On Tuesday the court issued an opinion in a case brought against Anthem Insurance Companies Inc. and others. The Southern District of Indiana case presented the question of whether ERISA pre-emption from a primary insurance plan’s coverage extends to secondary insurance when the secondary coverage is conditioned on the primary insurance’s coverage. The court rejected Amthem’s motion to dismiss the case.
The opinion recounted that the plaintiffs sued on behalf of their minor child regarding a vaccination the child was supposed to receive in a timely manner to prevent massive medical complications. The child had primary insurance coverage under Kroger Prescription Plans and obtained secondary Medicaid insurance coverage under Anthem BCBS. When the parents sought to obtain the vaccination dose, the patient’s primary coverage, Kroger, indicated that the balance would go to the deductible, making the payment the responsibility of the secondary insurance. The secondary insurance indicated that the primary insurance had not submitted sufficient information to obtain authorization for the vaccination to confirm that it was medically necessary as opposed to denied as non-covered, which would change the processing by the secondary coverage. The delay in processing between the two insurance companies resulted in the effective period for the vaccine passing and the patient contracting the disease, resulting in an extended and life threatening hospital stay, the opinion said.
Anthem BCBS moved to dismiss the claim for three reasons: first, ERISA should preempt the state law negligence claim filed by the plaintiff, second, the plaintiff family did not plead that they had exhausted administrative remedies with the primary coverage as required under ERISA, and thid, that there was no duty of care to support a negligence theory.
Regarding the first objection, the court noted that while the primary insurance was an ERISA plan, Anthem BCBS as secondary was not. The court also noted that ERISA does not preempt tort actions, of which the state law negligence theory that the plaintiff was of the same type. Having decided that ERISA did not preempt the cause of action, the court also noted that there was no requirement that the processing for the secondary content also meet the mandatory processing requirement from ERISA either. Finally, regarding the duty of care, the court noted that Indiana law mandates a duty of good faith when dealing with insureds, and it is not possible to deal in good faith and not have a matching duty of care in their communications with the patients.