Opinion
Case No. CIV-17-600-J
2021-08-24
EMERGENCY SERVICES OF OKLAHOMA, PC, et al., Plaintiffs, v. AETNA HEALTH, INC., et al., Defendants.
Alan D. Lash, Evan A. Creutz, Justin C. Fineberg, Michael L. Ehren, Lash & Goldberg LLP, Miami, FL, Ashley L. Powell, Laura McConnell-Corbyn, Hartzog Conger Cason & Neville, Oklahoma City, OK, Jonathan E. Siegelaub, Lash & Goldberg LLP, Weston, FL, for Plaintiffs Emergency Services of Oklahoma PC, Oklahoma Emergency Services PC, Emergency Services of Mid-America PC, South Central Emergency Services PC. Amy Sherry Fischer, Andrew M. Bowman, Larry D. Ottaway, Foliart Huff Ottaway & Bottom, Oklahoma City, OK, Dimitri D. Zgourides, Jeffrey D. Migit, Jessica E. Schaffner, John Bruce Shely, Andrews Kurth-Houston, Houston, TX, for Defendants Aetna Health Inc., Aetna Health Insurance Company, Aetna Life Insurance Company.
Alan D. Lash, Evan A. Creutz, Justin C. Fineberg, Michael L. Ehren, Lash & Goldberg LLP, Miami, FL, Ashley L. Powell, Laura McConnell-Corbyn, Hartzog Conger Cason & Neville, Oklahoma City, OK, Jonathan E. Siegelaub, Lash & Goldberg LLP, Weston, FL, for Plaintiffs Emergency Services of Oklahoma PC, Oklahoma Emergency Services PC, Emergency Services of Mid-America PC, South Central Emergency Services PC.
Amy Sherry Fischer, Andrew M. Bowman, Larry D. Ottaway, Foliart Huff Ottaway & Bottom, Oklahoma City, OK, Dimitri D. Zgourides, Jeffrey D. Migit, Jessica E. Schaffner, John Bruce Shely, Andrews Kurth-Houston, Houston, TX, for Defendants Aetna Health Inc., Aetna Health Insurance Company, Aetna Life Insurance Company.
ORDER
BERNARD M. JONES, UNITED STATES DISTRICT JUDGE
Before the Court is the Motion for Partial Summary Judgment (Motion) filed by all Defendants (collectively, Aetna). [Doc. No. 113]. Plaintiffs have responded in opposition (Response). [Doc. No. 121]. Aetna has replied [Doc. No. 133], Plaintiffs have filed a sur-reply [Doc. No. 137], and the Motion is fully briefed. Based upon the parties’ submissions, the Court makes its determination.
I. Background
Plaintiffs are medical providers who provided emergency medical services to patients covered under the health plans underwritten, operated, and/or administered by Aetna (Aetna Patients). Plaintiffs are non-participating (or out-of-network) providers for Aetna, and did not have a contract or agreement with Aetna that established rates of reimbursement for the medical services provided. At issue in this matter are claims Aetna paid, but which Plaintiffs assert were paid at impermissibly low rates. There are two types of claims. The first are Non-Participating HMO Claims, which, according to Plaintiffs, Aetna was obligated under Oklahoma statutory law to reimburse Plaintiffs, at a minimum, at the prevailing charges in the geographic area where the services were provided. The second are Other Non-Participating Claims, which, according to Plaintiffs, Aetna was obligated under Oklahoma common law to reimburse Plaintiffs at rates, at a minimum, equivalent to the reasonable value of Plaintiffs’ services.
Plaintiffs bring claims under Oklahoma's Clean Claim Reimbursement Laws: Okla. Stat. tit. 36, § 1219 ; Okla. Stat. tit. 36, § 6571 ; and Okla. Admin. Code 365:40-5-120 et seq.
Plaintiffs bring claims under the doctrines of unjust enrichment and implied contract.
Aetna moves for summary judgment on Counts II, III, and IV, asserting (1) that the majority of Plaintiffs’ Other Non-Participating Claims are preempted by the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1001 - 1461 (ERISA), and (2) the remainder of Plaintiffs’ Other Non-Participating Claims and all of Plaintiffs’ Non-Participating HMO Claims are barred by an express contract.
II. Standard of Review
Summary judgment is warranted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Material facts are those that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. To determine whether this standard is met, the court views the evidence in the light most favorable to the non-moving party. Estate of Booker v. Gomez , 745 F.3d 405, 411 (10th Cir. 2014). "[T]he plain language of Rule 56(c) mandates entry of summary judgment ... against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett , 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
III. Analysis
A. ERISA
Aetna first argues that most of Plaintiffs’ Other Non-Participating Claims are preempted by ERISA. Motion at 14-22. Because the scope of ERISA preemption is a question of law, a decision at the summary judgment stage is appropriate. See Kidneigh v. UNUM Life Ins. Co. of Am. , 345 F.3d 1182, 1184 (10th Cir. 2003). ERISA provides for two types of preemption: conflict preemption, which arises under § 514(a), and complete preemption, which arises under § 502(a). Aetna specifies that conflict preemption under § 514(a) "is at issue here." Motion at 14-15.
When addressing preemption claims, the Court begins with the presumption that Congress does not intend to supplant state law. See De Buono v. NYSA-ILA Med. & Clinical Servs. Fund , 520 U.S. 806, 813, 117 S.Ct. 1747, 138 L.Ed.2d 21 (1997). That said, under § 514(a), ERISA does preempt "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144(a). The Supreme Court has interpreted this clause narrowly, holding ERISA conflict preemption preempts state laws having a reference to ERISA plans or having impermissible connections with ERISA plans. To "reference" ERISA plans, the state law must "act[ ] immediately and exclusively upon ERISA plans ... or [ ] the existence of ERISA plans is essential to the law's operation ...." Cal. Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc. , 519 U.S. 316, 325, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997). Determining whether a state law has an impermissible "connection" with ERISA plans is less concrete, but the Supreme Court has held laws have such a connection where " ‘acute, albeit indirect, economic effects’ of the state law[s] ‘force an ERISA plan to adopt a certain scheme of substantive coverage or effectively restrict its choice of insurers.’ " Gobeille v. Liberty Mutual Ins. Co. , 577 U.S. 312, 136 S. Ct. 936, 943, 194 L.Ed.2d 20 (2016) (quoting New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co. , 514 U.S. 645, 668, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995) ). As such, the conflict preemption provision does not apply " ‘[i]f the state law has only a tenuous, remote, or peripheral connection with covered plans, as is the case with many laws of general applicability.’ " Felix v. Lucent Techs., Inc. , 387 F.3d 1146, 1154 (10th Cir. 2004) (quoting District of Columbia v. Greater Wash. Bd. of Trade , 506 U.S. 125, 130 n. 1, 113 S.Ct. 580, 121 L.Ed.2d 513, (1992) ).
Here, the Oklahoma common law doctrines under which Plaintiffs bring their claims operate akin to rate regulations and, accordingly, are not preempted. First, the common law claims of implied-in-fact contract and unjust enrichment do not "relate to" ERISA plans such that ERISA preempts Plaintiffs’ claims. Neither of these doctrines directly refer to ERISA plans nor do they differentiate between ERISA and non-ERISA plans. See California Div. of Lab. Standards Enf't v. Dillingham Const., N.A., Inc. , 519 U.S. 316, 325, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997) (declining to find a reference to ERISA plans where the regulated programs could be but "need not necessarily be" ERISA plans); Rutledge v. Pharm. Care Mgmt. Ass'n , ––– U.S. ––––, 141 S.Ct. 474, 481, 208 L.Ed.2d 327 (2020) (finding that a state law did not "refer to" ERISA when it affected ERISA plans "only insofar as [pharmacy benefit managers] may pass along higher pharmacy rates to plans with which they contract"). Indeed, these common law causes of action have force and operate independently of the existence of any ERISA plans.
Plaintiffs provided the Court with supplemental authority, Florida Emergency Physicians Kang & Associates, M.D., Inc. v. United Healthcare of Florida, Inc. , 20-60757-CIV, 526 F. Supp. 3d 1282, 1297–1300 (S.D. Fla. Mar. 16, 2021). [Doc. No. 127]. The Court finds the dispute analogous and the court's reasoning on ERISA conflict preemption persuasive, particularly in light of the court's reliance upon Rutledge v. Pharm. Care Mgmt. Ass'n , ––– U.S. ––––, 141 S.Ct. 474, 208 L.Ed.2d 327 (2020).
Second, the relevant state laws do not have an impermissible "connection with" ERISA plans but, rather, "amount[ ] to nothing more than cost regulation" and do not "require plan administrators to structure their benefit plans in any particular manner." See Rutledge v. Pharm. Care Mgmt. Ass'n , ––– U.S. ––––, 141 S.Ct. 474, 481-82, 208 L.Ed.2d 327 (2020) (explaining that ERISA is primarily concerned with preempting laws that require providers to structure benefit plans in certain ways and a law that merely affects cost is not preempted); New York State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co. , 514 U.S. 645, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995) (finding no preemption of a state law that had "an indirect economic influence" but did not "bind plan administrators to any particular choice").
Aetna argues that the right to payment arises from the ERISA plans. E.g. , Motion at 17. That may be true only in the sense that Plaintiffs are seeking payment for treatment of Aetna Patients thus, but for the fact that the Aetna Patients were covered by Aetna plans, Plaintiffs would not have submitted claims for payment to Aetna. But the plans are not the factual basis for Plaintiffs’ claims as Plaintiffs are not seeking payment under the plans and have not asserted their claims based upon any terms of any ERISA plan. See Settles v. Golden Rule Ins. Co. , 927 F.2d 505, 509 (10th Cir. 1991). Plaintiffs have not sought derivative standing to bring claims under § 502(a), ERISA's civil enforcement provision. Nor have Plaintiffs alleged payment due based on any calculation of benefits owed under any plan. Rather, Plaintiffs have alleged that under the Oklahoma common law principles of unjust enrichment and implied contract, Aetna is obligated to pay certain reimbursement rates for emergency medical care rendered to its insureds. Plaintiffs argue that state common law principles apply to set the rate of reimbursement, and as duly noted by the District Court of Colorado in the context of complete preemption: "From the Hospital's perspective, it does not matter how the Plan calculates its portion of the bill versus the patient's portion of the bill – which calculation would be related to the patient's benefits or obligations under the Plan – so long as the total bill is covered by some combination of the two." Centura Health Corp. v. Agnew , 18-CV-00569-RBJ, 2018 WL 3454976, at *7 (D. Colo. July 18, 2018). Here the issue is the rate of reimbursement for the total bill, which Plaintiffs argue is set by state law, and not by the terms of an agreement to which Plaintiffs (as non-participating providers) are not parties. As such, the state laws upon which Plaintiffs rely for their claims are not preempted by ERISA and Aetna's motion for summary judgment on these counts is denied.
B. Express Contract
Aetna next argues that all of Plaintiffs’ claims for breach of implied contracts and unjust enrichment are barred by an express contract. Motion at 22-25. Aetna points to the assignment of benefits by Aetna Patients to Plaintiffs, arguing that Plaintiffs submitted their claims for payment based on such assignments. Id. at 23-24. In response, Plaintiffs cite to anti-assignment language in Aetna plans, and reiterate that their claims are not brought pursuant to such assignments. Response at 34-36.
Because the issue of a valid assignment is fundamental to Aetna's position, and because the validity of said assignments is disputed, summary judgment on the contract claims is precluded.
IV. Conclusion
For the reasons set forth above, Aetna's Motion for Partial Summary Judgment [Doc. No. 113] is DENIED. The stay entered by the Court on June 7, 2021 [Doc. No. 130], is lifted and a Fourth Amended Scheduling Order will be entered herewith.
IT IS SO ORDERED this 24th day of August, 2021.