Bloom v. Independence Blue Cross
152 F. Supp. 3d 431
E.D. Pa.2015Background
- Dr. Howard Bloom and Weather Vane Chiropractic were in-network providers for IBC and related plans from 2005–2013 and had a separate Provider Agreement governing fee terms.
- Patients signed Financial Policy forms containing an assignment clause purporting to assign their rights and benefits to Weather Vane.
- IBC historically reimbursed massage services (DATMP) performed at Weather Vane, then issued billing guides/medical policy bulletins (2006–2011) disclaiming reimbursement for services performed by massage therapists and later sought large retroactive recoupments.
- IBC referred fraud allegations that led to criminal charges (Dr. Bloom was acquitted in 2013); IBC thereafter imposed pre-payment reviews, sought repayment (~$352,948), offset claims, and terminated the Provider Agreement.
- Plaintiffs sued asserting ERISA claims (Adverse Benefit Determination, failure to provide review, declaratory and injunctive relief re: coverage) and related state-law claims; defendants moved to dismiss for lack of ERISA standing and jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether providers have direct standing as ERISA "beneficiaries" | Providers who render covered services become "entitled to a benefit" and thus are beneficiaries with standing | Providers are non-enumerated parties under §1132 and cannot be beneficiaries; precedent rejects provider-as-beneficiary theory | Court: Providers are not direct ERISA beneficiaries; no direct standing |
| Whether providers have derivative standing via patient assignments (anti-assignment clause) | Patients validly assigned their ERISA rights to providers; anti-assignment clause only bars assignment of benefit payments, not the right to pursue coverage disputes | Plan anti-assignment clause bars assignments; clause is enforceable and defeats standing | Court: Assignment route upheld — anti-assignment clause is ambiguous and construed for insured; plaintiffs plausibly allege valid assignments; derivative standing allowed |
| Whether insurer waived anti-assignment clause by conduct (payments, confirmations) | IBC repeatedly paid claims and confirmed coverage, conduct inconsistent with asserting anti-assignment clause — constitutes waiver | Payments are explained by the Provider Agreement and do not show waiver of plan terms | Court: Plaintiffs plausibly pleaded waiver by insurer conduct; question survives pleading-stage review |
| Availability of ERISA declaratory/injunctive relief to assignee | Assignment included rights and remedies; assignee stands in assignor’s shoes and may seek injunction/declaratory relief under ERISA | Remedies are outside the logical scope of a benefits assignment | Court: Assignee may seek injunctive and declaratory relief; remedies pass with the assignment |
Key Cases Cited
- CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165 (3d Cir. 2014) (distinguishes provider reimbursement claims from ERISA coverage disputes and recognizes provider standing via assignment)
- Pascack Valley Hosp. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393 (3d Cir. 2004) (provider may sue contractually for reimbursement under provider agreement; distinguishes coverage claims under ERISA)
- Spinedex Physical Therapy USA, Inc. v. United Healthcare of Ark., Inc., 770 F.3d 1282 (9th Cir. 2014) (assignees may assert rights that existed at time of assignment; insured’s lack of post-assignment injury does not defeat standing)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing and injury-in-fact principles)
- Cohen v. Independence Blue Cross, 820 F. Supp. 2d 594 (D.N.J. 2011) (district court enforced an anti-assignment clause to deny provider standing under ERISA)