DB Healthcare, LLC v. Blue Cross Blue Shield of Arizona, Inc., No. 14-16518 (9th Cir. 2017)
Annotate this CasePlaintiffs are health care providers who furnish medical services to subscribers of employee health benefits plans. Defendants are health insurers, plan administrators, and/or claims administrators for the relevant employee benefit plans. These two cases involved reimbursement disputes: In DB Healthcare, Blue Cross determined that certain blood 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 issue was whether a health care provider designated to receive direct payment from a health plan administrator for medical services was authorized to bring suit in federal court under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court held before, and reiterated, 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 and held that a non-participant healthcare provider cannot bring claims for benefits on its own behalf but must do so derivatively. The court concluded that the providers in DB Healthcare lacked derivative standing because they do not hold valid assignments. The court also concluded that the Center lacked derivative authority because the claims fell outside the scope of those assigned rights. Accordingly, the court affirmed the judgment.
Court Description: 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 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.
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