CATES v. INTEGRIS HEALTH, INC.
2018 OK 9
| Okla. | 2018Background
- Plaintiff Elizabeth Cates, a former patient, signed a hospital admission form promising payment for charges remaining after third-party payment unless prohibited by contract between the hospital and the insurer.
- Integris had a separate Participating Hospital (PPO) agreement with the insurer setting discounted, in-network terms and (according to Cates) restricting the hospital from billing patients unless certain conditions were met (e.g., patient consent after notice of noncoverage).
- Cates alleges Integris failed to submit charges to her insurer for coverage/authorization, filed liens, and billed patients directly; she brings class claims for breach of contract, third‑party beneficiary breach, violation of the Oklahoma Consumer Protection Act, and deceit.
- Integris moved to dismiss, arguing ERISA preempts the state-law claims because they "relate to" an ERISA plan; the district court granted dismissal on express-preemption grounds.
- The Oklahoma Supreme Court reviews de novo and holds Cates’ pleaded claims can be adjudicated without interpreting or enforcing the ERISA plan, so they are not expressly preempted; the dismissal is reversed and the case remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cates' state-law claims are expressly preempted by ERISA §514 | Cates: claims enforce independent contracts and prohibit billing unless hospital first submitted charges to insurer; resolution does not require interpreting ERISA plan | Integris: claims "relate to" ERISA plan because rights to billing/payment depend on whether services are covered under the plan | Not preempted — claims can be resolved by reference to admission form and PPO/provider agreement without interpreting plan coverage |
| Whether breach-of-contract and third-party-beneficiary claims require plan interpretation | Cates: breach depends on hospital's contractual duty to submit charges, not plan coverage | Integris: any obligation to bill insurer rather than patient depends on whether services were "covered" by the ERISA plan | Court: plaintiff’s theory permits adjudication without plan interpretation; claims survive dismissal |
| Whether consumer-protection and deceit claims are preempted because they implicate ERISA rights | Cates: claims target wrongful billing and false liens independent of plan benefit enforcement | Integris: allegations effectively seek to alter plan obligations and beneficiary rights | Court: claims allege traditional state-law wrongs (unauthorized billing, misrepresentations) and can be proved without referencing plan terms; not preempted |
| Whether allowing state claims frustrates ERISA's objectives | Cates: denying state remedies leaves beneficiaries without recourse and invites provider conduct that undermines ERISA aims | Integris: state claims would interfere with uniform plan administration | Court: permitting state-law remedies here does not impermissibly affect relations among principal ERISA entities and may better serve ERISA’s protective purpose |
Key Cases Cited
- Kolbe & Kolbe Health & Welfare Benefit Plan v. Med. Coll. of Wis., 657 F.3d 497 (7th Cir. 2011) (state-law breach claims against provider resolved by provider/member agreements without interpreting ERISA plan; not preempted)
- Hospice of Metro Denver, Inc. v. Group Health Ins. of Okla., 944 F.2d 752 (10th Cir. 1991) (provider promissory‑estoppel claims based on assurances from plan/agent are not ERISA enforcement and escape preemption)
- Mem'l Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236 (5th Cir. 1990) (provider claims for reliance damages not seeking plan benefits are not preempted; denying state remedies can undermine ERISA objectives)
- David P. Coldesina, D.D.S., P.C. v. Estate of Simper, 407 F.3d 1126 (10th Cir. 2005) (claims that do not affect relationships among ERISA entities fall outside preemption)
- Ingersoll‑Rand Co. v. McClendon, 498 U.S. 133 (1990) (ERISA preemption analysis hinges on whether state law "relates to" an ERISA plan)
- FMC Corp. v. Holliday, 498 U.S. 52 (1990) (noting the breadth of ERISA’s preemption clause)
- N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995) ("relate to" cannot be given limitless scope to avoid swallowing all state law)