Db Healthcare v. Blue Cross Blue Shield of Az , 852 F.3d 868 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DB HEALTHCARE, LLC, DBA Metro No. 14-16518
Center Health Care; AVD
HEALTHCARE, LLC, DBA Mountain D.C. No.
Vista Health Center; MH 2:13-cv-01558-
HEALTHCARE, LLC, DBA North NVW
Health Center; SV HEALTHCARE,
LLC, DBA White Rock Health
Center; QUINN CHIROPRACTIC, LLC,
DBA White Rock Health Center; CK
HEALTHCARE, LLC, DBA Avondale
Health Center; TM HEALTHCARE,
LLC, DBA Avondale Health Center;
KM HEALTHCARE, LLC, DBA
Avondale Health Center; KD
CHIROPRACTIC, LLC, DBA White
Rock Health Center; EW
HEALTHCARE, LLC, DBA Greenway
Health Center; PW HEALTHCARE,
LLC, DBA Greenway Health Center;
MARY MELISSA HANDS; VICTORIA
TWEEDY; ROBERT ALEXANDER;
SIMRAN SETHI; SARAH QUINN;
TERESA MELOCHE; ALLISON
WOODWORTH; JOE MELBY; CRYSTY
FRICK; PATRICIA PARADIS,
Plaintiffs-Appellants,
v.
2 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
BLUE CROSS BLUE SHIELD OF
ARIZONA, INC.,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Arizona
Neil V. Wake, District Judge, Presiding
ADVANCED WOMEN’S HEALTH No. 14-16612
CENTER, INC.,
Plaintiff-Appellant, D.C. No.
1:13-cv-01145-
v. AWI-JLT
ANTHEM BLUE CROSS LIFE AND
HEALTH INSURANCE COMPANY, OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of California
Anthony W. Ishii, Senior District Judge, Presiding
Argued and Submitted July 7, 2016
San Francisco, California
Filed March 22, 2017
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 3
Before: Marsha S. Berzon, and N. Randy Smith, Circuit
Judges, and Dana L. Christensen,* Chief District Judge.
Opinion by Judge Berzon
SUMMARY**
Employee Retirement Income Security Act
The panel affirmed two district court judgments
dismissing ERISA actions brought by health care providers
designated to receive direct payments from employee health
plan administrators for medical services.
The panel held that neither direct statutory authority nor
derivative authority through assignment authorized the health
care providers to bring suit in federal court under ERISA’s
civil enforcement provisions. Agreeing with other circuits,
the panel reaffirmed that health care providers are not health
plan beneficiaries who may sue for declaratory relief and
money damages under ERISA § 502(a)(1)(B) or injunctive
relief under ERISA § 502(a)(3). Rather, a health care
provider must bring claims derivatively, relying on its
patients’ assignments of their benefit claims. The panel held
that the health care providers here, however, lacked derivative
authority to sue, given the nature of the governing agreements
*
The Honorable Dana L. Christensen, United States Chief District
Judge for the District of Montana, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
4 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
and of the purported assignments. In one case, the governing
employee benefit plans contained non-assignment clauses that
overrode any purported assignments. In the other case,
although the provider agreement permitted assignment, and
payment authorization forms could be construed as assigning
the provider limited rights, the provider’s claims fell outside
the scope of the assigned rights.
COUNSEL
Richard J. Quadrino (argued), Harold J. Levy, and Eugene R.
Pagano, Quadrino Law Group P.C., Melville, New York; Tod
F. Schleier and Bradley H. Schleier, Schleier Law Offices,
Phoenix, Arizona; for Plaintiffs-Appellants.
Anthony F. Shelley (argued), Michael N. Khalil, and Adam
P. Feinberg, Miller & Chevalier Chartered, Washington,
D.C., for Defendant-Appellee Blue Cross Blue Shield of
Arizona, Inc.
Eileen R. Ridley (argued), Alan R. Ouellette, and Michael A.
Naranjo, Foley & Lardner LLP, San Francisco, California, for
Defendant-Appellee Anthem Blue Cross Life and Health
Insurance Company.
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 5
OPINION
BERZON, Circuit Judge:
These two cases involve reimbursement disputes between
health care providers and employee health benefit plan
administrators. We decide the cases together because they
raise a common central issue: whether a health care provider
designated to receive direct payment from a health plan
administrator for medical services is authorized to bring suit
in federal court under the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.
We consider two separate potential bases for such authority
under ERISA’s civil enforcement provisions: direct statutory
authority and derivative authority through assignment.
Although the contractual relationships between the health
care providers and the plan administrators, and between the
providers and the patients, in these two cases differ in
relevant ways, we conclude in both cases that the providers
cannot enforce ERISA’s protections in federal court on either
basis.
I. Background
The Plaintiffs-Appellants in these cases are health care
providers (“Providers”) who furnish medical services to
subscribers1 of employee health benefit plans. The benefit
plans are governed by either ERISA (the private employer
plans) or the Patient Protection and Affordable Care Act
1
We use the term “subscribers” to refer to individuals covered under
the health benefit plans. We avoid the terms “participant” and
“beneficiary” to describe these individuals because the precise meaning
of those terms is central to this dispute.
6 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
(“ACA”) (the government employer plans). The Plaintiffs in
DB Healthcare are twelve medical facilities located in and
around Phoenix, Arizona, and ten nurse practitioner
employees of those facilities (collectively, “DB Healthcare
Providers”). The Plaintiff in Advanced Women’s Health
Center is a medical facility in Bakersfield, California (“the
Center”). Defendants-Appellees Blue Cross Blue Shield of
Arizona, Inc. (“Blue Cross”) and Anthem Blue Cross Life
and Health Insurance Company (“Anthem”) are health
insurers, plan administrators, and/or claims administrators for
the relevant employee benefit plans.
The reimbursement disputes in these cases share a number
of common facts. In 2010 and 2011, Providers performed
certain blood tests and related services for plan subscribers
and submitted reimbursement claims to either Blue Cross or
Anthem. Blue Cross and Anthem processed the claims and
reimbursed Providers. On completion of post-payment
reviews, however, the plan administrators determined that
Providers were not entitled to reimbursement for the blood
tests, albeit for different reasons. In DB Healthcare, Blue
Cross determined that the tests were investigational and thus
excluded from coverage. In Advanced Women’s Health
Center, Anthem determined that the Center used faulty
practices to bill for the tests and so was not entitled to
reimbursement.
At that point, Blue Cross and Anthem informed Providers
that the prior reimbursements for the blood tests were in error
and requested repayments totaling $237,000 and $295,912.87,
respectively. Providers disputed Blue Cross and Anthem’s
authority retroactively to recoup the reimbursements and
refused to pay. Blue Cross responded by restating its
payment demand to DB Healthcare Providers, threatening to
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 7
withhold recredentialing for the in-network nurse
practitioners, refusing to credential newly hired nurses, and
threatening to terminate the relevant provider agreements.
Anthem went one step further, withholding reimbursements
from Advanced Women’s Health Center in 2013 for unrelated
claims as a means of recouping the disputed past payments.
Several types of contracts govern the relationships
between the subscribers, the plan administrators, and the
providers in each case: (1) Employee benefit plans provide
the terms of the insurance provided to the subscribers.
(2) Payment authorizations or assignment of benefits forms
executed by subscribers assign some rights to the providers.
(3) Provider agreements govern the relationships between the
providers and the plan administrators. Each of these contracts
is relevant to our analysis.
In DB Healthcare, the governing employee benefit plans
prohibit patients from assigning any of their rights under the
plans to third parties.2 Despite this prohibition, DB
Healthcare Providers’ patients executed “assignment of
benefits” forms purporting to assign certain plan rights to DB
Healthcare Providers. Unlike in DB Healthcare, the benefits
plans in Advanced Women’s Health Center do not prohibit
assignment of benefits. The Center’s patients signed forms
2
The record does not include all the employee benefit plans at issue
in the case. DB Healthcare Providers submitted an exemplar plan in
support of their complaint. The sample plan includes a non-assignment
clause, which reads, in relevant part: “The benefits contained in this plan,
and any right to reimbursement or payment arising out of such benefits,
are not assignable or transferable, in whole or in part, in any manner or to
any extent, to any person or entity. . . .” The district court relied on this
provision in the exemplar plan to find that the governing plans contained
valid non-assignment clauses. This finding is not contested on appeal.
8 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
authorizing Anthem to pay the Center directly for health care
services rendered to plan subscribers. Those forms read: “I
Hereby Authorize My Insurance Benefits To Be Paid Directly
to the Physician And Acknowledge That I Am Financially
Responsible for Any Unpaid Balance.”
The provider agreements grant some health care providers
in-network status for the benefit plans administered by
Anthem or Blue Cross. Five of the ten nurse practitioner
Providers are credentialed by Blue Cross as in-network
providers and the five others seek such credentialing.
Advanced Women’s Health Center is an in-network provider
for health plans administered by Anthem. In-network
providers agree to a fixed schedule of fees for services and
can bill the insurers directly for health care services rendered
to plan subscribers. In fact, the provider agreements require
Providers to seek payment for medical services rendered only
from the relevant plan administrator, not from patients
(subject to limited exceptions).3
In response to recoupment strategies by Blue Cross and
Anthem, DB Healthcare Providers and the Center,
respectively, filed complaints in federal district court. The
specific claims in DB Healthcare and Advanced Women’s
Health Center differ slightly, although both sets of providers
generally allege that the claims administrators violated
ERISA when they unilaterally determined that the blood
testing procedures and related services were not reimbursable
and used various strategies to recoup payments already made.
3
In DB Healthcare, just the in-network nurse practitioners, not the
out-of-network practitioners or the facilities themselves, have provider
agreements with Blue Cross.
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 9
DB Healthcare Providers alleged two causes of action
under ERISA in their complaint.4 First, they sought
injunctive relief regarding Blue Cross’s refusal to credential
nurse-practitioners and its threat to cancel provider
agreements, alleging that Blue Cross violated ERISA’s
prohibition against retaliation for the exercise of rights
guaranteed by employee benefit plans. See 29 U.S.C. § 1140.
Second, they sought a declaratory judgment that Blue Cross’s
recoupment efforts violate the ERISA Claims Procedure,
29 U.S.C. § 1133, and the ERISA Claims Procedure
regulation, 29 C.F.R. § 2560.503-1, which provide procedural
protections for ERISA claimants. Specifically, DB
Healthcare Providers alleged that Blue Cross violated the
requirement that plan administrators notify claimants of
adverse benefit determinations within thirty days of receiving
a claim.
Advanced Women’s Health Center also challenged
Anthem’s recoupment efforts, asserting four causes of action
in its complaint, three under ERISA and one under the
Declaratory Judgment Act, 28 U.S.C. § 2201. Under ERISA,
which governs private employer plans, the Center: (1) sought
a declaratory judgment that Anthem’s reversal of benefit
determinations and offsetting of asserted overpayment against
other reimbursements violate ERISA’s Claims Procedure,
29 U.S.C. § 1133, and the ERISA Claims Procedure
regulation, 29 C.F.R. § 2560.503-1, and an injunction
precluding such offsetting; (2) sought monetary damages for
past recoupments; and (3) requested declaratory and
4
DB Healthcare Providers also brought a state law breach of contract
claim with respect to government employee benefit plans. The district
court declined to exercise supplemental jurisdiction over the state law
claim, dismissing the claim without prejudice.
10 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
injunctive relief regarding Anthem’s alleged violation of its
fiduciary duty to plan beneficiaries and participants.
Invoking the Declaratory Judgment Act, the Center alleged
that the government employee benefit plans administered by
Anthem are also subject to the ERISA Claims Procedure
regulation and sought a declaratory judgment that Anthem’s
recoupment of payments for claims made under those plans
was unlawful.
The district courts in both Advanced Women’s Health
Center and DB Healthcare dismissed the claims, holding that
the health care providers lacked authority to bring claims
under ERISA. In Advanced Women’s Health Center, the
district court also dismissed the claim brought under the
Declaratory Judgment Act, holding that government plans
are, by their terms, exempt from the ERISA Claims
Procedure regulation. The providers in both cases timely
appealed.
II. Discussion
A.
ERISA’s civil enforcement provisions specify which
categories of individuals and entities may enforce each of the
statute’s protections. The relevant provisions state: “(a) A
civil action may be brought– (1) by a participant or
beneficiary– (A) for the relief provided for in subsection
(c) of this section, or (B) 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; . . . (3) by a participant, beneficiary, or
fiduciary (A) to enjoin any act or practice which violates any
provision of this subchapter or the terms of the plan, or (B) to
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 11
obtain other appropriate equitable relief (i) to redress such
violations or (ii) to enforce any provisions of this subchapter
or the terms of the plan.” ERISA § 502(a), 29 U.S.C. § 1132
(a)(1),(3). Providers maintain that they are “beneficiar[es]”
for purposes of § 502(a) and so may bring suit directly under
that statute.
We note, preliminarily, that our cases discussing whether
a plaintiff is authorized to sue under ERISA’s civil
enforcement provisions often refer to the question as whether
the plaintiff has “standing” or “statutory standing” to sue
under ERISA. See e.g., Harris v. Amgen, Inc., 573 F.3d 728,
732 (9th Cir. 2009) (examining whether a plaintiff has
“standing under ERISA”); Davidowitz v. Delta Dental Plan
of Cal., Inc., 946 F.2d 1476, 1477 (9th Cir. 1991) (“Under
ERISA, a beneficiary has standing to bring a civil action for
non-payment.”). This common shorthand suggests that
subject matter jurisdiction may also be at stake. It is not. The
question whether Congress has granted a private right of
action to a particular plaintiff is not a jurisdictional
requirement. “[A] dismissal for lack of statutory standing
[under ERISA] is properly viewed as a dismissal for failure
to state a claim rather than a dismissal for lack of subject
matter jurisdiction.” Vaughn v. Bay Envtl. Mgmt., Inc.,
567 F.3d 1021, 1024 (9th Cir. 2009).5 For clarity on this
point, we avoid in this opinion references to Providers’
“standing,” and so turn to the question whether Providers may
bring suit directly under ERISA § 502(a).
5
The district court in Advanced Women’s Health Center dismissed
the Center’s claims for lack of subject matter jurisdiction under Federal
Rule of Civil Procedure 12(b)(1). That error, however, does not affect our
analysis, because we review dismissals under both Rule 12(b)(1) and Rule
12(b)(6) de novo. See Vaughn, 567 F.3d at 1024.
12 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
“[Section] 502(a) [of ERISA] . . . demonstrates Congress’
care in delineating the universe of plaintiffs who may bring
certain civil actions.” Harris Tr. & Sav. Bank v. Salomon
Smith Barney, Inc., 530 U.S. 238, 247 (2000). With regard to
the plaintiffs specified in § 502(a), “Congress presumably
determined that a right to enter federal court was necessary to
further the statute’s purposes.” Franchise Tax Bd. v. Constr.
Laborers Vacation Tr., 463 U.S. 1, 21 (1983), superseded by
statute on other grounds, 28 U.S.C. § 1441(e).
Among the parties who may sue under ERISA § 502(a)
are health plan “beneficiaries.” Providers argue that they are
“beneficiaries” under ERISA and so may sue for declaratory
relief and money damages under ERISA § 502(a)(1)(B), as
well as for injunctive relief under § 502(a)(3).
We have held before, and reiterate now, that health care
providers are not “beneficiaries” within the meaning of
ERISA’s enforcement provisions. Spinedex Physical
Therapy USA Inc. v. United Healthcare of Arizona, Inc.
emphasized this rule when it held, “a non-participant health
care provider . . . cannot bring claims for benefits on its own
behalf. It must do so derivatively, relying on its patients’
assignments of their benefits claims.” 770 F.3d 1282, 1289
(9th Cir. 2014), cert denied, United Healthcare of Ariz. v.
Spinedex Physical Therapy USA, Inc., 136 S. Ct. 317 (2015).
As Spinedex’s analysis is brief, we expand on it here.
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.”
29 U.S.C. § 1002(8). Here, the employee benefit plans or the
plan subscribers, or both, designate Providers to receive direct
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 13
payment from Anthem or Blue Cross. This remuneration for
medical services rendered is not a “benefit” under ERISA.
Although ERISA does not define the word “benefit,” in
isolation, the definition of “employee welfare benefit plans”
in ERISA, in conjunction with the common definition of the
term “benefit,” supports the conclusion that a payment to a
medical provider for services rendered is not properly termed
a “benefit” to the provider. ERISA defines “employee
welfare benefit plans,” in part, as any plan, fund or program
maintained by an employer or an employee organization that
“was established or is maintained for the purpose of
providing for its participants or their beneficiaries, through
the purchase of insurance or otherwise . . . medical, surgical,
or hospital care or benefits, or benefits in the event of
sickness, accident, disability, death or unemployment, or
vacation benefits, apprenticeship or other training programs,
or day care centers, scholarship funds, or prepaid legal
services.” Id. § 1002(1). The term “benefit,” in context, quite
evidently refers to the specific advantages provided to
covered employees, as a consequence of their employment,
for particular purposes connected to alleviating various life
contingencies.
That statutory usage comports with dictionary definitions
of “benefit,” which include “[a] form of compensation, such
as paid vacation time, subsidized health insurance, or a
pension, provided to employees in addition to wages or salary
as part of an employment arrangement.” American Heritage
Dictionary of the English Language 168 (5th ed. 2011). The
statutory usage is also consistent with a more general
definition of “benefit,” “something that promotes or enhances
well-being; an advantage.” Id. Neither of these meanings of
14 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
the term “benefit” suggests that a fee owed in exchange for a
service is included.
Both the statutory context and common usage thus
illustrate that in the ERISA context, as the Second Circuit has
explained, the “[b]enefits to which a beneficiary [under
ERISA] is entitled are bargained-for goods, such as medical,
surgical, or hospital care, . . . rather than a right to payment
for medical services rendered.” Rojas v. Cigna Health & Life
Ins. Co., 793 F.3d 253, 257 (2d Cir. 2015) (internal citations
and quotation marks omitted). Although the “benefits”
provided under ERISA plans are often monetary rather than
“goods” in the tangible sense, they are provided only in the
event of specified contingencies, as part of an overall
compensation package. They are not payment in exchange
for any discrete services.
Health care providers’ patients are thus the ones who
receive ERISA health benefits, not the providers themselves.
Neither a designation in a health benefit plan nor an
assignment by a patient allowing a health care provider to
receive direct payment for health services entitles a health
care provider to “benefits” on its own behalf. Providers are
therefore not ERISA “beneficiar[ies].” They do not have
direct authority as beneficiaries to sue under ERISA
§ 502(a)(1)(B) or § 502(a)(3) to recover payments due them
for services rendered, or otherwise to enforce the statute’s
protections.
This holding is consistent with the decisions of other
circuits, which have uniformly concluded that health care
providers are not “beneficiar[ies]” for ERISA purposes, even
when the providers are contractually authorized to receive
direct payment for medical services rendered subscribers.
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 15
See Brown v. BlueCross BlueShield of Tenn., Inc., 827 F.3d
543, 546 (6th Cir. 2016); Pa. Chiropractic Ass’n v. Indep.
Hosp. Indem. Plan, Inc., 802 F.3d 926, 930 (7th Cir. 2015);
Rojas, 793 F.3d at 257–58; Pascack Valley Hosp. v. Local
464A UFCW Welfare Reimbursement Plan, 388 F.3d 393,
400 (3d Cir. 2004), as amended (Dec. 23, 2004); Hobbs v.
Blue Cross Blue Shield of Ala., 276 F.3d 1236, 1241 (11th
Cir. 2001); Ward v. Alt. Health Delivery Sys., Inc., 261 F.3d
624, 627 (6th Cir. 2001).
In the face of this great weight of authority, Providers
insist that many circuits have held that health care providers
are ERISA “beneficiaries.” Not so. The cases Providers rely
upon in support of this assertion did not so conclude.
City of Hope National Medical Center v. Healthplus, Inc.,
156 F.3d 223, 224–26 (1st Cir. 1998), and Kennedy v.
Connecticut General Life Insurance Co., 924 F.2d 698, 701
(7th Cir. 1991), both involved providers that held assignments
from their patients and so had derivative authority to sue for
their patients’ benefits. Although Kennedy suggested that the
health care provider was a “beneficiary,” a close look at the
opinion reveals that the Seventh Circuit’s language covered
only derivative authority suits, as later cases have clarified.
See, e.g., Davidowitz, 946 F.2d at 1479 (“[T]he plaintiff
health care provider in Kennedy sued under . . . an
assignment.” ). In Pennsylvania Chiropractic Ass’n, the
Seventh Circuit eliminated any doubt in this regard when it
held that health care providers “are not ‘beneficiaries’ as
ERISA uses that term.” 802 F.3d at 930.
Neither Ruttenberg v. U.S. Life Insurance Co., 413 F.3d
652 (7th Cir. 2005), nor Peterson v. American Life & Health
Insurance Co., 48 F.3d 404 (9th Cir. 1995), involved
16 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
recovery by health care providers of payments due. Instead,
both cases concerned patient claims for health plan coverage,
and considered whether an independent contractor and a
partner in a company – workers who do not fit the traditional
definition of an employee – are ERISA beneficiaries.
Ruttenberg, 413 F.3d at 661–63; Peterson, 48 F.3d at 408.
In sum, Spinedex, consistently with all other circuits that
had addressed the question, held that health care providers are
not “beneficiar[ies]” within the meaning of § 502(a) of
ERISA and may not bring suit under ERISA in that capacity.
We reaffirm that holding of Spinedex.
B.
Providers do not enjoy derivative authority to bring their
claims either. As a general matter, “ERISA does not forbid
assignment by a beneficiary of his right to reimbursement
under a health care plan to the health care provider.” Misic
v. Bldg. Serv. Emps. Health and Welfare Tr., 789 F.2d 1374,
1377 (9th Cir. 1986) (per curiam). So a health care provider
in appropriate circumstances can assert the claims of an
ERISA participant or beneficiary. See id. Here, however,
Providers lack such derivative authority to sue under ERISA
§ 502(a)(1)(B) or § 502(a)(3) given the nature of the
governing agreements and of the purported assignments.
(i) The providers in DB Healthcare lack derivative
standing because they do not hold valid assignments. The
governing employee benefit plans contain non-assignment
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 17
clauses that override any purported assignments.6 “ERISA
welfare plan payments are not assignable in the face of an
express non-assignment clause in the plan.” Davidowitz,
946 F.2d at 1481.
(ii) The Center lacks derivative authority for a different
reason. Their provider agreement with Anthem permits
assignment, and payment authorization forms in the record
could be construed as assigning the Center limited rights. But
the claims made here fall outside the scope of those assigned
rights.
The Center’s patients signed forms that read, “I Hereby
Authorize My Insurance Benefits to Be Paid Directly to the
Physician.” These forms do not use the terms “assign” or
“assignment,” but no such specific language is necessary to
effectuate an assignment of rights. “No words of art are
required to constitute an assignment; any words that fairly
indicate an intention to make the assignee owner of a claim
are sufficient.” 29 Williston on Contracts 74:3 (4th ed.). We
shall assume therefore that these payment authorizations
assign the physicians limited rights to payment under ERISA.
See BlueCross BlueShield of Tenn., 827 F.3d at 544 n.1,
546–47 (finding a limited assignment of rights where an
“Assignment of Benefits Form” stated “I request that
payment of authorized insurance benefits . . . be made on my
behalf to [my provider]”).
6
The exemplar assignment of benefits forms submitted by DB
Healthcare Providers to the district court are blank and unsigned. As a
result, the district court found that DB Healthcare Providers did not plead
sufficient facts to allege that their patients had assigned them any rights.
Because we find the non-assignment clause overrides any purported
assignment, we decline to review the determination that no patient
assignments existed.
18 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
Assuming the payment authorizations in Advanced
Women’s Health Center effectuated an assignment of some
rights, however, does not end the inquiry. “The question of
what rights and remedies pass with a given assignment
depends upon the intent of the parties.” Pac. Coast Agr. Exp.
Ass’n v. Sunkist Growers, Inc., 526 F.2d 1196, 1208 (9th Cir.
1975). We therefore consider whether the claims the Center
advances in this litigation are within the scope of the
assignments on which it relies. See Spinedex, 770 F.3d at
1292.
Here, the Center seeks injunctive relief to prevent Anthem
from offsetting asserted overpayments against other payments
due the Center (which for the most part, of course, relate to
different patients than the ones to whom the contested
services were provided); declaratory relief that Anthem’s
recoupment efforts are unlawful; monetary damages for
benefits allegedly unlawfully recouped; and declaratory and
injunctive relief for breach of fiduciary duty. To determine
whether the payment authorization forms assigned the Center
the right to pursue these claims, we look at the language and
context of the authorizations.
Our analysis in Spinedex, 770 F.3d at 1292, is instructive.
There, health plan subscribers signed forms assigning the
provider the right to seek payment of claims directly from
health plan administrators. Id. In that context, the forms
provided, in part, “[t]his is a direct assignment of my rights
and benefits under this policy.” Id. (capitalization removed).
Notwithstanding the broad language of the assignment –
considerably broader than the language here – the court held
that “the entirety of the Assignment indicates that patients
intended to assign to [the provider] only their rights to bring
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 19
suit for payment of benefits,” and that the provider had “no
right to bring claims for breach of fiduciary duty.” Id.
Even more clearly than in Spinedex, the language and
context of the assignment here indicates the plan subscribers’
intended to assign, at most, the right to payment of benefits
and the associated right to sue for non-payment.7 The
authorization is located on a form that lists types of medical
services. The assignment language refers only to direct
payment of insurance benefits to the physician, with no
reference to any broader rights. There is no doubt that this
authorization does not encompass the Center’s claims for
declaratory and injunctive relief with regard to offsetting of
overpayments against largely unrelated claims, or for breach
of fiduciary duty. See id.
Nor does the authorization reflect an assignment that
encompasses the Center’s claims for declaratory relief and
money damages regarding recoupment of alleged
overpayments. We have held that “because a health care
provider-assignee stands in the shoes of the beneficiary, such
a provider has standing to sue under § 502(a)(1)(B) to recover
7
An assignment of the right to receive payment of benefits generally
includes the limited right to sue for non-payment under § 502(a)(1)(B),
which empowers a participant or beneficiary to bring a civil action “to
recover benefits due to her under the terms of the plan.” See Spinedex,
770 F.3d at 1292, 1297 (recognizing that patients had assigned the health
care provider their “rights to bring suit for payment of benefits”); Misic,
789 F.2d at 1377–79 (holding that a physician, “as assignee of
beneficiaries pursuant to assignments valid under ERISA, has standing to
assert the claims of his assignors,” and so can sue to recover benefits
under § 502(a)(1)(B) of ERISA); see also BlueCross BlueShield of Tenn.,
827 F.3d at 547; N. Jersey Brain & Spine Ctr. v. Aetna, Inc., 801 F.3d
369, 372 (3d Cir. 2015).
20 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
benefits due under the plan.” Blue Cross of Cal. v.
Anesthesia Care Ass’n, 187 F.3d 1045, 1051 (9th Cir. 1999).
But the Center’s claim regarding recoupments is not a suit to
recover benefits under the ERISA plans. Rather, the claim
relates to Anthem’s process of post-payment claims review
and practice of recouping erroneous payments. These are
claims that the Center’s “patient-assignors could not assert,”
id., as any recoupment would come from Providers not from
the patients. See n.8, infra. The claims therefore do not fall
within the scope of the assignment. See Anesthesia Care
Ass’n, 187 F.3d at 1051. Although a “dispute . . . over the
right to payment, . . . might be said to depend on the patients’
assignments to the Providers,” the dispute over recoupment
“depends on the terms of the provider agreements,” not on the
assignment. Id.; see also BlueCross BlueShield of Tenn.,
827 F.3d at 548–49 (in an analogous case, holding that a
health care provider’s claims regarding recoupment were
“outside the scope of [the provider’s] assigned standing,”
because “the patient-assignors are not party to the Provider
Agreement that governs the recoupment process, and [the
insurer] has no right to recoup payments for medical care
made to its members”).
In sum, Providers are not “beneficiaries” expressly
authorized to sue to enforce ERISA’s provisions, and they
cannot bring their claims derivatively as assignees on behalf
of plan beneficiaries. Providers therefore are not authorized
to bring their claims in federal court under ERISA.
Accordingly, we affirm the district courts’ dismissals of the
DB HEALTHCARE V. BLUE CROSS BLUE SHIELD 21
ERISA claims in both DB Healthcare and Advanced
Women’s Health Center.8
C.
We caution that our conclusions regarding the reach of
ERISA’s statutory remedies do not necessarily preclude
Providers from contesting the recoupment and offsetting
actions they dispute. Claims are preempted by ERISA only
if two conditions are met: (1) the litigant could have brought
the claim under ERISA’s civil enforcement provision, and
(2) the claims have no basis in an independent legal duty.
Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004). Any
state law claims for breach of the provider agreements could
not have been brought under ERISA and would have an
independent legal basis. Such claims would not be preempted
by ERISA. See Anesthesia Care Ass’n, 187 F.3d at 1050–52
8
Because we affirm the district courts’ decisions on the ground that
Providers are not statutorily or contractually authorized to bring suit, we
do not consider the merits of Providers’ claims that the plan administrators
violated the ERISA Claims Procedure regulation. We do note, however,
that the regulation applies only to “claims for benefits by participants and
beneficiaries.” See 29 C.F.R. § 2560.503-1(a) (emphasis added). That
language does not seem to provide procedural protections to health care
providers in payment disputes with claims administrators where, as here,
those providers have no recourse against the plan subscribers. See Dep’t
of Labor, Employee Benefits Security Administration, Benefit
Claims Procedure Regulation FAQs, A-8, available at
https://www.dol.gov/ebsa/faqs/faq_claims_proc_reg.html (last viewed
February 21, 2017) (“The regulation does not apply to requests by health
care providers for payments due them – rather than due the claimant – in
accordance with contractual arrangements between the provider and an
insurer or managed care organization, where the provider has no recourse
against the claimant for amounts, in whole or in part, not paid by the
insurer or managed care organization.”).
22 DB HEALTHCARE V. BLUE CROSS BLUE SHIELD
(holding that because a health care provider’s claim that Blue
Cross of California improperly amended its schedule of fees
was governed by a provider agreement rather than an
employee benefit plan, that claim was properly brought in
state court and not preempted by ERISA).
D.
Finally, the district court properly dismissed the Center’s
claims under the Declaratory Judgment Act, 28 U.S.C.
§ 2201(a), disapproving Anthem’s recoupment program with
respect to government employee benefits plans. The
government employee benefits plans are governed by the
ACA, not by ERISA. See 29 U.S.C. § 1003(b)(1); 42 U.S.C.
§ 300gg-21(a)(1).
The Center does not have authority to bring its claims
directly under ERISA – because, among other reasons, the
government plans are not covered by ERISA § 502(a), and
also because the Center is not, in any event, an ERISA
beneficiary, see Part IIA, supra. For the reasons explained
earlier, see Part IIB, supra, the Center cannot sue derivatively
via patient assignment either. Nor can the Center be
considered a “beneficiary” under the government plans
themselves, for essentially the same reasons it is not a
“beneficiary” under ERISA. As the Center has not identified
any other basis for the claims concerning the government
plans, those claims cannot go forward.
III. Conclusion
For the foregoing reasons we AFFIRM the judgments of
the district courts in Advanced Women’s Health Center and
DB Healthcare.