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Subrogation – Reimbursement

By: Derek Hawkins//May 3, 2017//

Subrogation – Reimbursement

By: Derek Hawkins//May 3, 2017//

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US Supreme Court

Case Name: Coventry Health Care of Missouri, Inc. v. Nevils

Case No.: 16-149

Focus: Subrogation – Reimbursement

Because contractual subrogation and reimbursement prescriptions plainly “relate to . . . payments with respect to benefits,” §8902(m)(1), they override state laws barring subrogation and reimbursement.

“This reading best comports with §8902(m)(1)’s text, context, and purpose. Contractual provisions for subrogation and reimbursement “relate to . . . payments with respect to benefits” because subrogation and reimbursement rights yield just such payments. When a carrier exercises its right to either reimbursement or subrogation, it receives from either the beneficiary or a third party “payment” respecting the benefits the carrier had previously paid. The carrier’s very provision of benefits triggers the right to payment. Congress’ use of the expansive phrase “relate to,” which “express[es] a broad pre-emptive purpose,” Morales v. Trans World Airlines, Inc., 504 U. S. 374, 383, weighs against Nevils’ effort to narrow the term “payments” to exclude payments that occur “long after” a carrier’s provision of benefits. Nevils’ argument that Congress intended to preempt only state coverage requirements, e.g., inclusion of acupuncture and chiropractic services, also miscarries. The statutory context and purpose reinforce this conclusion. FEHBA concerns “benefits from a federal health insurance plan for federal employees that arise from a federal law.” Bell v. Blue Cross & Blue Shield of Okla., 823 F. 3d 1198, 1202. Strong and “distinctly federal interests are involved,” Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U. S. 677, 696, in uniform administration of the program, free from state interference, particularly in regard to coverage, benefits, and payments. The Federal Government also has a significant financial stake in subrogation and reimbursement”

Reversed and Remanded

Concur: Thomas

Dissent:

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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