852 F.3d 868
9th Cir.2017Background
- Two consolidated appeals (DB Healthcare and Advanced Women’s Health Center) involve medical providers who received post-payment recoupment demands from plan administrators (Blue Cross and Anthem) after performing blood tests for plan subscribers.
- Providers had various contracts: employer-sponsored benefit plans, subscriber payment-authorization/assignment forms, and provider agreements (some in-network) that governed billing and recoupment procedures.
- DB Healthcare: governing plans contained express non-assignment clauses; some nurse practitioners were in-network with Blue Cross; Blue Cross sought repayment and threatened credentialing/contract actions.
- Advanced Women’s Health Center: plans allowed direct payment authorization forms; Anthem recouped disputed past payments by offsetting unrelated reimbursements; Center sought declaratory, injunctive, and monetary relief under ERISA and the Declaratory Judgment Act.
- District courts dismissed both suits holding providers lacked authority to sue under ERISA; appeals challenged whether providers could sue (1) directly as ERISA "beneficiaries" or (2) derivatively via patient assignments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether health care providers are ERISA "beneficiaries" with direct §502(a) enforcement rights | Providers: designation to receive direct payment makes them beneficiaries entitled to sue under §502(a) | Insurers: payments to providers are fees for services, not ERISA "benefits" to beneficiaries | Providers are not ERISA "beneficiaries"; cannot sue directly under §502(a) |
| Whether providers may sue derivatively via patient assignments when plan contains non-assignment clause | Providers: patients signed assignment/authorization forms that confer rights to pursue claims | Insurers: valid plan non-assignment clauses or scope limits defeat assignments | Where plan has express non-assignment clause, assignment is ineffective; DB Healthcare providers lack derivative authority |
| Whether payment-authorization forms in Advanced Women’s Health Center conveyed rights to pursue recoupment/offset claims | Center: authorization to pay provider directly grants standing to challenge recoupment/offsets and seek damages | Anthem: the authorization only assigns limited right to payment; recoupment/offset disputes arise from provider agreement, not patient rights | The authorization at most conveyed limited right to payment; claims about recoupment/offset and fiduciary breach fall outside assigned rights; no derivative standing |
| Whether claims regarding government (ACA) plans can proceed under Declaratory Judgment Act or ERISA remedies | Center: seeks declaration that Anthem’s recoupment of government-plan payments is unlawful | Anthem: government plans are governed by ACA, not ERISA §502(a); Center is not a beneficiary | Claims against government plans fail: government plans not covered by ERISA §502(a) and Center lacks beneficiary/assignee authority |
Key Cases Cited
- Spinedex Physical Therapy USA Inc. v. United Healthcare of Ariz., 770 F.3d 1282 (9th Cir. 2014) (health care providers are not ERISA beneficiaries; assignment analysis)
- Misic v. Bldg. Serv. Emps. Health & Welfare Tr., 789 F.2d 1374 (9th Cir. 1986) (beneficiaries may assign reimbursement rights to providers)
- Davidowitz v. Delta Dental Plan of Cal., Inc., 946 F.2d 1476 (9th Cir. 1991) (ERISA plan non-assignment clauses bar enforceable assignments)
- Blue Cross of Cal. v. Anesthesia Care Ass’n, 187 F.3d 1045 (9th Cir. 1999) (provider-assignee stands in beneficiary’s shoes for recovery of plan benefits but not for claims governed by provider agreements)
- Rojas v. Cigna Health & Life Ins. Co., 793 F.3d 253 (2d Cir. 2015) (ERISA beneficiaries’ "benefits" are bargained-for medical goods/services, not a provider’s right to payment)