services or leads an enrollee reasonably to believe that it has, a vicarious liability claim for negligent treatment by a physician who is its agent or ostensible agent is not preempted.
The courts' holding that such claims are preempted do so for essentially the same several reasons.
In the cases cited above the courts all emphasize that the central feature of such a claim is the circumstances of medical treatment under an employee benefit plan, citing to Altieri v. CIGNA Dental Health, Inc., 753 F. Supp. 61, 64 (D. Conn. 1990). Plaintiff in Altieri, however, did not allege that his treating dentist was an ostensible agent of the defendant. Plaintiff in that case asserted claims for negligent failure to determine the dentist's competence and misrepresenting the quality of benefits offered, claims arising from the manner in which benefits were administered or provided which are preempted. If literally all claims involving "the circumstances of medical treatment" under a plan were preempted, however, a plan beneficiary could not even sue his treating participating physician for his malpractice.
The courts in Visconti, Dukes and Ricci also note that a determination of ostensible agency would require an examination of the plan and thus such a claim "relates to" an employee benefit plan. The courts in these cases also note that denying preemption in vicarious liability cases would result in higher costs for the plans. The courts in Visconti and Dukes further state that a determination of malpractice would require an examination of the plan to see whether the services provided measured up to those promised. Finally, the courts in Ricci and Visconti state that it would be anomalous to deny preemption for vicarious liability claims while allowing preemption of direct negligence claims.
The term "related to" is not to be taken literally but rather must be applied consistent with the policies underlying ERISA. Pohl v. National Benefits Consultants, Inc., 956 F.2d 126, 128 (7th Cir. 1992). A law relates to an ERISA plan if it is designed to affect such plans, singles them out for special treatment or predicates rights or obligations on the existence of such plans, impairs their ability to function simultaneously in different states or effectively restricts such plans with regard to their structure, administration, reporting requirements or choice of benefits. United Wire v. Morristown Mem. Hosp., 995 F.2d 1179, 1192-93 (3d Cir. 1993).
That a state law may increase the costs of operating a benefit plan does not result in preemption or such plans would enjoy "a charmed existence that never was contemplated by Congress." Id. at 1194. If cost were determinative, employee benefit plans would be exempt from liability for virtually all state law torts and they are not. See Mackey v. Lanier Collection Agency & Service, 486 U.S. 825, 833, 100 L. Ed. 2d 836, 108 S. Ct. 2182 (1988); Pohl, 956 F.2d at 128.
A determination that a treating physician committed malpractice does not require an examination of the plan to decide whether the service provided was that which was promised. What is required is evidence of what transpired between the patient and physician and an assessment of whether in providing admittedly covered treatment or giving professional advice the physician possessed and utilized the knowledge, skill and care usually had and exercised by physicians in his community or medical specialty. As noted, a claim that one was denied a promised benefit is preempted. A claim that one received a promised service from a provider who performed that service negligently is another matter.
That one may refer to the contents of a plan to adduce evidence that it held out a particular person as its employee or agent to help sustain a cause of action does not implicate the concerns underlying the ERISA preemption provision. A physician suing a plan administrator for services rendered to beneficiaries may have to reference the plan to prove that he was a participating physician, that he conformed with the required authorization procedure or that the person who authorized performance of the services in question was duly designated to do so. A participating physician suing a plan administrator for libel for publication of false statements that he overcharged for certain services and performed unnecessary procedures may have to reference the plan to show what procedures were approved and what fee or fee range was authorized. Yet, such an action is not preempted. See Mackey, 486 U.S. at 833 n.8 (referencing Abofreka v. Alston Tobacco Co., 288 S.C. 122, 341 S.E.2d 622 (1986)).
A state law vicarious liability claim for malpractice is based on common law tort and agency principles, and does not require a finding that a plan was wrongfully administered or that promised benefits were not provided. To present such a claim, a plaintiff whose employer enrolled him in an HMO would have to show nothing more than would a plaintiff who secured an HMO membership for himself. Unless we are going to create a two track system of justice in which ERISA plan entities operate in "a fully insulated legal world," such a claim should not be preempted. See United Wire, 995 F.2d at 1193 (quoting Rebaldo v. Cuomo, 749 F.2d 133 (2d Cir. 1984)).
To allow such claims would not create any more of an "anomalous situation" than results from the type of line drawing in which courts and legislatures frequently and necessarily engage.
Claims arising from allegedly wrongful benefit determinations are preempted whether the determination was made by a bureaucrat or by a utilization review physician and labeled as malpractice. A malpractice claim for injuries resulting from medical treatment could be maintained against any physician and entity employing him or holding him out as an employee, including an HMO employee benefit plan that provided treatment directly through a physician it employed or through an ostensible agent. Notably, the Court in Corcoran did not disclaim Independence HMO but distinguished it on the ground that the claim there was based on medical decisions made during treatment and not in connection with a benefit or cost containment determination. Corcoran, 965 F.2d at 1333 n.15; Lancaster v. Chandra, 1994 U.S. Dist. LEXIS 1110, 1994 WL 33962 at * 4-5 (N.D. Ill. Feb. 4, 1994)(same -- defendants conceding Elsesser /Independence HMO exception). See also Butler v. Wu, 853 F. Supp. 125, 129 (D.N.J. 1994)(noting distinction between claim against HMO employee benefit plan for failure to supervise treatment provided by negligent participating physician which court held preempted and malpractice claim against an HMO plan that employs allegedly negligent doctor).
Claims against an ERISA plan party premised on a failure to provide promised benefits or a misrepresentation of what benefits would be provided are preempted. A claim that participating primary care physicians were restricted or discouraged for economic reasons from referring beneficiaries to specialists or hospitals or from using the most state of the art diagnostic tests merely ascribes to a defendant a motive for failing to provide certain benefits and is preempted. A claim that an operator or administrator of a plan failed to use due care in selecting those with whom it contracted to perform services relates to the manner in which benefits are administered or provided and is preempted.
Accordingly, plaintiff's claims for negligent selection of a particular primary care physician, for misrepresentation of available benefits and for breach of a contractual obligation to provide certain benefits will be dismissed. To the extent plaintiff's "malpractice" claim is premised on Dr. Stulpin not testing, hospitalizing or referring decedent to a specialist because defendant disallowed or discouraged such services, the claim is preempted and also will be dismissed.
To the extent that plaintiff asserts a malpractice claim that defendant's ostensible agent was professionally negligent in treating or giving medical advice to decedent, the claim will not be dismissed.
The court does not suggest that Dr. Stulpin was defendant's ostensible agent merely because it "approved" him. This would amount to no more than a grant by a hospital of operating privileges to particular surgeons. The court also does not suggest that ostensible agency exists merely because an HMO plan requires a beneficiary to select from a list of physicians under contract with the HMO. See Lancaster, 1994 U.S. Dist. LEXIS 1110, 1994 WL 33962 at * 5-6 (referencing Raglin v. HMO Illinois, Inc., 230 Ill. App. 3d 642, 646, 172 Ill. Dec. 90, 595 N.E.2d 153 (1st Dist. 1992)). The court merely concludes that it does not appear beyond doubt from the face of her complaint that plaintiff can prove no set of facts in support of a malpractice claim which could entitle her to relief.
Because the court lacks subject matter jurisdiction over such a vicarious liability medical malpractice claim by a Pennsylvania citizen against a Pennsylvania corporation, this action will be remanded to the Common Pleas Court of Delaware County. An appropriate order will be entered herewith.
O R D E R
AND NOW, this day of August, 1994 upon consideration of defendant's Motion to Dismiss and plaintiff's response thereto, consistent with the accompanying memorandum, IT IS HEREBY ORDERED that said Motion is GRANTED in part and DENIED in part in that all of plaintiff's claims except her claim of vicarious liability for medical malpractice are DISMISSED and, pursuant to 28 U.S.C. § 1447(c), the above action is REMANDED to the Court of Common Pleas of Delaware County.
BY THE COURT:
JAY C. WALDMAN, J.