Hendrix v. Arkansas Municipal League et al
ORDER granting 4 Motion to Remand to State Court. This case is remanded to the Circuit Court of Pope County, Arkansas, for lack of subject matter jurisdiction. Signed by Judge D. P. Marshall Jr. on 12/1/2017. (jak)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
RICKY HENDRIX, Individually and on
behalf of a class of Arkansans Similarly
ARKANSAS MUNICIPAL LEAGUE and
MUNICIPAL HEALTH BENEFIT FUND
This removed case is a coverage dispute involving health
insurance benefits for municipal employees and their families. Hendrix
is a detective for the Russellville Police Department; his daughter was
injured in a bad car wreck; and her medical bills occasion the suit.
Hendrix challenges how the
Municipal Health Benefit Fund
coordinates benefits, as well as how the Fund decides what charges are
usual, customary, and reasonable. He sues for himself and proposes a
class. The Municipal League and the Fund removed the case. Hendrix
wants to go back to state court. There's no question arising under
ERISA because this governmental plan is exempt. 29U.S.C.§1002 (32) .
"Instead, the question is, does a state-law claim necessarily raise a
stated federal issue, actually disputed and substantial, which a federal
forum may entertain without disturbing any congressionally approved
balance of federal and state judicial responsibilities." Grable & Sons
Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308,
314 (2005); see also Empire Healthchoice Assurance, Inc. v. McVeigh, 547
U.S. 677, 699 (2006).
The Municipal League points to the Affordable Care Act and
To help consumers compare health
insurance plans, the Act mandated the development, by regulation, of
uniform definitions of common insurance and medical terms. 42 U.S.C.
§ 300gg-15(a) & (b)(3).
Among these terms was "UCR (usual,
customary[,] and reasonable) fees[.]" 42 U.S.C. § 300gg-15(g)(l) & (2).
The parties highlight two regulations that cover this ground. 29 C.F.R.
§ 2590.715-2715(c)(2)(i) and 45 C.F.R. § 147.200(c)(2)(i). Both require
benefit summaries and coverage explanations to include "the uniform
glossary" of common terms, including UCR. Ibid. That glossary defines
usual, customary, and reasonable. It is "[t]he amount paid for a medical
service in a geographic area based on what providers in the area usually
charge for the same or similar medical service.
The UCR amount
sometimes is used to determine the allowed amount." NQ 10-1 at 5,
quoting CENTERS FOR MEDICARE & MEDICAID SERVICES, Glossary of
Health Coverage and Medical Terms, at 3. The glossary also hedges its
uniform definitions. "Some of these terms also might not have exactly
the same meaning when used in your policy or plan, and in any such
case, the policy or plan governs." NQ 10-1at1. The Fund's summary
cited the glossary for reference:
A glossary of commonly used Health
Coverage & Medical Terms is available at www.arml.org/ service
s/ mhbf / or by calling Customer Service at 501-978-6137." NQ 2 at 79.
But, a few lines earlier, the Fund had provided some particulars on how
it would set "Usual, Customary[,] and Reasonable Charges (UCR)[.]"
Ibid. The Fund's summary stated: "To determine UCR charges billed
by a medical provider for services and supplies, the Fund reserves the
right to use national tables (including, but not limited to, RBRVS, ADP
and MDR, Medispan, First Databank) and methods in accordance with
health care industry standards. The Fund may set limits on a provider's
charges and fees at its discretion without giving notice to the provider.
The Fund will not pay 100 percent of a provider's billed charges." Ibid.
The federal uniform definition is generic. The CMS's glossary
makes plain that each plan could specify its own method of establishing
the usual, customary, and reasonable fee for a particular medical
service in a certain geographic area. The Fund's plan did. Federal law
mandates definition of a category, while contemplating plan-by-plan
variations within that category.
Hendrix challenges the Municipal
League's method for implementing this categorical definition, not the
This case is more like Hartland Lakeside Joint No. 3 School District v.
WEA Insurance Corporation, 756 F.3d 1032 (7th Cir. 2014), than Morris v.
Blue Shield of California, 2017 WL 1653938 (C.D. Cal. 1 May 2017). The
parties have a dispute about coverage under state law, with some
federal law in the background. There are no national implications in
how a court ultimately answers the Arkansas law questions asked by
Hendrix's complaint. Grable and like cases provide a footpath. That
narrow track isn't open to the Municipal League in this case, which
should be in state court.
* * *
Motion, Ng 4, granted. The case is remanded to the Circuit Court
of Pope County, Arkansas, for lack of subject matter jurisdiction. 28
U.S.C. § 1447(c).
D.P. Marshall Jr.
United States District Judge
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