Beverly Oaks Physicians Surgical Center, LLC v. Blue Cross and Blue Shield of Illinois, No. 19-55820 (9th Cir. 2020)
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The Ninth Circuit reversed the district court's dismissal of Beverly Oaks' claim for benefits under the Employee Retirement Income Security Act of 1974 (ERISA). Beverly Oaks contends that Blue Cross waived or is equitably estopped from raising an anti-assignment provision as a reason for denying a benefits claim for the first time in litigation.
The panel held, under Spinedex Physical Therapy USA Inc. v. United Healthcare of Ariz., Inc., 770 F.3d 1282, 1296 (9th Cir. 2014), that Beverly Oaks plausibly alleged that Blue Cross waived the anti-assignment provisions in the Teamsters, Williams Lea, and Woodward Plans. Therefore, Blue Cross cannot raise the anti-assignment provision for the first time in litigation when Blue Cross held that provision in reserve as a reason to deny benefits. In this case, Blue Cross confirmed that plan benefits were available during pre-surgery conversations, Beverly Oaks submitted the claim form to Blue Cross indicating that it sought to recover benefits via a patient assignment, and Blue Cross either denied in full or underpaid the claims during the administrative claim process without asserting the anti-assignment provision as a ground for denying full reimbursement. The panel also held that Beverly Oaks alleged facts that showed plausibly that Blue Cross made an actionable misrepresentation and was thus equitably estopped from raising the antiassignment provisions as a litigation defense contrary to its prior conduct.
Court Description: Employee Retirement Income Security Act. The panel reversed the district court’s dismissal of a healthcare provider’s claim for benefits under the Employee Retirement Income Security Act, and remanded the case to the district court. The panel held that plaintiff, an assignee of its patients, sufficiently alleged that defendant waived or was equitably estopped from raising an anti-assignment provision in ERISA plan documents as a reason for denying the benefits claim for the first time in litigation. Specifically, defendant confirmed that ERISA plan benefits were available during pre-surgery conversations, plaintiff submitted the claim form to defendant indicating that it sought to recover benefits via a patient assignment, and defendant either denied in full or underpaid the claims during the administrative claim process without asserting the anti- assignment provision as a ground for denying a full reimbursement. ** The Honorable Jennifer Choe-Groves, Judge for the United States Court of International Trade, sitting by designation. BEVERLY OAKS V. BLUE CROSS & BLUE SHIELD 3
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