We consider in this case whether the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq., completely preempts an “out-of-network” health care provider’s promissory-estoppel claim against a health insurer where the provider (1) did not receive a valid assignment for payment under the health care plan and (2) received an independent promise from the insurer that he would be paid for certain medical services provided to the insured. We hold that ERISA does not completely preempt such a claim.
BACKGROUND
Plaintiff-appellant McCulloch Ortho-paedic Surgical Services, PLLC, a/k/a Dr. Kenneth E. McCulloch (“McCulloch”) filed this action against defendant-appellee Aet-na Inc. and several of its wholly-owned subsidiaries
Before performing the patient’s surgeries, McCulloch’s office staff called a number listed on the patient’s Aetna insurance card to obtain information about the patient’s coverage. An Aetna representative informed McCulloch’s staff that the patient was covered by a health care plan administered by Aetna, that the plan provided for payment to out-of-network physicians, and that the plan covered the surgical procedures that McCulloch would be providing for the patient. The Aetna representative stated that McCulloch would be reimbursed at seventy percent of the usual, customary, and reasonable (“UCR”) rate for the knee surgeries and that this rate would be based on an industry-standard schedule.
Relying on Aetna’s promise of reimbursement, McCulloch performed the two surgeries and billed Aetna at the UCR rate for a total of $66,048. McCulloch then submitted a health insurance claim form to Aetna for each surgery (Centers for Medicare and Medicaid Services Form 1500). The claim form has two sections that concern the assignment of payment for medical benefits. First, in Box 13, the insured must authorize the “payment of medical benefits to the undersigned physician ... for services described below.” The parties do not dispute that the patient signed both of the completed forms submitted by McCulloch. Second, in Box 27, the form asks if the provider will “Accept Assignment?”. The parties also do not dispute that McCulloch checked “yes” in response to this question on the forms.
The patient’s health care plan, however, has an anti-assignment provision, which states that:
Coverage may be assigned only with the written consent of Aetna. To the extent allowed by law, Aetna will not accept an assignment to an out-of-network provider, including but not limited to, an assignment of:
• The benefits due under this contract;
• The right to receive payments due under this contract; or
• Any claim you make for damages resulting from a breach or alleged breach, of the terms of this contract.
Despite this provision, Aetna reimbursed McCulloch $842.51 for the first surgery and $14,425 for the second surgery, for a total of $15,267.51.
On February 17, 2015, McCulloch sued Aetna in New York State court on a single cause of action: promissory estoppel. McCulloch alleged that Aetna had made a clear and unambiguous promise to reimburse him for seventy percent of the UCR rate for both knee surgeries ($46,233.60), that he had reasonably and foreseeably relied on that promise, and that he had been injured as a result. McCulloch sought
On March 17, 2015, Aetna timely removed this action to the United States District Court for the Southern District of New York. Aetna invoked federal-question jurisdiction, asserting that McCulloch’s complaint raised a claim for benefits under an employee welfare-benefit plan governed by ERISA. McCulloch then filed a motion to remand the action to state court. On May 11, 2015, the district court (Katherine B. Forrest, J.) issued an opinion and order denying McCulloch’s motion to remand and directing McCulloch to amend his complaint “to assert ERISA eause[s] of action not later than ... May 25, 2015.” App’x at 233.
On May 21, 2015, McCulloch moved for reconsideration of the district court’s order. He requested that the district court either remand this case to state court or enter a final judgment dismissing the action for failure to state a claim under ERISA. McCulloch did not file an amended complaint. On June 8, 2015, the district court denied McCulloch’s motion for reconsideration and, “[i]n light of plaintiffs refusal to amend,” dismissed this action. McCulloch timely appealed.
LEGAL STANDARD
We review de novo whether a district court has subject matter jurisdiction. Montefiore Med. Ctr. v. Teamsters Local 272,
The defendant, as the party seeking removal and asserting federal jurisdiction, bears the burden of demonstrating that the district court has original jurisdiction. See Montefiore,
ERISA provides for the wholesale displacement of certain state-law claims. Pursuant to ERISA § 502(a)(1)(B), a participant or beneficiary may bring an action “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” ERISA § 502(a)(1)(B), codified at 29 U.S.C. § 1132(a)(1)(B). This civil enforcement scheme “completely preempts any state-law cause of action that ‘duplicates, supplements, or supplants’ an ERISA remedy.” Montefiore,
In Aetna Health Inc. v. Davila, the Supreme Court established a two-pronged test to determine whether a state-law claim is completely preempted by ERISA § 502(a)(1)(B) (the “Davila” test).
DISCUSSION
The district court held that McCulloch’s promissory-estoppel claim was completely preempted by ERISA under the Davila test. The district court found that the first prong of this test was satisfied because McCulloch was assigned the right to receive payment under the plan and because McCulloch’s promissory-estoppel claim could be construed as a colorable claim for benefits pursuant to § 502(a)(1)(B). The district court further found that the second prong of the Davila test was satisfied because the Aetna representative’s oral statements did not give rise to an “independent legal duty” and, instead, that any duty to reimburse McCulloch “ar[ose] out of the terms and conditions of [the patient’s] plan.” App’x at 243-44.
On appeal, McCulloch argues inter alia that his state-law claim is not preempted by ERISA because: (1) he did not receive a valid assignment and thus is not the “type of party” that can bring a claim pursuant to § 502(a)(1)(B) and (2) Aetna’s oral statements gave rise to a duty that was distinct and independent from its obligations under the patient’s health care plan. We agree.
I. Davila, Prong 1, Step 1
We first must determine whether McCulloch is “the type of party that can bring a claim pursuant to § 502(a)(1)(B).” See Montefiore,
Under § 502(a), a civil action may be brought “by a participant or beneficiary” of an ERISA plan to recover benefits due to him under the terms of that plan. See 29 U.S.C. § 1132(a)(1)(B). ERISA defines a beneficiary as “a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.” Id. § 1002(2)(B)(8). Although § 502(a) is narrowly construed to permit only the enumerated parties to sue directly for relief, we have “ ‘carv[ed] out a narrow exception to the ERISA standing requirements’ to grant standing ‘to healthcare providers to whom a beneficiary has assigned his claim in exchange for health care.’ ” Montefiore,
In Montefiore Medical Center v. Teamsters Local 272, an “in-network” hospital brought state-law claims against a union’s
Here, McCulloch submitted claim forms to Aetna indicating that the patient had authorized payment of medical benefits to McCulloch and that McCulloch had accepted this assignment from the patient. As we held in Montefiore, this normally would constitute an assignment to the provider of the patient’s right to payment. See Montefiore,
Based on the plain language of this provision, McCulloch’s acceptance of an assignment was ineffective—a legal nullity. See Allhusen v. Caristo Constr. Corp.,
Aetna does not dispute that this provision renders invalid McCulloch’s attempt to enforce the purported assignment. Instead, Aetna argues—and the district court found—that in determining whether preemption applies, we should ignore that the health care plan prohibits any assignment to McCulloch. The. district court noted that “[w]hether the assignment is valid under the terms of the ERISA plan at issue is a question to be decided once an ERISA claim is before the Court” and that the attempted assignment between the patient and McCulloch was “all that [was] required to render [McCulloch] ‘the type of party that can bring a claim pursuant to § 502(a)(1)(B)’ for purposes of complete preemption.”
The first prong of the Davila test, however, requires that we must assess wheth
If we were to ignore that the health care plan prohibits an assignment to McCulloch in determining whether his claim is preempted, this would lead to a result that is both unjust and anomalous: McCulloch would be barred from pursuing state-law claims in state court on preemption grounds and from pursuing an ERISA claim in federal court for lack of standing. McCulloch—and other third-party providers in similar situations—would be left without a remedy to enforce promises of payment made by an insurer.
Such a rule would not further the principal purpose of ERISA to protect plan beneficiaries and participants. As the United States Department of Labor noted in its amicus brief,
In sum, while the patient attempted to assign McCulloch the right to payment for the surgeries that McCulloch performed, this assignment was prohibited under the terms of the patient’s health care plan. Aetna—which has not argued on appeal that the anti-assignment provision does not apply—has failed to establish that McCul-loch is the “type of party” who may bring claims pursuant to § 502(a)(1)(B).
Although Aetna’s failure to meet any part of the Davila test requires that we reverse the district court’s ruling, we briefly address why Aetna has failed to satisfy the remaining requirements as well. Under the Davila test, we next must determine “whether the actual claim that [McCulloch] asserts can be construed as a colorable claim for benefits pursuant to § 502(a)(1)(B).” Montefiore,
In Montefiore, we determined that the “in-network” hospital provider’s suit against the ERISA plan, seeking reimbursement for medical services that the hospital had provided to beneficiaries of the plan, were “colorable claims for benefits pursuant to § 502(a)(1)(B).” Id. The hospital had entered into agreements with preferred provider organizations that it would offer medical services to the plan’s beneficiaries at certain rates. Id. at 326. The preferred provider organizations, in turn, had contracted with the ERISA plan to set reimbursement rates and terms. Id. We concluded that the hospital’s state-law claims of breach of contract and quasi-contract concerned the hospital’s right to be reimbursed as a valid assignee under the ERISA plan and that deciding whether the hospital should be reimbursed would implicate the plan’s coverage and benefits determinations. Id. at 331.
The instant case differs from Montefiore for several reasons. First, because McCul-loch is not a valid assignee and has no plan-related relationship with Aetna, the benefits under the health care plan belong to the patient, not to McCulloch. The health care plan simply provides the context for McCulloch’s claim—if no plan had existed, McCulloch’s office would not have called Aetna to inquire about the patient’s coverage and Aetna likely would not have made such representations.
Second, unlike the contract and quasi-contract claims at issue in Montefiore, McCulloch’s promissory-estoppel claim does not depend on the specific terms of the relevant health care plan or on Aetna’s determination of coverage or benefits pursuant to those terms. The Aetna representative’s statements to McCulloch may have been a mere summary of the patient’s health care plan and the coverage and benefits that would apply to an “out-of-network” provider.
Thus, because McCulloch’s promissory-estoppel claim does not implicate the terms of the plan—and instead is based on the Aetna representative’s oral statements (regardless of whether those statements accurately represent the plan’s terms)— McCulloch has not alleged a colorable claim for benefits pursuant to § 502(a)(1)(B).
III. Davila, Prong 2
Finally, we proceed to the second prong of the Davila test. “Under Davila, a claim is completely preempted only if ‘there is no other independent legal duty that is implicated by [the] defendant’s actions.’ The key words here are ‘other’ and ‘independent.’ ” Montefiore,
We conclude that any legal duty Aetna has to reimburse McCulloch is independent and distinct from its obligations under the patient’s plan. McCulloch’s promissory-estoppel claim against Aetna arises not from an alleged violation of some right contained in the plan, but rather from a freestanding state-law duty grounded in conceptions of equity and fairness. See generally 57 N.Y. Jur. 2d Estoppel, Ratification, and Waiver § 51. Aetna is correct that, in Montefiore, we found that an insurer’s statements in response to a provider’s phone inquiry about plan coverage did not create a “sufficiently independent duty.” Montefiore,
Here, unlike in Montefiore, McCulloch’s phone call with Aetna was not in furtherance of an ERISA plan. McCulloch was not a valid assignee of the plan, he had no preexisting relationship with Aetna, and he was not required by the plan to pre-ap-prove coverage for the surgeries that he
Franciscan Skemp Healthcare, Inc. v. Central States Joint Board Health & Welfare Trust Fund is illustrative. See
For similar reasons, McCulloch’s promissory-estoppel claim is not completely preempted by ERISA. McCulloch does not seek to enforce the patient’s right to reimbursement. He is suing in his own right pursuant to an independent obligation. In other words, this is simply a suit between a third-party provider and an insurer based on the insurer’s independent promise. See Stevenson,
CONCLUSION
Because we find that ERISA does not preempt McCulloch’s state-law promissory-estoppel claim, we VACATE the district court’s orders denying McCulloch’s motion to remand and dismissing McCulloch’s complaint. We REMAND this action to the district court with instructions to remand the case to New York state court.
Notes
. In addition to Aetna Inc., the following subsidiaries were named as defendants in this action: Aetna Health Inc., Aetna Health and Life Insurance Company, Aetna Life Insur-
. McCulloch alleges that he charges UCR rates in accordance with those established by Ingenix, now known as the Optumln-sight/FAIRPLAN program. Aetna does not dispute that this is an industry-standard schedule.
. The district court also stated that, “Aetna in fact sent two payments ... for [the] surgery directly to [McCulloch] despite the anti-assignment provision” which "is sufficient for purposes of the complete preemption analysis.” App’x at 241. There are several district court cases in this circuit that have held that where an ERISA plan either permits assignment with the consent of an insurer or the plan is ambiguous as to whether assignment is permitted, direct payment is sufficient to demonstrate a patient’s assignment for preemption purposes. See, e.g., Neuroaxis Neuro-surgical Assocs., PC v. Cigna Healthcare of N.Y., Inc., No. 11 CIV. 8517 (BSJ) (AJP),
. This amicus brief was filed in support of McCulloch in a companion case with identical issues—McCulloch Orthopedic Surgical Services, PLLC v. United Healthcare Insurance Co. of New York, No. 15-2144-cv. Although the parties ultimately withdrew this case, we may take judicial notice of the brief. See In re Enter. Mortg. Acceptance Co., LLC, Securities Litig.,
. The health care plan, for example, covers seventy percent of an out-of-network provider’s surgical procedures after a calendar year deductible.
. We note that Aetna made two payments to McCulloch and it does not contest that it had a legal duty to make these payments.
. Although the plan states that the insured is "responsible for obtaining the necessary pre-certification from Aetna prior to receiving services from an out-of-network provider,” it does not require an out-of-network provider to make a pre-approval call. App’x at 89.
. Aetna relies on Devlin v. Transportation Communications International Union,