Gonzalez v. Blue Cross Blue Shield ( 2023 )

Case: 22-10062 Document: 00516674855 Page: 1 Date Filed: 03/13/2023
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
March 13, 2023
No. 22-10062 Lyle W. Cayce
Clerk
Roslyn Gonzalez, individually and on behalf of all others similarly
situated,
Plaintiff—Appellant,
versus
Blue Cross Blue Shield Association; Health Care
Services Corporation, doing business as Blue Cross Blue
Shield of Texas; United States Office of Personnel
Management,
Defendants—Appellees.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:20-CV-2149
Before Graves, Willett, and Engelhardt, Circuit Judges.
Don R. Willett, Circuit Judge:
Roslyn Gonzalez is a former federal employee and participant in a
health-insurance plan (“Plan”) that is governed by the Federal Employees
Health Benefits Act (“FEHBA”).1 The Plan stems from a contract between
1
5 U.S.C. §§ 8901–8914.
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the federal Office of Personnel Management (“OPM”) and Blue Cross Blue
Shield Association and certain of its affiliates (together, “Blue Cross”). Blue
Cross administers the Plan under OPM’s supervision.
Gonzalez suffered from cancer, and she asked Blue Cross whether the
Plan would cover the proton therapy that her physicians recommended. Blue
Cross told her the Plan did not cover that treatment. So Gonzalez chose to
receive a different type of radiation treatment, one that the Plan did cover.
The second-choice treatment eliminated the cancer, but it also caused
devastating side effects. Gonzalez then sued OPM and Blue Cross, claiming
that the Plan actually does cover proton therapy. As against OPM, she seeks
the “benefits” that she wanted but did not receive, as well as an injunction
directing OPM to compel Blue Cross to reform its internal processes by,
among other things, covering proton therapy in the Plan going forward. As
against Blue Cross, she seeks monetary damages under Texas common law.
The district court dismissed Gonzalez’s suit. It concluded that
sovereign immunity bars Gonzalez’s monetary claims against OPM, that
Gonzalez lacks standing for injunctive relief, and that FEHBA expressly
preempts Gonzalez’s state-law claims against Blue Cross. Our reasoning
follows a different path, but we AFFIRM the district court’s judgment.
I
A
“The Federal Employees Health Benefits Act of 1959[] establishes a
comprehensive program of health insurance for federal employees.”2
“FEHBA assigns to OPM responsibility for negotiating and regulating
2
Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 682 (2006) (citations
omitted) (internal abbreviations omitted).
2
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health-benefits plans for federal employees.”3 OPM carries out that duty by
agreeing to contracts with private insurers like Blue Cross, who then act as
“carriers”4 to “provide health benefits to federal employees.”5 As a carrier,
“Blue Cross never takes on the risks of an insurer in its relationship with
OPM. It operates instead as a claims processor, rather than an insurer.”6
OPM has the first and last word on the health benefits that an
employee may receive under the Plan. First, OPM’s contract with Blue
Cross describes the benefits that employees are eligible for, and on what
terms. That contract requires Blue Cross to furnish each enrolled employee
with a detailed Statement of Benefits (the contract also incorporates that
document).7 Blue Cross must provide the benefits that OPM requires, and it
cannot modify or misrepresent those benefits. OPM has the last word, too,
because Blue Cross must honor any case-by-case determinations that OPM
makes for an individual employee.8
“In the event of a dispute between a patient and Blue Cross over
coverage, OPM resolves the issue.”9 Here’s how. The patient begins the
process by submitting a claim to Blue Cross.10 If Blue Cross denies the claim,
3
Id. at 684; see 5 U.S.C. § 8902.
4
5 U.S.C. § 8901(7).
5
St. Charles Surgical Hosp., LLC v. La. Health Serv. & Indem. Co., 935 F.3d 352,
356 (5th Cir. 2019) (citations omitted).
6
Id.7
5 U.S.C. § 8902(d).
8
5 U.S.C. § 8902(j).
9
St. Charles, 935 F.3d at 356; see 5 C.F.R. § 890.105(a)(1).
10
5 C.F.R. § 890.105(a)(1).
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the patient can ask Blue Cross to reconsider.11 If Blue Cross affirms the
denial, then the patient can ask for OPM’s review.12 If OPM also denies the
claim, then the patient can then seek judicial review of OPM’s denial.13
OPM’s regulations require a patient to “exhaust both the carrier and
OPM review processes . . . before seeking judicial review.”14 The regulations
also say that a patient who wishes to challenge a denial may sue only OPM,
not Blue Cross.15 “The recovery in such a suit shall be limited to a court order
directing OPM to require the carrier to pay the amount of benefits in
dispute.”16 The Plan documents describe all of these procedures.
B
Roslyn Gonzalez is a former federal employee and participant in the
Plan.17 In 2019, she was diagnosed with a malignant tumor in her lower
abdomen. Her healthcare provider, the MD Anderson Cancer Center,
determined that radiation treatment was necessary. Given the tumor’s
location and severity, as well as Gonzalez’s medical history, MD Anderson
recommended a special, more expensive type of radiation therapy called
proton beam therapy.
Blue Cross allows providers and claimants to ask about coverage using
a process that it calls “advance benefit determination.” This process lets
11
Id.12
Id.13
Id. § 890.107(c).
14
Id. § 890.105(a)(1); id. § 890.107(d)(1).
15
Id. § 890.107(c).
16
Id.
17
In this appeal from a motion to dismiss, we draw the facts from Gonzalez’s
operative complaint. See Sewell v. Monroe City Sch. Bd., 974 F.3d 577, 582 (5th Cir. 2020).
4
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patients and providers seek Blue Cross’s pre-treatment approval for a
procedure that the Plan will cover (if at all) only after the patient submits a
post-treatment claim to Blue Cross. This process is not part of Blue Cross’s
contract with OPM, and it does not appear in the Plan, the Statement of
Benefits, or in any other Plan materials that Gonzalez received.
MD Anderson submitted an advance request explaining that proton
therapy treatment was medically necessary to treat Gonzalez’s cancer. Blue
Cross responded with a letter titled “Advance Benefit Determination –
DENIAL.” That letter contained a “review of benefit coverage” and told
Gonzalez that “we are unable to approve your request.” It also “denied” the
specific proton therapy that MD Anderson’s request described. The Plan
covered “chemotherapy and radiation therapy,” and it did not specifically
exclude proton therapy from coverage, but it also contained an exception for
“[e]xperimental or investigational” treatments. The letter explained that
Blue Cross classified proton therapy as an investigational procedure. That
classification relied on an internal Blue Cross document that was also not part
of the Plan.
MD Anderson appealed the decision, but Blue Cross doubled-down.
Two days after its “initial denial of coverage,” Blue Cross sent a letter that
stated flatly: “[y]our claim is denied.” And about a month later, Blue Cross
tripled-down, again sending a letter telling Gonzalez it had “reviewed our
initial denial of coverage” but would “uphold the previous denial.” Blue
Cross also told Gonzalez that she had “exhausted” her claim. Blue Cross’s
first denial letter explained that the denial “is not covered by the
reconsideration and appeals process outlined in [the Plan documents]” and
that “[o]ur decision is not subject to [OPM] appeal rights.” The second
letter reiterated that “[t]his advance benefit decision is not subject to the
disputed claims process. [OPM] appeal rights do not apply.” The third letter
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summed up in plain English: “Additional appeal rights have been
exhausted.”
At no point did Blue Cross explain that the advance process was only
preliminary, or that Gonzalez could undergo proton therapy at her own
expense and then submit a claim for reimbursement, or that Blue Cross’s
decision did not bind OPM. Instead, Blue Cross told Gonzalez that her
“claim” was “denied” and that her “remedies” were “exhausted.”
Because she needed radiation treatment but could not afford proton
therapy, Gonzalez had “no choice” but to undergo a different type of
treatment called intensity-modulated radiation therapy (which her Plan
unquestionably covered). Gonzalez is now cancer-free, but she also suffers
from severe side effects. And on top of all that, Gonzalez says, it turns out
that proton therapy is neither experimental nor investigational. Rather,
Gonzalez argues that the medical community has long recognized proton
therapy as an appropriate treatment for cancer.
C
Gonzalez sued OPM and Blue Cross on her own behalf and on behalf
of a putative class of federal employees to whom Blue Cross denied proton
therapy. Her operative complaint asserts eight theories of liability against the
two defendants, all arising from (1) Blue Cross’s denial of coverage and (2)
Blue Cross’s reliance on the “advance benefit determination” process that
purported to bar OPM review.
Count 1 is a FEHBA benefits claim that seeks an order compelling
OPM to direct Blue Cross to pay Gonzalez “the amount of benefits due for
the wrongful denial of covered [proton therapy].”18 Count 2, under the
18
See 5 C.F.R. § 890.107 (authorizing a cause of action “against OPM”).
6
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Administrative Procedure Act, seeks an injunction requiring OPM to
compel Blue Cross to: end the “advance benefit determination” process;
stop classifying proton therapy as experimental; identify benefit funds
belonging to employees who should have received proton therapy; ensure
that those funds are not wrongfully directed to another purpose; and re-
adjudicate all prior proton-therapy denials under the Plan.
Counts 3–8 are Texas common-law claims against Blue Cross. They
focus on Blue Cross’s “advance benefit determination” process and on Blue
Cross’s decision to deny coverage for proton therapy. These six claims are
for third-party breach of contract, breach of contract, tortious interference
with an employment contract, intentional infliction of emotional distress,
fraud, and negligent misrepresentation.
The district court granted each defendant’s motion to dismiss. Citing
Rule 12(b)(1), that court held that sovereign immunity bars Gonzalez’s
benefits claim (Count 1), and that Gonzalez lacks standing for injunctive
relief (Count 2). And citing Rule 12(b)(6), it held that FEHBA expressly
preempts Gonzalez’s claims against Blue Cross (Counts 3–8). Because the
district court dismissed the complaint, it did not address class certification.19
Gonzalez timely appealed both dismissals.
II
We review the district court’s dismissals under Rules 12(b)(1) and
12(b)(6) de novo, taking all well-pleaded factual allegations in the complaint
19
Gonzalez v. Blue Cross & Blue Shield Ass’n, No. 3:20-CV-2149-B, 2021 WL
5882825 (N.D. Tex. Dec. 13, 2021).
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as true, and viewing them in the light most favorable to the plaintiff.20 We
may affirm the district court’s dismissal on any ground the record supports.21
III
We begin with Gonzalez’s benefits and injunctive claims against
OPM. We affirm dismissal as to Count 1 because FEHBA does not
recognize the “benefits” that Gonzalez seeks to recover, and we affirm as to
Count 2 because Gonzalez lacks Article III standing to seek injunctive relief.
A
Count 1 seeks monetary relief from OPM, under FEHBA, in the
amount of the “benefits” Gonzalez argues that the Plan entitles her to. The
district court dismissed this claim on grounds of federal sovereign immunity.
We conclude that sovereign immunity does not bar Gonzalez’s suit, but we
affirm dismissal on the alternative ground that Gonzalez has failed to state a
claim under Rule 12(b)(6).
1
“[T]he United States may not be sued except to the extent that it has
consented to suit by statute. Further, where the United States has not
consented to suit or the plaintiff has not met the terms of the statute the court
lacks jurisdiction and the action must be dismissed.”22 As relevant here,
“[t]he district courts of the United States have original jurisdiction . . . of a
civil action or claim against the United States founded on [5 U.S.C. §§ 8901–
20
Lane v. Halliburton, 529 F.3d 548, 557 (5th Cir. 2008).
21
Walmart Inc. v. U.S. Dep’t of Just., 21 F.4th 300, 307 (5th Cir. 2021).
22
Alabama-Coushatta Tribe of Tex. v. United States, 757 F.3d 484, 488 (5th Cir.
2014) (internal quotation marks and citations omitted).
8
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14, that is, FEHBA].”23 The government has thus “consented to suits to
vindicate rights or enforce obligations created by [FEHBA].”24
In contrast to that broad waiver, OPM has promulgated a regulation
that says:
A covered individual may seek judicial review of OPM’s final
action on the denial of a health benefits claim. A legal action to
review final action by OPM involving such denial of health
benefits must be brought against OPM and not against the
carrier or carrier’s subcontractors. The recovery in such a suit
shall be limited to a court order directing OPM to require the
carrier to pay the amount of benefits in dispute.25
OPM argues that this regulation states the full extent of Congress’s waiver
of sovereign immunity. So, OPM says, immunity bars Gonzalez from seeking
anything beyond a court order directing OPM to require Blue Cross to pay
the “amount of benefits in dispute.”
OPM erroneously assumes that it can use a regulation to narrow or
retract a statutory waiver of immunity. On the contrary, just as “only
Congress can waive an agency’s sovereign immunity,”26 so too only
Congress can withdraw or modify a waiver of immunity.27 This is because
23
5 U.S.C. § 8912.
24
Nat’l Treas. Emps. Union v. Campbell, 589 F.2d 669, 674 (D.C. Cir. 1978); see also
Empire Healthchoice, 547 U.S. at 696 (“FEHBA’s jurisdictional provision, 5 U.S.C. § 8912,
opens the federal district-court door to civil actions ‘against the United States.’”).
25
5 C.F.R. § 890.107(c) (emphases added).
26
Wagstaff v. U.S. Dep’t of Educ., 509 F.3d 661, 664 (5th Cir. 2007).
27
See Lynch v. United States, 292 U.S. 571, 581 (1934) (“Although consent to sue
was thus given when the policy issued, Congress retained power to withdraw the consent at
any time.” (emphasis added)); Becker Steel Co. of Am. v. Cummings, 296 U.S. 74, 80 (1935)
(“Only compelling language in the congressional enactment will be construed as withdrawing
or curtailing the privilege of suit against the government granted in recognition of an
9
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“[a] waiver of the Federal Government’s sovereign immunity must be
unequivocally expressed in statutory text and will not be implied.”28 An
agency cannot waive the federal government’s immunity when Congress
hasn’t.29 For the same reason, an agency’s regulation cannot narrow, rescind,
withdraw, retract, or otherwise modify Congress’s statutory waiver. Section
8912 waives federal sovereign immunity in federal court for “a civil action or
claim against the United States founded on [FEHBA].”30 Sovereign
immunity, therefore, does not bar Gonzalez’s FEHBA claim.
Although the Tenth Circuit reached the opposite conclusion in Bryan
v. OPM, our sister circuit did so based on a mistaken premise.31 In Bryan, the
court relied on OPM’s regulations to conclude that “Congress clearly
intended a limited waiver of sovereign immunity in [FEHBA] disputes.”32
Congress, however, enacted § 8912—not § 890.107(c). An agency’s
regulation, just like “[a] statute’s legislative history[,] cannot supply a waiver
that does not appear clearly in any statutory text.”33 As one district court
aptly put it, “[OPM’s] regulatory scheme reflects OPM’s choices, not
obligation imposed by the Constitution.” (emphasis added)); Juda v. United States, 13 Cl.
Ct. 667, 689 (1987) (“An unbroken line of decisions holds that Congress may withdraw its
consent to sue the Government at any time.” (emphasis added) (collecting cases)).
28
Lane v. Pena, 518 U.S. 187, 192 (1996) (emphasis added); see also F.A.A. v. Cooper,
566 U.S. 284, 290 (2012) (same).
29
See United States v. Mitchell, 463 U.S. 206, 215–16 (1983) (“[N]o contracting
officer or other official is empowered to consent to suit against the United States. The same
is true for claims founded upon executive regulations.” (footnote omitted)); see also, e.g.,
Charles v. McHugh, 613 F. App’x 330, 335 (5th Cir. 2015) (“EEOC does not have the
authority to waive sovereign immunity through its regulations.”).
30
5 U.S.C. § 8912.
31
165 F.3d 1315, 1318 (10th Cir. 1999).
32
Id. (citing 5 C.F.R. § 890.107(c)).
33
Lane, 518 U.S. at 192.
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necessarily a manifestation of congressional intent.”34 We therefore disagree
with Bryan, and we do not follow it here.
In sum, because § 8912 waives immunity, the district court erred by
concluding that sovereign immunity bars Gonzalez’s FEHBA claim.
2
OPM next argues that Gonzalez failed to exhaust her remedies, and
that this failure is an alternative ground for affirming. Blue Cross’s repeated
assurances that Gonzalez’s claims were both denied and exhausted leave us
skeptical that OPM can rely on exhaustion here.35 But because regulatory
exhaustion requirements are not jurisdictional, we need not decide this issue.
There are two types of exhaustion requirements: jurisdictional and
jurisprudential.36 When “Congress statutorily mandates that a claimant
exhaust administrative remedies, the exhaustion requirement is
jurisdictional.”37 But when an exhaustion requirement appears only in a
regulation, “the jurisprudential doctrine of exhaustion controls.”38 The
jurisprudential doctrine involves discretion, not jurisdiction.39 Here, OPM
34
Smith v. OPM, 80 F. Supp. 3d 575, 586 (E.D. Pa. 2014).
35
See, e.g., United States v. Henderson, 707 F.2d 853, 856 (5th Cir. 1983) (“While
we agree that the United States was under no obligation to provide appellant with its
interpretation of the applicable statutory provisions, the government nonetheless may not
affirmatively misrepresent the obligations of a debtor.” (emphasis added)).
36
Williams v. J.B. Hunt Transp., Inc., 826 F.3d 806, 810 (5th Cir. 2016).
37
Taylor v. U.S. Treasury Dep’t, 127 F.3d 470, 475 (5th Cir. 1997).
38
Williams, 826 F.3d at 810 (quoting Taylor, 127 F.3d at 475); see Kobleur v. Group
Hospitalization & Med. Services, Inc., 954 F.2d 705, 711 (11th Cir. 1992) (“But when, as in
this [FEHBA] case, the exhaustion requirement is created by agency regulations, the
decision whether to require exhaustion is a matter for district court discretion.”).
39
See Dawson Farms, LLC v. Farm Serv. Agency, 504 F.3d 592, 602 (5th Cir. 2007).
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relies on a regulatory exhaustion requirement.40 Because that requirement is
not jurisdictional, we have discretion to decide this appeal on another basis.
In the next section, we do just that.
3
With our jurisdiction secure, and with Gonzalez’s Count 1 claim for
benefits properly before us on the merits, we “may affirm dismissal for any
reason supported by the record.”41 OPM argues that we should affirm
dismissal because Gonzalez “fail[ed] to state a claim upon which relief can
be granted.”42 We agree that Rule 12(b)(6) supports dismissal.
OPM has statutory authority to “prescribe regulations necessary to
carry out [FEHBA].”43 OPM’s regulations allow a patient to “seek judicial
review of OPM’s final action on the denial of a health benefits claim.”44 The
regulations also say that “recovery in such a suit shall be limited to a court
order directing OPM to require the carrier to pay the amount of benefits in
dispute.”45 Gonzalez’s Count 1 thus cannot survive unless she has identified
a benefits claim for which there is some “amount of benefits in dispute.”46
The statutory and regulatory definitions do not have any entry for
“benefits in dispute,”47 but that term’s meaning is still plain as relevant here.
40
See 5 C.F.R. § 890.107(d)(1).
41
Walmart, 21 F.4th at 307.
42
Fed. R. Civ. P. 12(b)(6).
43
5 U.S.C. § 8913.
44
5 C.F.R. § 890.107(c) (emphasis added).
45
Id. (emphasis added). Because Gonzalez and OPM seemingly agree that the
regulation itself is lawful, we express no view on that issue.
46
Id.47
See 5 U.S.C. § 8901; 5 C.F.R. § 890.101.
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Benefits cannot be “in dispute” during judicial review unless they are part of
the “health benefits claim” that opens the door to judicial review.48 OPM’s
regulations define “claim” as “a request for (i) payment of a health-related
bill[] or (ii) provision of a health-related service or supply.”49 Gonzalez has
not identified any “bill” that Blue Cross denied—not for the proton therapy
that she wanted, and not for the intensity-modulated radiation therapy that
she received. And because Gonzalez is presently “cancer-free,” she also is
not seeking to undergo proton therapy or any other radiation treatment as a
“service.”50
Gonzalez thus has not identified any “payment of a . . . bill” or any
“provision of a . . . service” that is “in dispute” in this case.51 Instead, she
seeks to blend those categories by seeking payment for a service that she never
received. No matter how she describes the service—whether proton therapy
itself, access to coverage, or access to administrative process—OPM’s
regulations do not authorize judicial review for such a hybrid “benefit.” We
therefore affirm dismissal as to Count 1 for failure to state a claim.
B
Gonzalez’s second count seeks injunctive relief under the
Administrative Procedure Act. The APA waives sovereign immunity for
suits that seek non-monetary relief against federal agencies such as OPM.52
Gonzalez asks for an order compelling OPM to direct Blue Cross to stop
using the “advance benefit determination” process and to amend its internal
48
5 C.F.R. § 890.107(c) (emphasis added).
49
5 C.F.R. § 890.101.
50
See id.51
Id.; 5 C.F.R. § 890.107(c).
52
Cambranis v. Blinken, 994 F.3d 457, 462 (5th Cir. 2021) (citing 5 U.S.C. § 702).
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policies to cover proton therapy going forward.53 We conclude that the
district court correctly dismissed Gonzalez’s injunctive request for lack of
Article III standing.
“To have standing to sue for injunctive relief, a party must: (1) have
suffered an injury-in-fact; (2) establish a causal connection between the
injury-in-fact and a complained-against defendant’s conduct; (3) show that it
is likely, not merely speculative, that a favorable decision will redress the
injury-in-fact; and (4) demonstrate either continuing harm or a real and
immediate threat of repeated injury in the future.”54 As the party invoking
federal jurisdiction, Gonzalez “bears the burden of establishing these
elements” of standing.55
Because the fourth element is lacking here, so is jurisdiction.56
Gonzalez does not allege that she is currently involved in the advance
process, so that process is not responsible for a “continuing harm.”57 And
because Gonzalez does not allege that Blue Cross will require her to use the
advance process again, she has not shown how that process creates a threat
of “repeated injury.”58 On the contrary, OPM and Blue Cross have
53
Gonzalez also seeks injunctive relief that appears targeted to assist her in
recovering the monetary amounts that she seeks for herself and the putative class as part of
Count 1. We have concluded that the district court properly dismissed Count 1, see supra
Part III.A, so we need not address Gonzalez’s requests for injunctive relief related to that
count.
54
Funeral Consumers All., Inc. v. Serv. Corp. Int’l, 695 F.3d 330, 342 (5th Cir. 2012)
(internal quotation marks omitted).
55
Lujan v. Defenders. of Wildlife, 504 U.S. 555, 561 (1992).
56
See Attala Cnty. NAACP v. Evans, 37 F.4th 1038, 1042 (5th Cir. 2022).
57
Funeral Consumers All., 695 F.3d at 342; Attala Cnty. NAACP, 37 F.4th at 1042.
58
Id.
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confirmed that an advance determination is a “voluntary” process that an
employee “can choose to request.” So, while Gonzalez may choose to use the
process again, “standing cannot be conferred by a self-inflicted injury.”59
Because Gonzalez is free to ignore the advance process, she does not face any
continuing or threatened harm sufficient to create standing for injunctive
relief.
Nor does Blue Cross’s internal proton-therapy guideline pose an
immediate threat of injury. This is because OPM has the final word regarding
proton therapy—not Blue Cross.60 At worst, then, Blue Cross’s internal
guideline threatens Gonzalez only to the extent that it might require her to
seek OPM’s review if her cancer goes into remission and if Blue Cross again
denies coverage. But even if Gonzalez does end up seeking OPM’s review
for some future claim, she would not thereby suffer an injury under Article
III. Nor would an injunction that eliminates Blue Cross’s proton-therapy
guideline prevent OPM from denying coverage for treatment. And to top it
off, Gonzalez has not even alleged that OPM would deny coverage.
Neither the advance process nor the proton-therapy guideline poses
an immediate threat of injury, so injunctive relief is therefore unavailable.
IV
We now turn to Gonzalez’s state-law monetary claims against Blue
Cross (that is, Counts 3–8). FEHBA contains a preemption clause that
“displac[es] state law on issues relating to ‘coverage or benefits.’”61 The
59
Zimmerman v. City of Austin, 881 F.3d 378, 389 (5th Cir. 2018).
60
See, e.g., 5 C.F.R. § 890.105(e)(2)(iv) (providing that, in reviewing a carrier’s
decision, OPM may “[m]ake its decision based solely on the information the covered
individual provided with his or her request for review.”).
61
Empire Healthchoice, 547 U.S. at 683 (citing 5 U.S.C. § 8902(m)(1)).
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district court correctly determined that this clause preempts Gonzalez’s
Texas common-law claims against Blue Cross. The preemption clause says:
The terms of any contract under this chapter which relate
to the nature, provision, or extent of coverage or benefits
(including payments with respect to benefits) shall
supersede and preempt any State or local law, or any
regulation issued thereunder, which relates to health
insurance or plans.62
The clause helps “[t]o ensure uniform coverage and benefits under
plans OPM negotiates for federal employees.”63 The clause’s language is
“expansive,” and the Supreme Court has “‘repeatedly recognized’ that the
phrase ‘relate to’ in a preemption clause ‘expresses a broad pre-emptive
purpose.’ Congress characteristically employs the phrase to reach any
subject that has ‘a connection with, or reference to,’ the topics the statute
enumerates.”64 Thus, “state law—whether consistent or inconsistent with
federal plan provisions—is displaced on matters of ‘coverage or benefits.’”65
“[P]reemption occurs under FEHBA when (1) the FEHBA
contract terms at issue relate to the nature, provision, or extent of coverage
or benefits, and (2) the state law relates to health insurance or plans.”66
Gonzalez’s claims against Blue Cross meet both prongs of this test.
62
5 U.S.C. § 8902(m)(1).
63
Empire Healthchoice, 547 U.S. at 686.
64
Coventry Health Care of Missouri, Inc. v. Nevils, 581 U.S. 87, 95–96 (2017)
(citations omitted).
65
Empire Healthchoice, 547 U.S. at 686.
66
Health Care Serv. Corp. v. Methodist Hosps. of Dallas, 814 F.3d 242, 253 (5th Cir.
2016) (internal quotation marks omitted); see 5 U.S.C. § 8902(m)(1).
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A
Each of Gonzalez’s claims against Blue Cross arises either from Blue
Cross’s refusal to cover proton therapy under the Plan or from Blue Cross’s
reliance on the advance process that the Plan does not mention. Each claim
thus places “at issue” Plan terms that “relate to the nature, provision, or
extent of coverage or benefits (including payments with respect to
benefits).”67 To see why, consider each claim individually—
 Count 3, for third-party breach of contract, alleges that Blue
Cross denied coverage for proton therapy even though the
Plan’s terms cover radiation therapy.
 Count 4, for breach of contract, alleges that Blue Cross
imposed the advance process that the Plan’s terms do not
mention.
 Count 5, for tortious interference, alleges that Blue Cross
interfered with Gonzalez’s (alleged) employment contract
by denying her the rights that the Plan’s terms guarantee.
 Count 6, for intentional infliction of emotion distress,
alleges that the Plan’s terms did not give Blue Cross any
basis to deny proton therapy.
 Counts 7, for fraud, alleges that Blue Cross made false
representations about the Plan’s terms.
 Count 8, for negligent misrepresentation, alleges that Blue
Cross misrepresented the Plan’s terms.
The claims alleging that the Plan covers proton therapy “relate to”
the Plan terms that address the “nature” and “extent” of coverage.68 And
67
5 U.S.C. § 8902(m)(1).
68
Id.17
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the claims about the advance process “relate to” the Plan terms that address
“payments with respect to benefits.”69 The claims involving the advance
process also fail because “[t]ort claims arising out of the manner in which a
benefit claim is handled are not separable from the terms of the contract that
governs benefits.”70 Prong one, therefore, is satisfied.
B
We next address preemption’s second prong—whether the state laws
that Gonzalez relies on “relate[] to health insurance or plans.”71 She invokes
Texas common law for her tort and contract claims against Blue Cross. These
causes of action do not specifically relate to health insurance, but preemption
reaches even a state’s general laws when their application relates to the scope
or administration of federal healthcare plans.
“[T]he key phrase, obviously, is ‘relat[es] to.’ The ordinary meaning
of these words is a broad one.”72 The phrase means “to stand in some
relation; to have bearing or concern; to pertain; refer; to bring into
association with or connection with.”73 It is thus no surprise that the phrase
“express[es] a broad pre-emptive purpose.”74 “[A] state law may ‘relate to’
a benefit plan, and thereby be pre-empted, even if the law is not specifically
designed to affect such plans, or the effect is only indirect.”75
69
Id.70
Burkey v. Gov’t Emps. Hosp. Ass’n, 983 F.2d 656, 660 (5th Cir. 1993).
71
5 U.S.C. § 8902(m)(1); see Health Care Serv. Corp., 814 F.3d at 253.
72
Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383 (1992).
73
Id. (quoting Black’s Law Dictionary 1158 (5th ed. 1979) (internal
quotation marks omitted).
74
Id.75
Id. at 386 (quoting Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990)).
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In an analogous context, the Supreme Court held that ERISA’s
preemption clause bars common-law tort and breach-of-contract actions that
seek “[d]amages for failure to provide benefits.”76 ERISA, like FEHBA,
preempts state laws that “relate to” benefit plans. Citing the phrase’s
“expansive sweep,” the Court reasoned that “[t]he common law causes of
action raised in [the] complaint, each based on alleged improper processing
of a claim for benefits under an employment benefit plan, undoubtedly meet
the criteria for pre-emption.”77 The Court has squarely rejected the notion
that “laws of general applicability” escape the broad “sweep of the ‘relating
to’ language.”78 FEHBA’s preemption clause uses exactly the same
language, so the high Court’s interpretation compels ours.79
Gonzalez’s common-law claims seek to hold Blue Cross liable for
denying proton therapy and for imposing the advance process. But as just
discussed, Blue Cross’s actions relate to the Plan’s terms.80 As a result,
Gonzalez’s common-law claims based on these actions “relate[] to”81 the
Plan as well, and her claims thus “meet the criteria for pre-emption.”82
76
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 43, 47–48 (1987).
77
Id. at 48.
78
Morales, 504 U.S. at 386.
79
See id. at 384 (applying ERISA preemption precedents to other preemption
statutes containing substantively identical language because the Supreme Court’s ERISA
precedents “clearly and unmistakably rely on . . . a construction of the phrase ‘relates
to.’”).
80
See supra Part IV.A.
81
5 U.S.C. § 8902(m)(1).
82
Pilot Life Ins., 481 U.S. at 48.
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Gonzalez argues that our decision in Corporate Health Insurance v.
Texas Department of Insurance compels a different result, but we disagree.83
According to Gonzalez, that case means that preemption does not bar state
laws that impose duties that are completely separate from and additional to
the duties that arise under a healthcare plan. That argument misunderstands
the case’s holding. In Corporate Health Insurance, the defendants wore two
“hats”—one as insurer, and one as medical-care provider.84 True, we held
that FEHBA did not preempt a state law that regulated the defendants in
their capacity as healthcare providers (rather than insurers).85 But we also
held that FEHBA did preempt the state law insofar as that law purported to
regulate the defendants in their capacity as insurance-plan administrators.86
Because Gonzalez seeks to use state law to regulate the way that Blue Cross
administers benefits and resolves claims-related disputes, Corporate Health
Insurance reinforces our conclusion.
FEHBA preempts Gonzalez’s common-law claims against Blue
Cross, and we therefore affirm the district court’s dismissal of those claims.
V
Health insurance is too often maddening. Policy terms can be vague
and confusing, insurers might have hidden guidelines that conflict with
prevailing medical norms, and procedural hurdles can be byzantine. Here, a
confluence of these and other all-too-common complications conspired to
83
Corp. Health Ins., Inc. v. Texas Dep’t of Ins., 215 F.3d 526, 539 (5th Cir.
2000), cert. granted, judgment vacated sub nom. Montemayor v. Corp. Health Ins., 536 U.S. 935(2002), opinion modified and reinstated in relevant part, 314 F.3d 784 (5th Cir. 2002),
abrogated on other grounds by Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355 (2002).
84
Id. at 534.
85
Id. at 539.
86
Id.
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prevent Gonzalez from making an informed choice about treatment. We
sympathize. But under the statutory and regulatory regime that we are bound
to apply, no relief is available. We AFFIRM the district court’s judgment.
21