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Bristol SL Holdings v. CIGNA Health & Life (9th Cir. 23-55019 5/31/24) ERISA

By May 31, 2024June 24th, 2024Uncategorized

Affirming the district court’s summary judgment in favor of the defendants in an action brought by a drug treatment center’s successor-in-interest, the panel held that the Employee Retirement Income Security Act of 1974 preempted claims that a health plan administrator’s denial of reimbursements violated state law.

The plaintiff alleged that the treatment center’s calls to the plan administrator verifying out-of-network coverage and seeking authorization to provide health services created independent contractual obligations. There was no dispute that the patients and their treatment were covered under the health plans, but payment was later rejected based on fee-forgiving, which the plans prohibited. (Fee-forgiving is a healthcare provider’s practice of failing to collect the financial contributions, such as co-pays and deductibles, that participants are required to pay under an ERISA plan.)

The panel held that the plaintiff’s state law claims for breach of contract and promissory estoppel were preempted by ERISA because they had both a “reference to” and an “impermissible connection with” the ERISA plans that the defendants administered. The panel held that The Meadows v. Employers Health Ins., 47 F.3d 1006 (9th Cir. 1995) (holding that ERISA does not preempt third-party claims for reimbursement triggered by the complete absence of ERISA plan coverage), did not apply because, although the plaintiff brought its state law claims as an independent entity, its claims were not independent of an ERISA plan because they concerned the denial of reimbursement to patients who were covered under such plans.

In a concurrently filed memorandum disposition, the panel affirmed the district court’s grant of summary judgment to the plan administrator on the plaintiff’s ERISA claim seeking recovery of plan benefits.