Chiropractic Nutritional Associates, Inc. v. Empire Blue Cross & Blue Shield

669 A.2d 975, 447 Pa. Super. 436, 1995 Pa. Super. LEXIS 4122
CourtSuperior Court of Pennsylvania
DecidedDecember 29, 1995
Docket62-69
StatusPublished
Cited by31 cases

This text of 669 A.2d 975 (Chiropractic Nutritional Associates, Inc. v. Empire Blue Cross & Blue Shield) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chiropractic Nutritional Associates, Inc. v. Empire Blue Cross & Blue Shield, 669 A.2d 975, 447 Pa. Super. 436, 1995 Pa. Super. LEXIS 4122 (Pa. Ct. App. 1995).

Opinion

CERCONE, Judge:

This is a consolidated direct appeal from the trial court’s orders which granted the preliminary objections of defendants/appellees and dismissed multiple complaints initiated by plaintiff/appellant. We reverse and remand for further proceedings.

Appellee Allegheny Power System, Incorporated (“Allegheny Power”) entered into a contractual agreement with appellee Empire Blue Cross and Blue Shield (“Empire”) to provide *439 health care coverage for Allegheny Power’s employees and their dependents. Appellant, Chiropractic Nutritional Associates, Incorporated (“Chiropractic”), provided chiropractic services to certain individuals covered under the group medical insurance policy issued by Empire. Chiropractic billed the insurance carrier directly pursuant to assignments Allegheny Power’s insured employees executed in appellant’s favor. Although the insurance carrier, Empire, initially paid appellant for the chiropractic services rendered, at some point a dispute developed over the medical necessity of continuing treatments for the insureds or their dependents. Appellant Chiropractic subsequently filed suit against both appellees contesting Empire’s denial of benefits to Allegheny Power’s employees and seeking the fees owed for services it had rendered to the employees. 1

The complaints appellant Chiropractic lodged in the Court of Common Pleas alleged, inter alia, that the insurance company and the employer, Empire and Allegheny Power, had entered into a contract to provide medical benefits to Allegheny Power’s employees and their dependents, including chiropractic care. Appellant also alleged that appellee Allegheny Power had prepared and distributed a handbook to its employees explaining the covered medical and chiropractic therapy available under the terms of the group insurance contract.

*440 The Allegheny Power handbook explicitly states that employees may assign their right to collect benefits. 2 Appellees responded with preliminary objections averring that appellant lacked the capacity to file suit in any of the matters before the Court of Common Pleas. Appellees averred that, contrary to the terms of the Allegheny Power employee handbook, the Master Agreement between Empire and Allegheny Power actually forbids assignment of benefits. 3 Thus, appellees concede that Allegheny Power gave its employees covered under the group insurance agreement incorrect information in the handbook describing the medical coverage provided by Empire. 4

The tidal court scheduled a hearing on the preliminary objections for November 29,1994. Ultimately, the lower court determined that Chiropractic lacks the capacity to bring suit because the court found the non-assignment clause in the *441 master agreement to be enforceable against all third parties, including medical providers. On December 6, 1994, the trial judge therefore sustained the preliminary objections and dismissed all of appellant’s complaints. Appellant Chiropractic filed timely notices of appeal. On January 10, 1995, the Superior Court consolidated the appeals so that they could be briefed and argued as a single matter.

The instant appeal presents two issues for our consideration:

1. Where patients assign their cause of action for unpaid treatment bills (detriments) to the health care provider, does a non-assignement [sic] of benefits clause in the group contract [between the patients’ employer and the insurance company] preclude a remedy to the plaintiff [health care provider]?
2. Does a health care provider, which has obtained an assignment of cause of action from its patients, have the capacity to sue?

Before addressing these claims, it is important to note the specific procedural posture of this case. The complaints underlying this appeal were filed by a third party assignee, the health care provider, who purports to “stand in the shoes” of the assignor-employees in bringing suit to challenge the denial of medical benefits. 5

*442 Several other preliminary matters must be considered prior to discussing the merits of appellant’s claims. First, we must determine whether to apply state or federal law in our analysis; The issues before us concern the proper interpretation of the provisions of an employer sponsored group health insurance plan. For the reasons explained infra, appellant is-correct in asserting that the trial court erred by applying state law rather than the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”). Appellees have not contested this point.

Congress enacted ERISA to protect the interests of employees and their beneficiaries in employee benefit plans. Ingersoll-Rand v. McClendon, 498 U.S. 133, 137, 111 S.Ct. 478, 482, 112 L.Ed.2d 474, 482 (1990) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983)). ERISA explicitly provides for concurrent federal and state jurisdiction over benefit claims. 29 U.S.C. § 1132(e)(1). Thus, the Act permits the plaintiff to choose the forum and initiate suit either in state court or federal district court. Id. 6 ERISA also contains a preemp *443 tion clause intended to ensure that employee benefit plans and plan sponsors are subject to a uniform body of law, no matter which forum considers the case. Ingersoll-Rand, 498 U.S. at 142, 111 S.Ct. at 484, 112 L.Ed.2d at 485-86. Whenever a state court exercises jurisdiction over a matter pertaining to employee benefits, that court must first resolve whether to apply state law or ERISA. Id.

As a general proposition, ERISA supercedes “any and all State laws insofar as they may ... relate to any employee benefit plan.... ” 29 U.S.C. § 1144(a). See Arber v. Equitable Beneficial Life Insurance Co., 848 F.Supp. 1204, 1210 (E.D.Pa.1994) (ERISA comprehensively regulates employee welfare benefit plans that, through purchase of insurance or otherwise, provide medical, surgical or hospital care, or benefits in event of sickness, accident, disability or death). A determination of preemption is ultimately a question of Congressional intent. Ingersoll-Rand v. McClendon, 498 U.S. at 137-38, 111 S.Ct. at 482, 112 L.Ed.2d at 483.

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669 A.2d 975, 447 Pa. Super. 436, 1995 Pa. Super. LEXIS 4122, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chiropractic-nutritional-associates-inc-v-empire-blue-cross-blue-pasuperct-1995.