F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

DB H E A L T H C A R

E , L L C, DB A Metro Center Health Care; AVD H E A L T H C A R

E , L L C, DB A Mountain Vista Health Center; MH H E A L T H C A R

E , L L C, DB A North Health Center; SV H E A L T H C A R E , L L C, DB A W hite Rock Health Center; Q U I

N N C H I R O P R A C T I C , L L C, DB A W h ite Rock Health Center; CK H E A L T H C A R

E , L L C, DB A Avondale Health Center; TM H E A L T H C A R E , L L C, DB A Avondale Health Center; KM H E A L T H C A R

E , L L C, DB A Avondale Health Center; KD C H I R O P R A C T I C , L L C, DB A W h ite Rock Health Center; EW H E A L T H C A R

E , L L C, DB A Greenway Health Center; PW H E A L T H C A R E , L L C, DB A Greenway

Health Center; M A R Y M E L I S S A H A

N D S ; V I C T O R

I A T W E E D Y ; R O B E R

T A L E X A N D E R ; S I M R A N S E T H I ; S A

R A H Q U I N N ; T E R E S A M E L O C H E ; A L L I S O N W O O D W

O R T H ; J O E M E L B Y ; C R

Y S T Y F R I C K ; P A T R

I C I A P A R A D I S , Plaintiffs-Appellants
,

v

. N o. 14-16518

D.C. No. 2:13-cv-01558- NVWDB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 2

B L U E C R O S S B L U E S H I E L D O F A R I Z O N A , I N C ., Defendant-Appellee.

A ppeal from the United States District Court for the District of Ariz o na N eil V. W a k e , District J udg e, Presiding

A D V A N C E D W O M E

N ’ S H E A L T H C E N T E R , I N C ., Plaintiff-Appellant
,

v

.

A N T H E M B L

U E C R O S S L I F E A

N D H E A L T H I

N S U R A N C E C O M P A

N Y , Defendant-Appellee. N o. 14-16612

D.C. No. 1:13-cv-01145- AW I -J L T

OPI NI ON

A ppeal from the United States District Court for the Eastern District of California Anthony W . I shii, Senior District J udg e, Presiding

Arg ued and Submitted J uly 7, 2016 San F rancisco, California

F iled March 22, 2017DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 3

B efore: Marsha S. B e rz on, and N. Randy Smith, Circuit J udg es, and Dana L

. Christensen, * Chief District J udg e.

Opinion by J udg e B e rz on

SUMMARY * *

Em ployee Retirem ent Incom e Security Act

The pa nel affirmed two d istrict court judg ments dismissing ERI SA actions broug ht by health care p r o v iders desig nated to receive direct p ay ments from employ ee health plan administrators for medical services.

T h e p anel held that n either direct statutory authority n o r derivative authority throug h assig nment authoriz ed the health

care providers to bring suit in federal court under ERI SA ’s civil enforcement provisions. Ag reeing with other circui ts, the panel reaffirmed that health care providers are not health
p lan beneficiaries who may sue for declaratory relief a n d
money damag es under E RI SA § 502(a)(1 ) ( B) or injunctive relief u nder ERI SA § 502(a)(3). Rather, a h e alth care provider must b ring claims deriv a t ively
, rely ing on its patients’ a ssig nments of their b enefit claims. The panel h eld
t hat the health care providers here, however, lacked derivative authority to sue, g iven the nature of the g o verning ag reements

* T h e Ho n o rab le D a n a L

. Ch risten sen , Un ited States C h ief District J u d g e f o r th e District o f

Mo n tan a, sittin g b y

d esig n atio n

.

** T h is su m m ary co n stitu

t es n o p art o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 4

and of the purported a ssig nments. I n one case, the g overning employ e e ben e f

i t p l a n s c o n t a i n e d n o n-assig nment clauses that overrode any purported assig nments. I n the other c ase, althoug h the p rovider agreement permitted assig n ment, a nd
pay ment authoriz ation f

orms could b e c o nstrued as assig ning the provider limited r ig hts, the provider’s claims f ell outside the scope of the assigned rig hts.

COUNSEL

Richard J

. Quadrino (arg

ued), Harold J

. L evy , and Eug ene R. Pag ano, Quadrino L aw Group P.C., Melville, New York; Tod F

. Schleier and B radley H. Schleier, Schleier L aw Of f i ces, Phoenix , Ariz o na; for Plaintiffs-Appellants.

Anthony F

. Shelley (arg

ued), Michael N

. K h a lil, and Adam P. F einberg
, Miller & Chevalier Chartered, Washing ton, D

. C
., for Defendant-Appellee B lue Cross B lue Shield of Ariz ona, I nc.

Eileen R. Ridley (arg

ued), Alan R. Ouellette, and Michael A

. Naranjo, F oley & L ardner L L P, San F rancisco, California, for Defendant-Appellee An t h e m B lue Cross L ife and Health I nsurance Company

.DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 5

OP INION

B ERZ ON, Circuit J udg e :

These two c ases involve reimbursement disputes b etween health care providers and employ ee health benefit p lan administrators. W e decide the c ases tog ether becau s e t h ey raise a common central issue: w hether a health care provider desig nated to receive direct pay ment from a hea l t h p lan administrator f

or medical services is authoriz ed to bring suit in federal court under the Employ ee R e t i rement I ncome Security Act of 1 9 7 4 (“ E RI SA”), 2 9 U.S.C. § 1 0 01 et seq

. W e consider two separate p otential bases for such authority under ERI SA’s civil enforcement provisions: direct statutory authority and deriv a tive authority throug h assig nment. Althoug h the contractual r elationsh i p s between the health

care providers and the plan administrators, and b etween the providers and the p atients, in these two cases differ in relevant way s, we c onclude in both cases that the providers
cannot enforce ERI SA’s p rotections in federal court o n either basis.

I . B ackg round

T he Plaintiffs-Appellants in these cases are health care providers (“Providers” ) w ho furnish medical services to subscribers 1 of employ ee h ealth benefit plans. The benefit plans are g overned by e ither ERI SA (the private employ er plans) or the P a t ient Protection a n d Affordable Care A ct

1 W e u s e th e t erm “ su

b s crib ers” t o ref

er to in d iv id u als co v ered u n der th e h ealth b en ef

it p l an s. W e av o i d th e t e r m s “p articip an t ” an d

“ ben ef iciary ” to d e s c r i b e th ese in div id u als b ecau se th e p recise m ean in g

o f th ose term s is cen tral to th is d isp u te.DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 6

(“ACA”) (the g overnment employ e r plans). The Plaintiffs in D B Healthcare are twelve medical facilities located in a n d around Phoenix
, Ariz o na, and ten nurse practitioner employ e es of those facilities (collectively
, “DB Healthcare Pro v i d e rs”). The Plaintiff in A dvanced W omen’s Health Center is a medical fac i l i t y in B akersfield, California (“the Center”). Defendants-Appellees B lue Cross B lue Shield o f Ariz ona, I n c. (“B lue Cross”) and Anthem B l u e C r o ss L ife and Health I nsurance Company ( “Anthem”) are health insurers, plan administrators, and/or claims ad m i n istrators for the relevant employe e benefit plans.

The r eimbursement dis p u t es in these cases share a number of common facts. I n 2010 and 2011, Providers performed certain blood tests a n d related services for plan subscribers and submitted reimbursement claims to either B lue Cross o r Anthem. B lue Cross and Anthem p r o c e s s e d the claims a nd

r e i m bursed Providers. O n completion o f post-pay ment reviews, h owever, the plan administrat o r s determined that Providers w ere not entitled to reimbur s e m ent for the blood tests, albeit f

or d ifferent reasons. I n DB Healthcare
, B lue Cross determined that the tests w ere investig ational and thus

ex c luded from c overag e. I n Advanced W omen’s Health Center
, Anthem d etermined that the Center used f aulty practices to bill for the tests an d s o was not entitled to reimbursement.

At that point, B lue Cross a n d Anthem informed Providers that the prior r eimbursements for the blood tests were in error and reque s t e d r e p a

y m e n t s t o t a l i n g $237,000 and $295,912.87, respectively

. Providers disputed B lue Cross and An t hem’s authority retroactively to recoup the reimbursements a nd refused to pay

. B lue Cross r esponded b y r e stating its
pay ment demand to DB Healthcare Providers, threatening toDB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 7

w i t h h o l d r e c r e d e n t i a l i n g f o r t h e i n

- n e t w o r k n u r s e practitioners, refusing to c redential newly hired n u r s e s , a nd
t hreatening to terminate the r e levant provider ag reemen t s

. Anthem went o ne step further, w ithholding reimbursements from Advanced W omen’s H e a l t h Center in 2013 for unrelated claims as a means of recouping the disputed past pay

ments.

Several ty

pes of contracts g o vern the relationships between the subscribers, the plan administrators, and the providers in each case: (1) E mploy ee benefit plans provide the terms o f the insurance provided to the subscribers. (2) Pay ment authoriz ations or assig n ment of be n e fits f orms

ex e c uted by subsc ribers assig n some rig hts to the providers. (3) Provider ag reements g o v ern the relationships between the providers and the plan administrators. Each of these contracts is relevant to our analy sis.

I n DB Healthcare
, the g overning employ ee benefit plans prohibit patients from assig ning any of their rig hts under the plans to third parties. 2 Despite this p r o h i b i tion, DB Healthc are Providers’ patients ex e c uted “assig nment o f benefits” f

orms purporting to assig n certain plan rig hts to DB Healthcare Providers. U nlike in DB Healthcare
, the benefits plans in Adv a n c ed W

omen’s Health Center do not prohibit assig nment of benefits. T h e Center’s p a tients sig ned f orms

2 T h e reco rd d o es n o t in clu d e all th e em p lo y ee b en ef

it p lan s at issu e in th e case. DB Health care P ro v id ers su b m itted an ex em

p lar p l an in

su p p o rt o f th eir co m

p lain t. T h e s a m

p l e p lan in clu d es a n o n

- assig n m en t clau se, w h i ch read s, in relev an t part: “ T h e b en ef its co n tain ed in th is p lan
, an d an y rig h t t o r e i m

b u rsem en t o r p ay

m en t arisin g o u t o f s u ch b en ef its,

are n o t assig n ab l e o r tran sf erab l e, i n w

h o le o r in p art, in an y m an n er o r to

an y ex ten t, to an y p erso n o r en tity

. . . .” T h e d istrict co u rt relied o n th is
p ro v isio n in th e ex em

p lar p l an to f

in d t h at t h e g o v ern in g p lan s co n tain ed

v alid n o n

- assig n m en t clau ses. T h is f in d in g is n ot co n tested o n ap peal.DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 8

authoriz ing A nthem to pay the Center directly for health care services ren d e r ed to plan subscribers. Those forms read: “I Hereby Authoriz e My I n surance B enefits To B e Paid Directly
t o the Phy sician And Acknowledg e T hat I Am F inanci a l l y Responsible for Any

Unpaid B alance.”

The p rovider ag reements g rant some health c are providers in-network status for the b enefit plans ad m i nistered b y Anthem or B lue Cross. F ive o f the ten nurse practitioner Providers are credentialed by B lue Cro s s as in-network providers a

nd the five others seek such crede n t i a ling

. Advanced W omen’s H ealth Center is an in-network provider for health p lans administered by A nthem. I n -netw ork providers a gr e e t o a fix ed schedule of f ees for services a

nd

can bill the insurers directly for health care services rendered
to plan subscribers. I n fact, the p rovider ag reements require Providers to seek pay

ment f or medical services rendered only from the relevant plan administrator, not from patients (subject to limited ex ceptions). 3

I n resp o n s e to r ecoupment strateg ies by B lue Cross a nd Anthem, DB He a l t hcare Providers and the Center, respectively
, filed c omplai nts in federal district court. The specific claims in DB Healthcare and Advanced W o m en’s Health Center differ slig htly
, althoug h both sets o f providers
g ene ra lly alleg e that the claims administrators v iolated ERI SA when they unilaterally determined that the b l o o d testing procedures and related services were not reimbursable and used various strateg ies to recoup pay ments already made.

3 In D B Hea lth ca re , j u st th e in

- n etw o rk n u rse p ractitio n ers, n o t t h e

o u t- o f

- n etw o rk p ractitio n ers o r th e f acilities th em selv es, h av e p ro v id er ag reem en ts w ith

B lu e Cro ss.DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 9

DB Healthcare Provide r s alleg ed two causes of action under E RI SA in their complaint. 4 Fi r s t , they soug ht injunctive relief reg arding B lue Cross’s refusal to credential nurse-practitioners and its threat to cancel provider
ag reements, alleg ing that B lue Cro ss violated E RI SA’s prohibition ag ainst retaliation for the ex ercise of rig hts
g uaranteed b y employ ee benefit plans. See 29 U.S.C. § 1140. Second, they soug ht a declaratory judg ment that B lue Cross’s recoupment e fforts v iolate the E R I S A Claims Procedure, 2 9 U.S.C. § 1133, and the E RI SA Claims Proce d u r e reg ulation, 29 C.F .R. § 2 56 0

. 5 0 3 -1, which provide procedural protections for E RI SA claimants. S pecifically
, DB Healthcare Providers a lleg ed tha t B lue Cross violated the requirement that plan ad m i n istrators notify claimants o f adverse benefit determinations within thirty day s of r eceiving a claim.

A dvanced W omen’s Health Center also challenge d Anthem’s recoupment efforts, asserting four causes of action in its com p laint, three under E RI SA and one under the Declaratory J udg ment A ct, 28 U .S.C. § 2 201. Under E RI SA, which g overns private employ er plans, the Center: (1) soug ht

a declaratory judg ment that A nthem’s reversal of benefit determinations and o f

f s e t t i n g o f a s serted overpay ment ag ainst other reimbursements violate ERI SA’ s Claims Procedure, 29 U.S.C. § 1 1 3 3
, and the ERI SA Claims Procedure
reg ulation, 29 C.F .R

. § 2 5 60.503-1, and an injunction precluding such offsetting ; (2) soug ht monetary damag es for
p ast recoupments; and (3) requested declaratory a nd

4 DB Health care P ro v id ers also b ro u g h t a s t ate law b reach o f co n t ract

c laim w ith resp ect to g o v ern m en t em p lo y ee ben ef

it p lan s. T h e d i s t r i c t

co u rt d eclin ed to ex ercise su p p lem en t al j u risd ictio n o v er th e state law claim , d ism issin g th e claim w ith o u t p rej u d ice.DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 10

i n j unctive relief reg arding Anthem’s alleg ed violation of i t s fiduciary duty to plan beneficiaries and participants. I nvoking the Declarato r y J udg ment Act, the Center alleg ed that the g o vernment employ ee benefit plans administered b y Anthem are also subject to the E RI S A Claims Procedure
reg ulation and soug ht a declaratory judg ment that Anthem’s recoupment of pay

ments for claims made under those plans was unlawful.

The d ist r i ct courts in both Advanced W omen’s Health Center and DB Healthcare dismissed the claims, holding that the health care providers lacked authority to b r i n g c laims

u n d e r ERI SA. I n Advanced W omen’s Health Center
, t h e district court also dismissed the c l a i m broug ht under the Declaratory J u dg ment A c t , holding that g overnment plans

ar e, by their terms, ex empt from the ERI SA Claims Procedure reg ulation. The providers i n both cases timely appealed.

I I . Discussion

A.

ERI SA’s civi l e nforcement provisions specify which categ ories of individuals and entities may enforce each of the
statu t e ’s protections. The relevant provisions state: “(a) A civil action may be broug h t– (1) by a participa n t o r beneficiary

– (A) for the relie f p rovided for in subsection (c) of this section, or (B ) to recover benefits due to him under the terms of his plan, to enforce his rig hts under the terms o f the p l a n , o r to clarify his rig hts to f u ture benefits under the
terms of t h e plan;

. . . (3) by a participant, beneficiary
, o r fiduciary (A) to enjoin a

n y act or practice which violates any provision of this subchapter or the terms of the plan, or (B ) toDB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 11

o b t ain other appropriate equitable r elief (i) to redress s u c h violations or (ii) to enforce any provisions of this subchapter

or the terms of the plan.” ERI SA § 502(a), 29 U.S.C. § 1132 (a)(1),(3). Providers maintain that they are “beneficiar[ es] ” for purposes o f § 502(a) and so may bring suit directly under that statute.

W e note, preliminarily
, that our cases discussing whether

a pla i ntiff is authoriz e d to sue u nder ERI SA’s civil enforcement p rovisions often r efer to the question as whether the pla i ntiff has “standing ” or “statutory standing ” to sue under ERI SA. See e.g. , Harris v. A mgen, Inc.
, 573 F .3d 728, 732 ( 9 t h Cir. 2009) (ex amining w hether a p laintiff has “standing under ERI SA”); Davidowitz v. Delta Dental Plan of Cal., Inc.
, 946 F .2d 1 4 76, 1477 (9th Cir

. 1991) (“Under ERI SA, a b eneficiary has standing to bring a civil action for
non-pay ment.”). This common shorthand su g g e sts that subject matter jurisdiction may also b e at stake. I t is n o t. The question whether Cong ress has g ranted a private rig ht o f action to a particular plaintiff is n ot a j u risdictional requirement. “[ A] dismissal for lac k o f statutory standing [ under ERI SA] is properly viewed as a dismissal for failure
to state a c laim rather tha n a d i s missal for lack of subject

m a t ter jurisdiction.” Vaughn v. Bay Envtl. Mgmt., Inc

. , 567 F .3d 1021, 10 24 (9th Cir. 2009). 5 F or c larity on this point, we a void in this opinion references to Providers’ “standing ,” and so turn to the q uestion whether Providers may bring suit directly

under ERI SA § 502(a).

5 T h e d istrict co u rt in Ad

va n c e d W o m en ’s Hea lth Cen ter d i s m issed th e Cen t er’ s claim s f

o r lack o f su

b j ect m atter j u ri s d i c tio n u n d er Fed eral Ru le of Civ i l P ro ced u re 1 2 (b )(1 ). T h at erro r, h o w ev er, d o es n o t af f ect ou r

an aly sis, b ecau se w e rev iew d ism issals u n d er bo th Ru l e 1 2 (b )(1 ) an d Ru le 1 2 (b )(6 ) d

e n o vo

. S ee Va u g h n , 5 6 7 F.3 d at 1 0 2 4

.DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 12

“[ Section] 502(a) [ of ERI SA]

. . . demonstrates Cong ress’

care in deli n eating the universe of plaintiffs who may bring

c e rtain civil actions.” Harris Tr. & Sav. Bank v. Salo m o n Smith Barney, Inc.
, 530 U.S. 238, 247 (2000). With reg a rd to the plaintiffs specified in § 502(a), “Cong ress presu mably determined that a rig ht to enter federal court was n ecessary to further the statute’s purposes.” Franchise Tax Bd. v. Constr. Laborers Vacation Tr.
, 463 U .S. 1, 21 (1983), superseded by statute on other grounds , 28 U.S.C. § 1441(e).

Among the parties w h o may sue u nder ERI SA § 502(a)

are health plan “beneficiaries.” Providers arg ue that they a re “beneficiaries” under ERI SA and so may sue for d eclaratory relief and money damag es under ERI SA § 502(a)(1)(B )
, a s well as for injunctive relief under § 502(a)(3).

W e have held before, and reiterat e now, that health care providers are not “beneficiaries” wit h in the meaning o f ERI SA’s enforcement p r ovisions. Spin e dex Physical T h erapy USA Inc. v

. United H ealthcare of Arizona, Inc. emphasiz ed this rule when it held, “a non-participant health

care p rovider

. . . cannot bring claims for benefits on its o wn behalf. I t must do so der i v a t i vely
, rely ing on its patients’ assig nments of their benefits clai m s

. ” 770 F .3d 1282, 1289 (9th Cir. 2014), cert de n i e d

, United Healthcare of Ariz. v

. Spinedex Physical Therapy USA, Inc.
, 136 S. Ct. 317 (2015). As Spinedex ’s analy sis is brief, we ex p and on it here.

ERI SA d efines a “ b e n eficiary ” as “a person desig nated b y

a partici p a n t, or by the terms of an employ ee b enefit plan, who is or may become entitled to a b enefit thereunder.” 29 U.S.C. § 1002(8). Here, the employ ee benefit plans or the plan subscribers, or both, desig n a t e Providers to receive directDB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 13

pay ment from Anthem or B lue Cross. This r emuneration for medical services rendered is not a “benefit” under ERI SA.

Althoug h ERI SA does not d e f i n e the word “ benefit,” in isolation, the definition of “ e mploy ee welfare benefit plans” in ERI SA, in conjunction with the common definition of the
term “benefit,” sup p o r t s the conclusion that a pay ment to a medical provider for services rendered is not properly termed

a “benefit” to the p rovider. E RI SA defines “employ ee welfare benefit plans,” in part, as any plan, f und or pr o gram maintained by an employ er or an employ ee org aniz ation that “was e stablished or is maintained for t h e p urpose o f providing f

or its participants or their beneficiaries, throug h the purchase o f insurance o r o therwise

. . . medical, surg ical,

or hospital care or benefits, or b e n efits in the event o f sickness, accident, d isability
, dea t h or unemploy ment, o r vacation benefits, a

pprenticeship o r other training prog r a ms,

or day care centers, scholarship fun d s , or prepaid leg al services.” Id. § 1002(1). The term “ b enefit,” in contex t, quite evidently refers to the specific advantag es provided to covered e mploy ees, as a consequence of their e mploy ment, for particular purposes connected to alleviating various life conting encies.

That statutory usag e comports with dictionary definitions of “benefit,” which include “[ a] form of compensation, such

as paid v acation time, subsidiz ed health insurance, or a pension, provided to e mploy ees in addition to wag es o r salary

as part of an employ

ment arrang ement.” American Heritage Dictionary of the English Language 168 (5th ed. 2 0 11). The statutory u sag e is also consistent w ith a more g eneral definition of “benefit,” “something that promotes or enhances well-being ; an advantag e.” Id. Neither of these meaning s ofDB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 14

the term “benefit” sug g ests that a f ee o wed in ex chang e f

or a service is included.

B o th the statutory contex t a n d common usag e thus illustrate that in the ERI SA contex t, as the Second Circuit has

ex p lained, the “ [ b] e nefits to which a beneficiary [under ERI SA] is entitled are barg ained-for g oods, such as medical,
surg ical, or hospital care,

. . . r ath e r than a rig ht to pay ment for medical services rendered.” Rojas v. Cigna Health & Life Ins. Co.
, 793 F .3d 253, 257 (2d Cir. 2015) (internal citations and quotation marks omitted). A lthoug h the “b e nefits” provided under ERI SA plans are often monetary rather than “g oods” in the ta n g ible sense, they a r e p rovided only in the
event of specifie d c o nting encies, as part of an overall compensation packag e. They are not pay ment in ex chang e for any discrete services.

Health care providers’ p atients are thus the o n es w ho receive ERI SA health benefits, not the providers themselves. Neither a d es i gnation in a health benefit plan nor an assig nment by a patient allowing a h ea l t h care provider to receive direct pay

ment for healt h s er v ices entitles a health

care provider to “benefits” on its own behalf. Providers a re t h e r efore not ERI SA “beneficiar[ ies] .” They d o not ha v e direct a uthority a s benef

iciaries to sue under ERI SA § 502(a)(1)(B ) or § 502(a)(3) to recover pay ments d ue them for services rendered, or otherwise to enforce the statute’s protections.

This holding is c o n sistent with the decisions of other circuits, which have uniformly concluded that heal t h care providers are not “beneficiar[ ies] ” for ERI SA purposes, even when the providers a

re contractually authoriz ed to receive d irect p a y ment f or medical services rendered subscrib er s

.DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 15

S e e B r o wn v. BlueCross BlueShield of Tenn., Inc.
, 827 F .3 d 5 4 3
, 546 (6th Cir. 2016); Pa. Chiropractic Ass’n v. Inde p

. Hosp. Indem. Plan, I

nc. , 802 F

. 3 d 9 2 6
, 930 (7th Cir. 2 015); Rojas
, 793 F .3d at 257–58; Pascack Valley Hosp. v. Local 464A UFCW W

elfare Reimbursement P lan
, 388 F .3 d 393, 4 0 0 (3d Cir. 2004), as amended (Dec. 23, 2004); Hobbs v

. Blue Cross Blue Shield of A l a

. , 276 F .3d 1236, 1241 (11th Cir. 2001); W

a rd v. Alt. Health Delivery Sys., Inc. , 261 F .3d 624, 627 (6th Cir. 2001).

I n the face of t h is g r eat weig ht o f authority
, Providers insist that many

circuits have held that health care providers

are ERI SA “beneficiaries.” Not so. The cases Providers rely upon in support of this assertion did not so conclude.

City of Hope National Medical Center v. Healthplus, Inc.
, 156 F

. 3d 223, 224–26 (1st Cir. 1998), a nd K e n nedy v

. Connecticut General Life I nsurance Co

. , 9 24 F .2d 698, 701 ( 7 t h C i r

. 1991), both involved providers that held assig nments from their patients and so had derivative authority to sue for their patients’ b enefits. A lthoug h Kennedy sug g ested that the health care provider w as a “benef i c i a ry ,” a c lose look at the opinion reveals that the Seven t h C i rcuit’s lang uag e covered only derivative a

ut h o r ity suits, as later cases have clarified. See, e.g. , Davidowitz
, 946 F .2d at 1479 ( “[ T ] h e p laintiff health care p r o v i d er in Kennedy sued under

. . . an assig nm e n t .” ). I n Pennsylvania Chiropractic Ass’n
, the Seventh Circuit eliminated a ny doubt in this r eg a

rd when it held that he a l t h care providers “are not ‘beneficiaries’ a s ERI SA uses that term.” 802 F .3d at 930.

N ei ther Ruttenberg v. U.S. Life Insurance Co.
, 4 13 F. 3 d 652 (7th Cir. 2005), n or Peterson v. American Life & Health Insurance Co.
, 48 F

. 3 d 404 (9th Cir. 1995), involvedDB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 16

recovery by health care providers of pay ments due. I nstead, both cases concerned patient claims for health plan coverage , and considered whether an independent contractor and a partner in a company – workers w ho do not fit the traditional definition o f an employ ee – are ERI SA beneficiaries. Ruttenberg , 413 F .3d at 661–63; Peterson , 48 F .3d at 408.

I n sum, Spinedex
, consistently with all other circuits that had addressed the question, h e ld that health care providers a re not “beneficiar[ ies] ” within the meaning of § 502(a) o f ERI SA and may not bring suit under E RI SA in that capacity

. W e reaffirm that holding

of S pinedex.

B

.

Providers d o not e n

joy derivative authority to bring their claims either. As a g eneral matter, “ERI SA does n o t forbid assig nment by a beneficiary of his ri gh t to reimbursement under a health care plan to the health care provider.” Misic

v. Bldg. Serv. Emps. Health and W elfare Tr.
, 789 F .2d 1374, 1377 (9th Cir. 1986) (per c uriam). So a health care provider in appropriate circumstances can assert the clai m s o f an ERI SA participant or beneficiary

. See id. Here, however, Providers lack such derivative authority to sue under ERI SA § 5 0 2 (a)(1)(B ) or § 502(a)(3) g iven the nature of the
g overning ag reements and of the purported assig nments.

(i) The providers in DB Healthcare lack derivative standing because they do not h old v alid assig nme n t s

. The
g overning e mploy ee benefit p lans contain n o n

- assig nmentDB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 17

clauses that override any p urported a s s ig nments. 6 “ERI SA

w e lfare plan pay

ments are n ot a ssig nable in the face of a n

ex p ress non-assig nment clause in the plan.” Da v i dowitz
, 946 F .2d at 1481.

(ii) The Center lacks derivative authority for a d if ferent

r e a son. Their provider ag reement w ith Anthem permit s assig nment, and pay

ment aut h oriz ation forms in the record could be construed as assig ning the Center limited rig hts. B ut the claims made here fall outside the scope o f those assig n ed rig hts.

The Center’s patients sig ned forms that read, “I Hereby Authoriz e My I nsurance B enefits to B e Paid D i r e c tly to the Phy sician.” T hese forms do n ot u s e t h e t e rms “assig n” o r “assig nment,” but no such specific lang uag e is n ece s s ar y to effectuate an assig nment o f r ig hts. “No words of art a re required to constitute an assig nment; any wor d s that fairly indicate an intention to make the assig nee o w ner of a claim

are sufficient.” 29 W illiston on Contracts 74:3 (4th ed.). W e shall assume therefore that these pay ment aut h oriz ations assig n the phy sicians limited rig hts to pay ment under E RI SA. See Blu eC

r oss BlueShield of Tenn.
, 827 F .3d at 544 n.1, 546–47 (find i n g a limited a ssig n ment of rig hts where an “Assig nment of B enefits Fo r m” stated “I request that
pay ment of authoriz ed insurance benefits

. . . be made o n my behalf to [ my

provider] ”).

6 T h e ex em

p lar assig n

m en t o f b en ef

its f o rm s su b m itted b y DB H e a l t h c a re P ro v id ers to th e d istrict co u rt are b lan k an d u n sig n ed

. As a

resu lt, t h e d istrict co u rt f

ou n d th at DB Health care P ro v i d ers d id n o t p lead

su f f icien t f acts to alleg e th at t

h eir p atien ts h ad assig n ed th em an y rig h ts. B ecau se w e f

in d t h e n o n

- assig n m en t clau se ov errid es an y p u rp orted assig n m en t, w e d eclin e to rev iew th e d e t erm in atio n th at n o p atien t assig n m en ts ex isted

.DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 18

Assuming the pay

ment authoriz ations in A d v a n c ed W omen’s Heal t h Center effectuated an assig nment of some rig hts, however, does not end the inquiry

. “The question o f what r ig hts a

nd remedies p a ss with a g iven assig nment depends upon the intent o f the parties.” Pac. Coast Agr. Exp. Ass’n v. Sunkist Growers, I nc. , 526 F .2d 1196, 1208 (9th Cir. 1975). W e therefore consider whether the claims the Center advances in this litig ation a re within the s c o p e of the assig nments on which it reli e s

. See Spinedex
, 770 F .3d at 1292.

Here, the Center seeks injunctive relief to pr event A nthem from offsetting a s s e r

t e d o v e rpay

ments a g ainst other pay

ments due the Center (which for th e most part, of course, relate to different patients t han the ones to whom the contested services w ere provided); d eclarator y relief that Anthem’s recoupment efforts are unlawful; mon e t ary damag es for benefits alleg edly unlawfully r ecouped; and d ec l aratory a nd injunctive relief for breach of fiduciary duty

. To de t e rm i n e whether the pay

ment authoriz a tion forms assig ned the Center the rig ht to pursue these claims, we look at the lang uag e a nd
contex t of the authoriz a tions.

Our analy sis in Spinedex
, 770 F .3d at 1292, is instructive. There, h ealth plan subscribers sig n ed forms assig ning the provider the rig h t to seek pay me nt of claims directly from health p l an administrators. Id. I n that contex t, the f orms provided, in part, “[ t] his is a direct assign m ent of my rig hts and benefits under this policy .” Id. (capitaliz ation r emoved). Notwithstanding the broad lang uag e of the assig n ment

– considerably broader than the lang uag e here – the court h eld that “the entirety of the Assig nment indic a t e s that patients intended to assig n to [ the provider] only their rig hts to bringDB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 19

suit for pay

ment o f b e n e fits,” and that the p r ovider had “ no rig ht to bring claims for breach of fiduciary duty .” Id.

Ev en more clearly than in Spinedex
, the lang u ag e a nd
contex t of the a ssig nment here indicates the plan subscribers’ intended to assig n, at m o s t, the rig ht to pay ment of benefits and t h e a ssociated rig ht to sue for non-pay ment. 7 The authoriz ation is located on a form that lists ty pes of medical services. The assig nment lang u a g e refers only to direct
pay ment of insurance benefits to the phy sician, with n o reference to any broader rig hts. There is no dou b t that this authoriz ation does n o t encompass the Center’s claims for declaratory and injunctive relief with reg ard to o ffset t i ng o f
overpay ments ag ainst larg ely unrelated c laims, or for breach of fiduciary

duty

. S e e id

.

Nor does the authoriz ation reflect an a ssig n ment that
encompasses the Center’s claims for decl a r a t ory relief a nd

m o n e y d a m a g e s r e g a r d i n g re c o u p m e n t o f a l l e g e d
overpay ments. W e have h eld that “ because a hea l t h c a re provider-assig n ee stands in the shoes o f the beneficiary
, such

a provider has standing to sue under § 502(a)(1)(B ) to r ecover

7 A n assig n m en t o f t

h e rig h t to receiv e p ay

m en t o f b en ef

its g en erally in clu d es t h e l i m ited rig h t to su e f or n o n

- p ay

m en t u n d er § 5 0 2 (a)(1 )(B ),

w h ich em p o w ers a p articip an t o r b e n ef iciary to b rin g a civ il actio n “ to

r eco v er b en ef

its d u e to h er u n d er th e term s o f th e p lan .” S ee S p in ed ex , 7 7 0 F.3 d at 1 2 9 2, 1 2 9 7 (reco g n izin g th at p atien ts h ad assig n ed th e h ealth

care p ro v id er th eir “ rig h t s to b rin g su it f o r p ay m en t o f b en ef its”); Misic
, 7 8 9 F.2 d at 1 3 7 7

– 7 9 ( h o ld in g th at a p h y sician
, “ as assig n ee of b en ef iciaries pu rsu an t to assig n m en ts v alid u n d er ERISA
, h as stan d in g to assert th e claim s o f h is assig n o rs,” an d s o c a n su e to reco v er b en ef its

u n d er § 5 0 2 (a)(1 )(B ) o f ERISA ); see a lso Blu eCro ss Blu eS h ield o f T en n

. , 8 2 7 F.3 d at 5 47 ; N

. J e r s ey Bra in & S

p in e Ctr. v. Aetn a , In c. , 8 0 1 F.3 d 3 6 9 , 3 7 2 (3 d Cir. 2 0 1 5 ).DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 20

benefits due under th e p l a n.” Blue Cross of Cal. v

. Anesthesia Care Ass’n
, 187 F .3d 1045, 1051 (9th Cir. 1999). B ut the Center’s claim reg arding recoupments is not a suit to

recover benefits under the ERI SA plans. Rather, the claim relates to Anthem’s proc e s s of post-pay ment claims r eview

a n d p r a ctice of r ecouping erroneous pay ments. T h ese are claims that the Center’s “patient-assig nors could not assert,” id.
, as any recoupment would come from Providers n o t from the patients. See n.8, infra

. The claims therefore do not fall within the s c o pe of the assig nment. See Anesthesia Care Ass’n
, 187 F .3d at 1051. A l t h o u gh a “dispute

. . . over the right to pay

ment,

. . . mig h t be said to depend on the patients’ assig nments to the Providers,” the dispute over recoupment “depends on the terms of the provider a g reements,” not on the assig nment. Id. ; see also BlueCro s s Bl ueShield of Tenn.
, 827 F .3d at 548–49 (in an anal o go us case, holding that a health care provider’s c laims r eg a rding recoupment were “outside the scope o f [ the p rovider’s] a s s i gned standing
, ” because “the patient-assig nors are n ot party to the Provider Ag reement that g overns the recoupment process, a n d [ the insurer] has no rig ht to recoup pay ments for medical care made to its members”).

I n sum, Providers are not “ b eneficiar ies” ex pressly authoriz ed to sue to enforce ERI SA’s provisi o n s , and they cannot bring their claims derivatively as assig nees on behalf of plan beneficiaries. Providers therefore are not authoriz ed
to bring their claims in f ederal court under E RI SA. According ly
, we affirm the district courts’ d i s m i ssals of theDB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 21

ERI SA claims in both DB Healthcare and Adv anced W omen’s Health Center

. 8

C.

W e caution t h a t our conclusions reg arding the reach o f ERI SA’s statutory re m edies do not n ecessarily preclude Providers from contesting the recoupment and offsetting actions they dispute. Claim s a r e p reempted by ERI SA only if two conditions are met: (1) the litig ant could have broug ht the claim u nder ERI SA’s civil enforcement provision, a nd (2) the claims have no basis in an independent leg a l duty

. Aetna H ealth Inc. v. Davila
, 542 U.S. 200, 2 1 0 ( 2004). Any
state law claims f

or breach of the p rovider ag reements could
not have been broug ht u nder ERI SA and would have an independent leg al basis. Such c laims would not be p reempted by ERI SA. See Anesthesia Care Ass’n
, 187 F .3d a t 1050–52

8 B ecau se w e af

f irm th e district co u rts’ d ecisio n s o n th e g ro u n d th at P ro v id ers are n o t statu to rily o r co n tractu ally

au th o rized to b rin g su it, w e d o n o t co n sid er th e m erits o f P ro v id ers’ claim s th at th e p lan ad m i n istrato rs

v io lated th e ERISA Claim s P ro ced u re reg u l atio n

. W e d o n o te, h o w ev er, th at t h e reg u l atio n ap p l ies o n ly to “ claim s f or b en ef its b y p articip an ts an d b en ef iciaries.” S

ee 29 C.F.R. § 2 5 6 0 .5 0 3- 1 (a) (em p h asis ad d ed ). T h at lan g u ag e do es n o t seem t o pro v id e p ro ced u ral pro tectio n s to h ealth care p ro v id ers in p ay

m en t d isp u tes w ith claim s ad m in istrato rs w h ere, as h ere, th o se p ro v id ers h av e n o reco u rse ag ain st th e p lan su b scrib ers. S

ee Dep ’ t

o f L ab o r, Em

p lo y ee B en ef

its Secu rity A d m in i stratio n , Ben efit C l a i m s P r o c e d u r e R e g u l a t i o n F A Q s , A

- 8
, a v a i l a b l e a t h ttp s://w w w .d o l.g o v /eb sa/f

aq s/f aq

_ claim s_

p ro c_ reg .h tm l (last v iew ed Feb ru ary 2 1
, 20 1 7 ) (“ T h e reg u latio n d o es n o t ap p ly to req u ests b y h ealth

care p ro v id ers f

o r p ay m en ts d u e th em

–

rath er th an d u e th e claim an t

– in

acco rd an ce w ith co n tractu al arran g em en t s b etw een th e p ro v id er an d an in su rer o r m an ag ed care org an izatio n , w h ere th e p ro v id er h as n o reco u rse ag ain st t h e claim a n t fo r a m o u n ts, i n w h o le o r in p art, n ot paid b y th e in su rer o r m an ag ed care o rg an izatio n .”).DB H E A L T H C A R E V

. B L U E C R O S S B L U E S H I E L D 22

(holding that because a health care provider’s claim that B lue Cross of California improperly amended its schedule of fees

was g o verned by a p ro v ider ag reement rather than an employ e e benefit p lan, t h at claim w as properly broug ht in state court and not preempted by ERI SA).

D.

F inally
, the district court properly d ismissed the Center’s claims under the D eclaratory J u dg ment Act, 28 U .S.C. § 2201(a), disapproving Anthem’s recoupment prog ram with respect to g overnment employ e e b en e f its plans. The
g over nment employ ee benefits plans are g overned by the ACA, not b y ERI SA. See 29 U.S.C. § 1003(b)(1); 42 U .S.C. § 300g g -21(a)(1).

The Center does not have authorit y t o bring its c laims directly under ERI SA – because, among other reasons, the
g overnment plans a

re not covered by E RI SA § 5 0 2(a), a nd

a l s o because the Center is not, in any event, an ERI SA beneficiary
, see Part I I A, supra

. F o r the reasons ex p lained earlier, see Part I I B
, supra , the Center cannot sue derivatively via patient assig n ment either. Nor c a n t h e Center be considered a “beneficiary ” under the g overnmen t plans
t h e m s e l ves, for essentially the same reasons it is not a “beneficiary

” under E RI SA. As the Center has not identified
any oth e r basis for the claims concerning the g overnment plans, those claims cannot g o forward.

I I I . Conclusion

F or the foreg oing reasons we AF F IRM the judg ments o f the district courts in Advanced W omen’s Health Cente r and DB Healthcare

.