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WALDSCHMIDT v. AETNA U.S. HEALTHCARE

August 14, 2002

CAROL WALDSCHMIDT, IN HER OWN RIGHT AND AS ADMINISTRATRIX OF THE ESTATE OF ROBERT WALDSCHMIDT, DECEASED, PLAINTIFF,
V.
AETNA U.S. HEALTHCARE; ST. JOHN'S LUTHERAN CARE CENTER; ALLEGHENY GENERAL HOSPITAL WEST PENN ALLEGHENY HEALTH SYSTEM, ANTONIOS ZIKOS; RAVIKUMAR ALAGAR AND EVELYN BERWICK, DEFENDANTS.



The opinion of the court was delivered by: Ambrose, District Judge.

OPINION and ORDER OF COURT

SYNOPSIS

OPINION

Robert Waldschmidt, a UPS employee, was severely injured in a traffic accident. After a prolonged stay in several hospitals, the decision was made to transfer him to a nursing facility. Carol Waldschmidt ("Waldschmidt"), his wife, insists that Defendant Aetna Life Insurance Company ("Aetna") made a medical decision to transfer her husband to St. John's Lutheran Care Center ("St.John's") — a facility which she contends was inadequately equipped to meet his needs. Waldschmidt claims that she asked Aetna to transfer her husband to a more highly skilled facility instead.

While at St. John's, Robert Waldschmidt suffered a cardiac and/or pulmonary arrest. Waldschmidt contends that he was not properly nor timely resuscitated, and that he suffered severe brain damage and other injuries as a consequence. He was then transferred back to Allegheny General Hospital, where he died a few months later. Waldschmidt attributes his death to the injuries sustained while at St. John's.

Waldschmidt has sued nearly everyone associated with her husband's care. She filed suit in the Court of Common Pleas of Allegheny County, Pennsylvania. Aetna thereafter removed the action to this Court, insisting that Waldschmidt's claims are completely preempted by ERISA, because they relate to the administration of benefits under a health plan. Waldschmidt disagrees. She contends that her claims address the quality of medical care received, and as such, are not completely preempted. Consequently, she filed the pending Motion to Remand (Docket No. 9). Only one other defendant, Ravi K. Algar, M.D., has weighed in on this issue. Algar supports Waldschmidt's contention that the claims involve the quality of medical care received and are not completely preempted.

This is a difficult case — especially given its posture. I am without the benefit of a thoroughly developed factual history.*fn1 Nevertheless, after careful consideration of the allegations set forth in the Complaint, and the plan documents, I reject Waldschmidt's characterization of her claim. Because the dispute involves the eligibility for benefits, the claim is completely preempted under ERISA and remand is inappropriate.

ANALYSIS

Consequently, whether Waldschmidt's Motion for Remand can be granted depends on whether her claim can fairly be characterized as one relating to the administration of benefits. In a series of cases beginning with Dukes v. U.S. Healthcare, Inc., 57 F.3d 350 (3d Cir. 1995) and culminating in Pryzbowski v. U.S. Healthcare, Inc., 245 F.3d 266 (3d Cir. 2001), the Third Circuit court established guidelines for determining whether a claim relates to the administration of benefits. In Dukes, the court initially distinguished between claims which focused on the "quality of benefits" received, and claims which focused on the "quantity of benefits" received. See Dukes, 57 F.3d at 357 (stating "[i]nstead of claiming that the welfare plans in any way withheld some quantum of plan benefits due, the plaintiffs in both cases complain about the quality of medical treatment that they actually received and argue that the U.S. Healthcare HMO should be held liable under agency and negligence principles. We are confident that a claim about the quality of a benefit received is not a claim under § 502(a)(1)(B) to `recover benefits due . . . under the terms of [the] plan.'"). Because § 502(a) makes no reference to the "quality" of benefits received, the court concluded that such claims are not completely preempted. The next few Third Circuit court decisions also utilized this terminology. See In Re U.S. Healthcare, Inc., 193 F.3d 151, 162 (3d Cir. 1999) (observing that "[a]s an administrator overseeing an ERISA plan, an HMO will have administrative responsibilities over the elements of the plan, including determining eligibility for benefits, calculating those benefits, disbursing them to the participant, monitoring available funds, and keeping records. As we held in Dukes, claims that fall within the essence of the administrator's activities in this regard fall within section 502(a)(1)(B) and are completely preempted. In contrast . . . when the HMO acts under the ERISA plan as a health care provider, it arranges and provides medical treatment, directly or through contracts with hospitals, doctors or nurses. . . . In performing these activities, the HMO is not acting in its capacity as a plan administrator but as a provider of health care, subject to the prevailing state standard of care."); and Lazorko v. Pennsylvania Hospital, 237 F.3d 242, 249 (3d Cir. 2000) (stating that "[t]hese direct claims, as they are presently pled, challenge the soundness of a medical decision by a health care provider rather than the administration of benefits under an ERISA plan. Thus, Lazorko does not seek a remedy for the administrative denial of a benefit under § 502(a)(1)(B). For that reason, the removal of Lazorko's action to the federal court on the basis of complete preemption was improper.").

Following the Supreme Court's decision in Pegram v. Herdrich, 530 U.S. 211, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000),*fn2 however, the Third Circuit court slightly modified its terminology. In Pryzbowski v. U.S. Healthcare, Inc., 245 F.3d 266 (3d Cir. 2001), the court adopted the Supreme Court's terminology of "eligibility decisions" versus "treatment decisions." Referring to the Pegram decision, the Third Circuit court stated:

. . . the distinction made there between "eligibility decisions" which "turn on the plan's coverage of a particular condition or medical procedure for its treatment," and "treatment decisions," which are choices in "diagnosing and treating a patent's [sic] condition," . . . is . . . applicable for complete preemption purposes. Regardless of the language used, the 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 ...

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