Memorial Hermann Health System v. Southwest LTC, L
683 F. App'x 274
5th Cir.2017Background
- C.W., a participant in an ERISA-governed Southwest LTC employee health plan administered by Meritain, incurred over $400,000 in hospital charges at Memorial Hermann in 2012.
- Memorial asserts C.W. assigned her insurance benefits to Memorial and sought payment from Meritain/Southwest for those charges.
- Meritain repeatedly informed Memorial it needed a written authorization from C.W. (showing Memorial acted on C.W.’s behalf) before releasing claim documents or processing an administrative claim; Memorial never provided such an authorization.
- Memorial sued Southwest in state court; Southwest removed to federal court and moved for summary judgment asserting Memorial failed to exhaust plan administrative remedies.
- The district court granted summary judgment for Southwest; the Fifth Circuit reviewed de novo and affirmed, concluding Memorial failed to exhaust and was not denied meaningful access to the administrative process.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Memorial exhausted administrative remedies under the Plan before suing under ERISA § 502(a)(1)(B) | Memorial contends it exhausted or should be deemed to have exhausted administrative remedies | Southwest argues the Plan requires claim/appeal by the Covered Person and Meritain was entitled to proof Memorial acted for C.W.; no authorization was provided | Held: Memorial did not exhaust because it never produced C.W.’s authorization showing it acted on her behalf |
| Whether an assignee has standing to bring claims under ERISA | Memorial invokes its assignment/derivative standing to pursue benefits | Southwest insists exhaustion and Plan procedures must be followed by the Covered Person/authorized representative | Held: Assignee may have derivative standing, but Memorial still failed to meet Plan’s procedural requirement of a written authorization, so exhaustion lacking |
| Whether Memorial was denied "meaningful access" to the administrative process | Memorial argues Meritain’s refusal to release documents without authorization effectively denied access | Southwest/Meritain argue they plainly instructed Memorial what was required (authorization), so no interference occurred | Held: No meaningful-access violation; Meritain merely required a valid task be completed before processing the claim |
Key Cases Cited
- Swanson v. Hearst Corp. Long Term Disability Plan, 586 F.3d 1016 (5th Cir. 2009) (standard for reviewing ERISA benefit exhaustion and summary judgment)
- Tango Transp. v. Healthcare Fin. Servs. LLC, 322 F.3d 888 (5th Cir. 2003) (assignee of plan participant has derivative standing to enforce ERISA benefits)
- McGowin v. ManPower Int’l, Inc., 363 F.3d 556 (5th Cir. 2004) (requiring a claimant to perform a clear, valid task does not constitute denial of meaningful access)