Source: https://openjurist.org/298/f3d/847
Timestamp: 2017-10-20 17:01:09
Document Index: 256634040

Matched Legal Cases: ['§ 8902', '§ 8902', '§ 8902', '§ 8902', '§ 8902', '§ 8902', '§ 1144']

298 F3d 847 Roach v. Mail Handlers Benefit Plan Cna | OpenJurist
298 F. 3d 847 - Roach v. Mail Handlers Benefit Plan Cna
Lisa ROACH, Plaintiff-Appellant,
MAIL HANDLERS BENEFIT PLAN, CNA, and Access Health, Inc., Defendants-Appellees.
Roach brought suit in California Superior Court. She alleged a malpractice claim, a breach of contract claim, and other state law claims. The defendants removed the action to federal district court on the basis that the FEHBA completely preempted the breach of contract claim. See 5 U.S.C. § 8902(m)(1) (2000); Carter v. Blue Cross & Blue Shield of Fla., Inc., 61 F.Supp.2d 1237, 1240-41 (N.D.Fla.1999).
Roach's sole argument on appeal is that the district court erred in granting summary judgment on her malpractice claim because that claim is not preempted by the FEHBA. "We review de novo a grant of summary judgment and must determine whether, viewing the evidence in the light most favorable to the nonmoving party, there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law." Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir.2000) (en banc). We also review de novo the district court's preemption decision. Nathan Kimmel, Inc. v. DowElanco, 275 F.3d 1199, 1203 (9th Cir.2002).
The FEHBA's preemption provision, 5 U.S.C. § 8902(m)(1), ensures the uniform administration of FEHBA benefits. Hayes v. Prudential Ins. Co., 819 F.2d 921, 925(9th Cir.1987). It states:
Although § 8902(m)(1)'s plain language covers all claims that "relate to" an FEHBA-administered health benefit plan, in the context of a similarly worded preemption provision in the Employee Retirement Income Security Act (ERISA), the Supreme Court has explained that the words "relate to" cannot be taken too literally.2 "If `relate to' were taken to extend to the furthest stretch of its indeterminacy, then for all practical purposes pre-emption would never run its course, for `really, universally, relations stop nowhere.'" N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995) (quoting H. James, Roderick Hudson xli (New York ed., World's Classics 1980)). Instead, "relates to" must be read in the context of the presumption that in fields of traditional state regulation "the historic police powers of the States [are] not to be superseded by [a] Federal Act unless that was the clear and manifest purpose of Congress." Id. at 655, 115 S.Ct. 1671 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947)). Here, this means that we must presume that Congress did not intend to preempt the "quintessentially state-law standards of reasonable medical care," Rush Prudential HMO, Inc. v. Moran, ___ U.S. ___, 122 S.Ct. 2151, 2171, 153 L.Ed.2d 375 (2002), because § 8902(m)(1) does not indicate a clear and manifest intent to preempt this area of state law. Cf. Pegram v. Herdrich, 530 U.S. 211, 236, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000) ("ERISA was not enacted... in order to federalize malpractice litigation....").
The question of how to interpret § 8902(m)(1) to protect both the federal interest in the uniform administration of FEHBA benefits and a state's interest in the quality of medical care is novel in this circuit. Other circuits, however, have decided the question in the context of both the FEHBA and ERISA. These courts have created a divide between claims based on a denial of benefits, which are preempted, and claims based on medical malpractice, which are not. See, e.g., Corporate Health Ins., Inc. v. Tex. Dept. of Ins., 215 F.3d 526, 534 (5th Cir.2000) ("Although state efforts to regulate an entity in its capacity as a plan administrator are preempted, managed care providers operate in a traditional sphere of state regulation when they wear their hats as medical providers.") (footnote omitted), vacated on other grounds by Montemayor v. Corporate Health Ins., ___ U.S. ___, 122 S.Ct. 2617, ___ L.Ed.2d ___ (2002); Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 356-58 (3d Cir.1995) (explaining that federal law governs the quantity of health benefits, while state law ensures the quality of benefits); accord Pacificare, Inc. v. Burrage, 59 F.3d 151, 153-55 (10th Cir.1995). We believe this division protects the federal interest in uniformity of FEHBA plan interpretation and preserves the traditional state interest in the quality of medical care. Accordingly we hold that denial of benefit claims are preempted by the FEHBA, but malpractice claims are not.
We note that our principle decision on FEHBA preemption, Hayes, 819 F.2d 921, is not inconsistent with our holding in this case. In Hayes, a quadriplegic brought suit against his insurance provider after the provider capped his nursing costs at $10,000 per year. Id. at 923. We held that the plaintiff's state law claims, all of which focused on the lawfulness of the $10,000 cap, were preempted by § 8902(m)(1). Id. at 925-26. We explained that "[t]ort claims arising out of the manner in which a benefit claim is handled are not separable from the terms of the contract." Id. at 926 (emphasis added). Hayes, thus, involved a quintessential denial of benefits claim and is not controlling as to a medical malpractice claim.
Defendants contend FEHBA preemption is triggered because Roach's malpractice claim references her benefit plan in explaining why she contacted the advice nurse. But referencing the existence of a benefit plan in a state law claim — without more — does not endanger the uniform federal interpretation of that plan. Cf. Kearney v. United States Healthcare, 859 F.Supp. 182, 186 (E.D.Pa.1994) ("That one may refer to the contents of a plan to adduce evidence that it held out a particular person as its employee or agent to help sustain a cause of action does not implicate the concerns underlying the ERISA preemption provision."); accord Negron, 6 F.Supp.2d at 371-72 (applying Kearney in a FEHBA case).
"The preemption provision in ERISA, like that in the FEHBA, calls for an examination of how particular state laws `relate to' the insurance plans that the statute regulates."Negron v. Patel, 6 F.Supp.2d 366, 371 (E.D.Pa.1998); see 29 U.S.C. § 1144(a) (2000).
Even if the defendants were right, such allegations may not trigger pre-emption, assuming the advice nurse denied certification based on a medical diagnosis. Recently, where the decision of a health care provider was one that mixed plan eligibility and treatment issues, the Supreme Court recognized that a claim challenging such a mixed decision ultimately boiled down to a malpractice claimSee Pegram, 530 U.S. at 228-29, 235-37, 120 S.Ct. 2143. But Pegram was not a preemption case, and we need not decide whether it applies here because Roach's claim is a garden-variety medical malpractice claim that does not raise the more difficult Pegram issue.