Opinion
Civil Action No. 3:00-CV-2368-D
May 25, 2001
MEMORANDUM OPINION AND ORDER
The instant motions to remand and dismiss in this removed action present a question of preemption under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001-1461. Plaintiffs have amended their complaint to allege a single claim under the Texas Health Care Liability Act ("THCLA"), Tex. Civ. Prac. Rem. Code Ann. §§ 88.001-88.003 (Vernon Supp. 2001). Concluding that plaintiffs' action complains about the administration of benefits rather than the quality of the medical treatment performed, the court denies the motion to remand, grants the motion to dismiss, and affords plaintiffs the opportunity to plead a claim for relief under ERISA.
I
Plaintiffs Gwen Roark and Robert Roark ("the Roarks") sued Humana, Inc., Humana Health Plan of Texas, Inc., and Humana HMO Texas, Inc. (collectively, "Humana") in Texas state court challenging its decisions concerning coverage for medical care for Mrs. Roark necessitated by a spider bite that had developed into a serious wound and required several years of medical care. They alleged that Humana delayed or denied authorization for a vacuum assisted closure ("VAC") device. The Roarks contended that Humana also delayed or denied approval for skilled home nursing care, approving instead periodic visits to a local hospital's wound care center, where the nursing staff lacked necessary training to provide proper treatment, and travel to the facility increased the likelihood of infection. They also asserted that they converted from a group to an individual insurance policy based on Humana's misrepresentations. The Roarks sued Humana under the Texas Deceptive Trade Practices-Consumer Protection Act ("DTPA"), Tex. Bus. Com. Code Ann. §§ 17.41-17.826 (Vernon 1987 Pamp. Supp. 2001), the Texas Insurance Code, Tex. Ins. Code Ann. art. 21.21 § 2(a) (Vernon 1981 Supp. 2001), the THCLA, and Texas common law for breach of the duty of good faith and fair dealing and breach of contract. After Humana removed the case based on ERISA preemption (the parties are not diverse), the Roarks moved to remand. The court denied the motion, holding that at least the Roarks' DTPA and Texas Insurance Code claims were completely preempted. See ERISA § 502(a), 29 U.S.C. § 1132(a).
Following the court's ruling, the Roarks filed a first amended complaint ("amended complaint") in which they allege only that Humana is liable under the THCLA. See Am. Compl. ¶¶ 20-26. They move once again to remand, contending that the court in its discretion may remand the case because only a state-law claim remains that is, at most, subject to conflict, not complete, preemption. Humana opposes the remand motion and separately moves to dismiss, contending the THCLA cause of action is preempted under at least conflict, if not complete, preemption.
II
Despite the complexities that can surround ERISA jurisprudence, the present case does not present a difficult application of preemption principles. Although the Roarks attempt by their amended complaint to delete any basis for complete preemption, they cannot circumvent the preemptive reach of ERISA by artful pleading. See Johnson v. Baylor Univ., 214 F.3d 630, 632 (5th Cir. 2000); Pryzbowski v. U.S. Healthcare, Inc., 245 F.3d 266, 274 (3d Cir. 2001) ("Although ostensibly directed at the provision of medical treatment, a federal court may `look beyond the face of the complaint to determine whether a plaintiff has artfully pleaded his suit so as to couch a federal claim in terms of state law[.]'" (quoting Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1488 (7th Cir. 1996))). When the allegations of their amended complaint are carefully scrutinized, it is clear that they are complaining in their THCLA claim about the administration, not quality, of the medical care that Mrs. Roark received.
As the Third Circuit held recently in Pryzbowski:
[T]he ultimate distinction to make for purposes of complete preemption is whether the claim challenges the administration of or eligibility for benefits, which falls within the scope of § 502(a) and is completely preempted, or the quality of the medical treatment performed, which may be the subject of a state action.Pryzbowski, 245 F.3d at 273. The Roarks attempt to cast their cause of action as a quality of care claim under the THCLA. They allege that, as a "managed care entity" under the Act, Humana failed to use ordinary care in influencing, controlling, participating in, and making decisions regarding Mrs. Roark's medical treatment. Am. Compl. ¶ [21. They aver that Humana "actually provided" medical services to Mrs. Roark and controlled, influenced, participated in, and affected the quality of the diagnosis, care, and treatment provided to her. Id. at ¶ 22. The Roarks contend that Humana violated the duty of ordinary care set forth in §§ 88.001 and 88.002 of the THCLA. Id. They also allege that Humana failed to provide medical necessity decisions that were within the standard of care, id. at ¶ 23, put in place systems that made sub-standard care more likely, id. Plaintiffs assert, having undertaken to manage the quality of medical care rendered to her, Humana failed in its duty to establish and follow policies and procedures that provided medical care that at least met the standard of care in the pertinent medical community, id. at ¶ 24. They aver that all actions and inactions regarding the medical decisions that Humana made concerning Mrs. Roark's care were negligent and proximately caused significant damages to her. Id. at ¶ 25.
Despite the Roarks' references in these paragraphs of their amended complaint to "medical treatment" and "quality" of care, the controlling question is whether their THCLA claim, fairly construed, challenges the administration of benefits or the quality of the medical treatment performed. The court holds that it is the former. The Roarks' THCLA cause of action is set out in ¶¶ 20-26 of their amended complaint. Paragraph 20, however, explicitly adopts ¶¶ 1-19. Paragraphs 8-19 contain allegations that form the factual predicate for the THCLA claim and reveal that the Roarks are challenging the administration of benefits, not assailing the quality of the medical care that Mrs. Roark received.
According to the fact-based allegations for the THCLA cause of action, Mrs. Roark received a spider bite in early 1990 that caused her to suffer severe skin, muscle, and bone damage. Id. at ¶ 8. She received various forms of treatment during the period of several years that followed. Id. She learned in 1997 of a new device — a VAC. At the time, Prudential Insurance Company was her health insurer, and it covered the VAC service. Id. at ¶ 9. In 1997, however, Humana became the Roarks' HMO. Philip Aronoff, M.D. ("Dr. Aronoff") became Mrs. Roark's primary care physician. Dr. Aronoff recommended and authorized Mrs. Roark's use of the VAC to assist the healing process and to prevent infection. Id. at ¶ 10.
It was also necessary that Mrs. Roark undergo frequent wound dressing changes, VAC maintenance, and debridement to remove fibrin tissue accumulations on the wound. This process required the services of a specially trained nurse for about two hours every other day, and the care of a physician once per month for deep debridement. Id. at ¶ 11. Mrs. Roark's physician ordered home nursing care for the debridement procedure and dressing changes to minimize physical stress on Mrs. Roark and to reduce the chance of infection. Id.
Once Humana became Mrs. Roark's health care provider, and despite Dr. Aronoff's orders, VAC treatment and home nursing care were consistently delayed. Id. at ¶ 12. The Roarks immediately appealed or grieved each delay. Both Dr. Aronoff and Mrs. Roark's specialist informed Humana that home nursing care and the VAC were medically necessary and that failure to treat her could result in the loss of her leg. Humana ultimately provided the VAC for a 90-day period, but only after significant delays. Id. at ¶ 13. This cycle of delay occurred several times in 1998. The Roarks, or their health care providers who were assisting them, encountered numerous obstacles and spent extensive time attempting to obtain authorized care. Id. at ¶ 14. In the fall of 1998 Humana refused to provide either the VAC or home nursing care. Id. at ¶ 15. The Roarks grieved this decision and Humana reinstated home nursing care about one month later. Id. at ¶¶ 15-16. During the delay, Mrs. Roark developed an infection, the condition of her wound deteriorated significantly, and the delay in providing the VAC and home nursing care reversed the healing process. Id. at ¶ 16. In December 1998, despite the recommendation of her treating physicians, Humana again refused to authorize home nursing care for cleaning, redressing, and debriding Mrs. Roark's wound, instead approving periodic visits to a local hospital wound center. Id. at ¶ 17. The hospital nurses lacked necessary training to change the dressing on the VAC and to perform debridement, and going to a public facility greatly increased the likelihood that Mrs. Roark would contract infection. Id. Although Mrs. Roark's primary care physician recommended home nursing care, Humana refused to provide it. Id. at ¶ 18. Mrs. Roark began receiving care at the hospital. By February 1999 she had developed a serious infection. Despite efforts by her doctors to treat her wound and control the infection, it was necessary in March 1999 to amputate her leg as a life-saving measure. Id. During her hospital convalescence, Humana again refused to provide the VAC. Id. at ¶ 19. In early 2000, after doctors concluded that her leg was still infected, Mrs. Roark underwent a second amputation. Id.
The amended complaint identifies Dr. Harvey Komet ("Dr. Komet") as Humana's Medical Authorization Director who was responsible for overseeing the care provided for Mrs. Roark. It alleges that Dr. Komet was an ear, nose, and throat physician with no training in wound care. Id. Plaintiffs do not, however, allege that Dr. Komet provided any medical care to Mrs. Roark, do not link him specifically to any medical necessity decision made in her case, and do not otherwise mention him in ¶¶ 8-26 of the amended complaint.
The foregoing factual allegations reveal that the Roarks are complaining in their amended complaint about Humana's administration of benefits, not the quality of the medical treatment performed. With one exception, each reference to a medical professional is positive — offered to show that the individual supported the Roarks' efforts to persuade Humana that the device, treatment, or facility in question was medically necessary — or neutral — offered to describe a service that the person rendered. No complaint is made about the quality of the care given. The sole exception is plaintiffs' assertion that the nurses at the hospital wound care center lacked necessary training to change the dressing on the VAC or to conduct debriding. See id. at ¶ 17. But the Roarks do not explicitly base their THCLA claim on the quality of that care or even assert that Humana can be held liable for the conduct of these nurses or the unnamed "local hospital." Nor do the Roarks sue a doctor, nurse, or hospital.
The assertion that Dr. Komet lacked any training in wound care, see Am. Compl. ¶ 12, is not connected to any decision that he made about Mrs. Roark's care. See supra note 1. The court therefore does not treat it as a negative reference.
What the amended complaint assails are Humana's delays in approving, or refusals to authorize, particular types of care, devices, or facilities. Therefore, the clam is completely preempted under ERISA § 502(a). See, e.g., Pryzbowski, 245 F.3d at 273 (holding that claims that alleged that HMO negligently and carelessly delayed approval of beneficiary's surgery, acted in arbitrary and capricious manner in doing so, acted in willful and wanton disregard for beneficiary's health, acted in bad faith, and breached beneficiary's health insurance contract, were completely preempted as benefits administration activities where underlying the allegations of delay was HMO policy requiring beneficiaries either to use in-network specialists or to obtain approval from HMO for out-of-network specialists); Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1331 (5th Cir. 1992) (holding that state-law medical malpractice claim against company that provided utilization review services was preempted where plaintiffs complained of medical decisions that were incident to benefit determinations).
The Roarks' reliance on Corporate Health Insurance, Inc. v. Texas Department of Insurance, 215 F.3d 526 (5th Cir. 2000), offers them no solace. While that case holds that the THCLA is only partly preempted by ERISA, see id. at 539-40, it explicitly states:
The [liability provisions of the THCLA] do not encompass claims based on a managed care entity's denial of coverage for a medical service recommended by the treating physician: that dispute is one over coverage, specifically excluded by the Act. Rather, the Act would allow suit for claims that a treating physician was negligent in delivering medical services, and it imposes vicarious liability on managed care entities for that negligence.Id. at 534.
The Roarks' reliance on Pegram v. Herdrich, 530 U.S. 211, 120 S.Ct. 2143 (2000), is also misplaced. If they were suing Humana for breach of fiduciary duty under ERISA based on a mixed eligibility decision made by a Humana physician, Pegram would hold that Humana could not be held liable for breach of fiduciary duty because the decision was not a fiduciary decision under ERISA. See id. at 2158. And while Pegram (though not a preemption case) contains reasoning that is helpful in understanding the reaches of ERISA preemption, the Roarks' claim is not a type of medical malpractice cause of action that should be litigated in state court. At bottom, it is about administration of benefits, not quality of medical treatment. Moreover, some of Pegram's rationale also runs counter to the Roarks' arguments, as Pryzbowski illustrates:
[Plaintiff]'s claims against U.S. Healthcare are limited to its delay in approving benefits, conduct falling squarely within administrative function. A holding that [plaintiff]'s claims against U.S. Healthcare are not completely preempted would open the door for legal challenges to core managed care practices (e.g., the policy of favoring in-network specialists over out-of-network specialists), which the Supreme Court eschewed in Pegram.Pryzbowski, 245 F.3d at 274-75 (emphasis added).
The court therefore holds that plaintiff's THCLA claim is completely preempted and denies their motion to remand this case to state court.
III
Because the Roarks' claim is completely preempted, Humana's motion to dismiss is also granted.
* * *
Plaintiffs' February 7, 2001 first amended motion to remand is denied. Humana's April 2, 2001 motion to dismiss for failure to state a claim is granted. Plaintiffs shall have 30 days from the date this order is filed to file an amended complaint that states a claim against Humana under ERISA If plaintiffs opt not to replead, the court will dismiss this action with prejudice.