Quintana v. Lightner
In Quintana v. Lightner, the Plan participant is suing State Farm and Ingenix for violations of his right to privacy, conspiracy to invade privacy, HIPAA violations, and intentional infliction of emotional distress. Ingenix provided State Farm with an itemization of Quintana’s medical bills, which included the dates of service, provider, diagnosis code, etc. Quintana asserts, among other things, that in providing State Farm with the itemization, Ingenix might adversely affect the outcome of his suit against state Farm’s insured. Quintana originally brought his action against State Farm and Ingenix in Texas state court. Ingenix removed the action to federal court, asserting that the terms of SPD govern the authority of Ingenix, and the plaintiff’s claim is pre-empted by ERISA. In its March 21, 2011 order, the District Court for the Northern District of Texas remanded the case back to state court, ruling that Quintana’s claim is a common law tort claim, and is not pre-empted by ERISA. The Texas state court will determine if Ingenix did in fact violate Quintana’s privacy rights.
In its analysis of ERISA pre-emption, the Court relied upon the Fifth Circuit decision, Memorial Hospital System v. Northbrook Life Insurance Company which found that pre-emption exists when “1.) the state law claim addresses area of exclusive federal concern, and 2.) the claim directly affects the relationship among traditional ERISA entities – the employer, the Plan and its fiduciaries, and the participants and beneficiaries.” The Court also pointed out that the burden of establishing federal jurisdiction is on the party seeking removal, and “any doubts concerning the removal will be resolved against removal and in favor of remanding the case back to state court.”
The Court disagreed with Ingenix’s claim that Quintana’s lawsuit constitutes claims for benefits under a Plan subject to ERISA. Instead, the Court held that Quintana’s claim of invasion of privacy has nothing to do with a right to receive benefits, but rather he is alleging that Ingenix exceeded the scope of its authority under the Plan. The Court went on to say that Quintana is not alleging a violation of the terms of the Plan, nor is he disputing the Plan’s subrogation right. (I would like to know what the Plan thinks about how Ingenix handled this case.)
An important take away point is how Court noted that the SPD contained a “Right to Receive Information” clause in the Coordination of Benefits section but not in the Subrogation Provision. The Court alluded that if this clause was contained in the Subrogation Provision, then Quintana would have waived his right to privacy but the Plan overlooked this important detail. Thankfully, Phia’s Plan Language contains a “Right to Receive and Release Information” clause under Miscellaneous Provisions which states “For the purpose of determining the applicability of and implementing the terms of these benefits, the Plan Administrator may, without the consent of or notice to any person, release or obtain any information necessary to determine the acceptability of any applicant or Participant for benefits from this Plan. In so acting, the Plan Administrator shall be free from any liability that may arise with regard to such action. Any Participant claiming benefits under this Plan shall furnish to the Plan Administrator such information as may be necessary to implement this provision.” Therefore, if we were ever faced with a similar problem, we can argue that the Plan Participant was on notice that the Plan has the right to release information to implement the terms of the SPD, including but not limited to the Subrogation and Reimbursement Provisions. In this case, the “Right to Receive Information” only applied to one section of the SPD, which the Court interpreted quite literally.
Interestingly, the Court noted (literally, in a foot note) that the Subrogation provision of the SPD requires Plan Participants to “sign any documents and instruments and take any legal action that the Plan considers necessary to protect its rights.” The Court points out that it is arguable that this language would obligate Quintana to waive his right to privacy, but since Ingenix did not raise this point, the Court refused to officially consider it.
The Court only presented a very brief discussion of how HIPAA relates to this case. The Court stated that the mere mention of HIPAA in Quintana’s claim does not give it federal jurisdiction. Relying on case law from the Fifth Circuit, the Court maintains that HIPAA contains no express provision creating a private cause of action. Ingenix did not present a defense under HIPAA (i.e. they are a business associate and are permitted to disclose PHI for payment purposes) perhaps for strategic reasons or maybe because the plaintiff’s primary claim was not an actual HIPAA violation, but a claim for invasion of privacy under state law?
Another interesting point about this case is that the Plan Participant is not suing the Plan, and is alleging that Ingenix acted outside the scope of their authority under the Plan. The Court states that because “none of the parties [Quintana filed a claim against] are the Plan administrator or an affiliate,” the claims are not preempted. Yet the Court goes on to say that because Ingenix had discretion as a Claims Administrator for “urgent care claims” they may “very well be an ERISA fiduciary.”
When this case is eventually decided, it will not set any new precedent under HIPAA because the basis of the plaintiff’s claim is a state law tort action for invasion of privacy, and only a small aspect of the suit involves HIPAA. Nevertheless, it will be very interesting to see how the state court will decide this one because it could mean that we will have to be more aware of how SPD’s address privacy waivers, etc.
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