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Bell v. Blue Cross & Blue Shield of Oklahoma

United States Court of Appeals, Eighth Circuit

May 26, 2016

Teresa Bell, Plaintiff - Appellant,
v.
Blue Cross and Blue Shield of Oklahoma, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company agent of Health Care Service Corporation; Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company agent of Health Care Service Corporation, Defendants - Appellees, Association of Federal Health Organizations; United States, Amici on Behalf of Appellees

         Submitted September 23, 2015.

          Appeal from United States District Court for the Western District of Arkansas - Fayetteville.

         For Teresa Bell, Plaintiff - Appellant: Richard Andrew Bright, Taylor King And Associates, Arkadelphia, AR; Gabriel S.H. Hopkins, Public Justice, Washington, DC; Matthew W.H. Wessler, Gupta & Wessler, Washington, DC.

         For Blue Cross and Blue Shield of Oklahoma, a Division of: Health Care Service Corporation, a Mutual Legal Reserve Company agent of Health Care Service Corporation, Blue Cross and Blue Shield of Texas, a Division of: Health Care Service Corporation, a Mutual Legal Reserve Company agent of Health Care Service Corporation, Defendants - Appellees: Mark H. Allison, Carl F. Cooper III, Dover & Dixon, Little Rock, AR; Adam P. Feinberg, Anthony F. Shelley, Miller & Chevalier, Washington, DC.

         For Association of Federal Health Organizations, Amicus on Behalf of Appellee(s): David M. Ermer, Ermer Law Group, Washington, DC.

         For United States, Amicus on Behalf of Appellee(s): Kenneth P. Elser, U.S. Attorney, U.S. Attorney's Office, Western District of Arkansas, Fort Smith, AR; Alisa Beth Klein, Henry Charles Whitaker, U.S. Department of Justice, Civil Division, Appellate Staff, Washington, DC; Benjamin C. Mizer, U.S. Department of Justice, Civil Division, Washington, DC; Susan G. Whitman, U.S. Office of Personnel, Washington, DC.

         Before WOLLMAN, COLLOTON, and KELLY, Circuit Judges.

          OPINION

         COLLOTON, Circuit Judge.

         This appeal concerns a dispute between Teresa Bell and two Blue Cross and Blue Shield insurance carriers that administer Bell's government-sponsored benefit plan (" the Plan" ). Bell was injured in a motor vehicle accident in Arkansas, and the Plan paid medical benefits on Bell's behalf. Bell then received a payment from a different carrier that insured the party who was allegedly responsible for Bell's injury.

         The Blue Cross carriers contend that under the terms of Bell's benefit plan, she must use any monies obtained from the alleged tortfeasor's insurer to reimburse the Plan for medical benefits paid by Blue Cross. Bell responds that under Arkansas law, she is not required to reimburse the Plan unless she has been wholly compensated for her injuries, and that she was not " made whole" by the payments from Blue Cross and the alleged tortfeasor's insurer. Blue Cross's position is that a provision of the Federal Employees Health Benefits Act, 5 U.S.C. § 8902(m)(1), expressly preempts Bell's state-law defense, and that the Plan governs the question of reimbursement. We conclude that federal law preempts the Arkansas state-law defense, and that Bell must reimburse the Plan. We therefore affirm the decision of the district court.[*]

         I.

         The Federal Employees Health Benefits Act of 1959 (" FEHBA" ), 5 U.S.C. § § 8901-14, creates a " comprehensive program of health insurance for federal employees." Empire HealthChoice Assur., Inc. v. McVeigh, 547 U.S. 677, 682, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006). Under the Act, the Office of Personnel Management, commonly known as OPM, contracts with private carriers to offer federal employees a variety of healthcare plans. 5 U.S.C. § 8902(a). One of these plans is the Blue Cross and Blue Shield Service Benefit Plan, a government-wide plan that is established between OPM and the Blue Cross and Blue Shield Association. See 5 U.S.C. § 8903(1); McVeigh, 547 U.S. at 682. Blue Cross and Blue Shield companies in their respective localities administer this plan.

         Each contract between OPM and a carrier like Blue Cross must include " a detailed statement of benefits offered." 5 U.S.C. § 8902(d). OPM issues official descriptions of plan terms through a " statement of benefits" or " brochure." See id. § § 8902(a), (d), 8907. The Statement of Benefits for the contract at issue here includes a section discussing the rights of the parties when others are responsible for injuries to an employee. It provides, among other things, that if another person causes an employee to suffer an injury, and the Plan pays benefits for that injury, the employee must agree that the Plan is entitled to be reimbursed for its benefit payments even if the employee is not " made whole" for all of her damages in the recoveries that she receives.

         Teresa Bell, an employee of the Department of Veterans Affairs, received health-care benefits through a government-sponsored plan that was administered by Blue Cross and Blue Shield of Oklahoma and Blue Cross and Blue Shield of Texas (collectively, " Blue Cross" ). In October 2010, she sustained personal injuries and medical expenses from a motor vehicle accident that occurred in Arkansas. Bell's benefit plan paid $33,014.01 in medical benefits on her behalf. Bell also pursued a third party who allegedly caused her injury, ...


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