• Thompson v. TransAm Trucking, Inc. et al. No. 2:08-cv-927 (S.D. Oh. June 1, 2009)
  • July 9, 2009 | Authors: Arthur N. Lerner; Bruce O. Tavel
  • Law Firm: Crowell & Moring LLP - Washington Office
  • The United States District Court for the Southern District of Ohio held that ERISA did not preempt a beneficiary's claim that an orthopedic center and one of its physicians negligently misrepresented that a knee procedure would be covered as an in-network expense by the terms of the beneficiary's health plan.

    TransAm Trucking, Inc. ("TransAm") was the plan sponsor of plaintiff Cynthia Thompson's health plan, which was administered by defendant FMH Benefit Services, Inc. ("FMH"). When plaintiff sought treatment for a knee condition from defendant-Columbus Orthopaedic Group, Inc., ("Columbus Orthopaedic"), plaintiff alleged that the group and her physician's office "represented to [her] that her medical care would be covered as an ‘in-network' expense, or, alternatively, failed to inform her otherwise."

    When her claim for benefits was submitted, FMH partially denied the claim, concluding that while the bills submitted by the physician were covered as an in-network expense, the plaintiff's hospital bills were an out-of-network expense. As a result, the plaintiff's hospital bills were paid at an out-of-network rate.

    The plaintiff sued TransAm, the health plan, and FMH as administrator, to recover the benefits she was denied for her surgery. She also brought state law claims, including negligent misrepresentation and promissory estoppel, against the physician and Columbus Orthopaedic. The physician and Columbus Orthopaedic countered that the plaintiff's state law claims were preempted by ERISA.

    The Court concluded that the plaintiff's claims did not relate to the health plan and therefore were not preempted under ERISA. The Court found that such claims did not "affect the structure, the administration, or the type of benefits" provided by the health plan. Furthermore, the court found that state laws like negligent misrepresentation and promissory estoppel are "laws of general application -- not specifically targeting ERISA plans -- that involve traditional areas of state regulation and do not affect relations among the principal ERISA entities." As a result, the court found that the plaintiff's state law claims against the physician and Columbus Orthopaedic were not preempted by ERISA.