California Health Provider, Others Can’t Sue Under ERISA Claims


San Francisco, CA: Two lawsuits aimed at defeating a request for reimbursement of funds under ERISA were struck down by the Ninth Circuit on grounds that plaintiff actions did not qualify under ERISA. A lower court came to the same conclusion over claims made in the two ERISA lawsuits.

ERISA is the acronym for the Employee Retirement Income Security Act (as amended, 1974). ERISA maintains a broad jurisdiction with guidance over retirement investing, employee rights and fiduciary duty.

The two ERISA lawsuits had little to do with retirement investments, however. Rather the disputes were founded upon various tests a collection of health care providers undertook on behalf of their clients and patients, in two states in 2010 and 2011. The tests involved patients who were plan members with Blue Cross Blue Shield of Arizona Inc. (BCBS) and Anthem Blue Cross Life and Health Insurance Co. (Anthem) of California. Two jurisdictions were involved.

The providers proceeded to submit the bills and receipts for such testing, to the plans.

In California, a women’s health care center was found by Anthem to have used faulty practices and protocols while billing for the tests, and thus was not entitled to payment, in its view. Meanwhile, in Arizona BCBS determined that tests undertaken by health care providers in that state were investigational in nature and therefore not covered by Anthem.

There were twelve health care providers and related nurse practitioners involved with the ERISA lawsuit against BCBS in Arizona, while the California-based women’s health center sued Anthem Blue Cross Life and Health Insurance Co.

The trouble began when BCBS and Anthem, having duly reimbursed the health care providers as requested, conducted post-payment analysis and found the providers were not, in their view, entitled for reimbursement.

BCBS and Anthem sought repayment. However the health care providers pushed back, suggesting that patients had assigned their rights to the health care providers under ERISA. The health care providers asserted further that any collection efforts on the part of Anthem and BCBS were in violation of claims procedures observed by ERISA.

However a lower court hearing the ERISA lawsuits determined the health care providers were not true beneficiaries under the terms of ERISA enforcement provisions, and therefore had no grounds to undertake an ERISA lawsuit.

The Ninth Circuit agreed with that finding: “Here, the employee benefit plans or the plan subscribers, or both, designate providers to receive direct payment from Anthem or Blue Cross,” the panel wrote. “This remuneration for medical services rendered is not a ‘benefit’ under ERISA.”

The value attached to the claims represented a combined total of $533,000.

The case is DB Healthcare LLC et al. v. Blue Cross Blue Shield of Arizona Inc., Case No. 14-16518, in the US Court of Appeals for the Ninth Circuit.

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