Source: http://openjurist.org/999/f2d/74/caudill-v-blue-cross-and-blue-shield-of-north-carolina-caudill
Timestamp: 2014-04-23 08:25:39
Document Index: 719555951

Matched Legal Cases: ['§ 8901', '§ 8903', '§ 8902', '§ 8907', '§ 8902', '§ 890', '§ 1441']

999 F2d 74 Caudill v. Blue Cross and Blue Shield of North Carolina Caudill | OpenJurist
999 F. 2d 74 - Caudill v. Blue Cross and Blue Shield of North Carolina Caudill	Home999 f2d 74 caudill v. blue cross and blue shield of north carolina caudill
999 F2d 74 Caudill v. Blue Cross and Blue Shield of North Carolina Caudill 999 F.2d 74
16 Employee Benefits Cas. 2409
Crystal CAUDILL, Plaintiff-Appellant.v.BLUE CROSS AND BLUE SHIELD OF NORTH CAROLINA, et al.,Defendants-Appellees.Crystal CAUDILL, Plaintiff-Appellant,v.BLUE CROSS AND BLUE SHIELD OF NORTH CAROLINA, INC.; BlueCross and Blue Shield Association, Defendants-Appellees.
No. 92-2259.
Argued March 4, 1993.Decided April 29, 1993.Amended by Order Filed July 9, 1993.
Edward G. Connette, III, Lesesne & Connette, Charlotte, NC, argued (Roy D. Trest, Baxley & Trest, Shallotte, NC, on brief), for plaintiff-appellant.
Terry Bancroft Dowd, Miller & Chevalier, Chartered, Washington, DC; Mark Stanton Thomas, Maupin, Taylor, Ellis & Adams, P.A., Raleigh, NC, argued for defendants-appellees.
Plaintiff-Appellant Crystal Caudill ("Caudill") is a federal employee with breast cancer. She seeks treatment called high dose chemotherapy with autologous bone marrow transplant support ("HDC-ABMT"). Defendant-Appellee Blue Cross/Blue Shield of North Carolina is her insurer pursuant to the Federal Employees Health Benefits Act (FEHBA), 5 U.S.C. §§ 8901-8913. The FEHBA authorizes the United States Office of Personnel Management ("OPM") to enter into annual procurement contracts with private carriers which then provide health plan benefits to government employees. 5 U.S.C. § 8903. The 1992 Government-Wide Service Benefit Plan ("Benefit Plan") is one such contract. See J.A. 59-94.
The Benefit Plan is a contract the government purchased from Blue Cross/Blue Shield Association ("BCBSA"), which sponsors the plan on behalf of various Blue Cross/Blue Shield companies across the country. Blue Cross/Blue Shield of North Carolina ("BCBS-NC") administers the plan in North Carolina. However, no insurance contract exists between Caudill and BCBS-NC because that company merely underwrote its pro rata share of the Benefit Plan for which BCBSA bargained with the government; it did not specifically underwrite benefits for Caudill. Thus, Caudill is not a party to the contract, but an enrollee, with her benefits subject to OPM regulation.
Congress delegated to OPM the authority to decide the benefits and exclusions in FEHBA plans and to negotiate and contract for any benefits, maximums, limitation and exclusions "it considers necessary or desirable." 5 U.S.C. § 8902(d). Because OPM has final authority over coverage, it publishes and distributes an annual Statement of Contract Benefits for each health benefit plan. 5 U.S.C. § 8907.
The FEHBA requires that a carrier pay a benefits claim if OPM finds that the contract allows an individual to receive a payment. 5 U.S.C. § 8902(j). OPM has established a mandatory administrative process for review of denied claims. 5 C.F.R. § 890.105. Individuals who disagree with OPM's decisions may then sue the carrier to recover compensation for the health care benefits. In the matter presently before the court, BCBS-NC denied coverage of the HDC-ABMT and Caudill then sought administrative review.
After OPM denied coverage, Caudill brought this action in North Carolina state court and obtained an ex parte temporary restraining order. J.A. 13-22. The July 2, 1992 order enjoined BCBS-NC from notifying the Duke University Medical Center, where Caudill was being treated, that her insurance did not cover HDC-ABMT and from denying coverage for her treatment. On July 7, 1992, defendants filed a notice of removal in the United States District Court for the Western District of North Carolina, alleging removal jurisdiction under 28 U.S.C. § 1441(b). J.A. 5-11. In response, Caudill filed a motion to remand and a motion for a preliminary injunction, both of which were denied. J.A. 32-36. The state court restraining order expired on July 12, 1992.
On August 24, 1992, the district court granted summary judgment for the defendants. The district court held that federal law preempted any state claims Caudill might have against the defendants and that her claim arose from federal law, giving the district court jurisdiction over the case. Finding that OPM's interpretation of the terms at issue in the Benefit Plan was