Opinion ID: 2353693
Heading Depth: 1
Heading Rank: 8

Heading: ERISA section 514(a) preempts the application of NRS Chapter 695G in limited instances

Text: A claim predicated upon NRS Chapter 695G may be preempted if the MCO acts merely as an administrator or agent of the ERISA plan. If an MCO acts merely as an administrator or agent of an ERISA plan, then application of the quality assurance statutes and regulations to the MCO would be a direct regulation of the ERISA plan's benefit structure. This would impose a duty on the ERISA plan to monitor its service providers. In effect, the ERISA plan would be required to provide as a benefit a quality assurance program to its members due to Nevada law. Imposition of such a requirement falls squarely within the scope of prohibited connection with an ERISA plan. However, if the MCO's acts are independent of an ERISA plan, then ERISA section 514(a) would not preempt the application of NRS Chapter 695G. There is undoubtedly a strong possibility that NRS Chapter 695G will have an effect on an ERISA plan if it elects to merely purchase an insurance plan from an MCO or to lease access to the MCO's existing network of providers. The ERISA plan may experience high cost due to the quality assurance requirement and may have less options regarding what insurance plan or network is available; however, these would merely be indirect economic effects. See Travelers, 514 U.S. at 659, 115 S.Ct. 1671. Such an indirect economic effect does not trigger section 514(a)'s preemption because it does not bind plan administrators to any particular choice. Id. Moreover, in such capacity, NRS Chapter 695G serves only to regulate one of the many products that an ERISA plan might choose to purchase. Washington Physicians Service Ass'n v. Gregoire, 147 F.3d 1039, 1044-45 (9th Cir.1998). The mere fact that many ERISA plans choose to buy health insurance for their plan members does not cause a regulation of health insurance automatically to `relate to' an employee benefit planjust as a plan's decision to buy an apple a day for every employee, or to offer employees a gym membership, does not cause all state regulation of apples and gyms to `relate to' employee benefit plans. Id. at 1045. In the instant case, the question of whether Cervantes' claims are preempted under ERISA section 514(a)'s related to prong depends upon a determination of whether HPN merely facilitated the selection of providers by the Culinary Union Plan or if HPN leased out its existing network of providers. Here, it is undisputed that the ERISA plan would select certain outpatient providers with whom it wanted to contract and [HPN] would negotiate contracts with those providers. Thereafter, Prime Health would sign the contract on behalf of the [ERISA plan]. [8] Thus, because the Culinary Union selected its own providers, HPN's acts with ECSN are not independent of the ERISA plan. Rather, it was an administrative decision made by an ERISA plan that is subject to ERISA section 514(a) preemption. Unlike quality of care claims that are traditionally left to state regulation, the quality assurance statute imposes a monitoring requirement upon the ERISA plan that is separate and apart from a claim concerning the quality of care. Rather, this imposition necessarily interferes with the plan's administrative decision making and requires the plan to provide this additional monitoring benefit. Because we conclude that the selection and retention of ECSN was an administrative decision by an ERISA plan, Cervantes' state law claims are preempted by ERISA section 514(a), and HPN was entitled to judgment as a matter of law. Accordingly, we affirm the district court's summary judgment. [9] We concur: SAITTA, C.J., and CHERRY, GIBBONS, PICKERING, HARDESTY, and PARRAGUIRRE, JJ.