In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 03-2841
JIM KLASSY and BARBRA KLASSY,
                                             Plaintiffs-Appellants,
                                v.

PHYSICIANS PLUS INSURANCE COMPANY
and GARY JOHNSON,
                                            Defendants-Appellees.

                        ____________
           Appeal from the United States District Court
              for the Western District of Wisconsin.
           No. 03 C 49—Barbara B. Crabb, Chief Judge.
                        ____________
      ARGUED JANUARY 22, 2004—DECIDED JUNE 15, 2004
                        ____________



  Before EASTERBROOK, MANION, and ROVNER, Circuit Judges.
  MANION, Circuit Judge. Jim and Barbra Klassy sued
Physicians Plus Insurance Company (“Physicians Plus”)
and Dr. Gary Johnson, alleging numerous claims stem-
ming from Physicians Plus’s refusal to approve payment for
a bloodless hip surgery for Barbra, who is a practicing
Jehovah’s Witness. The district court dismissed the Klassys’
claims, one for failure to state a claim and the others as
being completely preempted by the Employment Retire-
2                                               No. 03-2841

ment Income Security Act of 1974. 29 U.S.C. §§ 1001, et seq.
(“ERISA”). The district court then gave the Klassys the
opportunity to amend their complaint to state a claim under
ERISA, but they instead filed this appeal. On appeal, the
Klassys challenge only the district court’s holding that
Barbra’s medical malpractice claim against Dr. Gary
Johnson is completely preempted by ERISA. We affirm.


                             I.
  At the relevant time, Jim and Barbra Klassy had health
insurance with Physicians Plus. The Klassys’ insurance plan
was an HMO and, as such, the Klassys were required to
obtain treatment from a Physicians Plus physician, unless a
plan physician was unable to provide the necessary treat-
ment. Accordingly, in 2001, when Barbra began experienc-
ing pain in her hip, she went to a Physicians Plus primary
care physician. The primary care physician in turn referred
Barbra to Dr. Harvey Barash, an orthopedic surgeon and
plan physician. After seeing Dr. Barash, Barbra requested
authorization from Physicians Plus for a surgical revision to
her hip. This request was passed on to Dr. Gary Johnson, a
Physicians Plus medical director. Dr. Johnson reviewed Dr.
Barash’s notes and concluded that the procedure was not a
covered benefit because the need for the surgery had not
been “definitely established.” Dr. Barash disagreed with Dr.
Johnson’s findings and wrote him, explaining that Barbra
had a compelling need for surgery. There was an added
wrinkle: The Klassys are both Jehovah’s Witnesses and they
believe that the Bible prohibits blood transfusions. Dr.
Barash thus noted that he supported authorization of Dr.
Carl Nelson to perform the surgery, because he was the only
known physician who could perform the procedure in
compliance with Barbra Klassy’s religious beliefs.
No. 03-2841                                                  3

  Dr. Johnson refused to authorize payment to Dr. Nelson
because Dr. Nelson was an “out-of-network” doctor, but Dr.
Johnson agreed to authorize the surgery by a plan physi-
     1
cian. However, because no plan physician would agree to
perform a “bloodless” surgery, Barbra traveled to Arkansas
and paid for the procedure herself. After surgery, Jim and
Barbra Klassy filed a complaint against Dr. Johnson and
Physicians Plus in Wisconsin state court.
   The Klassys alleged in their complaint that Physicians
Plus violated Title VII by refusing to accommodate Barbra’s
religious beliefs, asserting that Physicians Plus should be
treated as an employer because it was acting as an agent of
Jim’s employer. The complaint also alleged six state law
claims, including the torts of bad faith, medical malpractice,
and negligence, as well as claims for breach of contract,
breach of the implied covenant of good faith and fair
dealing, and estoppel. The defendants removed the case to
federal court. The Klassys then filed a motion to remand
their state law claims, contending that the medical malprac-
tice claim raised novel issues of state law. A few weeks later,
the defendants filed a motion to dismiss.
  The district court denied the Klassys’ motion to remand
and granted the defendants’ motion to dismiss, concluding
that Physicians Plus was not an employer for purposes of
Title VII and that the state law claims were completely pre-
empted by ERISA. The Klassys appeal. On appeal, the
Klassys challenge only the dismissal of their state law
malpractice claim against Dr. Johnson.




1
  Under the Plan, the Plan was required to pay for out-of-
network providers if Plan doctors could not provide “medically
indicated” treatments.
4                                                 No. 03-2841

                              II.
   The Klassys argue that the district court erred in con-
cluding that their medical malpractice claim against Dr.
Johnson was preempted by ERISA because their claim is
a state law claim for medical malpractice. Although the
Klassys presented their claim as a state law malpractice
claim, if the claim is within the scope of Section 502(a) of
ERISA it is completely preempted, no matter how the
Klassys have characterized it. Jass v. Prudential Health Care
Plan, Inc., 

, 1488 (7th Cir. 1996). Section 502(a)
provides that “a civil action may be brought . . . by a par-
ticipant 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.” 29 U.S.C. § 1132(a)(1).
  This court has set forth three factors for use in determin-
ing whether a claim is within the scope of Section 502(a) and
thus completely preempted: “[W]hether the plaintiff [is]
eligible to bring a claim under that section; whether the
plaintiff’s cause of action falls within the scope of an ERISA
provision that the plaintiff can enforce via § 502(a); and
whether the plaintiff’s state law claim cannot be resolved
without an interpretation of the contract governed by
federal law.” 

.
   These factors make clear that the Klassys’ claim, although
framed as a medical malpractice claim, is really a § 502(a)
denial of benefits claim. First, as plan participants, the
Klassys are eligible to bring a claim under Section 502(a). See
29 U.S.C. § 1132(a)(1). Second, the basis of the Klassys’ claim
is that Dr. Johnson did not approve payment for the blood-
less surgery, which concerns her rights “to recover benefits
due to [her] under the terms of [her] plan.” 

determine whether Dr. Johnson was negligent in refusing to
approve the out-of-network surgery requires a determina-
tion of whether the surgery was covered.
No. 03-2841                                                5

  In response, the Klassys cite to the Supreme Court’s de-
cision in Pegram v. Herdrich, 

(2000). In Pegram,
the Court held that treatment decisions made by an HMO,
acting through its physician employees, are not “fiduciary
acts” within the meaning of ERISA. In so holding, the Court
explained that an HMO’s responsibilities with regard to
patient care could be divided between “eligibility decisions”
and “treatment decisions.” However, the Court further
explained that most questions of insurance coverage
involved “mixed eligibility and treatment decisions” and
that in such mixed cases “eligibility decisions cannot be
untangled from physicians’ judgments about reasonable
medical treatment.” 

The Court then held that
Congress did not intend HMOs to be treated as fiduciaries
under ERISA to the extent they make mixed eligibility and
treatment decisions.
  Although the Supreme Court in Pegram expressly noted
that it was not addressing the interaction of § 502(a) and
state law claims, 

n.9, the Klassys
posit that the reasoning of Pegram applies equally to the
question of ERISA preemption. That is, the Klassys maintain
that Pegram changed the landscape of ERISA preemption,
and that post-Pegram state law claims based on treatment
decisions or mixed eligibility/treatment decisions are not
preempted.
   The Klassys find support in the Second Circuit’s decision
in Cicio v. Does, 

(2d Cir. 2003). Cicio involved
(among other things) a claim of medical malpractice under
state law brought by the widow of a cancer victim against
an HMO doctor who denied approval for a stem-cell chem-
otherapy treatment. The Second Circuit, after summarizing
the pre-Pregram preemption precedent, stated: “The Pegram
opinion has further ramifications for our analysis because of
its detailed description and analysis of decision-making in
the context of health care provisions.” 

The court
6                                                   No. 03-2841

in Cicio then summarized the Pegram discussion of eligibil-
ity, treatment, and mixed decisions, after which it reasoned
that “Pegram thus alters the framework used in [ERISA
preemption cases such as] Jass, in which a decision must be
about either ‘treatment’ or ‘eligibility’ and in which any
element of benefits determination suffices to make a
decision an ‘eligibility’ decision, that may only be chal-
lenged in a § 502(a) action.” 

The Second Circuit
then held that where the alleged malpractice of an HMO
doctor involves a mixed eligibility and treatment decision,
ERISA does not preempt a state law malpractice claim.
Several other circuits have also followed Cicio’s post-Pegram
approach. See, e.g., Roark v. Humana, Inc., 

, 309
(5th Cir. 2002) (“ERISA provides no cause of action for
medical malpractice claims against an HMO” and such
claims are therefore not preempted by § 502(a)(1)(B)); Land
v. CIGNA Healthcare of Florida, 

(11th Cir. 2003)
(applying Pegram approach and holding that the plaintiff’s
claim that the HMO’s failure to diagnose his condition cor-
rectly and failure to authorize proper medical treatment do
not fall within the civil enforcement provisions of § 502(a)
and thus are not completely preempted); Marks v. Watters,

, 324, 327 (4th Cir. 2003) (reasoning that under
Pegram, mixed eligibility and treatment decisions are not
preempted by § 502(a), but holding that the plaintiff’s claim
did not involve a treatment decision and was thus pre-
empted); Pryzbowski v. U.S. Healthcare, Inc., 

, 274
(3d Cir. 2001) (citing Pegram with approval, but concluding
that plaintiff’s claims were solely related to the approval of
                                                   2
benefits and were thus preempted by § 502(a)).

2
  These decisions focused on whether Pegram altered the frame-
work for determining if claims were completely preempted by
§ 502(a). As Land recognized, such state law claims may still be
subject to conflict preemption under Section 514(a). See Land, 339
                                                   (continued...)
No. 03-2841                                                    7

  This circuit has yet to consider the impact of Pegram on
questions of ERISA preemption, and we need not resolve
this issue today because, as discussed below, even under the
approach suggested by the Klassys and adopted in Cicio and
by other courts, the Klassys’ claim against Dr. Johnson is
preempted by ERISA.
  Under the Cicio approach, decisions take one of three
forms—eligibility, treatment or mixed treatment/eligibil-
ity—and ERISA preempts only eligibility decisions, not
treatment or mixed treatment/eligibility decisions. In this
case, the Klassys’ allegations make clear that Dr. Johnson’s
decision concerned solely the question of eligibility. Here,
Dr. Johnson approved surgery for Barbra, but concluded
that a bloodless surgery performed by an out-of-network
physician would not be covered. Barbra tries to turn that
decision into one concerning “treatment,” arguing that
whether a bloodless surgery is covered concerns the appro-
priate treatment for her condition. However, contrary to
Barbra’s position, there is no dispute as to the appropriate
medical treatment; rather, the Klassys seek alternative treat-
ment based on their religious beliefs. Although we are
sensitive to the Klassys’ sincerely held religious beliefs,
the sole question facing Dr. Johnson was one of eligibility
and whether a bloodless surgery performed by an out-of-
network physician was covered by the Plan. Therefore, even
under the Cicio approach, because the sole issue was one of
                                                         3
eligibility, Barbra’s claim is preempted by ERISA. See


2
  (...continued)
F.3d at 1294 n.7. For a detailed discussion on the difference
between complete and conflict preemption, see Jass, 

.
3
  To the extent that Dr. Johnson improperly denied coverage of
the bloodless hip surgery (as opposed to the traditional hip
                                                 (continued...)
8                                                  No. 03-2841

(holding that the plaintiff’s claim was
preempted by § 502(a) because the HMO did not make a
treatment determination); 

(holding that the plaintiff’s claims, which were “limited to
[the HMO’s] delay in approving benefits, [was] conduct
falling squarely within [the] administrative function” and
thus was not preempted by § 502(a)); Difelice v. Aetna U.S.
Healthcare, 

, 448 (3d Cir. 2003) (holding that
plaintiff’s claim that the HMO “interfered with” his medical
treatment by declaring treatment “medically unnecessary”
was preempted by ERISA because it could have been
brought under Section 502(a)).


                              III.
  ERISA provides a remedy for plan participants wrong-
fully denied benefits. However, such claims must be
brought under ERISA and creatively pleading a denial of
benefits claim as a state law claim does not defeat the broad
preemptive force of ERISA. Thus, although the Klassys
might have succeeded under ERISA and obtained payment
for the bloodless surgery, because they instead opted to
pursue a state law claim that is preempted, the district court
properly dismissed their complaint. For these and the
foregoing reasons, we AFFIRM.




3
  (...continued)
surgery that was approved), the Klassys could have sought re-
imbursement in an ERISA action. In fact, the district court gave
the Klassys an opportunity to amend their complaint to allege an
ERISA denial of benefits claim, but the Klassys instead appealed.
No. 03-2841                                             9

A true Copy:
       Teste:

                      _____________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit




                USCA-02-C-0072—6-15-04