What If The Insurance Company Says The Claim Will Be Paid – ERISA

Insurance lawyers needs to know about this ERISA case.  It is from the U.S. District Court, Southern District of Texas, Houston Division, and is styled, Houston Metro And Spine Surgery Center, LLC v. BlueCross BlueShield of Illinois, et al.

Houston Metro alleges BCBS failed to pay for medical services it provided under its patients’ health benefit plans.  Hoston Metro sued under a promissory estoppel claim under Texas law, based on the allegation that Houston Metro provided the medical services only after BCBC represented that the patient and procedure were covered by a health benefit plan and that Houston Metro would be paid in accordance with that plan.  BCBS moved to dismiss the claim based on it being preempted by ERISA.

Section 1132(a) allows an ERISA plan’s participants and beneficiaries to sue “to recover benefits due to him under the terms of the plan, to enforce his rights under the terms or the plan, or to clarify his right to future benefits under the terms of the plan.”  The United States Supreme Court has read 1132 to preempt any state law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement scheme.

To the extent that a health care provider’s promissory estoppel claim depends on and derives from the rights of the plan participants and beneficiaries to recover benefits under an ERISA plan’s terms, the claim is preempted.  But if the claim is based on the defendants’ misrepresentations about the extent to which – not whether – the plan would reimburse the health care provider, the claim is not preempted.

Houston Metro alleges that it called BCBS and received verification that a specific health benefit plan covered the patient and procedure and that Houston Metro would be paid under the plan terms.  Two types of claims are at issue.  The first type is the claims that BCBS paid only part of what Houston Metro billed – the “partial payment claims.” The second type is the claims that BCBS did not pay any amount – the “no payment claims.”

Houston Metro argues that neither the partial payment nor no payment clalims seek to recover benefits under the ERISA plans.  As a result, it need not prove that the ERISA plan was improperly administered.  But Houston Metro’s allegation is that BCBS stated that each patient and procedure were covered under an ERISA health benefit plan and that Houston Metro would be paid in accordance with that plan.  Interpreting the plan terms is necessary to learn what payment was due and whether BCBS misrepresented what they would pay.

Whether there was a misrepresentation is dependent on, and derived from the rights of the plan beneficiaries to recover benefits under the terms of the plan.  Thus, the promissory estoppel claim is preempted.