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From Roger Baron: Nevada Supreme Court Authorizes Tort Claim against ERISA entities

Reprinted with permission from Roger Baron

“Yesterday the Nevada Supreme Court handed down its decision in Lynam v Health Plan of Nevada, No. 56165 (March 21, 2012).  The insured was infected with hepatitis C in the course of medical treatment.  He brought a tort claim against a number of entities operating in and through the Health Plan of Nevada, alleging common-law negligence in that he was referred to a medical facility which did not meet “quality assurance program” required by Nevada statute.  The Defendants persuaded the trial court to dismiss the claim on the basis of ERISA preemption.  This decision reverses and remands.  The Nevada Supreme Court holds that ERISA preemption does not extend to “traditional police powers of the state” and makes a distinction between an ERISA plan which “facilitate[s] the selection of providers” and an ERISA plans which “lease[s] out its existing network of providers” or which “purchase[s] an insurance plan from a MCO or HMO.”  The insured should be given the opportunity on remand to prove that “to prove that [the health plan] merely leased out their network providers or issued an insurance policy” and thereby avoid federal preemption.  This decision is unanimous by the court, with one justice not participating.”

To view the decision click HERE


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