Source: http://www.lawmemo.com/docs/us/rush.htm
Timestamp: 2017-11-24 18:24:34
Document Index: 15207656

Matched Legal Cases: ['§1', '§4', '§ 1441', '§ 1132', '§ 1144', '§1144', '§4', '§ 1132', '§ 1011', '§21', '§1742', '§1', '§4', '§4', '§ 1132', '§4', '§1132', '§1132', '§1132', '§4', '§4', '§1132', '§4', '§4', '§4', '§1132', '§4', '§ 1133', '§1132', '§4', '§4', '§4', '§ 1132', '§4', '§1132', '§ 1012', '§ 1144', '§ 1132', '§4', '§4', '§4', '§ 1132', '§1132', '§4', '§10123', '§27', '§17', '§365', '§27', '§4', '§ 1133', '§4', '§1133', '§1132', '§4', '§4', '§502', '§514', '§ 1144', '§4', '§4', '§4', '§4', '§4', '§4', '§502', '§ 1132', '§4', '§4', '§4', '§1132', '§4', '§4', '§4', '§4', '§4', '§4', '§503', '§ 1133', '§502', '§502', '§502', '§4', '§502', '§4', '§502', '§1132', '§1109', '§514', '§4', '§4', '§1132', '§ 1132']

No. 00-1021. Decided June 20, 2002.
“any organization formed under the laws of this or another state to provide or arrange for one or more health care plans under a system which causes any part of the risk of health care delivery to be borne by the organization or its providers.” Ch. 125, §1—2.1
Meanwhile, the federal court remanded the case back to state court on Moran’s motion, concluding that because Moran’s request for independent review under §4—10 would not require interpretation of the terms of an ERISA plan, the claim was not “completely preempted” so as to permit removal under 28 U.S.C. § 1441.2 230 F.3d, at 964. The state court enforced the state statute and ordered Rush to submit to review by an independent physician. The doctor selected was a reconstructive surgeon at Johns Hopkins Medical Center, Dr. A. Lee Dellon. Dr. Dellon decided that Dr. Terzis’s treatment had been medically necessary, based on the definition of medical necessity in Rush’s Certificate of Group Coverage, as well as his own medical judgment. Rush’s medical director, however, refused to concede that the surgery had been medically necessary, and denied Moran’s claim in January 1999.
Moran amended her complaint in state court to seek reimbursement for the surgery as “medically necessary” under Illinois’s HMO Act, and Rush again removed to federal court, arguing that Moran’s amended complaint stated a claim for ERISA benefits and was thus completely preempted by ERISA’s civil enforcement provisions, 29 U.S.C. § 1132(a), as construed by this Court in Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987). The District Court treated Moran’s claim as a suit under ERISA, and denied the claim on the ground that ERISA preempted Illinois’s independent review statute.3
The Court of Appeals for the Seventh Circuit reversed. 230 F.3d 959 (2000). Although it found Moran’s state-law reimbursement claim completely preempted by ERISA so as to place the case in federal court, the Seventh Circuit did not agree that the substantive provisions of Illinois’s HMO Act were so preempted. The court noted that although ERISA broadly preempts any state laws that “relate to” employee benefit plans, 29 U.S.C. § 1144(a), state laws that “regulat[e] insurance” are saved from preemption, §1144(b)(2)(A). The court held that the Illinois HMO Act was such a law, the independent review requirement being little different from a state-mandated contractual term of the sort this Court had held to survive ERISA preemption. See 230 F.3d, at 972 (citing UNUM Life Ins. Co. of America v. Ward, 526 U.S. 358, 375—376 (1999)). The Seventh Circuit rejected the contention that Illinois’s independent review requirement constituted a forbidden “alternative remedy” under this Court’s holding in Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987), and emphasized that §4—10 does not authorize any particular form of relief in state courts; rather, with respect to any ERISA health plan, the judgment of the independent reviewer is only enforceable in an action brought under ERISA’s civil enforcement scheme, 29 U.S.C. § 1132(a). 230 F.3d, at 971.
In Metropolitan Life, we said that in deciding whether a law “regulates insurance” under ERISA’s saving clause, we start with a “common-sense view of the matter,” 471 U.S., at 740, under which “a law must not just have an impact on the insurance industry, but must be specifically directed toward that industry.” Pilot Life Ins. Co. v. Dedeaux, supra, at 50. We then test the results of the common-sense enquiry by employing the three factors used to point to insurance laws spared from federal preemption under the McCarran-Ferguson Act, 15 U.S.C. § 1011 et seq.4 Although this is not the place to plot the exact perimeter of the saving clause, it is generally fair to think of the combined “common-sense” and McCarran-Ferguson factors as parsing the “who” and the “what”: when insurers are regulated with respect to their insurance practices, the state law survives ERISA. Cf. Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 211 (1979) (explaining that the “business of insurance” is not coextensive with the “business of insurers”).
This conception has not changed in the intervening years. Since passage of the federal Act, States have been adopting their own HMO enabling Acts, and today, at least 40 of them, including Illinois, regulate HMOs primarily through the States’ insurance departments, see Aspen Health Law and Compliance Center, Managed Care Law Manual 31—32 (Supp. 6, Nov. 1997), although they may be treated differently from traditional insurers, owing to their additional role as health care providers,5 see, e.g., Alaska Ins. Code §21.86.010 (2000) (health department reviews HMO before insurance commissioner grants a certificate of authority); Ohio Rev. Code Ann. §1742.21 (West 1994) (health department may inspect HMO). Finally, this view shared by Congress and the States has passed into common understanding. HMOs (broadly defined) have “grown explosively in the past decade and [are] now the dominant form of health plan coverage for privately insured individuals.” Gold & Hurley, The Role of Managed Care “Products” in Managed Care “Plans,” in Contemporary Managed Care 47 (M. Gold ed. 1998). While the original form of the HMO was a single corporation employing its own physicians, the 1980s saw a variety of other types of structures develop even as traditional insurers altered their own plans by adopting HMO-like cost-control measures. See Weiner & de Lissovoy, Razing a Tower of Babel: A Taxonomy for Managed Care and Health Insurance Plans, 18 J. of Health Politics, Policy and Law 75, 83 (Spring 1993). The dominant feature is the combination of insurer and provider, see Gold & Hurley, supra, at 47, and “an observer may be hard pressed to uncover the differences among products that bill themselves as HMOs, [preferred provider organizations], or managed care overlays to health insurance.” Managed Care Law Manual, supra, at 1. Thus, virtually all commentators on the American health care system describe HMOs as a combination of insurer and provider, and observe that in recent years, traditional “indemnity” insurance has fallen out of favor. See, e.g., Weiner & de Lissovoy, supra, at 77 (“A common characteristic of the new managed care plans was the degree to which the roles of insurer and provider became integrated”); Gold, Understanding the Roots: Health Maintenance Organizations in Historical Context, in Contemporary Managed Care, supra, at 7, 8, 13; Managed Care Law Manual, supra, at 1; R. Rosenblatt, S. Law, & S. Rosenbaum, Law and the American Health Care System 552 (1997); Shouldice, Introduction to Managed Care, at 13, 20. Rush cannot checkmate common sense by trying to submerge HMOs’ insurance features beneath an exclusive characterization of HMOs as providers of health care.
Nor do we see anything standing in the way of applying the saving clause if we assume that the general state definition of HMO would include a contractor that provides only administrative services for a self-funded plan.6 Rush points out that the general definition of HMO under Illinois law includes not only organizations that “provide” health care plans, but those that “arrange for” them to be provided, so long as “any part of the risk of health care delivery” rests upon “the organization or its providers.” 215 Ill. Comp. Stat., ch. 125, §1—2(9) (2000). See Brief for Petitioner 38. Rush hypothesizes a sort of medical matchmaker, bringing together ERISA plans and medical care providers; even if the latter bear all the risks, the matchmaker would be an HMO under the Illinois definition. Rush would conclude from this that §4—10 covers noninsurers, and so is not directed specifically to the insurance industry. Ergo, ERISA’s saving clause would not apply.
The McCarran-Ferguson factors confirm our conclusion. A law regulating insurance for McCarran-Ferguson purposes targets practices or provisions that “ha[ve] the effect of transferring or spreading a policyholder’s risk; … [that are] an integral part of the policy relationship between the insurer and the insured; and [are] limited to entities within the insurance industry.” Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 129 (1982). Because the factors are guideposts, a state law is not required to satisfy all three McCarran-Ferguson criteria to survive preemption, see UNUM Life Ins. Co. v. Ward, 526 U.S., at 373, and so we follow our precedent and leave open whether the review mandated here may be described as going to a practice that “spread[s] a policyholder’s risk.” For in any event, the second and third factors are clearly satisfied by §4—10.
In ERISA law, we have recognized one example of this sort of overpowering federal policy in the civil enforcement provisions, 29 U.S.C. § 1132(a), authorizing civil actions for six specific types of relief.7 In Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985), we said those provisions amounted to an “interlocking, interrelated, and interdependent remedial scheme,” id., at 146, which Pilot Life described as “represent[ing] a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans,” 481 U.S., at 54. So, we have held, the civil enforcement provisions are of such extraordinarily preemptive power that they override even the “well-pleaded complaint” rule for establishing the conditions under which a cause of action may be removed to a federal forum. Metropolitan Life Ins. Co. v. Taylor, 481 U.S., at 63—64.
In Pilot Life, an ERISA plan participant who had been denied benefits sued in a state court on state tort and contract claims. He sought not merely damages for breach of contract, but also damages for emotional distress and punitive damages, both of which we had held unavailable under relevant ERISA provisions. Russell, supra, at 148. We not only rejected the notion that these common-law contract claims “regulat[ed] insurance,” Pilot Life, 481 U.S., at 50—51, but went on to say that, regardless, Congress intended a “federal common law of rights and obligations” to develop under ERISA, id., at 56, without embellishment by independent state remedies. As in AT&T, we said the saving clause had to stop short of subverting congressional intent, clearly expressed “through the structure and legislative history[,] that the federal remedy … displace state causes of action.” 481 U.S., at 57.8
But this case addresses a state regulatory scheme that provides no new cause of action under state law and authorizes no new form of ultimate relief. While independent review under §4—10 may well settle the fate of a benefit claim under a particular contract, the state statute does not enlarge the claim beyond the benefits available in any action brought under §1132(a). And although the reviewer’s determination would presumably replace that of the HMO as to what is “medically necessary” under this contract,9 the relief ultimately available would still be what ERISA authorizes in a suit for benefits under §1132(a).10 This case therefore does not involve the sort of additional claim or remedy exemplified in Pilot Life, Russell, and Ingersoll-Rand, but instead bears a resemblance to the claims-procedure rule that we sustained in UNUM Life Ins. Co. of America v. Ward, 526 U.S. 358 (1999), holding that a state law barring enforcement of a policy’s time limitation on submitting claims did not conflict with §1132(a), even though the state “rule of decision,” id., at 377, could mean the difference between success and failure for a beneficiary. The procedure provided by §4—10 does not fall within Pilot Life’s categorical preemption.
Rush still argues for going beyond Pilot Life, making the preemption issue here one of degree, whether the state procedural imposition interferes unreasonably with Congress’s intention to provide a uniform federal regime of “rights and obligations” under ERISA. However, “[s]uch disuniformities … are the inevitable result of the congressional decision to ‘save’ local insurance regulation.” Metropolitan Life, 471 U.S., at 747.11 Although we have recognized a limited exception from the saving clause for alternative causes of action and alternative remedies in the sense described above, we have never indicated that there might be additional justifications for qualifying the clause’s application. Rush’s arguments today convince us that further limits on insurance regulation preserved by ERISA are unlikely to deserve recognition.
Section 4—10 does resemble an arbitration provision, then, to the extent that the independent reviewer considers disputes about the meaning of the HMO contract12 and receives “evidence” in the form of medical records, statements from physicians, and the like. But this is as far as the resemblance to arbitration goes, for the other features of review under §4—10 give the proceeding a different character, one not at all at odds with the policy behind §1132(a). The Act does not give the independent reviewer a free-ranging power to construe contract terms, but instead, confines review to a single term: the phrase “medical necessity,” used to define the services covered under the contract. This limitation, in turn, implicates a feature of HMO benefit determinations that we described in Pegram v. Herdrich, 530 U.S. 211 (2000). We explained that when an HMO guarantees medically necessary care, determinations of coverage “cannot be untangled from physicians’ judgments about reasonable medical treatment.” Id., at 229. This is just how the Illinois Act operates; the independent examiner must be a physician with credentials similar to those of the primary care physician, 215 Ill. Comp. Stat., ch. 125, §4—10 (2000), and is expected to exercise independent medical judgment in deciding what medical necessity requires. Accordingly, the reviewer in this case did not hold the kind of conventional evidentiary hearing common in arbitration, but simply received medical records submitted by the parties, and ultimately came to a professional judgment of his own. Tr. of Oral Arg. 30—32.
Next, Rush argues that §4—10 clashes with a substantive rule intended to be preserved by the system of uniform enforcement, stressing a feature of judicial review highly prized by benefit plans: a deferential standard for reviewing benefit denials. Whereas Firestone Tire & Rubber Co. v. Bruch, 489 U.S., at 115, recognized that an ERISA plan could be designed to grant “discretion” to a plan fiduciary, deserving deference from a court reviewing a discretionary judgment, §4—10 provides that when a plan purchases medical services and insurance from an HMO, benefit denials are subject to apparently de novo review. If a plan should continue to balk at providing a service the reviewer has found medically necessary, the reviewer’s determination could carry great weight in a subsequent suit for benefits under §1132(a),14 depriving the plan of the judicial deference a fiduciary’s medical judgment might have obtained if judicial review of the plan’s decision had been immediate.15
Again, however, the significance of §4—10 is not wholly captured by Rush’s argument, which requires some perspective for evaluation. First, in determining whether state procedural requirements deprive plan administrators of any right to a uniform standard of review, it is worth recalling that ERISA itself provides nothing about the standard. It simply requires plans to afford a beneficiary some mechanism for internal review of a benefit denial, 29 U.S.C. § 1133(2), and provides a right to a subsequent judicial forum for a claim to recover benefits, §1132(a)(1)(B). Whatever the standards for reviewing benefit denials may be, they cannot conflict with anything in the text of the statute, which we have read to require a uniform judicial regime of categories of relief and standards of primary conduct, not a uniformly lenient regime of reviewing benefit determinations. See Pilot Life, 481 U.S., at 56.16
Not only is there no ERISA provision directly providing a lenient standard for judicial review of benefit denials, but there is no requirement necessarily entailing such an effect even indirectly. When this Court dealt with the review standards on which the statute was silent, we held that a general or default rule of de novo review could be replaced by deferential review if the ERISA plan itself provided that the plan’s benefit determinations were matters of high or unfettered discretion, see Firestone Tire, supra, at 115. Nothing in ERISA, however, requires that these kinds of decisions be so “discretionary” in the first place; whether they are is simply a matter of plan design or the drafting of an HMO contract. In this respect, then, §4—10 prohibits designing an insurance contract so as to accord unfettered discretion to the insurer to interpret the contract’s terms. As such, it does not implicate ERISA’s enforcement scheme at all, and is no different from the types of substantive state regulation of insurance contracts we have in the past permitted to survive preemption, such as mandated-benefit statutes and statutes prohibiting the denial of claims solely on the ground of untimeliness.17 See Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985); UNUM Life Ins. Co. of America v. Ward, 526 U.S. 358 (1999).
1. In the health care industry, the term “Health Maintenance Organization” has been defined as “[a] prepaid organized delivery system where the organization and the primary care physicians assume some financial risk for the care provided to its enrolled members… . In a pure HMO, members must obtain care from within the system if it is to be reimbursed.” Weiner & de Lissovoy, Razing a Tower of Babel: A Taxonomy for Managed Care and Health Insurance Plans, 18 J. of Health Politics, Policy and Law 75, 96 (Spring 1993) (emphasis in original). The term “Managed Care Organization” is used more broadly to refer to any number of systems combining health care delivery with financing. Id., at 97. The Illinois definition of HMO does not appear to be limited to the traditional usage of that term, but instead is likely to encompass a variety of different structures (although Illinois does distinguish HMOs from pure insurers by regulating “traditional” health insurance in a different portion of its insurance laws, 215 Ill. Comp. Stat., ch. 5 (2000)). Except where otherwise indicated, we use the term “HMO” because that is the term used by the State and the parties; what we intend is simply to describe the structures covered by the Illinois Act.
2. In light of our holding today that §4—10 is not preempted by ERISA, the propriety of this ruling is questionable; a suit to compel compliance with §4—10 in the context of an ERISA plan would seem to be akin to a suit to compel compliance with the terms of a plan under 29 U.S.C. § 1132(a)(3). Alternatively, the proper course may have been to bring a suit to recover benefits due, alleging that the denial was improper in the absence of compliance with §4—10. We need not resolve today which of these options is more consonant with ERISA.
3. No party has challenged Rush’s status as defendant in this case, despite the fact that many lower courts have interpreted ERISA to permit suits under §1132(a) only against ERISA plans, administrators, or fiduciaries. See, e.g., Everhart v. Allmerica Financial Life Ins. Co., 275 F.3d 751, 754—756 (CA9 2001); Garren v. John Hancock Mut. Life Ins. Co., 114 F.3d 186, 187 (CA11 1997); Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (CA7 1996). Without commenting on the correctness of such holdings, we assume (although the information does not appear in the record) that Rush has failed to challenge its status as defendant because it is, in fact, the plan administrator. This conclusion is buttressed by the fact that the plan’s sponsor has granted Rush discretion to interpret the terms of its coverage, and by the fact that one of Rush’s challenges to the Illinois statute is based on what Rush perceives as the limits that statute places on fiduciary discretion. Whatever Rush’s true status may be, however, it is immaterial to our holding.
4. The McCarran-Ferguson Act requires that the business of insurance be subject to state regulation, and, subject to certain exceptions, mandates that “[n]o Act of Congress shall be construed to invalidate … any law enacted by any State for the purpose of regulating the business of insurance … .” 15 U.S.C. § 1012(b).
5. We have, in a limited number of cases, found certain contracts not to be part of the “business of insurance” under McCarran-Ferguson, notwithstanding their classification as such for the purpose of state regulation. See, e.g., SEC v. Variable Annuity Life Ins. Co. of America, 359 U.S. 65 (1959). Even then, however, we recognized that such classifications are relevant to the enquiry, because Congress, in leaving the “business of insurance” to the States, “was legislating concerning a concept which had taken on its coloration and meaning largely from state law, from state practice, from state usage.” Id., at 69.
6. ERISA’s “deemer” clause provides an exception to its saving clause that forbids States from regulating self-funded plans as insurers. See 29 U.S.C. § 1144(b)(2)(B); FMC Corp. v. Holliday, 498 U.S. 52, 61 (1990). Therefore, Illinois’s Act would not be “saved” as an insurance law to the extent it applied to self-funded plans. This fact, however, does not bear on Rush’s challenge to the law as one that is targeted toward non-risk-bearing organizations.
7. Title 29 U.S.C. § 1132(a) provides in relevant part: “A civil action may be brought– “(1) by a participant or beneficiary– “(A) for the relief provided for in subsection (c) of this section [concerning requests to the administrator for information], or “(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan; “(2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title [breach of fiduciary duty]; “(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan; “(4) by the Secretary, or by a participant, or beneficiary for appropriate relief in the case of a violation of 1025(c) of this title [information to be furnished to participants]; “(5) except as otherwise provided in subsection (b) of this section, by the Secretary (A) to enjoin any act or practice which violates any provision of this subchapter, or (B) to obtain other appropriate equitable relief (i) to redress such violation or (ii) to enforce any provision of this subchapter; “(6) by the Secretary to collect any civil penalty under paragraph (2), (4), (5), or (6) of subsection (c) of this section or under subsection (i) or (l) of this section.”
8. Rush and its amici interpret Pilot Life to have gone a step further to hold that any law that presents such a conflict with federal goals is simply not a law that “regulates insurance,” however else the “insurance” test comes out. We believe the point is largely academic. As will be discussed further, even under Rush’s approach, a court must still determine whether the state law at issue does, in fact, create such a conflict. Thus, we believe that it is more logical to proceed as we have done here.
9. The parties do not dispute that §4—10, as a matter of state law, purports to make the independent reviewer’s judgment dispositive as to what is “medically necessary.” We accept this interpretation of the meaning of the statute for the purposes of our opinion.
10. This is not to say that the court would have no role beyond ordering compliance with the reviewer’s determination. The court would have the responsibility, for example, to fashion appropriate relief, or to determine whether other aspects of the plan (beyond the “medical necessity” of a particular treatment) affect the relative rights of the parties. Rush, for example, has chosen to guarantee medically necessary services to plan participants. For that reason, to the extent §4—10 may render the independent reviewer the final word on what is necessary, see n. 9, supra, Rush is obligated to provide the service. But insurance contracts do not have to contain such guarantees, and not all do. Some, for instance, guarantee medically necessary care, but then modify that obligation by excluding experimental procedures from coverage. See, e.g., Tillery v. Hoffman Enclosures, Inc., 280 F.3d 1192 (CA8 2002). Obviously, §4—10 does not have anything to say about whether a proposed procedure is experimental. There is also the possibility, though we do not decide the issue today, that a reviewer’s judgment could be challenged as inaccurate or biased, just as the decision of a plan fiduciary might be so challenged.
11. Thus, we do not believe that the mere fact that state independent review laws are likely to entail different procedures will impose burdens on plan administration that would threaten the object of 29 U.S.C. § 1132(a); it is the HMO contracting with a plan, and not the plan itself, that will be subject to these regulations, and every HMO will have to establish procedures for conforming with the local laws, regardless of what this Court may think ERISA forbids. This means that there will be no special burden of compliance upon an ERISA plan beyond what the HMO has already provided for. And although the added compliance cost to the HMO may ultimately be passed on to the ERISA plan, we have said that such “indirect economic effect[s],” New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 659 (1995), are not enough to preempt state regulation even outside of the insurance context. We recognize, of course, that a State might enact an independent review requirement with procedures so elaborate, and burdens so onerous, that they might undermine §1132(a). No such system is before us.
12. Nothing in the Act states that the reviewer should refer to the definitions of medical necessity contained in the contract, but the reviewer did, in this case, refer to that definition. Thus, we will assume that some degree of contract interpretation is required under the Act. Were no interpretation required, there would be a real question as to whether §4—10 is properly characterized as a species of mandated-benefit law of the type we approved in Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985).
13. See, e.g., Cal. Ins. Code Ann. §10123.68 (West Supp. 2002); Ind. Code Ann. §27—13—37—5 (1999); N. J. Stat. Ann. §17B:26—2.3 (1996); Okla. Admin. Code §365:10—5—4 (1996); R. I. Gen. Laws §27—39—2 (1998).
15. An issue implicated by this case but requiring no resolution is the degree to which a plan provision for unfettered discretion in benefit determinations guarantees truly deferential review. In Firestone Tire itself, we noted that review for abuse of discretion would home in on any conflict of interest on the plan fiduciary’s part, if a conflict was plausibly raised. That last observation was underscored only two Terms ago in Pegram v. Herdrich, 530 U.S. 211 (2000), when we again noted the potential for conflict when an HMO makes decisions about appropriate treatment, see id., at 219—220. It is a fair question just how deferential the review can be when the judicial eye is peeled for conflict of interest. Moreover, as we explained in Pegram, “it is at least questionable whether Congress would have had mixed eligibility decisions in mind when it provided that decisions administering a plan were fiduciary in nature.” id., at 232. Our decision today does not require us to resolve these questions.
16. Rush presents the alternative argument that §4—10 is preempted as conflicting with ERISA’s requirement that a benefit denial be reviewed by a named fiduciary, 29 U.S.C. § 1133(2). Rush contends that §4—10 interferes with fiduciary discretion by forcing the provision of benefits over a fiduciary’s objection. Happily, we need not decide today whether §1133(2) carries the same preemptive force of §1132(a) such that it overrides even the express saving clause for insurance regulation, because we see no conflict. Section 1133 merely requires that plans provide internal appeals of benefits denials; §4—10 plays no role in this process, instead providing for extra review once the internal process is complete. Nor is there any conflict in the removal of fiduciary “discretion”; as described below, ERISA does not require that such decisions be discretionary, and insurance regulation is not preempted merely because it conflicts with substantive plan terms. See UNUM Life Ins. Co. of America v. Ward, 526 U.S. 358, 376 (1999) (“Under [Petitioner’s] interpretation … insurers could displace any state regulation simply by inserting a contrary term in plan documents. This interpretation would virtually rea[d] the saving clause out of ERISA.” (internal quotation marks omitted)).
17. We do not mean to imply that States are free to create other forms of binding arbitration to provide de novo review of any terms of insurance contracts; as discussed above, our decision rests in part on our recognition that the disuniformity Congress hoped to avoid is not implicated by decisions that are so heavily imbued with expert medical judgments. Rather, we hold that the feature of §4—10 that provides a different standard of review with respect to mixed eligibility decisions from what would be available in court is not enough to create a conflict that undermines congressional policy in favor of uniformity of remedies.
Of course, the “expectations that a federal common law of rights and obligations under ERISA-regulated plans would develop . . . would make little sense if the remedies available to ERISA participants and beneficiaries under §502(a) could be supplemented or supplanted by varying state laws.” Pilot Life, supra, at 56. Therefore, as the Court concedes, see ante, at 19, even a state law that “regulates insurance” may be pre-empted if it supplements the remedies provided by ERISA, despite ERISA’s saving clause, §514(b)(2)(A), 29 U.S.C. § 1144(b)(2)(A). See Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 248 (1984) (noting that state laws that stand as an obstacle to the accomplishment of the full purposes and objectives of Congress are pre-empted).1 Today, however, the Court takes the unprecedented step of allowing respondent Debra Moran to short circuit ERISA’s remedial scheme by allowing her claim for benefits to be determined in the first instance through an arbitral-like procedure provided under Illinois law, and by a decisionmaker other than a court. See 215 Ill. Comp. Stat., ch.125, §4—10 (2000). This decision not only conflicts with our precedents, it also eviscerates the uniformity of ERISA remedies Congress deemed integral to the “careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans.” Pilot Life, supra, at 54. I would reverse the Court of Appeals’ judgment and remand for a determination of whether Moran was entitled to reimbursement absent the independent review conducted under §4—10.
From the facts of this case one can readily understand why Moran sought recourse under §4—10. Moran is covered by a medical benefits plan sponsored by her husband’s employer and governed by ERISA. Petitioner Rush Prudential HMO, Inc., is the employer’s health maintenance organization (HMO) provider for the plan. Petitioner’s Member Certificate of Coverage (Certificate) details the scope of coverage under the plan and provides petitioner with “the broadest possible discretion” to interpret the terms of the plan and to determine participants’ entitlement to benefits. 1 Record, Exh. A, p. 8. The Certificate specifically excludes from coverage services that are not “medically necessary.” Id., at 21. As the Court describes, ante, at 2—3, Moran underwent a nonstandard surgical procedure.2 Prior to Moran’s surgery, which was performed by an unaffiliated doctor, petitioner denied coverage for the procedure on at least three separate occasions, concluding that this surgery was not “medically necessary.” For the same reason, petitioner denied Moran’s request for postsurgery reimbursement in the amount of $94,841.27. Before finally determining that the specific treatment sought by Moran was not “medically necessary,” petitioner consulted no fewer than six doctors, reviewed Moran’s medical records, and consulted peer-reviewed medical literature.3
Dr. A. Lee Dellon, an unaffiliated physician who served as the independent medical reviewer, concluded that the surgery for which petitioner denied coverage “was appropriate,” that it was “the same type of surgery” he would have done, and that Moran “had all of the indications and therefore the medical necessity to carry out” the nonstandard surgery. Appellant’s Separate App. (CA7), pp. A42—A43.4 Under §4—10, Dr. Dellon’s determination conclusively established Moran’s right to benefits under Illinois law. See 215 Ill. Comp. Stat., ch.125, §4—10 (“In the event that the reviewing physician determines the covered service to be medically necessary, the [HMO] shall provide the covered service” (emphasis added)). 230 F.3d 959, 972—973 (CA7 2000).
The question for the Court, therefore, is whether §4—10 provides such a vehicle. Without question, Moran had a “panoply of remedial devices,” Russell, supra, at 146, available under §502 of ERISA when petitioner denied her claim for benefits.5 Section 502(a)(1)(B) of ERISA pro-
vided the most obvious remedy: a civil suit to recover benefits due under the terms of the plan. 29 U.S.C. § 1132(a)(1)(B). But rather than bring such a suit, Moran sought to have her right to benefits determined outside of ERISA’s remedial scheme through the arbitral-like mechanism available under §4—10.
The Court of Appeals attempted to evade the pre-emptive force of ERISA’s exclusive remedial scheme primarily by characterizing the alternative enforcement mechanism created by §4—10 as a “contract term” under state law.6 Id., at 972. The Court saves §4—10 from pre-emption in a somewhat different manner, distinguishing it from an alternative enforcement mechanism because it does not “enlarge the claim beyond the benefits available in any action brought under §1132(a),” and characterizing it as “something akin to a mandate for second-opinion practice in order to ensure sound medical judgments.” Ante, at 22, 27. Neither approach is sound.
The Court’s attempt to diminish §4—10’s effect by characterizing it as one where “the reviewer’s determination would presumably replace that of the HMO,” ante, at 23 (emphasis added), is puzzling given that the statute makes such a determination conclusive and the Court of Appeals treated it as a binding adjudication. For these same reasons, it is troubling that the Court views the review under §4—10 as nothing more than a practice “of obtaining a second [medical] opinion.” Ante, at 27. The independent reviewer may, like most arbitrators, possess special expertise or knowledge in the area subject to arbitration. But while a second medical opinion is nothing more than that–an opinion–a determination under §4—10 is a conclusive determination with respect to the award of benefits. And the Court’s reference to Pegram v. Herdrich, 530 U.S. 211 (2000), as support for its Alice in Wonderland-like claim that the §4—10 proceeding is “far removed from any notion of an enforcement scheme,” ante, at 27, is equally perplexing, given that the treatment is long over and the issue presented is purely an eligibility decision with respect to reimbursement.7
Section 4—10 constitutes an arbitral-like state remedy through which plan members may seek to resolve conclusively a disputed right to benefits. Some 40 other States have similar laws, though these vary as to applicability, procedures, standards, deadlines, and consequences of independent review. See Brief for Respondent State of Illinois 12, n. 4 (citing state independent review statutes); see also Kaiser Family Foundation, K. Politz, J. Crowley, K. Lucia, & E. Bangit, Assessing State External Review Programs and the Effects of Pending Federal Patients’ Rights Legislation (May 2002) (comparing state program features). Allowing disparate state laws that provide inconsistent external review requirements to govern a participant’s or beneficiary’s claim to benefits under an employee benefit plan is wholly destructive of Congress’ expressly stated goal of uniformity in this area. Moreover, it is inimical to a scheme for furthering and protecting the “careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans,” given that the development of a federal common law under ERISA-regulated plans has consistently been deemed central to that balance.8 Pilot Life, 481 U.S., at 54, 56. While it is true that disuniformity is the inevitable result of the Congressional decision to save local insurance regulation, this does not answer the altogether different question before the Court today, which is whether a state law “regulating insurance” nonetheless provides a separate vehicle to assert a claim for benefits outside of, or in addition to, ERISA’s remedial scheme. See, e.g., id., at 54 (citing Russell, 473 U.S., at 146); Harris Trust, 510 U. S., at 99 (citing Silkwood, 464 U.S., at 248). If it does, the exclusivity and uniformity of ERISA’s enforcement scheme must remain paramount and the state law is pre-empted in accordance with ordinary principles of conflict
pre-emption.9
1. I would assume without deciding that 215 Ill. Comp. Stat., ch. 125, §4—10 (2000) is a law that “regulates insurance.” We can begin and end the pre-emption analysis by asking if §4—10 conflicts with the provisions of ERISA or operates to frustrate its objects. See, e.g., Boggs v. Boggs, 520 U.S. 833, 841 (1997).
2. While the Court characterizes it as an “unconventional treatment,” the Court of Appeals described this surgery more clinically as “rib resection, extensive scale-nectomy,” and “microneurolysis of the lower roots of the brachial plexus under intraoperative microscopic magnification.” 230 F.3d 959, 963 (CA7 2000). The standard procedure for Moran’s condition, as described by the Court of Appeals, involves (like the nonstandard surgery) rib resection with scale-nectomy, but it does not include “microneurolysis of the brachial plexus,” which is the procedure Moran wanted and her primary care physician recommended. See id., at 963—964. In any event, no one disputes that the procedure was not the standard surgical procedure for Moran’s condition or that the Certificate covers even nonstandard surgery if it is “medically necessary.”
3. Petitioner thus appears to have complied with §503 of ERISA, which requires every employee benefit plan to “provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied,” and to “afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim.” 29 U.S.C. § 1133.
4. Even Dr. Dellon acknowledged, however, both that “[t]here is no particular research study” to determine whether failure to perform the nonstandard surgery would adversely affect Moran’s medical condition and that the most common operation for Moran’s condition in the United States was the standard surgery that petitioner had agreed to cover. Appellant’s Separate App. (CA7), p. A43.
5. Commonly included in the panoply constituting part of this enforcement scheme are: suits under §502(a)(1)(B) (authorizing an action to recover benefits, obtain a declaratory judgment that one is entitled to benefits, and to enjoin an improper refusal to pay benefits); suits under §§502(a)(2) and 409 (authorizing suit to seek removal of the fiduciary); and a claim for attorney’s fees under §502(g). See Russell, 473 U.S., at 146—147; Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 53 (1987).
6. The Court of Appeals concluded that §4—10 is saved from pre-emption because it is a law that “regulates insurance,” and that it does not conflict with the exclusive enforcement mechanism of §502 because §4—10’s independent review mechanism is a state-mandated contractual term of the sort that survived ERISA pre-emption in UNUM Life Ins. Co. of America v. Ward, 526 U.S. 358, 375—376 (1999). In the Court of Appeals’ view, the independent review provision, like any other mandatory contract term, can be enforced through an action brought under §502(a) of ERISA, 29 U.S. C. §1132(a), pursuant to state law. 230 F.3d, at 972.
7. I also disagree with the Court’s suggestion that, following Pegram v. Herdrich, 530 U.S. 211 (2000), HMOs are exempted from ERISA whenever a coverage or reimbursement decision relies in any respect on medical judgment. Ante, at 26, 30, n. 17. Pegram decided the limited question whether relief was available under §1109 for claims of fiduciary breach against HMOs based on its physicians’ medical decisions. Quite sensibly, in my view, that question was answered in the negative because otherwise, “for all practical purposes, every claim of fiduciary breach by an HMO physician making a mixed decision would boil down to a malpractice claim, and the fiduciary standard would be nothing but the malpractice standard traditionally applied in actions against physicians.” 530 U.S., at 235.
8. The Court suggests that a state law’s impact on cost is not relevant after New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 662 (1995), which holds that a state law providing for surcharges on hospital rates did not, based solely on their indirect economic effect, “bear the requisite ‘connection with’ ERISA plans to trigger pre-emption.” But Travelers addressed only the question whether a state law “relates to” an ERISA plan so as to fall within §514(a)’s broad preemptive scope in the first place and is not relevant to the inquiry here. The Court holds that “[i]t is beyond serious dispute,” ante, at 7—8, that §4—10 does “relate to” an ERISA plan; §4—10’s economic effects are necessarily relevant to the extent that they upset the object of §1132(a). See Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142 (1990) (“Section 514(a) was intended to ensure that plans and plan sponsors would be subject to a uniform body of benefits law; the goal was to minimize the administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government. Otherwise, the inefficiencies created could work to the detriment of plan beneficiaries”).
9. The Court isolates the “plan” from the HMO and then concludes that the independent review provision “does not threaten the object of 29 U.S.C. § 1132” because it does not affect the plan, but only the HMO. Ante, at 24, n. 11. To my knowledge such a distinction is novel. Cf. Pegram, 530 U.S., at 223 (recognizing that the agreement between an HMO and an employer may provide elements of a plan by setting out the rules under which care is provided). Its application is particularly novel here, where the Court appears to view the HMO as the plan administrator, leaving one to wonder how the myriad state independent review procedures can help but have an impact on plan administration. Ante, at 5—6, n. 3.