Court Opinion

ID: 8410182
Source: CourtListenerOpinion
Date Created: 2022-11-02 17:56:08.663774+00
Date Added: 2024-06-11T16:46:54.253936
License: Public Domain

OWEN, Circuit Judge,
concurring:
I concur in the judgment. We need not resolve whether section 40:2010 of the Louisiana Revised Statutes “relates to” an employee benefit plan within the meaning of 29 U.S.C. § 1144(a)1 and the Supreme Court’s decisions interpreting and applying that provision. Section 40:2010 is saved from preemption under 29 U.S.C. § 1144(b)(2)(A) as a law that “regulates insurance.”2 Section 40:2010’s application to the ERISA benefit plans at issue is accordingly not preempted.
*542I
Louisiana Health Service & Indemnity Co., doing business as Blue Cross and Blue Shield of Louisiana, insures and administers employee benefit plans that are subject to ERISA. In providing and administering health care benefits, Blue Cross has contracted with hospitals, physicians and others, whom it calls Participating Providers, and agreed to provide direct payment for services rendered to plan beneficiaries. If a,plan beneficiary obtains the services of a non-Participating Provider, Blue Cross will reimburse the plan beneficiary but will not make direct payment to the non-Participating Provider. The terms of the ERISA plans that Blue Cross insures or administers are congruent with Blue Cross’s method of doing business and provide that assignments by a plan beneficiary to providers other than Participating Providers will not be honored.
I agree with the panel majority that the ERISA plans Blue Cross insures or administers contravene section 40:2010 of the Louisiana Revised Statutes. Section 40:2010 requires insurers to pay benefits directly to a hospital when the insurer has notice that a beneficiary has assigned benefits to that hospital. Section 40:2010 provides:
Not later than ten business days after the date of discharge, each hospital in the state which is licensed by the Department of Health and Hospitals shall have available an itemized statement of billed services for individuals who have received the services from the hospital. The availability of the statement shall be made known to each individual who receives service from the hospital before the individual is discharged from the hospital, and a duplicate copy of the billed services statement shall be presented to each patient within the specified ten day period. No insurance company, employee benefit trust, self-insurance plan, or other entity which is obligated to reimburse the individual or to pay for him or on his behalf the charges for the services rendered by the hospital shall pay those benefits to the individual when the itemized statement submitted to such entity clearly indicates that the individual’s rights to those benefits have been assigned to the hospital. When any insurance company, employee benefit trust, self-insurance plan, or other entity has notice of such assignment prior to such payment, any payment to the insured shall not release said entity from liability to the hospital to which the benefits have been assigned, nor shall such payment be a defense to any action by the hospital against that entity to collect the assigned benefits. However, an interim statement shall be provided when requested by the patient or his authorized agent.3
Assuming, arguendo, that Blue Cross is correct in contending that the directives in this statute regarding assignments of benefits “relate to” an ERISA employee benefit plan, the Louisiana statute is saved from preemption by the saving clause in 29 U.S.C. § 1144(b)(2)(A). That clause says: “Except as provided in subparagraph (B), nothing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities.”4 The *543Supreme Court has held that through this saving clause, state laws may indirectly regulate employee benefit plans that are insured.5 The Court has explained, “an insurance company that insures a plan remains an insurer for purposes of state laws ‘purporting to regulate insurance,’ ” and an “ERISA plan is consequently bound by state insurance regulations insofar as they apply to the plan’s insurer.”6 Accordingly, even though the insured employee benefit plans Blue Cross insures or administers7 may provide that assignments will not be honored, those provisions must give way to state law to the extent ERISA’s insurance saving clause applies.8 It is unnecessary to resolve whether the “deemer” clause, contained in 29 U.S.C. § 1144(b)(2)(B), precludes the application of the ERISA saving clause to self-funded ERISA benefit plans that Blue Cross might administer but not insure because the State of Louisiana concedes that it has not attempted to enforce section 40:2010 with regard to self-funded ERISA plans and Blue Cross does not contend that it administers any self-funded plans to which the State of Louisiana has sought to apply section 40:2010.9
Blue Cross does contend, though, that La.Rev.Stat. Ann. § 40:2010 does not “reg-úlatela ] insurance” within the meaning of ERISA’s insurance saving clause. The Supreme Court’s decision in Kentucky Association of Health Plans, Inc. v. Miller10 provides considerable guidance in resolving this question. The Court announced it was “mak[ing] a clean break from the [three] McCarran-Ferguson factors” it had referenced in prior opinions and held “that for a state law to be deemed a ‘law ... which regulates insurance’ under § 1144(b)(2)(A), it must satisfy two requirements.”11 Those are 1) “the state law must be specifically directed toward entities engaged in insurance” and 2) “the state law must substantially affect the risk *544pooling arrangement between the insurer and the insured.”12
With regard to the first requirement, Kentucky Association explained that “laws of general application that have some bearing on insurers do not qualify” as a state law “ ‘specifically directed toward’ the insurance industry,”13 and “not all state laws ‘specifically directed toward’ the insurance industry will be covered by § 1144(b)(2)(A).”14 “[IJnsurers must be regulated ‘with respect to their insurance practices.’ ”15
At issue in Kentucky Association was a state statute that prohibited health insurers from discriminating against any provider located within the geographic coverage area of a health benefit plan and willing to meet the terms and conditions for participation established by that insurer and a corollary statute that directed that any chiropractor who agreed to the terms, conditions and rates of a health care benefit plan must be permitted to serve as a participating primary chiropractic provider.16 The Supreme Court held that the ERISA saving clause saved these “any-willing-provider” statutes from preemption. The Court reasoned that the statutes “ ‘regulate[d]’ insurance by imposing conditions on the right to engage in the business of insurance.”17
With regard to the second requirement for application of the insurance saving clause, the Court concluded that the statutes at issue in Kentucky Association “substantially affect[ed] the risk pooling arrangement between [the] insurer and [the] insured” because “[b]y expanding the number of providers from whom an insured may receive health services, [any-willing-provider] laws alter the scope of permissible bargains between insurers and insureds.”18 The Court likened the any-willing-provider laws’ impact to that of “mandated-benefit laws [it] upheld in Metropolitan Life, the notice-prejudice rule [it] sustained in UNUM, and the independent-review provisions [it] approved in Rush Prudential.”19
The Louisiana statute before us is directed toward entities that engage in insurance-“[any] insurance company, employee benefit trust, self-insurance plan, or other entity which is obligated to reimburse the individual or to pay for him or on his behalf the charges for the services rendered by the hospital.”20 The statute’s inclusion of “self-insured plans” does not preclude it from qualifying as a law that “regulates insurance.”21 Even benefit plans that are self-funded “engage in the same sort of risk pooling arrangements as separate entities that provide insurance to an employee benefit plan,” and in the ab*545sence of § 1144(b)(2)(B) (the “deemer clause”), self-funded plans could be regulated by states under the insurance saving clause.22 The Supreme Court has said, “We do not think [a state law’s] application to self-insured non-ERISA plans forfeits its status as a ‘law ... which regulates insurance’ under 29 U.S.C. § 1144(b)(2)(A).”23 Likewise, nothing in the text of La.Rev.Stat. Ann. § 40:2010 regarding assignments indicates that the term “other entity which is obligated to reimburse the individual or to pay for him or on his behalf the charges for the services rendered” means anything other than an entity that is engaging is some sort of risk pool arrangement to provide benefits.
The fact that the Louisiana law requiring insurers to honor assignments of benefits to hospitals appears in a statute that also requires hospitals to provide an itemized bill to patients within ten days is of no moment. The provisions that are directed at insurance companies are not directed at hospitals, and mere inclusion of those provisions with other separable regulations does not preclude the provisions aimed at insurers from qualifying as laws “regu-lat[ing] insurance” under ERISA’s insurance saving clause. Nor is it of any significance that section 40:2010 is not within Louisiana’s insurance code. The State of Louisiana has, through section 40:2010, directly ' regulated insurance by imposing conditions on the right to engage in the business of insurance in that State.24
The Louisiana statute before us satisfies the second requirement identified' in Kentucky Association, as well. Section 40:2010 substantially affects the risk pooling arrangement between the insurer and the insured in much the same way as the state law at issue in Kentucky Association. With regard to the any-willing-provider statutes at issue in Kentucky Association, the Supreme Court held that those statutes altered the scope of permissible bargains between insurers and insured and observed that Kentucky insureds could “[n]o longer ... seek insurance from a closed network of health-care providers in exchange for a lower premium.”25 Section 40:2010 similarly alters the scope of permissible bargains between insurers and insureds by prohibiting anti-assignment agreements. There is evidence in the record before us that some Louisiana hospitals who were not Participating Providers refused to accept Blue Cross beneficiaries as patients because Blue Cross would not honor patients’ assignments of benefits, and Blue Cross would not pay non-Participating Providers directly. Section 40:2010 expands insureds’ access to hospitals by removing this obstacle to treatment. Blue Cross must treat all hospitals equally with regard to assignments of benefits. Section 40:2010 also has the effect of requiring insurers like Blue Cross to make allowance for instances in which they erroneously pay a beneficiary directly because payment to the beneficiary is not a defense to the *546insurer’s obligation to pay the provider.26 Although Blue Cross might seek to recover an erroneous payment from a beneficiary, some beneficiaries will not have the means, or will refuse, to repay. The unrecoverable costs associated with pursuing beneficiaries paid in error must additionally be taken into account. These considerations have the effect of increasing premiums and spreading the risk of erroneous payments among policyholders.
Section 40:2010 of the Louisiana Revised Statutes is also similar to the statute at issue in FMC Corp. v. Holliday, which prohibited insurers from exercising subro-gation rights against an insured’s tort recovery.27 The Supreme Court concluded that the anti-subrogation statute would be saved from preemption to the extent that it applied to insured ERISA employee benefit plans, but the statute was preempted to the extent it applied to self-insured plans.28
I would hold that ERISA’s insurance saving clause applies to La.Rev.Stat. Ann. § 40:2010. The only remaining question is whether section 40:2010 conflicts with ERISA’s civil enforcement scheme.
II
Blue Cross contends that section 40:2010 creates a remedy in addition to those set forth in ERISA. That remedy, Blue Cross contends, is the right to obtain a “double payment” in instances in which Blue Cross has notice of an assignment and pays the beneficiary instead of the hospital to whom the benefits have been assigned. The Supreme Court held in Aetna Health Inc. v. Davila that “even a state law that can arguably be characterized as ‘regulating insurance’ will be preempted if it provides a separate vehicle to assert a claim for benefits outside of, or in addition to, ERISA’s remedial scheme.”29
ERISA’s remedial scheme is set forth in 29 U.S.C. § 1132. That section authorizes a participant or beneficiary “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.”30 This section “clearly contemplates” that a money judgment may be obtained against benefit plans.31
Nothing in ERISA prevents a participant or beneficiary from assigning his or her rights to welfare benefits, which include health care benefits. Notably, ERISA affirmatively prohibits assignment of pension benefits.32 This distinction led the Supreme Court to conclude that “Congress’ decision to remain silent concerning the attachment or garnishment of ERISA welfare plan benefits ‘acknowledged and accepted the practice, rather than prohibiting it.’ ”33 This Circuit has held that as*547signees of welfare plan benefits have standing to enforce plan benefits under ERISA.34
An assignment of a plan beneficiary’s right to receive welfare benefits does nothing more than transfer the right to be paid to the assignee. It does not create new rights outside of ERISA. Blue Cross argues that barring payment to a beneficiary as a defense and requiring payment to an assignee even if payment has been made to the beneficiary creates a new right outside of ERISA’s remedial scheme. This contention has no merit. Suppose a plan administrator paid benefits to a former spouse rather than the current spouse of a participant. That mistake would not relieve the plan administrator of its obligation to pay the correct person. The Louisiana statute does not enlarge the rights, causes of action, or remedies of beneficiaries or their assignees. Section 40:2010 simply directs to whom payment must be made once there has been a valid assignment and the plan has received notice of that assignment.
* ‡ * * *
For the foregoing reasons, I concur in the judgment.

. That section states: '
Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title. This section shall take effect on January 1, 1975.
29 U.S.C. § 1144(a).

. Id. § 1144(b)(2)(A) (“Except as provided in subparagraph (B), nothing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities.”).

. La.Rev.Stat. Ann. § 40:2010 (2001).

. 29 U.S.C. § 1144(b)(2)(A). Subparagraph B, referenced in this subsection, is the so-called "deemer clause” and provides:
Neither an employee benefit plan described in section 1003(a) of this title, which is not exempt under section 1003(b) of this title (other than a plan established primarily for the purpose of providing death benefits), nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, bank, trust company, or investment company or to be engaged in *543the business of insurance or banking for purposes of any law of any State purporting to regulate insurance companies, insurance contracts, banks, trust companies, or investment companies.
Id. § 1144(b)(2)(B).

. See FMC Corp. v. Holliday, 498 U.S. 52, 61, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990) (holding "employee benefit plans that are insured are subject to indirect state insurance regulation”); Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 747, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985) (recognizing "a distinction between insured and uninsured plans, leaving the former open to indirect regulation while the latter are not”).

. FMC Corp., 498 U.S. at 61, 111 S.Ct. 403 (quoting 29 U.S.C. § 1144(b)(2)(B)).

. See Ky. Ass’n of Health Plans, Inc. v. Miller, 538 U.S. 329, 336 n. 1, 123 S.Ct. 1471, 155 L.Ed.2d 468 (2003) (stating that administration by noninsuring HMO's of even a self-insured plan "suffices to bring them within the activity of insurance for purposes of § 1144(b)(2)(A)”).

. See UNUM Life Ins. Co. of Am. v. Ward, 526 U.S. 358, 375-76, 119 S.Ct. 1380, 143 L.Ed.2d 462 (1999) (rejecting the argument that an ERISA plan's terms always control, observing "insurers could displace any state regulation simply by inserting a contrary term in plan documents” which "would virtually "rea[d] the saving clause out of ERISA!" (quoting Metro. Life, 471 U.S. at 741, 105 S.Ct. 2380)).

. See generally Ky. Ass’n, 538 U.S. at 336 n. 1, 123 S.Ct. 1471 (discussing the "deemer clause” and the reach of the saving clause when an insurance company or HMO acts only as an administrator of a self-insured ERISA plan); Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 372 n. 6, 122 S.Ct. 2151, 153 L.Ed.2d 375 (2002) (discussing the possibility that an HMO may provide only administrative services for a self-funded plan and stating that a state law "would not be saved’ as an insurance law to the extent it applied to self-funded plans”).

. 538 U.S. 329, 123 S.Ct. 1471, 155 L.Ed.2d 468 (2003).

. Id. at 341-42, 123 S.Ct. 1471.

. Id. at 342, 123 S.Ct. 1471.

. Id. at 334, 123 S.Ct. 1471 (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 50, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987)).

. Id.

. Id. (quoting Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 366, 122 S.Ct. 2151, 153 L.Ed.2d 375 (2002)).

. Id. at 331-32, 123 S.Ct. 1471.

. Id. at 338, 123 S.Ct. 1471.

. Id. at 338-39, 123 S.Ct. 1471.

. Id. at 339, 123 S.Ct. 1471 (referring to Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985), UNUM Life Ins. Co. of Am. v. Ward, 526 U.S. 358, 119 S.Ct. 1380, 143 L.Ed.2d 462 (1999), and Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 122 S.Ct. 2151, 153 L.Ed.2d 375 (2002)).

. La.Rev.Stat. Ann. § 40:2010.

. See Ky. Ass’n, 538 U.S. at 336 n. 1, 123 S.Ct. 1471 (discussing the interplay between the insurance saving clause in 29 U.S.C. § 1144(b)(2)(A) and the deemer clause in 29 U.S.C. § 1144(b)(2)(B)).

. Id.

. Id.; see also Rush Prudential, 536 U.S. at 372, 122 S.Ct. 2151 (observing that because the "deemer clause” provides an exception to the saving clause, a state law would not be saved under 29 U.S.C. § 1144(2)(b)(A) to the extent is applied to self-funded plans, but nevertheless, "there is no reason to think Congress would have meant such minimal application to noninsurers to remove a state law entirely from the category of insurance regulation”).

. See Ky. Ass'n, 538 U.S. at 337-38, 123 S.Ct. 1471 (concluding that the any-willing-provider statute at issue regulated insurance and likening the statute to a state law requiring all licensed attorneys to participate in ten hours of continuing legal education, which, the Court said, would be a statute regulating the practice of law).

. Id. at 339, 123 S.Ct. 1471.

. See La.Rev.Stat. Ann. § 40:2010 (2001).

. 498 U.S. 52, 55 n. 1, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990).

. Id. at 61, 111 S.Ct. 403 (holding that the state statute "returns the matter of subrogation to. state law ... [ujnless the statute is excluded from the reach of the saving clause by virtue of the deemer clause”).

. 542 U.S. 200, 217-18, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004).

. 29 U.S.C. § 1132(a)(1)(B).

. Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 832-33 & n. 7, 108 S.Ct. 2182, 100 L.Ed.2d 836 (1988).

. 29 U.S.C. § 1056(d)(1) ("Each pension plan shall provide that benefits provided under the plan may not be assigned or alienated.”); see also Mackey, 486 U.S. at 836, 108 S.Ct. 2182 (discussing anti-alienation provisions in 29 U.S.C. § 1056(d)(1) and stating, "Congress did not enact any similar provision applicable to ERISA welfare benefit plans”).

. Mackey, 486 U.S. at 837-38, 108 S.Ct. 2182 (quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 516, 101 S.Ct. 1895, 68 L.Ed.2d 402 (1981)).

. Tango Transp. v. Healthcare Fin. Servs. LLC, 322 F.3d 888, 892 (5th Cir.2003); see also Hermann Hosp. v. MEBA Med. & Benefits Plan, 845 F.2d 1286, 1289-90 (5th Cir.1988).