Cates v. Integris Health, Inc.

• Decision Date: 30 January 2018
• Docket Number: No. 114,314,114,314
• Citation: 412 P.3d 98
• Parties: Elizabeth CATES, individually and on behalf of others similarly situated, Plaintiff/Appellant, v. INTEGRIS HEALTH, INC., an Oklahoma corporation, Defendant/Appellee.
• Court: Oklahoma Supreme Court

412 P.3d 98

Elizabeth CATES, individually and on behalf of others similarly situated, Plaintiff/Appellant,

v.INTEGRIS HEALTH, INC., an Oklahoma corporation, Defendant/Appellee.

No. 114,314

Supreme Court of Oklahoma.

FILED January 30, 2018

Terry W. West, Bradley C. West, Gregg W. Luther, and J. Shawn Spencer, The West Law Firm, Shawnee, Oklahoma, for Plaintiff/Appellant.

Kevin D. Gordon and Alison M. Howard, Crowe & Dunlevy, P.C., Oklahoma City, Oklahoma, for Defendant/Appellee.

Wyrick, J.:

¶ 1 Elizabeth Cates claims that Integris wrongfully billed her for services she received after being admitted to one of Integris's facilities following a car accident. She also claims that Integris has performed the same wrongful billing practice on other patients. The question in this appeal is whether these patients may pursue state-law remedies for their alleged harms.

¶ 2 Cates brought state-law claims for breach of contract, deceit, and violation of the Oklahoma Consumer Protection Act, 15 O.S. §§ 751 et seq . But Integris argues that Cates's claims are expressly preempted by the federal Employee Retirement Income Security Act² (ERISA). This is so, says Integris, because the claims "relate to" an ERISA plan.³ According to Integris, Cates may vindicate her rights only through pleading a claim under the cause of action established in ERISA.⁴ The district court agreed with Integris and dismissed Cates's claims. We now reverse and hold that Cates's state-law claims are not expressly preempted and may proceed below.

I.

¶ 3 This case arises out of two agreements: one between Cates and Integris, the other between Integris and Cates's health insurance Participating Provider Organization (PPO). The agreement between Cates and Integris is a hospital admission form she signed that provides the promise of healthcare and services in exchange for Cates's promise to comply with hospital rules.⁵ It also specifies that Cates is responsible for all charges "that remain after any third party payment ... unless the Hospital is prohibited by contract between third party and Hospital from billing Patient for these amounts."⁶ The second agreement at issue, the one between Integris and the PPO, is called a "Participating Hospital Agreement," and it secures medical services for insurance-plan beneficiaries in exchange for the hospital's promise to accept pre-arranged, discounted prices.⁷ According to Cates, it also specifies that the hospital may not bill her "except for a copay or deductible or coinsurance, or, in cases where Integris has confirmed the services are not covered, advised the patient the services are not covered prior to delivering the services, and the patient agreed to pay for those services."⁸

¶ 4 Cates argues that these two agreements work in tandem to require Integris first to submit all charges to her insurance provider before billing her directly.⁹ She alleges that following her hospital visit, Integris did not submit the charges to her insurer as required, but instead simply filed and asserted a lien against her. She also alleges that Integris has employed the same billing tactic with many of its patients.¹⁰ Accordingly, Cates brought a class action against Integris alleging the following four claims: (1) breach of contract, (2) breach of contract to which Cates is a third-party beneficiary, (3) violation of the Oklahoma Consumer Protection Act, and (4) "deceit."¹¹

¶ 5 Integris countered that Cates's claims were "completely" preempted, meaning that they should be treated as federal ERISA claims and could be removed to federal court.¹² Upon removal, however, the federal courts disagreed and remanded the case back to state court for lack of subject-matter jurisdiction.¹³

¶ 6 Integris now argues that Cates's state-law claims are "expressly" preempted, meaning that they cannot be brought at all.¹⁴ The Oklahoma district court agreed and granted Integris's motion to dismiss on that basis. Cates then filed this appeal, which we retained.

II.

¶ 7 The standard of review for a district court's decision granting a motion to dismiss¹⁵ is de novo .¹⁶ The purpose of such a review is to test the law that governs the claim, not the underlying facts.¹⁷ As such, we take all factual allegations in the petition as true and draw all reasonable inferences therefrom.¹⁸ We also do not require the plaintiff to specify a theory of recovery, nor a particular remedy.¹⁹ If relief is possible under any set of facts that can be gleaned from the petition, the motion to dismiss should be denied.²⁰

¶ 8 The particular law tested in this motion to dismiss is ERISA express preemption—a treacherous "thicket" for any court to navigate.²¹ The basis for ERISA express preemption is found at 29 U.S.C. § 1144(a), which states "[ERISA] shall supersede any and all State laws insofar as they may now or hereafter relate to any [ERISA] plan." The key in that standard is the phrase "relate to."²² The U.S. Supreme Court has said that those words give ERISA a preemption clause that is "conspicuous for its breadth,"²³ preempting anything that "relates to" an ERISA plan in the "normal ... common sense" meaning of the phrase.²⁴ But the Supreme Court has also said that "relate to" cannot be taken to its logical extreme, lest we find ourselves playing Six Degrees of ERISA, where everything eventually relates to an ERISA plan.²⁵ Our job is thus to determine whether Cates's claims fairly "relate to" her ERISA plan, not in the broadest sense of the phrase, but rather in its "normal ... common sense" meaning.

A.

¶ 9 Integris argues that Cates's claims "relate to" an ERISA plan because they cannot be decided without reference to her underlying employee benefit plan—a.k.a the ERISA "Plan."²⁶ Specifically, Integris contends that "any right to have INTEGRIS bill and accept payment from the Plan rather than Plaintiff, applies only to services covered under the terms of the Plan,"²⁷ and thus that Cates's claims cannot be adjudicated without interpretation of what is and is not a "covered" charge under the plan.²⁸ This is especially true, argues Integris, because the real right Cates seeks to vindicate is her right to receive an in-network discount for the services rendered—a discount that applies only to "covered" services under the plan.²⁹ If Integris is correct, it would appear that its express-preemption defense is a strong one.³⁰

¶ 10 Integris's argument, however, misapprehends the thrust of Cates's case. Cates isn't asking for Integris to accept payment from her health insurer for these bills, and she isn't looking for a discount.³¹ Rather, Cates says that the two contracts she references (the admission form and the PPO agreement) prohibit Integris from billing her at all if Integris did not first submit those charges for confirmation of coverage and authorization . In other words, under Cates's theory, it does not matter whether the charges were "covered," only whether they were first submitted to the insurer. Accordingly, there would be no need to reference and interpret the ERISA plan in order to ascertain what was and wasn't "covered" or to itemize her bill into what would or wouldn't have been discounted. In the words of Plaintiff's counsel, if Integris failed to first submit the charges to the insurer, Integris "get[s] zero."³²

¶ 11 An examination of each of Cates's claims bears this out. First is her claim for breach of contract, the elements of which are (1) the formation of a contract, (2) breach of the contract, and (3) damages as a result of that breach.³³ Cates alleges she formed a contract with Integris when she signed the hospital admission form³⁴ providing that she would be responsible for payment "unless the Hospital is prohibited by contract between third party and Hospital from billing Patient for these amounts."³⁵ She claims that such a third-party contract exists (the PPO agreement) and that it prohibits Integris from billing her unless it first submits the charges to her insurer for review. She further alleges that Integris billed her without first submitting the charges to her insurer for review, thus breaching both the PPO agreement and the admission form. Cates also alleges that Integris filed and asserted a lien against her for the relevant charges and that she and every other putative class member have suffered damages as a result of Integris's billing practices.³⁶ Assuming each of these allegations to be true, Cates has stated a colorable claim for relief—and has done so without reference to the ERISA plan.

¶ 12 The same is true of Cates's claim for breach of a contract to which she is a third-party beneficiary (i.e. , the PPO agreement), as it was necessarily breached as part of her first claim, and the only additional element she must prove is that the PPO agreement was made expressly for her benefit.³⁷ Cates alleges as much in her petition,³⁸ and we have no trouble inferring that a PPO agreement is made for the express benefit of the insurance beneficiaries receiving services under it.

¶ 13 Cates's third claim alleges a violation of the Oklahoma Consumer Protection Act, 15 O.S. §§ 751 et seq . That law authorizes "a private right of action" whenever a person commits "any act or practice declared to be a violation of the Consumer Protection Act."³⁹ Cates claims a violation of the provisions that prohibit "[k]nowingly caus[ing] a charge to be made by any billing method to a consumer for services ... or products which the person knows was not authorized in advance by the consumer."⁴⁰ Again, based on Cates's interpretation of the two agreements at issue,⁴¹ there is a conceivable set of facts by which she could establish that she did not consent to the relevant charges and that Integris knew that when it billed her—and again, she could do all of this without reference to the ERISA plan.

¶ 14 Cates's last claim is for what she calls "deceit." In this count, she alleges that Integris, through filing and asserting its lien against each putative class member,...