Family Caught in Health Dispute
by Joe Hanel of The Durango Herald, www.durangoherald.com
DENVER – Stephen and Naomi Dobbs have some of the same complaints about stonewalling by their health-insurance company as many people.
But when the Durango couple sued Anthem Blue Cross & Blue Shield, they got caught between two complex areas of the law – health insurance and Native American tribal sovereignty.
Stephen Dobbs worked for the Southern Ute Indian Tribe, and he argues federal insurance laws prohibiting his family’s lawsuit do not apply to him because his former employer is a sovereign nation. Anthem argues the law does apply to the tribe. And the tribe itself, which carefully guards its sovereignty, has sided with Anthem against Dobbs, arguing federal insurance law does apply to the tribe.
The verdict could have an effect on the rights of the growing number of Four Corners residents who work for the Southern Ute tribe. The tribe is the largest employer in the Four Corners, with 1,291 people in its benefit plan at the end of 2007, according to an IRS document.
The Dobbses are not members of the tribe.
Their case made its way back to the U.S. 10th Circuit Court of Appeals in Denver on Wednesday – its second stop in that court since 2007. A three-judge panel heard oral arguments Wednesday, but the judges did not say when they would announce a decision.
Payment denied for son’s surgery. In 2003, Stephen Dobbs was a geologist for Red Willow, the Southern Ute natural-gas company. He and his wife signed up for a “preferred” health-insurance plan the tribe bought from Anthem. They were told the plan would let them see a national specialist in Dallas who had been treating their son, Skyler, for a rare skull disorder.
But when they went to see the specialist, Anthem tried to charge them higher “out-of-network” rates. They fought the company for nine months, during which Anthem employed “cruel and astonishing” tactics to delay their claim, according to a brief filed by their lawyer, Shawn Mitchell. One Anthem employee even staged a fake appeal hearing by telephone with Naomi Dobbs, she said.
When they finally did get to see the specialist, he recommended surgery for their son. Anthem again denied “in-network” reimbursement, and the Dobbses spent $100,000 out of pocket to pay for Skyler’s surgery, which was successful.
Anthem never has reversed its decision, although it inexplicably has paid most of the surgery’s costs, according to Mitchell’s brief.
The Dobbses sued in state court, hoping to collect punitive damages to deter Anthem from treating others the same way. But they never got a chance to make their case.
Anthem had the lawsuit removed to federal court under the Employee Retirement Income Security Act. Anthem argued ERISA pre-empted their claims, and U.S. Senior Judge Lewis Babcock agreed, dismissing the case.
ERISA was enacted in 1974 to protect employees’ pensions. Congress has amended it several times, and it now covers health insurance, too. In order to give insurance companies a uniform legal standard across the whole country, it often prevents people from filing state lawsuits. And, as Naomi Dobbs found out, it didn’t let her family sue for punitive damages.
Ute sovereignty vs. federal lawTo escape from ERISA, the Dobbses argued Native American sovereignty meant the federal health-insurance law didn’t apply to tribal companies.
Their case has bounced back and forth from district court to the 10th Circuit Court of Appeals.
Anthem argues ERISA’s prohibition on lawsuits covers the tribe’s benefits package.
The Southern Ute tribe weighed in with a friend-of-the-court brief that sides with Anthem’s conclusion, asking the case to be dismissed.
The tribe’s lawyer, Tom Shipps of Durango, wrote the tribe has followed ERISA since 1995, even though he maintains it doesn’t limit Ute sovereignty.
However, other tribes disagree, and the National Congress of American Indians in 2004 formally asked Congress to give tribes a governmental exemption under ERISA.
The Southern Utes have submitted to ERISA because the law allows Native American tribes to offer retirement plans to their employees that have tax advantages other governments can’t offer. If ERISA didn’t apply to tribes, their employees might lose a lot of money at retirement, said Shipps.
In 2006, Congress tried to end the confusion about whether ERISA applied to Native American tribes. But instead, it created more controversy by saying tribal workers in “essential government functions” aren’t subject to ERISA, but “commercial” tribal employees like Dobbs are.
Debate now centers on whether the 2006 law change applies to the Dobbs lawsuit.
So for now, the Dobbses’ case sits in a Denver courthouse, waiting for three appellate judges to untangle the web of tribal sovereignty law and federal health-insurance regulations.
In his legal brief, Shipps also threw another wrinkle into the fabric of the case. Even though ERISA prohibits a state lawsuit by the Dobbses, they might be able to sue Anthem in Southern Ute tribal court, Shipps wrote.
Chief Judge Robert H. Henry seemed intrigued by the argument in court Wednesday, and he asked Anthem’s lawyer, Mann, about it.
Mann called it an “interesting question,” but he did not say whether he agreed.
Comments