Coventry Health Care Of Mo., Inc. v. Nevils

The preemption clause of the Federal Employees Health Benefits Act (“FEHBA”) is valid under the Supremacy Clause of the U.S. Constitution, and it overrides state laws that prohibit FEHBA subrogation and reimbursement requirements.

Respondent was a federal employee and participated in a private healthcare plan with Petitioner, a private healthcare provider, pursuant to Federal Employees Health Benefits Act of 1959, 5 U. S. C. §8901 et seq. (“FEHBA”). Petitioner secured a lien against Respondent’s judgment in a personal injury case for related medical expenses. After Respondent settled the lien payment with Petitioner, he brought this lawsuit in state court for unlawful reimbursement, pursuant to Missouri law prohibiting the subrogation and reimbursement conduct demonstrated by Petitioner. Petitioner was granted summary judgment in light of §890.106(h) (the “Preemption Clause”). The Missouri Supreme Court reversed, finding that the Preemption Clause lacked “a clear and manifest purpose.” The U.S. Supreme Court granted certiorari to resolve conflicting state court interpretations of the Preemption Clause. The Court clarified that the contract with Petitioner did not trigger the preemption and the Preemption Clause did, therefore there was no constitutional violation of the Supremacy Clause. After reviewing the text, context and prior cases interpreting the Preemption Clause, as well as other federal preemption clauses, the Court held that the clear congressional purpose of Preemption Clause was to preempt state law if a federal employee contracts with a private health care provider. As such, the Supreme Court held that state laws that prohibit FEHBA subrogation and reimbursement requirements are preempted. REVERSED and REMANDED.