706 F. App'x 521
11th Cir.2017Background
- Plaintiffs BioHealth Medical Laboratory, Inc., and PB Laboratories LLC are out-of-network providers who sued Cigna (Connecticut General Life Insurance Co. and Cigna Health & Life Ins. Co.) after Cigna denied payment for lab services.
- Plaintiffs sued based on written patient assignments that purported to assign “all benefits under any policy of insurance, indemnity agreement, or any collateral source as defined by statute,” including the right to sue as an assignee under ERISA § 502(a)(1).
- Cigna administers both traditional insured plans (insurer bears risk) and self-funded ERISA plans (employer bears risk but Cigna administers claims). The dispute focuses on whether the Assignment covers claims under self-funded plans administered by Cigna.
- The district court held the Laboratories had standing to pursue fiduciary-duty claims generally but ruled the Assignment did not cover self-funded plans, so the Laboratories lacked standing to bring claims arising from those plans; the court also dismissed ERISA claims for failure to exhaust administrative remedies (not challenged on appeal) and state-law claims for failure to state a claim.
- On appeal the Laboratories challenged only the district court’s interpretation that the Assignment excluded self-funded plans and argued that any ambiguity made resolving the issue on a motion to dismiss improper.
- The Eleventh Circuit vacated the portion of the district court’s ruling dismissing claims arising from self-funded plans for lack of standing, holding the Assignment’s language plausibly includes self-funded plans and that contract interpretation requires further factual development; the court affirmed dismissal without prejudice based on failure to exhaust administrative remedies and left other rulings intact.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the patient Assignment conveys the right to sue for benefits under self-funded (ERISA) plans administered by Cigna | Assignment’s broad language (incl. “any collateral source as defined by statute” and “my insurance company”) plausibly includes self-funded plans; Florida collateral-source statute supports inclusion | Assignment’s text emphasizes recovery from an “insurance company” and “policy of insurance,” so it excludes self-funded plans where employer, not insurer, bears risk | Vacated district court’s standing ruling; Assignment plausibly covers self-funded plans and contract interpretation cannot be resolved on motion to dismiss without discovery |
| Whether the contract can be interpreted at the motion-to-dismiss stage | Ambiguity exists (e.g., which state’s statute defines “collateral source”), so extrinsic evidence and discovery are required | District court properly interpreted the plain language and excluded self-funded plans | Court held it was improper to resolve the disputed contract interpretation on a motion to dismiss; ambiguity requires further factual development |
Key Cases Cited
- America’s Health Ins. Plans v. Hudgens, 742 F.3d 1319 (11th Cir. 2014) (distinguishing insured and self-funded ERISA plans)
- Hobbs v. Blue Cross Blue Shield of Ala., 276 F.3d 1236 (11th Cir. 2001) (providers may sue under ERISA if they have an express assignment)
- Tex. Life, Acc. Health & Hosp. Serv. Ins. Guar. Ass’n v. Gaylord Entm’t Co., 105 F.3d 210 (5th Cir. 1997) (assignment must be sufficiently specific to transfer particular ERISA causes of action)
- Inetianbor v. CashCall, Inc., 768 F.3d 1346 (11th Cir. 2014) (contract interpretation aims to effectuate parties’ intent)
- Alexandra H. v. Oxford Health Ins. Freedom Access Plan, 833 F.3d 1299 (11th Cir. 2016) (rules for construing ERISA benefit-plan language)
- Adams v. Thiokol Corp., 231 F.3d 837 (11th Cir. 2000) (ambiguity permits consideration of extrinsic evidence)
- Stewart v. KHD Deutz of Am., Corp., 980 F.2d 698 (11th Cir. 1993) (contractual interpretation principles)
- Cagle v. Bruner, 112 F.3d 1510 (11th Cir. 1997) (assignments to providers can facilitate beneficiaries’ access to benefits)
- Wilkerson v. Grinnel Corp., 270 F.3d 1314 (11th Cir. 2001) (questions left for district court after further development)