                                                                     FILED
                                                                May 11 2020, 3:27 pm

                                                                     CLERK
                                                                 Indiana Supreme Court
                                                                    Court of Appeals
                                                                      and Tax Court

                          IN THE

   Indiana Supreme Court
            Supreme Court Case No. 20S-PL-302

FMS Nephrology Partners North Central Indiana
           Dialysis Centers, LLC,
                           Appellant,

                              –v–

             Meritain Health, Inc., et al.,
                           Appellees.


       Argued: October 10, 2019 | Decided: May 11, 2020

           Appeal from the St. Joseph Superior Court
                    No. 71D07-1605-PL-194
            The Honorable Steven L. Hostetler, Judge

    On Petition to Transfer from the Indiana Court of Appeals
                     Case No. 18A-PL-1349



                 Opinion by Justice Slaughter
     Chief Justice Rush and Justices Massa and Goff concur.
                 Justice David concurs in result.
Slaughter, Justice.

   The Employee Retirement Income Security Act of 1974 establishes
minimum federal standards governing employee-benefit plans. Under
ERISA, the responsibility for regulating this system of benefit plans is
exclusively a federal concern. To further the goal of uniform federal
standards, ERISA contains two preemption provisions. These provisions’
preemptive effect on state laws is far-reaching but not absolute. Some state
laws—and hence the claims arising under such laws—survive ERISA
preemption, such as those not requiring interpretation of benefit-plan
documents. A claim withstands preemption to the extent its validity turns
not on the meaning of the plan documents but on a separate legal duty
independent of the plan.

   Here, a health-care provider sued defendant health-insurance plans,
which are governed by ERISA, alleging they failed to pay agreed
reimbursement rates for covered services under their plans. On this
record, we hold that the trial court erred by entering summary judgment
for the defendant plans based on ERISA preemption. A key factual
dispute exists concerning a central issue in this case. Contrary to the
defendants’ arguments, the designated summary-judgment evidence does
not establish either that the provider’s claims were denied coverage under
the plans or that the provider’s claims necessitate interpreting the plan
documents. We grant transfer, vacate the entry of summary judgment for
the defendants, and remand with instructions.



Background Facts and Procedure
  Third-party networks are common in the health-care industry. These
networks serve as middlemen that connect patients with health-care
providers by entering separate, individual contracts with both providers
and employee-health plans. The plans receive access to a network of
certified providers that have agreed to be reimbursed at negotiated rates
discounted from the provider’s full sticker price. And providers within
these networks receive the certainty and predictability of fixed rates with
prompt reimbursement.


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   Plaintiff, FMS Nephrology Partners North Central Indiana Dialysis
Centers, LLC, is a health-care provider. It owns and operates facilities in
Indiana that provide dialysis treatments to patients suffering from end-
stage renal disease, and it participates in third-party networks. Over the
years, FMS has contracted with two such networks, Community Health
Alliance and Select Health Network. Defendants University of Notre
Dame and its affiliated employee health-insurance plans have contracted
with both health networks. Defendants Beacon Health and its affiliated
employee health-insurance plans have contracted only with Community
Health Alliance.

   To handle various claims-administration functions for the plans, both
the Notre Dame and Beacon Health plans engaged Defendant Meritain
Health as their third-party administrator. In that capacity, Meritain
processes the claims a health-care provider submits to the Notre Dame
and Beacon Health plans. Meritain then issues an “Explanation of
Benefits” for each claim. The EOB memorializes information about the
claim, including the date of service, the total amount billed, and whether
the claim is covered under the plan. This coverage determination is
reflected in an EOB’s various columns:

       •   “Provider Discount”,
       •   “Ineligible Amount”,
       •   “Pymt Made By Plan”,
       •   “Patient Responsibility”, and
       •   “Notes”.

Once Meritain determines that a claim is covered under the applicable
plan, the provider agrees to accept, and Notre Dame and Beacon Health
agree to pay, the discounted rates for that provider’s services as reflected
in the network agreements.

   Of relevance here, seven patients received dialysis-related treatments
from FMS over a four-year period: five patients were covered under Notre
Dame’s plans and two under Beacon Health’s plans. As administrator,
Meritain issued EOBs for the claims FMS submitted. According to FMS,
the EOBs show Meritain’s coverage determinations and the agreed
reimbursement payable to FMS for services rendered. FMS alleges that


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some line items in the EOBs reflect that it received the negotiated rate for
its claims, while other line items show the claims were subject to a one-
hundred-percent “Provider Discount”. According to FMS, some of these
amounts reflect claims for covered services for which FMS received an
amount less than the agreed rates.

   FMS thus sued Meritain, Notre Dame, and Beacon Health, alleging,
among other things, breaches of the Community Health Alliance and
Select Health Network agreements. FMS also sued in the alternative for
implied contract and promissory estoppel. Notre Dame and Beacon
Health answered that FMS’s claims were foreclosed under principles of
both “complete” and “conflict” ERISA preemption. Early in discovery,
FMS moved for summary judgment on its claim that Notre Dame and
Beacon Health breached the Community Health Alliance network
agreement. Notre Dame and Beacon Health opposed this motion and
cross-moved for summary judgment, again arguing ERISA preemption.
These defendants also argued lack of contractual privity between FMS
and themselves.

  The trial court granted the defendants’ motions and entered partial
summary judgment in their favor and against FMS, concluding that FMS’s
claims were preempted under ERISA’s conflict-preemption provision, 29
U.S.C. § 1144(a). The court believed that resolving payment disputes
under the network contracts would require it to interpret the plans’ terms
to determine how much FMS was owed. In addition, the court found there
was no just reason for delay and directed the entry of final judgment
under Trial Rule 54(B) in favor of the Notre Dame and Beacon Health
defendants and against FMS.

  The court of appeals affirmed, agreeing with Notre Dame and Beacon
Health that ERISA preempted FMS’s claims. FMS Nephrology Health
Partners N. Cent. Ind. Dialysis Ctrs, LLC v. Meritain Health, Inc., 120 N.E.3d
1012, 1014 (Ind. Ct. App. 2019), trans. granted. The appellate court
believed our opinion in Midwest Security Life Insurance Co. v. Stroup, 730
N.E.2d 163 (Ind. 2000), compelled the conclusion that FMS’s claims were
preempted. Analogizing to Stroup, the court found that “FMS’s claims are
based on an alleged failure to pay sums due for services covered by an



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ERISA-regulated plan.” FMS Nephrology Partners, 120 N.E.3d at 1020–21.
Thus, the court concluded, FMS’s claims were preempted because “the
trial court would have had to refer to and interpret the Beacon and Notre
Dame Plans to determine (1) whether proper payment had been rendered,
and (2) if not, how much additional payment FMS was entitled to
receive.” Id. at 1021.

   After the appellate court denied rehearing, FMS sought transfer,
arguing that the court of appeals’ opinion is at odds with Stroup, 730
N.E.2d 163, and puts Indiana out of step with settled ERISA case law from
elsewhere. Having granted transfer, thus vacating the appellate decision,
we vacate the trial court’s judgment and remand.



Discussion and Decision
   At issue is whether FMS can proceed with its claims, all brought under
state law, or whether ERISA preempts those claims. Two forms of ERISA
preemption are before us: complete preemption and conflict preemption.
The courts below determined that FMS’s claims were foreclosed by
ERISA’s conflict-preemption provision. But we consider both that
provision and the alternative ground—complete preemption—urged for
affirming the trial court’s judgment.

   We begin with complete preemption. Despite its name, complete
preemption is not about preemption but jurisdiction. It confers federal-
question jurisdiction even for claims denominated as state-law claims. The
Supreme Court has pronounced a two-prong test for complete preemption
asking, first, whether the claim at some point could have been brought
under ERISA’s civil-enforcement scheme; and, second, whether the
defendant’s actions implicate any independent legal duty apart from
ERISA. On this record, we hold that FMS’s claims satisfy neither prong
and thus are not completely preempted.

   Then we address conflict (or express) preemption. We briefly discuss
express preemption under the Supreme Court’s general preemption
jurisprudence, which looks to the plain text of the applicable preemption
statute. Despite its literalism when interpreting most preemption statutes,


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the Court continues to endorse an atextual, policy-driven test for ERISA
preemption. This test asks whether a claim has either a “reference to” or a
“connection with” an ERISA plan. Applying the test, we hold first that
express preemption does not prevent a health-care provider from
enforcing a separate contract against a plan. We also hold that a key
factual dispute remains over whether the underlying claims were deemed
covered under the defendant plans. If covered, then the claims would not
be preempted. But if not covered, then preemption would apply. We
conclude that the trial court erred in entering summary judgment for the
Notre Dame and Beacon Health defendants because, on this record, they
did not prove their entitlement to judgment as a matter of law.


   A. No complete preemption
   Preemption is typically a federal defense to a plaintiff’s substantive
state-law claim. If the plaintiff’s claim is preempted, federal law supplies
the substantive rule of decision. But federal jurisdiction over an ERISA
claim is not exclusive. Of relevance here, even where federal jurisdiction
lies over an ERISA claim, state courts have concurrent jurisdiction over
such claims. “State courts of competent jurisdiction and district courts of
the United States shall have concurrent jurisdiction of actions under
paragraphs (1)(B) and (7) of subsection (a) of this section [referring to
ERISA Section 502(a)].” 29 U.S.C. § 1132(e)(1).

  The term “complete preemption” is a misnomer. It is less a preemption
doctrine than a jurisdictional rule. Franciscan Skemp Healthcare, Inc. v. Cent.
States Joint Bd. Health & Welfare Trust Fund, 538 F.3d 594, 596 (7th Cir.
2008). Under complete ERISA preemption, even a claim denominated as a
state-law claim, such as one alleging breach of contract, “arises under”
federal law, see 28 U.S.C. § 1331, and thus can—but need not—be
removed to federal court, id. § 1441(a); Franciscan Skemp Healthcare, Inc.,
538 F.3d at 596–97. In that sense, complete preemption is an exception to
the federal well-pleaded-complaint rule, according to which the plaintiff is
the master of its complaint, and so long as the face of the complaint does
not affirmatively allege a federal claim, the plaintiff can remain in state
court. But under ERISA’s complete-preemption exception, a complaint



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alleging only state-law claims will nevertheless be transformed from “an
ordinary state common law complaint into one stating a federal claim for
purposes of the well-pleaded complaint rule.” Metro. Life Ins. Co. v. Taylor,
481 U.S. 58, 65–67 (1987).

   The Supreme Court first announced its doctrine of complete ERISA
preemption in Taylor. The Court held that ERISA Section 502(a), 29 U.S.C.
§ 1132(a)(1)(B), reflects Congress’s design to “so completely pre-empt a
particular area that any civil complaint raising this select group of claims
is necessarily federal in character.” 481 U.S. at 63–64, 67. Section 502(a)
authorizes an ERISA-plan participant or beneficiary to file suit “to recover
benefits due to him under the terms of his plan, to enforce his rights under
the terms of the plan, or to clarify his rights to future benefits under the
terms of the plan”. 29 U.S.C. § 1132(a)(1)(B). If a state-law claim comes
within the scope of this section, then the claim is completely preempted,
and the only permissible claim is federal.

   The Supreme Court applies a two-prong test for assessing whether an
asserted state-law claim comes within the scope of ERISA Section
502(a)(1)(B). A state-law claim is completely preempted if (1) “an
individual, at some point in time, could have brought [the] claim under”
this section and (2) “there is no other independent legal duty that is
implicated by [a] defendant’s actions.” Aetna Health Inc. v. Davila, 542 U.S.
200, 210 (2004). Davila’s two-prong test is phrased in the conjunctive,
meaning the state-law claim is completely preempted only if both prongs
are met. On this record, neither prong is satisfied.


      1. Davila’s first prong—right to assert an ERISA-based
         claim

   There is no complete preemption under the first Davila prong unless the
plaintiff asserts what amounts to a claim under ERISA’s civil-enforcement
statute, even if labeled a state-law claim. A medical provider is not a plan
participant or beneficiary, so it lacks standing to bring an ERISA claim
directly. But with a valid assignment of rights, a provider can sue
derivatively to enforce ERISA rights belonging to the assignor. Beacon
Health, however, admits that its plans’ documents prohibit any


Indiana Supreme Court | Case No. 20S-PL-302 | May 11, 2020          Page 7 of 19
assignment of rights, so FMS lacks standing to pursue claims even
derivatively under ERISA Section 502(a). Thus, because FMS cannot
pursue ERISA claims against Beacon Health directly or derivatively, its
claims against Beacon Health are not completely preempted.

   As for its claims against Notre Dame, FMS admits it received valid
ERISA-based assignments from patients enrolled in the Notre Dame
plans, which FMS initially pursued against Notre Dame, albeit
unsuccessfully, under the plans’ claims-administration process. FMS
eventually abandoned these assigned claims by electing not to pursue
them to completion under Section 502(a). According to Notre Dame,
FMS’s own actions show that these claims could have been pursued—and
were pursued for a time—under the plans, thus establishing that the first
Davila prong was satisfied as to FMS’s claims against Notre Dame. That is
true, as far as it goes. FMS’s claims are, to be sure, completely preempted
to the extent they are based on ERISA rights that Notre Dame plan
participants assigned to FMS. But this argument ignores that FMS “holds
two separate claims”: not only its claim for benefits under ERISA but also
its separate state-law claims. Conn. State Dental Ass’n v. Anthem Health
Plans, Inc., 591 F.3d 1337, 1347 (11th Cir. 2009) (citing Franciscan Skemp
Healthcare, Inc., 538 F.3d at 598). FMS has disclaimed suing for the ERISA
benefits due employees under the Notre Dame plans. Instead, FMS is
suing in its own capacity to recover damages from Notre Dame under
multiple breach-of-contract theories or, alternatively, based on promissory
estoppel. As the Fifth Circuit has observed, the crucial inquiry is whether
the provider is “seeking benefits under the terms of the plan, or rights that
derive from the independent basis of the contract.” Lone Star OB/GYN
Assocs. v. Aetna Health Inc., 579 F.3d 525, 529 n.3 (5th Cir. 2009). Because
FMS is pursuing state-law claims independent of any rights it may have
received from the assignments, the first Davila prong is not satisfied as to
Notre Dame either.

   FMS’s theory of this case reinforces our conclusion that its claims
against Notre Dame are not completely preempted. In the analogous
collective-bargaining context, the Supreme Court has held that a plaintiff
may avoid preemption by pursuing exclusively state-law claims in lieu of
other potentially preempted federal claims. In Caterpillar Inc. v. Williams,


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482 U.S. 386 (1987), the plaintiffs faced a set of contracts governed by a
collective-bargaining agreement and another set of individual
employment contracts governed only by state law. The plaintiffs elected to
sue only on the individual contracts. The Supreme Court rejected
Caterpillar’s attempt to remove the case to federal court on the basis that
the plaintiffs’ claims were founded on the collective-bargaining agreement
and thus governed exclusively by federal law. “[The plaintiffs’] complaint
is not substantially dependent upon interpretation of the collective-
bargaining agreement.” Id. at 395.

   The same is true here. Like the plaintiffs in Caterpillar, FMS has limited
its cause of action by asserting only state-law claims and has disclaimed
any theory of recovery premised on an ERISA-based claim for benefits
under the plans. Because FMS is suing in its own capacity for breach of
contract and not asserting a derivative right to benefits under an ERISA
plan, the Notre Dame and Beacon Health defendants fail to satisfy the first
prong of Davila.

   Our conclusion that the first Davila prong is not satisfied here means
there is no complete preemption of FMS’s claims because, as mentioned,
Davila’s test is conjunctive, requiring that both prongs be met. Though
unnecessary given our resolution of the first prong, we also address the
second Davila prong for the sake of completeness.


      2. Davila’s second prong—independent, non-ERISA-
         based duty
   Under Davila’s second prong, a claim is not completely preempted if it
seeks to enforce legal duties independent of those owed to an ERISA-plan
participant or beneficiary. Under Davila, complete preemption requires,
among other things, that there be “no other independent legal duty that is
implicated by a defendant’s actions”. 542 U.S. at 210. In other words, if
another, independent legal duty exists beyond what an ERISA plan
imposes, then a claim based on a violation of that duty is not preempted.
A clear example of an independent legal duty is one imposed by contract.
Such contract- or other state-law-based claims withstand complete ERISA
preemption because they rely on legal duties arising independently of


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ERISA. Recall that FMS seeks damages based on its relationships with the
Notre Dame and Beacon Health plans. Thus, FMS’s state-law claims are
premised not on ERISA but on the network agreements. These agreements
are separate contracts with legal obligations independent of ERISA for
both providers and health plans. Claims to enforce these agreements fail
the second Davila prong and are not preempted.

   Though not dispositive, we note that defendants Notre Dame and
Beacon Health—the parties urging complete preemption here—never
sought to remove this state-court action to federal court. Perhaps they
recognized removal would have failed because federal jurisdiction is
lacking. In other words, they knew (or suspected) a federal court would
have reached the same conclusion had they tried to remove, so they took
their chances by trying to persuade a state court instead. Whatever their
reasons for not seeking removal, we hold that FMS’s claims are not
completely preempted under ERISA Section 502. Its claims truly are state-
law claims under the federal well-pleaded-complaint rule and do not
establish federal-question jurisdiction under Section 1331 of Title 28 of the
United States Code.

   We also note, as an aside, that pending before the trial court is a request
for partial summary judgment, arguing that FMS lacks contractual privity
with the defendants. Because both the trial court and court of appeals
decided this case on preemption grounds alone, neither court addressed
privity. On remand, the defendants may wish to reassert this lack-of-
privity argument as an independent ground for summary judgment
against FMS.


   B. No conflict preemption


        1. General preemption principles
   Next, we consider FMS’s claims under ERISA’s conflict-preemption
provision. Unlike complete preemption, conflict (or express) preemption
is not an independent basis for invoking a federal court’s jurisdiction.
With conflict preemption, the issue is which substantive law (federal or



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state) governs the plaintiff’s state-law claim, regardless of whether the
plaintiff sued in a federal or state court.

   The relevant statute is ERISA Section 514(a), which preempts “all State
laws insofar as they … relate to any employee benefit plan” covered by
ERISA. 29 U.S.C. § 1144(a) (emphasis added). The Supreme Court has
cautioned against interpreting “relate to” literally; otherwise, nothing
would escape preemption: “If ‘relate to’ were taken to extend to the
furthest stretch of its indeterminacy, then for all practical purposes pre-
emption would never run its course, for really, universally, relations stop
nowhere”. N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers
Ins. Co., 514 U.S. 645, 655 (1995) (cleaned up).

   The Supreme Court’s early conflict-preemption cases applied Section
514’s “relate to” test by treating the phrase as “deliberately expansive”.
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45–46 (1987). Later cases,
however, took a more restrictive view. With its seminal decision in
Travelers, the Supreme Court explained that it has “never assumed lightly
that Congress has derogated state regulation” but instead has “addressed
claims of pre-emption with the starting presumption that Congress does
not intend to supplant state law.” 514 U.S. at 654. More recently, though,
the Supreme Court seems to have reverted to a broader view of express
preemption.

   In Puerto Rico v. Franklin California Tax-Free Trust, 136 S. Ct. 1938 (2016),
a bankruptcy case, the Court held that federal bankruptcy law preempted
Puerto Rico from enacting its own municipal scheme for restructuring the
debt of its insolvent public-utility companies. In finding preemption, the
Court looked solely to the “plain text” of the governing clause. “The plain
text of the Bankruptcy Code begins and ends our analysis.” Id. at 1946.
According to the Court, the existence of an express preemption clause
within the Code meant the clause applied as written. It also meant there
was no presumption against preemption. “[B]ecause the statute contains
an express preemption clause, we do not invoke any presumption against
pre-emption but instead focus on the plain wording of the clause, which
necessarily contains the best evidence of Congress’ pre-emptive intent.”
Id. (cleaned up).



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   Despite the statement in Franklin that the Court’s preemption analysis
“begins and ends” with the clause’s text, there is reason to think the Court
continues to apply a different, atextual preemption standard in ERISA
cases. Perhaps that is because, as the Court observed in Travelers, the plain
meaning of ERISA’s broad preemption clause would swallow nearly all
state laws. Applying the clause literally—so that virtually no state law
would escape preemption—is an outcome “no sensible person could have
intended”. Cal. Div. of Labor Standards Enforcement. v. Dillingham Constr.,
N.A., Inc., 519 U.S. 316, 336 (1997) (Scalia, J., concurring). In its most recent
ERISA preemption case, Gobeille v. Liberty Mutual Insurance Co., 136 S. Ct.
936 (2016), the Court did not apply Section 514(a) literally but continued to
identify factors for assessing preemption. “When considered together,
these formulations [for describing preempted state laws] ensure that
ERISA’s express pre-emption clause receives the broad scope Congress
intended while avoiding the clause’s susceptibility to limitless
application.” Id. at 943. In other words, Gobeille eschewed a plain-meaning
interpretation of Section 514(a) because of the clause’s propensity to
sweep seemingly without limit. That said, at least one Justice has voiced
concern that the Court’s interpretation of Section 514(a) “has become
increasingly difficult to reconcile with our pre-emption jurisprudence.” Id.
at 948 (Thomas, J., concurring). According to Justice Thomas, the Court
should no longer indulge a preemption jurisprudence under ERISA
untethered to the statute’s text, but instead should decide whether the
statute unconstitutionally preempts too broad a swath of state laws. Id. at
948–49. For now, however, that seems to represent the view of only a
single Justice.

   Under Gobeille, the relevant preemption factors are those the Court has
considered for some time. Id. at 943. To date, the Court has identified two
categories of state laws that ERISA preempts: laws having a “reference to”
and those having a “connection with” an ERISA plan. Id. As long ago as
Travelers, the Court recognized the futility of analyzing issues of conflict
preemption with such useless descriptions as “connection with” and
“reference to”. 514 U.S. at 656. That is why later decisions went “beyond
the unhelpful text and the frustrating difficulty of defining its key term
[‘relate to’]” and looked instead “to the objectives of the ERISA statute as a


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guide to the scope of the state law that Congress understood would
survive” preemption. Id. ERISA’s objectives are to protect plan
participants and their beneficiaries by, among other things, imposing
disclosure and reporting requirements, holding fiduciaries to standards of
conduct, providing appropriate remedies, and improving the equitable
character and financial soundness of employee-benefit plans. 29 U.S.C. §
1001(b), (c). Given these statutory objectives, the Supreme Court observed
that the point of conflict preemption is to ensure uniform national
standards for administering ERISA-covered plans. “The basic thrust of
[Section 514(a)] was to avoid a multiplicity of regulation in order to permit
the nationally uniform administration of employee benefit plans.”
Travelers, 514 U.S. at 657. The Court later modified its inquiry from
Travelers to emphasize that courts must consider not only ERISA’s
“objectives” but also the “nature of the effect of the state law on ERISA
plans”. Dillingham, 519 U.S. at 325. In other words, courts must look to
such factors as whether state law is mandating plan terms or benefits,
effectively regulating the plan, or providing an alternative enforcement
mechanism to ERISA. See Travelers, 514 U.S. at 658.

   These prior decisions have culminated in Gobeille’s “formulations” that
“reference to” an ERISA plan means a state law will be preempted when it
“acts immediately and exclusively upon” a plan or when the plan’s
existence “is essential to the [state] law’s operation”. 136 S. Ct. at 943
(quoting Dillingham, 519 U.S. at 325). And “connection with” an ERISA
plan means a state law will be preempted when it “governs … a central
matter of plan administration” or “interferes with nationally uniform plan
administration”, id. (quoting Egelhoff v. Egelhoff, 532 U.S. 141, 148 (2001)),
or “force[s] an ERISA plan to adopt a certain scheme of substantive
coverage or effectively restrict[s] its choice of insurers.” Id. (quoting
Travelers, 514 U.S. at 668).




Indiana Supreme Court | Case No. 20S-PL-302 | May 11, 2020         Page 13 of 19
      2. Applying the general principles


          a. No preemption of claims to enforce separate
             contract against ERISA plans
   We have previously held that ERISA expressly preempts claims
concerning coverage under an ERISA-governed plan. The issue in such
cases is whether there is a right to coverage under an ERISA plan. In
Stroup, 730 N.E.2d 163, the plaintiffs were beneficiaries of an employee-
benefit plan subject to ERISA who challenged the plan’s denial of health-
care coverage. We found it “clear” that the Stroups’ state-law claims for
breach of contract and the tort of bad faith were expressly preempted
because the claims were based on the plan’s “failure to pay benefits due
under an ERISA-governed” plan. Id. at 166–67. These claims thus had a
“connection with” the plan because they arose from the plan’s “denial of
coverage”. Id. at 167.

    FMS argues that the court of appeals misconstrued our precedent when
it held that Stroup preempts claims against ERISA plans to enforce state-
law-based obligations arising independent of the plans. We agree with
FMS. Stroup is a narrow decision holding that ERISA preemption occurs
when the “essence of the claims is a failure to supply benefits under the
plan.” Id. A claim challenging the denial of benefits necessarily requires
interpretation of the plan documents to assess whether the plan’s
coverage decision was correct. And that is quintessentially the type of
inquiry that ERISA Section 514 preempts. Our holding in Stroup is
consistent with other courts concluding that ERISA expressly preempts
claims about the scope of a plan’s coverage. See, e.g., Ray Klein, Inc. v. Bd.
of Trs. of the Alaska Elec. Health & Welfare Fund, 307 F. Supp. 3d 984, 991 (D.
Alaska 2018) (finding express preemption because “what charges are
covered under the Plan is at the heart of the dispute”). But neither Stroup
nor Ray Klein purports to preempt the species of claim that FMS is
asserting here, which is about neither a beneficiary’s right to coverage
under an ERISA plan nor a health-care provider’s right to payment under
a plan, but about a provider’s rate of payment under a separate contract
with a plan.


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   Here, the summary-judgment record is sufficiently complete and
uncontroverted that we can make the following three observations about
FMS’s claims. First, FMS does not seek to dictate the terms governing its
patients’ benefit plans, to regulate such plans, or to create alternative
grounds for enforcing ERISA’s requirements against the plans. FMS’s
claims, even if successful, would not impose disparate requirements on
the defendant plans, so there is no risk of undermining Congress’s goal of
a uniform national standard for administering ERISA plans. Second,
FMS’s claims do not concern the “areas with which ERISA is expressly
concerned—reporting, disclosure, fiduciary responsibility, and the like.”
Dillingham, 519 U.S. at 330 (cleaned up). Third, FMS is not using its claims
as a proxy for enforcing substantive rights conferred under ERISA. As
explained above, FMS is a health-care provider with no substantive rights
of its own under ERISA. And it has specifically disclaimed any derivative
rights under ERISA it may have obtained by assignment from its patients.
Instead, FMS seeks to vindicate only its contract-based rights against the
Notre Dame and Beacon Health defendants and their third-party
administrator arising under state law.

   Despite these conclusions, however, two issues remain. The trial court
held that even if the EOBs or other designated evidence established that
FMS’s claims were adjudicated as covered under the plans, the claims
would still be preempted because the question of how much is owed or
payable to FMS still requires “the application of, reference to and/or
interpretation of the plan documents.” And the court of appeals agreed:
“[D]espite FMS’s assertion to the contrary, the trial court would have had
to refer to and interpret the Beacon and Notre Dame Plans to determine
(1) whether proper payment had been rendered, and, (2) if not, how much
additional payment FMS was entitled to receive.” FMS, 120 N.E.3d at
1021. Yet in its transfer petition, FMS takes issue with this
characterization: “The trial court will not be asked to reference the Plans’
terms to determine the payment amount; the Plans contain no pricing
terms and there is no interpretation left to be done for claims already
adjudicated as covered.”

  The mere fact that a court may have to consider or consult the terms of
an ERISA-governed plan while adjudicating a state-law claim does not


Indiana Supreme Court | Case No. 20S-PL-302 | May 11, 2020         Page 15 of 19
mean the claim is preempted. As the Seventh Circuit held in Kolbe & Kolbe
Health & Welfare Benefit Plan v. Medical College of Wisconsin, Inc., 657 F.3d
496 (7th Cir. 2011), there is no express preemption “merely because [a
state-law claim] requires a cursory examination of ERISA plan
provisions.” Id. at 504 (citation omitted). There, the court held the
plaintiff’s claim was not preempted because resolving the breach-of-
contract claims required interpreting “only the member or service
agreements and the provider agreements”. Id. at 504–05. See also Blue
Cross of Cal.. v. Anesthesia Care Assocs. Med. Grp., Inc., 187 F.3d 1045, 1053
(9th Cir. 1999) (finding no preemption because provider’s claims “do not
involve construction of the terms of ERISA-covered benefit plans”).


          b. Summary judgment entered erroneously
   The record does not establish why the Notre Dame and Beacon Health
plans did not pay FMS’s disputed claims. If the reason is that there is no
right to payment under the plans, then the claims are expressly
preempted. But to the extent a court must determine not whether a claim
for services was covered but whether the plan paid less than the agreed
provider rate for covered services based on an agreement separate from
the plan, then the claim is not preempted. Based on our review of the
EOBs and the other evidence designated on summary judgment, we
cannot tell how these disputed claims were adjudicated under the plans.
Given these disputes of material fact over whether FMS’s claims were
denied based on the terms of the plans, we conclude that the trial court
erred in entering summary judgment on this basis.

   As mentioned, FMS argues that Meritain, as third-party administrator
issuing the EOBs, determined that FMS’s disputed claims were covered
under the defendants’ ERISA plans, and that the plans failed to pay the
negotiated amounts the parties had agreed FMS would receive for its
services. Thus, according to FMS, its legal claims are based not on the
plans themselves but on its separate agreements with the plans. FMS says
the Court need only examine the EOBs to see whether the plans paid the
negotiated rates for covered medical services. FMS says a plain reading of




Indiana Supreme Court | Case No. 20S-PL-302 | May 11, 2020           Page 16 of 19
its designated EOBs shows that the claims were covered, including the
claims that are entirely subject to the “Provider Discount”.

   In contrast, both Notre Dame and Beacon Health dispute that FMS’s
claims were deemed to be covered under their respective plans. They say
they rejected FMS’s claims based on the plan documents. Notre Dame
argues, for example, that certain claims were denied for lack of medical
necessity and bundling issues. To support its argument, Notre Dame
submitted certain EOBs that show the denial of some claims. But many of
the Notre Dame EOBs were issued for different dates of service than the
ones FMS offered to support its breach-of-contract claim. And we note
that if there is an adverse benefit determination, ERISA’s claims-
processing regulation requires that the “specific reason or reasons for the
adverse determination” be provided, as well as “[r]eference to the specific
plan provisions on which the determination is based”. See 29 C.F.R. §
2650.503-1(g)(1)(i), (ii). Yet neither Notre Dame’s nor FMS’s designated
EOBs provide specific reasons for adverse determinations or reference
specific plan provisions. We hold that Notre Dame did not sustain its
burden of affirmatively proving that FMS is challenging determinations of
no coverage under the plans.

   And, for its part, Beacon Health argues that it denied certain claims
because they were not “clean claims”, designating the affidavit of Annette
Vota to support its argument. In her affidavit, Vota stated that “[t]he
claims submitted by [FMS], which [FMS] asserts where [sic] not paid,
were not ‘clean claims’ and not entitled to payment”, and that FMS “has
been paid in full for all clean claims, as well as for all covered claims.” But
Beacon Health’s clean-claim argument fails on its own terms. Beacon
Health’s network contract defines a clean claim as one “submitted by a
provider for payment with no defect, impropriety, or particular
circumstance requiring special treatment preventing payment. Basically,
when the payor has received all information required to determine
liability under the terms of the policy the claim is clean.” By issuing EOBs
on Beacon Health’s behalf, Meritain was able to determine liability under
the policy’s terms—meaning FMS’s claims were clean. Additionally, just
as with the Notre Dame EOBs, those designated by Beacon Health
likewise did not meet the requirements of adverse benefit determinations


Indiana Supreme Court | Case No. 20S-PL-302 | May 11, 2020           Page 17 of 19
under ERISA’s claims-processing regulation. See 29 C.F.R. § 2650.503-
1(g)(1)(i), (ii). For both reasons, we find that Beacon Health has failed to
show there were adverse benefit determinations under its plans for FMS’s
disputed medical services.

  We refer to the Code of Federal Regulations not to suggest that Notre
Dame or Beacon Health necessarily violated notice requirements imposed
under federal law. Instead, we note the absence of such evidence only to
underscore our uncertainty over whether FMS’s claims were indeed
adjudicated as not covered under the plans, as Notre Dame and Beacon
Health maintain.

                                     *        *       *

   Summary judgment was improper because the Notre Dame and Beacon
Health defendants did not establish as a matter of law that FMS’s claims
“enter[] a fundamental area of ERISA regulation”, Gobeille, 136 S. Ct. at
946, or that its claims are “substantially dependent upon interpretation” of
the defendants’ plan documents, Caterpillar, 482 U.S. at 395. Specifically,
these defendants did not establish either (1) that FMS’s claims were
adjudicated as covered under the defendants’ plans or (2) that a court
would have to consult the various plans’ documents to determine whether
FMS was underpaid and, if so, by how much.



Conclusion
    For these reasons, we grant transfer, vacate the trial court’s entry of
judgment in favor of the Notre Dame and Beacon Health defendants and
against FMS, and remand for further proceedings not inconsistent with
this opinion.


Rush, C.J., and Massa and Goff, JJ., concur.
David, J., concurs in result.




Indiana Supreme Court | Case No. 20S-PL-302 | May 11, 2020        Page 18 of 19
ATTORNEYS FOR APPELLANT FMS NEPHROLOGY PARTNERS
NORTH CENTRAL INDIANA DIALYSIS CENTERS, LLC

Bryan H. Babb
Bradley Dick
Bose McKinney & Evans LLP
Indianapolis, IN

Caroline Turner English
Brian D. Schneider
Emily Baver Slavin
Arent Fox LLP
Washington, D.C.

ATTORNEYS FOR APPELLEES BEACON HEALTH SYSTEM, INC;
BEACON HEALTH SYSTEM GROUP BENEFIT PLAN; BEACON
HEALTH SYSTEM GROUP BENEFIT PLAN-UNION PLAN

Richard B. Urda, Jr.
Urda Professional Corporation
South Bend, IN

Joseph L. Amaral
R. William Jonas
Hammerschmidt, Amaral & Jonas
South Bend, IN

ATTORNEYS FOR APPELLEES UNIVERSITY OF NOTRE DAME DU
LAC; UNIVERSITY OF NOTRE DAME CHA HMO PL AN
(MEDICAL); UNIVERSITY OF NOTRE DAME SELECT HMO PLAN
(MEDICAL); UNIVERSITY OF NOTRE DAME PPO PLAN
(MEDICAL)

Brian E. Casey
Kelly J. Hartzler
Alice J. Springer
Barnes & Thornburg LLP
South Bend, IN




Indiana Supreme Court | Case No. 20S-PL-302 | May 11, 2020   Page 19 of 19
