Whether payment claims were preempted by ERISA was the issue in Lone Star OB/GYN Associates v. Aetna Health Inc., No. 08-50646, 2009 U.S. App. LEXIS 18572 (5th Cir. Aug. 18, 2009).
Aetna was the administrator of "employee welfare benefit plans" regulated by ERISA. Lone Star entered a provider agreement with Aetna and became a participating provider for individuals enrolled in Aetna-administered insurance plans. Lone Star alleged Aetna failed to pay the proper amount for services provided to Lone Star patients.
Lone Star sued Aetna in state court, alleging Aetna had not paid Lone Star's claims at the rates set out in the provider agreement. Aetna removed the case to federal court, arguing that Lone Star's state law claims were preempted by ERISA. ERISA allows a participant to bring a civil action "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." 29 U.S.C. 1132 (a)(1)(B). If a party's state law claims fall under this definition, they are preempted by ERISA.
Lone Star sought to amend its complaint to remove payment claims for which Aetna submitted no payment because coverage was denied. Instead, Lone Star only pursued payment claims that Aetna had partially paid. The district court granted Lone Star's motion for leave to amend and remanded the amended claims.
Aetna appealed the remand. The Fifth Circuit noted that after amending its complaint, Lone Star's claims were separate from coverage and instead arose out of the independent legal duty contained in the contract. The appellate court adopted the reasoning of the Ninth Circuit and other courts which relied on a distinction between "rate of payment" and "right of payment" in deciding whether ERISA preempted a claim brought in state court. In Blue Cross v. Anethesia Care Associates. Med Group, Inc., 187 F.3d 1045 (9th Cir. 1999), the Ninth Circuit found the cause of action arose out of the provider agreement, not ERISA. Where a medical service was determined to be covered and the only issue was the proper contractual rate of payment, coverage and benefit determinations were not implicated and ERISA was not applicable.
Nevertheless, the case was remanded because the Fifth Circuit could not determine whether the disputed payment claims were partially paid because Aetna denied the services for lack of coverage under the plan or because Aetna misinterpreted the provider agreement. It was possible an individual claim could include multiple procedures, only some of which were covered. Accordingly, partial payment could result from a denial of benefits under the plan, preempting the claim.
