108 F.4th 340
5th Cir.2024Background
- Caris MPI, Inc. (Caris), a cancer diagnostic provider, sued UnitedHealthcare, Inc. (United), a private insurer administering Medicare Advantage plans, for recouping alleged overpayments through offsets on new payment claims.
- Caris and United did not have a written contract; their relationship was based on a longstanding course of dealing.
- United removed the case from Texas state court to federal court under federal officer jurisdiction (28 U.S.C. § 1442(a)(1)), citing federal defenses including failure to exhaust administrative remedies and preemption.
- The district court denied Caris’s motion to remand to state court, finding federal officer jurisdiction, but then dismissed Caris’s claims for failure to exhaust administrative remedies, as required by the Medicare Act.
- Caris appealed both the denial of remand and the dismissal for failure to exhaust.
- The Fifth Circuit affirmed the finding of jurisdiction, but reversed the dismissal, holding exhaustion was not required because there was no enrollee interest in the dispute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal officer removal jurisdiction | Removal improper; no valid federal defense | Removal proper: raised colorable federal defenses | Removal proper; United met all four requirements |
| Failure to exhaust administrative remedies | RenCare controls: no exhaustion where no enrollee interest | Trinity controls: exhaustion required regardless of enrollee interest | RenCare controls; exhaustion not required here |
| Existence of colorable federal defenses | Defenses fail on the merits | Defenses are plausible; not frivolous | Defenses colorable even if unavailing on the merits |
| Statutory assignee status and admin remedies | Not an assignee—no enrollee claim assigned; dispute purely between provider and MAO | Provider is an assignee per regulation and must exhaust admin remedies | No actual assignment; exhaustion not triggered |
Key Cases Cited
- RenCare, Ltd. v. Humana Health Plan of Tex., 395 F.3d 555 (5th Cir. 2004) (Medicare Advantage administrative review process does not cover provider claims where enrollees have no interest)
- Heckler v. Ringer, 466 U.S. 602 (U.S. 1984) (exhaustion of administrative remedies is generally a prerequisite to jurisdiction over Medicare claims)
- Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286 (5th Cir. 2020) (colorable federal defense standard for federal officer removal)
- Gate Guard Servs., L.P. v. Perez, 792 F.3d 554 (5th Cir. 2015) (unpublished opinions are not binding precedent in the Fifth Circuit)
- H&D Tire and Automotive-Hardware, Inc. v. Pitney Bowes Inc., 227 F.3d 326 (5th Cir. 2000) (when opinions conflict, the earlier panel is controlling authority)