Brown v. BlueCross BlueShield of Tenn., Inc., No. 15-5739 (6th Cir. 2016)Annotate this Case
Harrogate, a healthcare provider, participates in Blue Cross networks. Harrogate’s patients sign an “Assignment of Benefits,” allowing Harrogate to bill Blue Cross directly for services. The Provider Agreement allows Blue Cross to perform post-payment audits and recoup overpayments from Harrogate. Blue Cross paid Harrogate's claims for antigen leukocyte cellular antibody (ALCAT) tests, which purport to identify certain food allergies. Blue Cross claims that these tests have “little or no scientific rationale.” Investigational treatments are not “covered, compensable services” under Blue Cross’s Manual, which is incorporated by reference into the Provider Agreement. That Agreement also specifies that Harrogate may not “back-bill” patients for un-reimbursed, investigational treatments unless, before rendering such services, “the Provider has entered into a procedure-specific written agreement with the Member, which has advised the Member of his/her payment responsibilities.” Blue Cross began recouping ALCAT payments. Harrogate filed suit under the Employee Retirement Income Security Act. The district court dismissed, holding that Harrogate did not meet the statutory definition of “beneficiary” and had not received a valid assignment for the purpose of conferring derivative standing to bring suit under ERISA. The Seventh Circuit affirmed. While Harrogate had derivative standing through an assignment of benefits, its claim regarding recoupments falls outside the scope of that assignment.