirement Income Security Act of 1974 and the Federal Arbitration Act, leave the context- specific scope of preemption to contractual terms. While §8902(m)(1)’s phrasing may differ from those other statutes’, FEHBA’s express-preemption provision manifests the same intent to preempt state law.

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