REAVLEY, Circuit Judge:
Access Mediquip L.L.C. ("Access") appeals a summary judgment for defendant UnitedHealthcare Insurance Company ("United"). The issue on appeal is whether Access's state-law claims of promissory estoppel, quantum meruit, unjust enrichment, negligent misrepresentation, and violations of the Texas Insurance Code, §§ 541.051(A) & (B) and 541.061(1) & (2), are preempted by the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA").
Access's lawsuit arises from United's refusal to pay some or all of Access's claims for reimbursement for medical-device procurement and financing services provided in connection with over 2,000 patients insured under ERISA plans administered by United. The district court limited discovery to the claims concerning the 300 patients with respect to whom Access seeks the largest amount of reimbursement. After written discovery was completed for those claims, United filed a motion for summary judgment on preemption grounds against the state-law claims relating to 269 of the 300. The district court ordered United to limit its motion to Access's claims arising from services for three patients, whom the district court anticipates will serve as exemplars for treatment of the preemption issue for the remaining patients. United filed a supplemental memorandum of law
With certain exceptions not applicable here, § 1144(a) states that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan...." We REVERSE with respect to Access's promissory estoppel, negligent misrepresentation, and Texas Insurance Code claims, because these claims are premised on allegations and evidence that Access provided the services in reliance on United's representations that it would pay reasonable charges for Access's services. We AFFIRM with respect to Access's quantum meruit and unjust enrichment claims, because these claims depend on Access's assertion that without its services the patients' ERISA plans would have obliged United to reimburse a different provider for the same services.
We review a summary judgment de novo, applying the same standards as the district court. Trinity Universal Ins. Co. v. Employers Mut. Cas. Co.
Access procures and finances the purchase of medical devices for health care providers. Usually, a provider requests Access to finance and procure a medical device before the procedure using the device is performed. Access then contacts the patient's insurer to confirm that the
On September 18, 2007, Century City Doctors Hospital ("Century City") asked Access to procure a prosthesis for use in patient L.G.'s back surgery, to be performed on September 20, 2007. On September 18, an Access representative, Violet Harrell, contacted United to confirm coverage for the prosthesis. In an August 17, 2010 declaration, submitted to the district court with Access's response to United's motion for summary judgment, Harrell avers that she spoke with United representative Steve Kirtonia, who "stated that (1) [United] insured L.G.; (2) [Access]'s billing code for the Prosthesis [sic], L8699, was valid; and (3) Access could bill [United] for the Prosthesis [sic]." Harrell's call was transferred to a United representative in United's care coordination department, who "stated that the procedure had been authorized." United's coordination department also gave Harrell "an authorization number for [Access] to use in submitting its claim." Access alleges that United's statements to Harrell amount to representations that United would pay Access reasonable and customary charges for procuring and financing the prosthesis.
L.G. had surgery on September 20, 2007. On September 25, Access submitted a claim to United for the prosthesis under authorization number L8699. On October 31, Century City submitted a claim for its surgical services under authorization number L8699. Century City's claim did not include the cost of the prosthesis. United paid Century City for the surgery, but requested additional information from Access. United subsequently refused to pay for L.G.'s prosthesis.
On November 19, 2007, Century City asked Access to procure spine fusion instrumentation for use in patient L.C.'s upcoming surgery. That same day, Harrell contacted United to confirm that United would pay for the instrumentation and that Access could bill United directly. Harrell spoke with United representative Kate P., who "advised [Harrell] ... that L.C. was one of [United]'s insureds, L.C. had out-of-network coverage available, and Access could bill United separately for the Implant [sic]." Kate P. also "informed [Harrell] that `care notification is not required' for the implant."
L.C. had the surgery on December 6, 2007, and Access submitted a $66,197.00 claim for the instrumentation on May 7, 2008. United initially paid Access $2,500.00 on July 9, 2008, but United subsequently recouped that payment and notified Access by letter that its provision of the instrumentation was "not covered under the patient's health benefit plan."
On August 25, 2008, a physician at University General Hospital performed back surgery on patient D.T. The surgery included implantation of a four-part spinal cord stimulator. On August 27, University General Hospital asked Access to finance payment for the stimulator. Before Access agreed to do so, Access representative Annette Gordon contacted United to confirm coverage for the stimulator. Access's response to United's motion for summary judgment includes an August 18, 2010 declaration by Gordon. Gordon avers that she contacted United on August 29, 2008, and spoke to "Nathan," a United representative. He "confirmed that D.T. was one of [United]'s insureds and had coverage for the procedure." He indicated that D.T. had "out of network benefits," and he directed Gordon to contact United's care coordination center, which Gordon did on the same day. United representatives at the care coordination center provided Gordon "with a reference number to use in submitting [Access]'s claim for the Stimulator [sic], and an address at which to submit the claim." In reliance on these representations, Access agreed to finance payment for the stimulator.
Access submitted a claim for the stimulator on September 8, 2008, the same day that University General submitted its claim for the surgery. United paid University General's claim on September 19, 2008, but did not pay Access. A week later, United denied payment to Access, stating that United needed various medical records. Later, United paid $19,436.80, the total charges for three of the stimulator's parts, but United has refused to pay for the stimulator's $61,932.00 generator. In February, 2009, United generated a "Provider Explanation of Benefits" document indicating that payment for the generator was denied under the XU remark code.
The district court granted summary judgment for United on the state law claims relating to services for L.G., L.C., and D.T. Preemption under 29 U.S.C. § 1144(a) was the only ground on which the district court granted summary judgment on the state law claims.
Access's state law promissory estoppel, negligent misrepresentation, and Texas Insurance Code claims are premised on its allegations that it provided its services for L.G., L.C., and D.T. in reliance on United's representations regarding how much, and under what conditions, United would pay Access for those services. Regarding its promissory estoppel claim, Access alleges that United representatives' statements regarding L.G., L.C., and D.T. constituted "promises to [Access] to accept bills from [Access] and/or to pay for medical devices and related services that [Access] provided to [United]'s Insureds." Regarding its
Access's complaint thus makes clear that the grievance underlying its state law misrepresentation claims is the inconsistency between United's representations and its conduct after Access submitted claims for reimbursement for its services: "In direct breach of their obligations and representations to [Access], [United] ha[s] failed and refused to pay and/or reimburse [Access] on the Claims."
The scenario depicted in Access's complaint is a familiar one in the health care context, as we explained in Memorial Hospital System v. Northbrook Life Ins. Co.:
904 F.2d 236, 246 (5th Cir.1990).
It bears emphasis that, fairly construed, Access's claims allege that United's agents' statements, though superficially about coverage under the plan, were in their practical context assurances that Access could expect to be paid reasonable charges if it would procure or finance the devices used in L.G.'s, L.C.'s, and D.T.'s surgeries. Texas law permits a party alleging an actionable misrepresentation to attempt to prove that it was reasonably misled by a true but crucially incomplete statement that conveyed a false impression of the speaker's intentions. McCarthy v. Wani Venture, A.S., 251 S.W.3d 573, 585 (Tex.App.—Houston [1 dist.] 2007, no pet.) ("a general duty to disclose information may arise in an arm's-length business transaction when a party makes a partial disclosure that, although true, conveys a false impression.") Access alleges that, given the coverage statements' commercial context, it was misleading for United's agents to omit mentioning that, though Access's services were covered under the plan, Access would never actually be reimbursed when the time came, because United's policy underlying the "XU" code required denying all claims for surgically implanted devices billed by providers who are not surgical facilities.
As noted above, § 1144(a) states that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan...." The Supreme Court has "observed repeatedly that this broadly worded provision is `clearly expansive.'" Egelhoff v. Egelhoff ex rel. Breiner
We extensively addressed the interaction between ERISA's objectives and state law claims premised on misrepresentations made to providers considering whether to provide services to a patient in Memorial. In that case, Noffs, Inc., provided health insurance to its employees through an insurance policy purchased from and administered by Northbrook Life Insurance Company. Gloria Echols's husband had recently started working at Noffs when she sought treatment from Memorial Hospital System. Before providing care, Memorial contacted Noffs, who verified that coverage was in effect. In fact, coverage for Echols would not take effect until thirty-five days after Memorial began treating Echols, and the policy did not cover any treatment for illnesses that arose before the coverage took effect. Memorial, 904 F.2d at 238.
Asserting that Noffs acted as Northbrook's agent when verifying coverage, Memorial brought various claims against Northbrook, including state law causes of action under the Texas Insurance Code, for equitable estoppel, and for negligent misrepresentation. Id. at 239. Memorial appealed the district court's ruling that ERISA preempted the Texas Insurance Code claim, and we reversed. Id. at 250. In our opinion we articulated the test we have subsequently used to determine whether § 1144(a) preempts a state law claim. E.g., Mayeaux v. La. Health Serv. and Indem. Co.
The district court summarized our case law as requiring that "to the extent ...
Id. at 955 (footnote omitted).
United asserts that we have "consistently used" the "`existence' of patient coverage versus `extent' of patient coverage analysis" under which claims based on "extent" misrepresentations are preempted. But neither United nor the district court cite, and we are not aware of, any case in which we held that ERISA preempts a third-party provider's state law misrepresentation claims premised on allegations that it was misled by an ERISA plan's statements regarding the extent of coverage for the provider's services. On the contrary, the claim we held was not preempted in Transitional was premised on an alleged misrepresentation regarding the extent of Davis's coverage, and our opinion made plain that our case law requires that result when there is some coverage, unless the claim in question is dependent on, and derived from the rights of the plan beneficiaries to recover benefits under the terms of the plan.
The dispositive issue in this appeal is therefore whether Access's state law claims are dependent on, and derived from the rights of L.G., L.C., and D.T. to recover benefits under the terms of their ERISA plans.
Transitional requires that we reverse the district court's judgment with respect to Access's state law misrepresentation claims. Addressing Transitional in its summary judgment order, the district court stated that "[i]n Transitional, the
The "existence-of-coverage" versus "extent-of-coverage" distinction applied by the district court is thus at odds with both the reasoning and the result of Transitional. Other circuits that have adopted the approach we set forth in Memorial and Transitional have also rejected an existence-versus-extent approach.
The state law underlying Access's misrepresentation claims does not purport to regulate what benefits United provides to the beneficiaries of its ERISA plans, but rather what representations it makes to third parties about the extent to which it will pay for their services. To prevail on these claims, Access need not show that United breached the duties and standard of conduct for an ERISA plan administrator, because Access's alleged right to reimbursement does not depend on the terms of the ERISA plans. It is immaterial whether the alleged statements regarding the extent that the patients' plans covered Access's services were correct or incorrect as descriptions of the plans' terms. As assurances of how much Access would be paid, the statements are belied by United's subsequent refusal to reimburse some or all of Access's claims. United points out that it is a plan fiduciary and its decisions regarding what claims to pay constitute administration of an ERISA plan that is governed by that statute. The critical distinction, however, is not whether the parties to a claim are traditional ERISA entities, but whether the claims affect an aspect of a relationship that is comprehensively regulated by ERISA. Bank of La. v. Aetna U.S. Healthcare Inc.
It is difficult to see how consultation of the plan's terms would be necessary to determine the amount of Access's recovery, given that the compensatory recovery Access seeks can be measured by the cost of the services it alleges United induced it to provide. If consultation of the plans is necessary, United concedes that this, without more, does not require preemption. Id. (explaining that the need to consult an ERISA plan in order to determine damages shows only an "incidental relation ... insufficient on these facts to require a finding of preemption.")
In E.I. DuPont de Nemours & Co. v. Sawyer,
Matters stand differently with Access's unjust enrichment and quantum meruit claims. Access alleges that, without its services, another provider would have had to procure or finance the devices. Access's unjust enrichment and quantum meruit claims depend on its allegations that the ERISA plan would have obliged United to reimburse that other provider. Access can therefore recover under these claims only to the extent that the patients' ERISA plans confer on their participants and beneficiaries a right to coverage for the services provided. Such claims are preempted under the test articulated in Transitional.
The considerations underlying the Memorial test also favor preemption of Access's unjust enrichment and quantum meruit claims. ERISA preemption protects plans from unexpected financial consequences that could result from routine exposure to state-law claims. State-law claims premised on misrepresentations to a third party provider do not greatly implicate this concern, because an ERISA plan can avoid liability under such claims by taking care that it does not mislead providers regarding what they can expect to be paid if they render services for the plan's insureds. But there is no equivalent way for plan administrators to limit their exposure to state-law unjust enrichment or quantum meruit claims. Those claims, if not preempted, would allow any provider
For the foregoing reasons, we affirm the district court's judgment with respect to Access's quantum meruit and unjust enrichment claims; we reverse the judgment with respect to Access's claims for negligent misrepresentation, promissory estoppel, and violations of the Texas Insurance Code, and we remand the case for proceedings not inconsistent with this opinion.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.