Coventry Health Care of Mo. v. Nevils (16-149)

argument 16-149

Coventry Health Care of Mo. v. Nevils

Supreme Court of the United States 51 min 5 speakers 7 chapters transcribed 7 days ago official recording ↗

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What is the central legal issue in Coventry Health Care v. Nevils?

John G. Roberts 0:00

hear argument this morning in case sixteen one hundred and forty nine, Coventry Healthcare Missouri versus Neville's. Mr Estrada?

Thompson Estrada 0:07

Thank you, Mr Chief Justice. I may please the Court. The issue in this case is whether FIBA preempts state laws that forbid subrogation by insurance carriers. The Missouri Supreme Court upheld the state rule, but we believe that is wrong for at least three reasons. Number one, anti subrogation laws relate to benefits and coverage, as this court concluded in FMC versus holiday, and at the very least they relate to payments with respect to benefits. Number two, If there is an any ambiguity on this point, OPM's Notice and Comment Regulation answers the question in favor of preemption. And number three, although the majority of the Supreme Court of Missouri thought otherwise, we believe there is no constitutional infirmity in Section eighty nine oh two M one under the Supremacy Clause.

How does counsel argue that the anti‑subrogation rule is pre‑empted by federal law?

Thompson Estrada 0:59

If I could turn to my first point, It seems to us that the anti subrogation rule in this case is preempted for basically the same reasons this court uh considered in FMC in concluding that the same rule was preempted under ERISA. That is to say that it effectively requires plant administrators to calculate benefits on the basis of different liability conditions that vary from State to State, that very importantly it undermines the statute's goal of uniformity. And third, that it could encourage plant sponsors. in this case the federal government, to reduce the scope of coverage. In addition to those reasons, uh this statute gives you an additional reason to find that it is preempted, and that is that it also preempts those rules that relate to payments with respect to benefits.

Thompson Estrada 1:52

Um it is quite clear to us that the subrogation and reimbursement claims that are at issue in these rules quite plainly refer to and uh relate to payments with respect to benefits. And therefore, uh the Supreme Court of Missouri was wrong in overlooking that part of the statute and also wrong in overlooking your decision in FMC versus holiday.

Unknown 2:16

Is there any room at all for state regulation of carriers who have these contracts with OPM?

Thompson Estrada 2:25

Well, to be sure, the the statute, if you focus on the last clause, and now the statute appears on page two of the Blue Brief, if you focus on the last clause, the statute only reaches those state laws that, quote, relate to health insurance or plans. And there are any number of subjects that may not be reached by these laws or by other laws, and also subjects that are not related to benefits. benefits coverage or payments with respect to benefits. Congress dealt separately in Section 8909F with the subject of taxation in the context of these plans, and generally provided that carriers may be subject to generally applicable laws that are applicable to all businesses under profits and and the like, but that states may not tax the benefits and the payments.

Thompson Estrada 3:17

Um and so Congress has in fact crafted a limited preemption provision that singles out those laws that are most likely to apply to the insurance plans at issue, and then only said that the scope of the preemption will be defined by particular terms of the contract. And so in our view, in some ways The reach of this law is somewhat more limited than that of the ERISA statute, because although the relay language is identical and they should have identical scope with respect to benefits coverage and payments with respect to benefits, it does not reach all laws of the State. It targets, to begin with, only the health insurance, uh those laws. that relate to health insurance or plans. Now, if I could get to the second point, we recognize

Anthony M. Kennedy 4:11

Before you do, I mean we appeared to find this a difficult question in McVay. We said there were two plausible readings, we said it was a hard statute. Um we didn't want to decide as between the two. You know, what do you make of that case?

Thompson Estrada 4:27

Uh I actually was going to be the headline on my second point, Justice Kagan, so thank you. Um, we recognize that McVeigh considered the same statute and concluded um that the statute did not give rise to a cause of action in federal subject matter jurisdiction.