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DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc. - 852 F.3d 868 (9th Cir. 2017)

Rule:

Health care providers' patients are the ones who receive Employee Retirement Income Security Act of 1974 (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 beneficiaries. 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. 

Facts:

The Plaintiffs-Appellants in these cases are health care providers ("Providers") who furnish medical services to subscribers of employee health benefit plans. The benefit plans are governed by either the Employee Retirement Income Security Act of 1974 ("ERISA)" (the private employer plans) or the Patient Protection and Affordable Care Act ("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. These two cases involve reimbursement disputes between health care providers and employee health benefit plan administrators. The district court dismissed the ERISA actions.

Issue:

Is a health care provider designated to receive direct payment from a health plan administrator for medical services authorized to bring suit in federal court under the Employee Retirement Income Security Act of 1974 (ERISA), either by direct statutory authority and derivative authority through assignment?

Answer:

No

Conclusion:

Affirming, the United States Court of Appeals for the Ninth Circuit held that the district court properly dismissed the ERISA actions brought by health care providers designated to receive direct payments from employee health plan administrators for medical services. The Court found that neither direct statutory authority nor derivative authority through assignment authorized the providers to bring suit in federal court under ERISA's civil enforcement provisions. The providers were not health plan beneficiaries who could sue for declaratory relief and money damages under ERISA § 502(a)(1)(B)29 U.S.C.S. § 1132 (a)(1)(B), or injunctive relief under ERISA § 502(a)(3)29 U.S.C.S. § 1132 (a)(3), but rather, the providers had to bring claims derivatively, relying on their patients' assignments of their benefit claims. The providers lacked derivative authority to sue, given the nature of the governing agreements and of the purported assignments.

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