Legal Document

514 U.S. 645115 S.Ct. 1671131 L.Ed.2d 695 NEW YORK STATE CONFERENCE OF BLUE CROSS & SHIELD PLANS, et al., Petitioners,v.TRAVELERS INSURANCE COMPANY al. George E. PATAKI, Governor of New York, Petitioners, v. TRAVELERS HOSPITAL ASSOCIATION STATE, Petitioner, Nos. 93-1408, 93-1414 and 93-1415. Supreme Court the United States Argued Jan. 18, 1995. Decided April 26, 1995.* Syllabus** A York statute requires hospitals to collect surcharges from patients covered by a commercial insurer but not insured Blue Cross/Blue Shield plan, also subjects certain health maintenance organizations (HMOs) surcharges. Several insurers their trade associations filed actions against state officials, claiming that § 514(a) Employee Retirement Income Security Act 1974 (ERISA)—under which laws "relate to" any employee benefit plan are superseded—pre-empts imposition on bills whose insurance coverage is purchased an ERISA HMOs insofar as membership fees paid plan. plans (collectively Blues) hospital association intervened defendants, several HMO conference plaintiffs. The District consolidated granted plaintiffs summary judgment. Appeals affirmed, relying this Court's decisions in Shaw Delta Air Lines, Inc., 463 85, 103 2890, 77 490, Columbia Greater Washington Board Trade, 506 ----, 113 580, 121 513, holding ERISA's pre-emption clause must be read broadly reach law having connection with, or reference to, plans. court decided were meant increase costs care held purposeful interference with choices make for constitutes "connection with" triggering pre-emption. Held: York's surcharge provisions do within meaning and, thus, pre-empted. Pp. ____. (a) Under Shaw, supra, if they have with," "reference to," They clearly no plans, text unhelpful determining whether them. Thus, look objectives guide scope Congress understood would survive. (b) basic thrust was avoid multiplicity regulation order permit nationally uniform administration pre-empts mandate structures well those provide alternate enforcement mechanisms. purpose effects quite different, however. principal reason charge differentials Blues many subscribers whom reject. Since more attractive, indirect economic effect made buyers, including However, influence does bind administrators particular choice preclude administrative practice provision interstate package. It simply bears benefits relative competing Cost uniformity almost certainly object Rate common even absence action, therefore it unlikely bar such influences under law. existence other plan's cost—such quality control standards workplace regulation—leaves intent pre-empt less likely, since superseded well. leave where case, responsibility choose best overall money, thus bear requisite trigger (c) This conclusion confirmed decision Mackey Lanier Collection Agency Service, 486 825, 108 2182, 100 836, falls short barring application general garnishment statutes participants' hands And Y ork's impose kind substantive requirement binding at issue Metropolitan Life Insurance Co. Massachusetts, 471 724, 105 2380, 85 728, require deal only one insure entire category illnesses might otherwise cover. (d) Any than drawn here unsettling result theory all there hint legislative history elsewhere intended squelch efforts regulating charges some degree time passed. Moreover, broad interpretation rendered nugatory federal statute—enacted after same Congress—that gave comprehensive aid rate regulation. (e) In reaching decision, hold direct possible produce acute, albeit indirect, force adopt scheme effectively restrict its insurers, case here. P. 14 F.3d 708 (CA 2 1993), reversed remanded. SOUTER, J., delivered opinion unanimous Court. Patricia Smith, petitioners. Edwin S. Kneedler, U.S., amicus curiae special Craig Murphy, respondents, Travelers Ins. Co., Harold N. Iselin, State Health, Justice SOUTER 1 vary number Medicaid recipients each enrolls. N.Y.Pub.Health Law 2807-c (McKinney 1993). calls us decide (ERISA), 88 Stat. 829, amended, 29 U.S.C. 1001 seq. (1988 ed. Supp. V), health-care governed ERISA, We provision, 514(a), 1144(a), accordingly suffer * A. 3 Prospective Hospital Reimbursement Methodology (NYPHRM) regulates rates in-patient care, except services provided Medicare beneficiaries.1 1993).2 charged cost individual treatment, average treating patient's medical problem, classified another 794 Diagnostic Related Groups (DRGs). allowable accordance DRG classifications adjusted specific reflect operating costs, capital investments, bad debts, charity like. 4 Patients coverage, patients, participants billed hospital's rate. 2807-c(1)(a); see Brief Petitioners Pataki 4.3 Others, however, not. served providing expense-incurred basis, self-insured funds directly reimbursing hospitals, workers' compensation, volunteer firefighters' benefit, ambulance no-fault motor vehicle funds, plus 13% retained hospital. 2807-c(1)(b). For year ending March 31, 1993, moreover, required bill commercially further 11% turned over State, these 24% 2807-c(11)(i). 5 imposes HMOs, varies depending eligible has enrolled, may run high 9% aggregate monthly members' care. 2807-c(2-a)(a)-(2-a)(e). assessment payment State's fund. B 6 welfare pension extends "medical, surgical, benefits" beneficiaries "through purchase otherwise." 3(1), 1002(1). go about protecting requiring employers given set minimum benefits, instead controls 2, 1001(b), imposing reporting disclosure mandates, §§ 101-111, 1021-1031, participation vesting requirements, 201-211, 1051-1061, funding standards, 301-308, 1081-1086, fiduciary responsibilities administrators, 401-414, 1101-1114. envisions oversight, criminal sanctions, establishes civil scheme. 501-515, 1131-1145. 514, 1144. 7 Section provides "shall supersede . relate plan" statute, although stops "any insurance." 514(b)(2)(A), 1144(b)(2)(A). (This exception itself limited, "be deemed company engaged business insurance. ." 514(b)(2)(B), 1144(b)(2)(B).) Finally, saves generally applicable State." 514(b)(4), 1144(b)(4). C 8 On claimed authority preemption acting fiduciaries administer, joined bring officials seeking invalidate 13%, 11%, statutes. Conference Cross Empire Blues), Association Health Maintenance Organization judgment 813 F.Supp. 996 (SDNY found "do [a]ffect level offered" could "little doubt [s]urcharges will significant lead, least indirectly, costs." Id., 1003 (footnote omitted). "entire justification premised exact result—that obtaining through source sufficient extent customers switch ensure viability Blues." Ibid. concluded enough saved 514(b) 1003-1008. enjoined "those plans." 1012.4 9 Second Circuit our 490 (1983), 513 (1992), 708, 718 (1994). light Ingersoll-Rand McClendon, 498 133, 141, 111 478, 484, 112 474 (1990), abandoned own prior Rebaldo Cuomo, 749 F.2d 137 (1984), cert. denied, 472 1008 (1985), had upon definition term "State" 514(c)(2), 1144(c)(2), conclude "a 'purport[ ] regulate, terms conditions plans' fall provision" ERISA. F.3d, 719 (internal quotation marks Rejecting narrower approach pre-emption, relied statement " 'broad common-s ense meaning,' 'relate to' thereby pre-empted, specifically designed affect indirect." 139, S.Ct., 483; 718. 10 agreed trial "purpose[ful] interfer[ence] constitute [a] 'connection with' plans" 719. court's conclusion, sum, "the three because burden HMOs" "have impermissible impact structure administration." 721. exception, them 723. recognized apparent conflict between Third Wire, Metal Machine Welfare Fund Morristown Memorial Hosp., 995 1179, 1191, 510 114 382, 383, 126 332 (1993), Jersey's similar setting "does way triggers clause." See F.3d., 721, n. 3. certiorari resolve conflict, 115 305, 130 217 (1994), now reverse remand. II 11 Our past cases Supremacy Clause, Const., Art. VI, entail either express implication, Pacific Gas Elec. Energy Resources Conservation Development Comm'n, 461 190, 203-204, 1721-22, 75 752 (1983); Rice Santa Fe Elevator Corp., 331 218, 230, 67 1146, 1152, 91 L.Ed. 1447 (1947). yet, despite variety opportunities preeminence, we never assumed lightly derogated regulation, addressed claims starting presumption intend supplant Maryland Louisiana, 451 725, 746, 101 2114, 2128, 68 576 (1981). Indeed, like one, said action fields traditional Hillsborough County Automated Medical Laboratories, 707, 719, 2371, 2378, 714 worked "assumption historic police powers Federal unless clear manifest Congress." Rice, 1152. See, e.g., Cipollone Liggett Group, 505 ---- - 2608, 2617-18, 120 407 (1992) id., 2626 (Blackmun, concurring part, dissenting part); 740, 2389, 728 (1985); Jones Rath Packing 430 519, 97 1305, 51 604 (1977); Napier Atlantic Coast Line R. 272 605, 611, 47 207, 209, 71 432 (1926). 12 turn Congress's intent, Cipollone, 2617-18; 95, 2898, begin exercise statutory construction question, move on, need be, occurs. Ingersoll-Rand, 138, 482. governing expansive. "all excused wondering, first blush, words limitation ("insofar relate") much limiting. If taken extend furthest stretch indeterminacy, then practical purposes course, "[r]eally, universally, relations stop nowhere," H. James, Roderick Hudson xli (New ed., World's Classics 1980). But that, mere sham, out whenever speaks matter generality. That said, recognize attempt construe phrase give help drawing line 13 explained "[a] 'relates normal sense phrase, plan." 96-97, 2900. latter alternative, least, can ruled out. imposed regardless membership, respectively, ultimately secured private purchase, otherwise, consequence cannot manner. Cf. Wash. Bd. 583 (striking down "specifically refers regulated basis alone pre-empted"). still leaves question uncritical literalism trying to." reasons infinite measure neither connections. beyond frustrating difficulty defining key term, As before, indicates establish "as exclusively concern." Alessi Raybestos-Manhattan, 504, 523, 1895, 1906, 402 passing 15 "to sponsors subject body law; goal minimize financial complying conflicting directives among Government ., [and prevent] potential tailoring employer conduct peculiarities jurisdiction." 142, 484. 16 objective described House Representatives sponsor Act, Representative Dent, being "eliminat[e] threat inconsistent local regulation." Cong.Rec. 29197 (1974). Senator Williams point, "with narrow exceptions specified bill, preempt field regulations, eliminating 29933. clause, then, 17 Accordingly example, trouble finding "Human Rights Law, prohibit[ed] structuring manner discriminate[d] pregnancy, [New York's] Disability Benefits require[d] pay employees 'relate[d] 97, These mandates affecting been honored varying applied, every demanded beneficiary. Similarly, Pennsylvania's prohibited "plans reimbursement [from beneficiary] event recovery third party" related 514(a). FMC Corp. Holliday, 52, 60, 403, 408, 356 (1990). "prohibit[ed] structured "require[d] providers calculate levels Pennsylvania based expected liability differ enacted antisubrogation legislation," "frustrat[ing] administrators' continuing obligation nationwide." who recovered negligence tort-feasors would, virtue law, entitled excess what provide, States. Along lines, Jersey prohibit compensation payments off employees' retirement pensions, doing so prevent using method calculating permitted Alessi, 524, 1906. cases, pre-empted mandated administration. Elsewhere, mechanisms supra. 18 Both distinguish examples just given. justified ground promptly efficiently importantly, reject unacceptable risks. Blues' practice, called open enrollment, consistently cited differentials, resulted voluntary negotiation payers NYPHRM system, created now. Charge Differential Analysis Committee, Review Planning Council, Report (1989), reprinted Joint Appendix No. 93-7132 (CA2), pp. 702, 705, 706 (J.A.CA2); J. Corcoran, Superintendent Insurance, Update 1984 Position Paper Department Inpatient Provided Non-Profit Insurers 6-7 (1988) (J.A. CA2 699-700); Trussell, Prepayment Care 170 (1958) CA2, 664) (Trussell); Thorpe, Does All-Payer Setting Work? Case Methodology, Politics, Policy, 391, (1987).5 presumably passed part follow purpose. Although evidence drive consumer Blues, attractive (or unattractive) alternatives 19 An influence, function itself; offer packages Blues. Nor package wishes one. shopping decisions, fact shop get, 20 There is, indeed, nothing remarkable bills, attractiveness insurers. variations accepted variation, traditionally "attempted compensate shortfalls adjusting price schedules 394. "varied dramatically across regions, ranging 36 percent," reflecting geographically disparate burdens uninsured. 400; 398-399; also, Trussell 664); Bobinski, Unhealthy Federalism: Barriers Increasing Access Uninsured, 24 U.C.Davis L.Rev. 255, 267, 44 21 character renders likely. Quality area others so, different benefits. Even employment invariably services. 22 sure, likely premium change indirectly afford get money. fair bigger respondent's reading eliminate costs. 23 displacing policies memberships cover services, limiting language violate principles squared pronouncement "[p]reemption occur tenuous, remote, peripheral applicability." 1, citations While extension "state relating sweep dealing matters ERISA[,] reporting, disclosure, responsibility, like," 98, 19, 2900, context passage chose displace historically concern, B. Furrow, T. Greaney, Johnson, Jost, Schwartz, 1-6, 1-23 (1995). cost-uniformity various far cry "conflicting directives" insulate Such right 25 836 (1988), took argument trustees 831, 2186, "Congress did forbid use state-law executing judgments when receiving benefits." 831-832, 2186. authorizing should merely here, suffice either. 26 challengers counter invoking earlier considered mental-health-care insuring surgical expenses. Because included bought "directly affected" 732, 2385. went savings 1144(b)(2)(A), respondents proffer steps support expressly statute. take too far, 27 Massachusetts applied '[a]ny blanket policy accident sickness insurance' 'any fund provide[d] expense benefits.' 730, 11, 2384, 11. fact, try defend unrelated 739, 2388. result, precision sufficiently connected address distinction bluntly, saying hand "bea[r] substantially requir[ing] mental-health policy," "laws regulate insurer, sell insurance, plans," 741, 2390. recognizes regulations If, sales stringently not-for-profit, rise; nonetheless say, following Life, instance." say tax exemption enjoyed non-profit days long before Marmor, Shield, 1934-1990: Complicated Politics Nonprofit Regulation, 761, 769 (1991) (tracing Cross's treatment prepayment organization back 1934); 1934 N.Y. Laws, ch. 595; yet necessarily prices 28 event, carry weight place it. Life. point exorbitant leaving consumers Hobson's treated mandate, showing prohibitive contract currently stand, without coverage. D remains speak already raised, draw system (even surcharge), market, startling States, passed, see, Cal.Ins.Code Ann. 11505 (West 1972) (nonprofit hospitals); Colo.Rev.Stat. 10-16-130, 10-17-108(2)-108(3), 10-17-119(1)(b) (1973); Conn.Gen.Stat. 33-166, 33-172 (medical service corporations), 33-179k (health centers) (1975); Md.Ann.Code, 43, 568H, 568U, 568W (Michie Supp.1976); Mass.Gen.Laws 176A, 5, 1958), amended 1968 Mass.Acts, 432, 1969 874, (hospital Ann., 176B, (1958 West Supp.1987) corporations); 1973 N.J.Laws, 337, 8, N.J.Stat.Ann. 26:2J-8(b) Supp.1986); 2807 1971); Wash.Laws, 15, Rev.Code Wash.Ann. 70.39.140 1975). anywhere else efforts. 30 revealing National (NHPRDA), Pub.L. 93-641, 2225, 1-3, repealed 99-660, title VII, 701(a), 3799, adopted months later. NHPRDA sought encourage responses growing widely diverging availability 2226-2227; Gerimedical Gerontology Center Kansas City, 452 378, 383-388, 2415, 2419-2421, 69 89 partial regional "health systems agencies" responsible gathering data planning developing resources designated areas. 2229-2242. designating development agencies qualifying coordinate policy. 2242-44. agencies, too, funding, 2249, grants "[f]or demonstrating effectiveness Agencies Exemption nowhere mentioned prerequisite receipt funding; legal "satisfactory functions section. 31 Secretary technical assistance promulgating institutions payors institutions." 2254. placed restrictions establish, (and envisioned regulation) covers tread. Secretary's supposed to: 32 "(A) [b]e all-inclusive categories .[,] 33 "(B) [p]rovide true 34 "(C) appropriate types .[, and] 35 "(D) differences classes purchasers (including payors, institution payors) documented operation purchasers." 2254-55. last-quoted subsection seems envision very put place, statute's incompatible To interpret respondent suggests, utterly nugatory, left induce enacting NHPRDA. Given Congress, makes good interpretation.6 III 37 today nor fidelity views expressed opinions matter. Pilot Dedeaux, 481 41, 47-48, 107 1549, 1552-1553, 95 39 (1987); acknowledge effects, indeed 514. shown, into category; policies, myriad areas possibly eliminate. 38 remanded proceedings consistent opinion. ordered. syllabus prepared Reporter Decisions convenience reader. Detroit Lumber 200 321, 282, 287, 50 499. ** Together 93-1414, Pataki, 93-1415, court. obtain authorization Human Services. 42 1395 seq.; infra, Part II-D. References stood times relevant litigation. circumstances, permits negotiate approval. 2807-c(2)(b)(i). both injunctive remedy Tax Injunction 1341, district courts enjoin, suspend restrain plain, speedy efficient taxes, "plain, remedy" exist court, 502(e), 1132(e)(1) divests jurisdiction claims. F.Supp., 1000-1001; 713-714 (CA2 1994). Neither party challenges occasion examine applies funds. analysis originally led enjoin defendants "from enforcing mention 1012. After staying pending appeal, 1012-1015, ordered named parties, Company (which plan), Conference, 92 Civ. 3999 Apr. 27, Carriers' Amicus Curiae 29a-31a. Appeals, turn, accordingly, consideration argue become superfluous enrollment Respondents 6-7, 5; 1992 N.Y.Laws, 501, (effective N.Y.Ins.Law 3231 (Supp.1995), review rationale find effort current makeup pool, continues longer policies. (1984) 679) ("If possibility abrupt abandonment discount, Plans core uninsurables obtained years ongoing resulting enrollment"). confirming blocking control, rather rely experimentation York's. K. Davis, G. Anderson, D. Rowland, Steinberg, Containment 23-25, 81, 99 tried 1960's 1970's, shown awareness encouragement controlled regulatory Social Amendments 1967, 90-248, 402(a), 81 930-931, 1395b-1, Education, (now Services) waive rules allow physician according approved schedules. 1972, 92-603, 222(a)(5), 86 1391, report prospective schemes favored future. Later all-payor rate-setting Reduction 1978, 1978 83, waiver evolved explicit commitment apply substantial portion inpatient statewide. 1395ww(c)(1), (c)(5)(A). 1983, Committee Ways Means recommended DRG-based systems. "State laboratory innovative methods controlling should, therefore, limited methodology." H.R.Rep. 98-25, pt. 146-147 (1983) U.S.Code Cong. Admin.News 1983 143, 365, 366. covering proven effective reducing encouraged. programs useful models national system." 147-148. waivers implementing legislation conclusive proof congressional behind experiments supports

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