Prud. Ins. Co. of America v. Nat. Park Med. Center
| Decision Date | 31 January 1997 |
| Docket Number | No. LR-C-95-514.,LR-C-95-514. |
| Citation | 964 F.Supp. 1285 |
| Parties | The PRUDENTIAL INSURANCE COMPANY OF AMERICA, et al., Plaintiffs, v. NATIONAL PARK MEDICAL CENTER, INC., et al., Defendants. State of Arkansas, Intervenor. |
| Court | U.S. District Court — Eastern District of Arkansas |
Byron L. Freeland, Mitchell, Williams, Selig, Gates & Woodyard, Little Rock, AR, Daly D.E. Temchine, Stuart M. Gerson, Epstein, Becker & Green, P.C., Washington, DC, for Prudential Ins. Co. of America, Prudential Health Care Plan Inc., Arkansas AFL-CIO, Tyson Foods, Inc., United Paperworkers Intern. Union, AFL-CIO, CLC, HMO Partners, Inc.
Allan W. Horne, Horne, Hollingsworth & Parker, Little Rock, AR, Byron L. Freeland, Mitchell, Williams, Selig, Gates & Woodyard, Little Rock, AR, Chet A. Roberts, Arkansas Blue Cross and Blue Shield, Little Rock, AR, Daly D.E. Temchine, Stuart M. Gerson, Epstein, Becker & Green, P.C., Washington, DC, for HMO Partners, Inc.
O. Jerome Green, Wallace & Green, Little Rock, AR, for Martha Flowers, M.D., James Trice, M.D., Horace Johnson, M.D.
Joann C. Maxey, Kaplan, Brewer & Maxey, P.A., Little Rock, AR, Michael W. Mitchell, Mitchell, Blackstock & Barnes, Little Rock, AR, for George A. Haas, O.D.
David Lawrence Ivers, Mitchell, Blackstock & Barnes, Little Rock, AR, for Y.Y. King, M.D., Bryan W. Russell, D.C.
Harold H. Simpson, II, Lynda Moneymaker Johnson, The Health Law Firm, Little Rock, AR, for American Medical Intern., Inc.
Philip E. Kaplan, Kaplan, Brewer & Maxey, P.A., Little Rock, AR, for Bryant Ashley, Jr., O.D.
Byron L. Freeland, Mitchell, Williams, Selig, Gates & Woodyard, Little Rock, AR, for American Ass'n of Health Plans, Inc.
This matter is before the Court on cross motions for summary judgment. For the reasons stated below, the plaintiffs' motion to declare Arkansas' Patient Protection Act of 1995 (the PPA), Arkansas Code Annotated §§ 23-99-201 to -209 (Michie Supp.1995), preempted by the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq., and for a permanent injunction of the enforcement of the PPA is granted, and the defendants' motion for declaratory and injunctive relief which would enforce the PPA is denied.
Plaintiffs, Prudential Insurance Company of America ("Prudential"), Prudential Health Care Plan, Inc., d/b/a Prudential Health Care Plan of Arkansas ("Prudential HMO"), HMO Partners, Inc. ("HMO Partners"), Arkansas AFL-CIO ("AFL-CIO"), Tyson Foods, Inc. ("Tyson"), and United Paperworkers International Union, AFL-CIO, CLC ("UPIU"), filed a complaint seeking declaratory and injunctive relief.
Plaintiffs alleged that Arkansas' newly-enacted Patient Protection Act ("PPA") of 1995 was (1) preempted by 29 U.S.C. § 1144(a) of the Employment Retirement Income Security Act of 1974 ("ERISA"); (2) preempted by the Federal Health Maintenance Organization Act's provision 42 U.S.C. § 300e-10(a) (1995) ("Federal HMO Act"); (3) preempted by the Federal Employment Health Benefit Act provision 5 U.S.C. §§ 8901-8914 (1995) ("FEHBA") as to the plaintiffs HMO and Prudential; and in violation of 42 U.S.C. § 1983.
Named as defendants were the State of Arkansas, Governor Jim Guy Tucker; Attorney General Winston Bryant; Dr. Sandra Nichols, Director of the Arkansas Department of Health; and Lee Douglas, Commissioner of the Arkansas Department of Insurance.
Plaintiffs amended their complaint to add additional defendants American Medical International, Inc., d/b/a National Park Medical Center; Bryan Russell, D.C.; Y.Y. King, M.D.; George A. Haas, O.D.; and Bryan Ashley, O.D. The Court granted defendants' Lee Douglas, Sandra Nichols, Attorney General Winston Bryant, and Governor Jim Guy Tucker's motion to dismiss for failure to state a claim based on lack of a between these parties.
National Park Medical Center filed a counterclaim seeking a declaratory judgment that the PPA is a law regulating insurance and is, therefore, not preempted by ERISA. National Park also sought an injunction requiring Prudential, Prudential HMO, and HMO Partners to comply with the PPA. The State of Arkansas intervened in defense of the PPA arguing that the case presented a Constitutional challenge to Arkansas statutes affecting the public interest.
Plaintiffs, defendants, and intervenor now move for summary judgment.
Rule 56(c) of the Federal Rules of Civil Procedure provides:
[Summary judgment] shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions, and admissions, on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
There is no such "genuine" dispute if the evidence is such that a reasonable jury could not return a verdict for a nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).
[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.... [T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.... If the evidence is merely colorable ... or is not significantly probative, summary judgment may be granted.
Id. at 249-250, 106 S.Ct. at 2511 (citations omitted). No genuine issue for trial exists "where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party ..." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); See Rifkin v. McDonnell Douglas Corp., 78 F.3d 1277 (8th Cir.1996). All parties agree there are no genuine issues of material fact in dispute here and that summary judgment is appropriate.
In 1995, the Arkansas Legislature passed the PPA with the specific intent:
that patients ... be given the opportunity to see the health care provider of their choice. In order to assure the citizens of the State of Arkansas the right to choose the provider of their choice, it is the intent of the General Assembly to provide the opportunity of providers to participate in health benefit plans.
Ark.Code Ann. § 23-99-202 (Michie Supp. 1995).
The law was made applicable to health benefit plans such as those administered and used by the plaintiffs. Ark.Code Ann. § 23-99-203(f). However, the Legislature carved out a category of health benefit plans to which, by its own terms, the PPA does not apply. Arkansas Code Annotated § 23-99-209 states:
The provisions of [the Patient Protection Act of 1995] shall not apply to self-funded or other health benefit plans that are exempt from state regulations by virtue of the federal Employee Retirement Income Security Act of 1974, as amended.
By its terms the PPA is applicable to health care insurers which include the plaintiffs1 and to health care providers which include the defendants.2
At the center of the present controversy is § 23-99-204 of the PPA, which prohibits health care insurers from imposing monetary advantages or penalties, or other conditions, under a health benefit plan that affect a beneficiary's choice among health care providers who participate in the plan according to the terms offered. See Ark.Code Ann. § 203-99-204.3
This section, known as the "Any Willing Provider" clause, also prohibits health care insurers from limiting or excluding health care providers qualified under § 23-99-203(d) and willing to accept the health benefit plan's terms and conditions from the opportunity to participate in the plan.
Defendants seek to compel plaintiffs' compliance with the "Any Willing Provider" clause; however, plaintiffs contend that they should not be required to comply because the PPA relates to ERISA employee benefit plans and is preempted by ERISA. Defendants, in response, deny that the PPA relates to ERISA plans and, furthermore, contend that it is a law regulating insurance which is exempt from preemption by ERISA.4
At issue is the scope of ERISA, 29 U.S.C. § 1001, et seq. ERISA regulates "employee benefit plans", which include both pension benefit plans and welfare benefit plans. Pension plans provide retirement income to employees. 29 U.S.C. § 1002(2). Welfare plans provide "medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability or death." 29 U.S.C. § 1002(1). This case involves only welfare plans.
ERISA contains a preemption provision which states that ERISA "shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan ..." 29 U.S.C. § 1144(a).
In order for ERISA to preempt a state law, the state law must "relate to" an ERISA plan. A law is held to "relate to" an employee benefit plan if it has a "connection with" or "reference to" such a plan. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983). ERISA preemption applies not only to state laws which are directed toward employee benefit plans, or which cover subject areas addressed by ERISA but also to laws or regulations which directly or indirectly relate to ERISA plans. Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 138-139, 111 S.Ct. 478, 482-483, 112 L.Ed.2d 474(1990).
Although the preemptive scope of ERISA is deliberately expansive, it has its limits. The Supreme Court has ruled that some state actions may affect employee benefit plans in a manner too tenuous, remote or peripheral to warrant a finding that the law "relates to" the plan. Shaw, 463 U.S. at 100 n. 21, 103 S.Ct. at 2901 n. 21. Since ERIS...
To continue reading
Request your trial
-
Prudential Ins. Co. of America v. National Park Medical Center, Inc.
...District of Arkansas, Western Division, 2 as amended, on cross-motions for summary judgment. See Prudential Ins. Co. of Am. v. National Park Medical Ctr., Inc., 964 F.Supp. 1285 (E.D.Ark.1997). In its original decision, filed January 31, 1997, the district court considered whether the Arkan......
-
Arkansas Blue Cross v. Little Rock Cardiology
...was partially preempted by the Employee Retirement Income Security Act of 1974 ("ERISA").3 Prudential Ins. Co. of Am. v. Nat'l Park Med. Ctr., Inc., 964 F.Supp. 1285, 1299-300 (E.D.Ark.1997). In the same action, Prudential and its co-plaintiffs obtained an injunction barring the enforcement......
-
Community Health Partners v. Commonwealth of Ky.
...from federal antitrust laws only those laws constituting the "business of insurance." Id. 10. In Prudential Ins. Co. v. National Park Medical Ctr., 964 F.Supp. 1285, 1299 (E.D.Ark.1997), the court rejected the defendants argument that Fabe replaces the test for the "business of insurance." ......
-
Prudential Ins. Co. of America v. National Park, 04-1465.
...order to hold that the Arkansas PPA was preempted by ERISA only insofar at it relates to ERISA plans. Prudential Ins. Co. of Am. v. Nat'l Park Med. Ctr., 964 F.Supp. 1285 (E.D.Ark.1997). In Prudential I, this Court reversed the district court's amendment of its judgment and held that the Ar......