Comments on: :: Seventh Circuit Permits Provider To Assert State Law Claims Over ERISA Preemption Challenge http://www.healthplanlaw.com/?p=678 ERISA Group Health Plan Administration Thu, 12 Aug 2010 17:18:07 -0600 http://wordpress.org/?v=2.8.6 hourly 1 By: Roy F Harmon III http://www.healthplanlaw.com/?p=678&cpage=1#comment-84934 Roy F Harmon III Wed, 06 Aug 2008 12:14:24 +0000 http://healthplanlaw.com/?p=678#comment-84934 John, Davila has really changed things up for providers as you have observed in our prior discussions. When a federal court reaches the point that a state common law claim will suffice as an "independent legal duty", what is really left of complete (viz, jurisdictional) preemption? The step toward allowing state law claims based upon managed care contracts where the provider had not accepted an assignment gives one pause - but the further step of allowing a provider that as taken an assignment (and filed claims, mind you, after seeking coverage verification!) to re-tool its complaint as a state common law claim - well, that seems to give providers an election that I don't think ERISA has traditionally allowed. Furthermore, the federal courts do not give individual claimants the same option - witness the McDonald case, also from the 7th, noted in my post. What is the material difference between the two plaintiff's cases? At one point, the provider actually had assignee status and during the COBRA election period, had the right to pursue a claim - the employee never got that far in that he never received the promised coverage. However you come out on the normative rule, the application should be consistent. It's not. John, Davila has really changed things up for providers as you have observed in our prior discussions. When a federal court reaches the point that a state common law claim will suffice as an “independent legal duty”, what is really left of complete (viz, jurisdictional) preemption? The step toward allowing state law claims based upon managed care contracts where the provider had not accepted an assignment gives one pause – but the further step of allowing a provider that as taken an assignment (and filed claims, mind you, after seeking coverage verification!) to re-tool its complaint as a state common law claim – well, that seems to give providers an election that I don’t think ERISA has traditionally allowed. Furthermore, the federal courts do not give individual claimants the same option – witness the McDonald case, also from the 7th, noted in my post. What is the material difference between the two plaintiff’s cases? At one point, the provider actually had assignee status and during the COBRA election period, had the right to pursue a claim – the employee never got that far in that he never received the promised coverage. However you come out on the normative rule, the application should be consistent. It’s not.

]]> By: John Eggertsen http://www.healthplanlaw.com/?p=678&cpage=1#comment-84744 John Eggertsen Tue, 05 Aug 2008 21:04:53 +0000 http://healthplanlaw.com/?p=678#comment-84744 Roy We've already discussed the question of 502 vs. 514 preemption (Devilla being the former) and the difficulty of identifying an "independent legal duty" (e.g., wouldn't a state statute creating coverage by estoppel under these facts be preempted, at least under 514 as "relating to" an ERISA plan?) so my current issue is--if the 7th is right, won't all PPOs, TPAs and insurers either stop doing pre-certs or have stronger caveats? In either case, will providers start turning patients away, particularly hospitals who usually have a duty to provide services, at least for 24 hours? Going back to the "relate to" question, isn't the "independent legal duty" derived from detrimental reliance which means the doctor or hospital had to reasonably believe there was coverage under an ERISA plan, otherwise they would have turned the patient away. How can that be "independent"? Finally, I can't resist reasserting that the providers PPO contract probably has a provision regarding pre-certs and that that document is relly an ERISA Plan document, another "relation to" fact. Your thoughts welcomed. Roy

We’ve already discussed the question of 502 vs. 514 preemption (Devilla being the former) and the difficulty of identifying an “independent legal duty” (e.g., wouldn’t a state statute creating coverage by estoppel under these facts be preempted, at least under 514 as “relating to” an ERISA plan?) so my current issue is–if the 7th is right, won’t all PPOs, TPAs and insurers either stop doing pre-certs or have stronger caveats? In either case, will providers start turning patients away, particularly hospitals who usually have a duty to provide services, at least for 24 hours?

Going back to the “relate to” question, isn’t the “independent legal duty” derived from detrimental reliance which means the doctor or hospital had to reasonably believe there was coverage under an ERISA plan, otherwise they would have turned the patient away. How can that be “independent”?

Finally, I can’t resist reasserting that the providers PPO contract probably has a provision regarding pre-certs and that that document is relly an ERISA Plan document, another “relation to” fact.

Your thoughts welcomed.

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