Justia ERISA Opinion Summaries

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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. View "Beverly Oaks Physicians Surgical Center, LLC v. Blue Cross and Blue Shield of Illinois" on Justia Law

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Pharmacy benefit managers (PBMs) reimburse pharmacies for the cost of drugs covered by prescription-drug plans by administering maximum allowable cost (MAC) lists. In 2015, Arkansas passed Act 900, which requires PBMs to reimburse Arkansas pharmacies at a price at least equal to the pharmacy’s wholesale cost, to update their MAC lists when drug wholesale prices increase, and to provide pharmacies an appeal procedure to challenge MAC reimbursement rates, Ark. Code 17–92–507(c). Arkansas pharmacies may refuse to sell a drug if the reimbursement rate is lower than its acquisition cost. PCMA, representing PBMs, sued, alleging that Act 900 is preempted by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1144(a).Reversing the Eighth Circuit, the Supreme Court held that Act 900 is not preempted by ERISA. ERISA preempts state laws that “relate to” a covered employee benefit plan. A state law relates to an ERISA plan if it has a connection with or reference to such a plan. State rate regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage are not preempted. Act 900 is a form of cost regulation that does not dictate plan choices. Act 900 does not “refer to” ERISA; it regulates PBMs whether or not the plans they service fall within ERISA’s coverage. Allowing pharmacies to decline to dispense a prescription if the PBM’s reimbursement will be less than the pharmacy’s cost of acquisition does not interfere with central matters of plan administration. The responsibility for offering the pharmacy a below-acquisition reimbursement lies first with the PBM. Any “operational inefficiencies” caused by Act 900 are insufficient to trigger ERISA preemption, even if they cause plans to limit benefits or charge higher rates. View "Rutledge v. Pharmaceutical Care Management Association" on Justia Law

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Plaintiffs, individuals living with HIV/AIDS who have employer-sponsored health plans, and who rely on those plans to obtain prescription drugs, filed suit alleging that CVS's program violates the anti-discrimination provisions of the Affordable Care Act (ACA), the Americans with Disabilities Act (ADA), and the California Unruh Civil Rights Act (Unruh Act); denies them benefits to which they are entitled under the Employee Retirement Security Act (ERISA); and violates California's Unfair Competition Law (UCL). The district court granted defendants' motion to dismiss.The Ninth Circuit held that Section 1557 of the ACA does not create a healthcare-specific anti-discrimination standard that allowed plaintiffs to choose standards from a menu provided by other anti-discrimination statutes. Because plaintiffs claim discrimination on the basis of their disability, to state a claim for a Section 1557 violation, they must allege facts adequate to state a claim under Section 504 of the Rehabilitation Act. Applying the section 504 framework, the panel concluded that plaintiffs adequately alleged that they were denied meaningful access to their prescription drug benefit under their employer-sponsored health plans because the program prevents them from receiving effective treatment for HIV/AIDS. Therefore, plaintiffs have stated a claim for disability discrimination under the ACA.However, plaintiffs have failed to establish a claim of disability discrimination under the ADA, because they have not plausibly alleged that their benefit plan is a place of public accommodation. Finally, the panel upheld the district court's denial of plaintiffs' claims under ERISA and their cause of action under California's Unfair Competition Law. The panel affirmed in part, vacated in part, and remanded. View "Doe v. CVS Pharmacy, Inc." on Justia Law

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DaVita filed suit alleging that the Amy's Kitchen Employee Benefit Health Plan's dialysis provisions violate the Medicare as Secondary Payer provisions (MSP) of the Social Security Act, the Employee Retirement Income Security Act of 1974 (ERISA), and state law. The district court dismissed the federal claims and declined to exercise supplemental jurisdiction over the state-law claims.Reviewing de novo, the Ninth Circuit affirmed and agreed with the district court's conclusion that the Plan does not violate the MSP because it reimburses at the same rate for all dialysis services, regardless of underlying diagnosis and regardless of Medicare eligibility. The panel also held that DaVita may not bring equitable claims on behalf of Patient 1 under ERISA, because the assignment form the patient signed did not encompass an assignment of equitable claims. View "DaVita Inc. v. Amy's Kitchen, Inc." on Justia Law

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The Eleventh Circuit held that, in the unusual circumstances of this case, Liberty still existed in 2012 sufficiently to act as the employee pension plan's sponsor under the Employee Retirement Income Security Act (ERISA). In this case, Liberty was an Illinois corporation that went bankrupt and dissolved under state law in the 1990s.The court followed the Supreme Court's instruction to fill in ERISA's gaps with common-law rules, and held that where the sponsor of an ERISA plan dissolves under state law but continues to authorize payments to beneficiaries and is not supplanted as the plan's sponsor by another entity, it remains the constructive sponsor such that other members of its controlled group may be held liable for the plan's termination liabilities. Under this narrow rule, the court held that the Companies are liable to PBGC for the Plan's termination liabilities for the simple reason that Liberty persisted as the Plan's sponsor even as it dissolved as an Illinois corporation. View "Pension Benefit Guaranty Corp. v. 50509 Marine LLC" on Justia Law

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Davis, insured under a Hartford long-term disability policy, began missing work due to chronic back pain, neuropathy, and fatigue caused by multiple myeloma. Relying on the opinion of Davis’s oncologist, Dr. Reddy, Hartford approved Davis’s claim for short-term disability benefits through April 17, 2012. In June, Hartford approved Davis for long-term disability benefits, retroactive to April, for 24 months. Davis could continue to receive benefits beyond that time if he was unable to perform one or more of the essential duties of “Any Occupation” for which he was qualified by education, training, or experience and that has comparable “earnings potential.” Reddy's subsequent reports were inconsistent. An investigator found “discrepancies" based on surveillance. Davis’s primary care physician and neurologist both concluded that Davis could work full-time under described conditions. Reddy disagreed, but would not answer follow-up questions. An orthopedic surgeon conducted an independent review and performed an examination, and reported that Davis was physically capable of “light duty or sedentary work” within certain restrictions. Other doctors agreed. Hartford notified Davis that he would be ineligible for benefits after April 17, 2014.Davis filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a). The Sixth Circuit affirmed summary judgment in favor of Hartford. Hartford reasonably concluded that Davis could work full-time, under certain limitations; the decision was not arbitrary. View "Davis v. Hartford Life & Accident Insurance Co." on Justia Law

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Donna’s former husband, Carl, retired from Ford in 1998 and participated in Ford’s retirement plan. “In the event of an error” in calculating a pension, the plan requires a beneficiary to return the overpayment “without limitation.” A committee runs the plan, with “discretionary authority" to reduce the repayment. Carl and Donna divorced in 2009. Donna received half of the marital portion of Carl’s pension. Donna agreed to postpone drawing the pension. In 2013, Ford offered a lump sum payment in place of future monthly benefits and a $351,690 retroactive payment for the postponed monthly benefits. After paying taxes, Donna invested some of the money and gave some to her children. Ford audited Donna’s benefits. It discovered that the retroactive pension payment mistakenly included benefits from 1998, when Carl retired, instead of 2009. The payment should have been $108,500. Ford requested repayment; the committee invited Donna to apply for a hardship reduction. The application required disclosure of her finances, including her other substantial retirement funds and an inheritance. Donna did not apply; she sued.The Sixth Circuit affirmed summary judgment for Ford. The committee’s actions were neither wrong nor arbitrary. Donna did not establish that Ford’s inclusion of an incorrect retroactive-payment amount constituted constructive fraud. She knew that the retroactive payment was too high when she got it, the plan put her on notice that Ford could demand repayment, and she has the capacity to return the money. View "Zirbel v. Ford Motor Co." on Justia Law

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The Ninth Circuit affirmed the district court's grant of summary judgment for defendants in an action brought by plaintiff under the Employee Retirement Income Security Act (ERISA), challenging the denial of health care coverage for out-of-state residential treatment for anorexia nervosa.The panel held that defendants' denial of coverage did not violate the Mental Health Parity and Addiction Equity Act or the California Mental Health Parity Act where the denial of coverage was based solely on the Plan's exclusion of coverage for out-of-state treatment, which applies equally to mental and physical illnesses. In this case, plaintiff, aware of this exclusion, sent her daughter to an out-of-state residential treatment program for anorexia nervosa. The panel concluded that plaintiff has not shown that the Plan's requirement of in-state treatment is applied to mental health conditions, but not to other medical conditions. View "Stone v. UnitedHealthcare Insurance, Co." on Justia Law

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Beginning in‌ ‌‌2017,‌ ‌DaVita‌ ‌provided‌ ‌dialysis‌ ‌treatment‌ ‌to‌ ‌Patient‌ ‌A,‌ ‌who was ‌diagnosed‌ ‌ with‌ ‌end-stage‌ ‌renal‌ ‌disease‌ ‌(ESRD).‌ ‌‌Patient‌ ‌A‌ assigned his‌ ‌insurance‌ ‌rights‌ ‌to‌ ‌DaVita.‌ ‌Through‌ August‌ ‌2018,‌ ‌the‌ ‌costs‌ ‌of‌ ‌Patient‌ ‌A’s‌ ‌dialysis‌ ‌were‌ ‌reimbursed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Health‌ ‌Benefit‌ ‌Plan,‌ ‌governed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Retirement‌ ‌Income‌ ‌Security‌ ‌Act‌ ‌(ERISA), ‌at‌ ‌its‌ ‌bottom‌ ‌tier,‌ ‌which‌ ‌applied‌ ‌to‌ ‌providers‌ ‌who‌ ‌are‌ ‌“out-of-network.”‌ ‌All‌ ‌dialysis‌ ‌providers‌ were‌ ‌out-of-network.‌ ‌While‌ ‌most‌ ‌out-of-network‌ ‌providers‌ ‌are‌ ‌reimbursed‌ ‌in‌ ‌the‌ ‌bottom‌ ‌tier‌ ‌based‌ ‌on‌ ‌a‌ ‌“reasonable‌ ‌and‌ ‌customary”‌ ‌fee‌ ‌as‌ ‌understood‌ ‌in‌ ‌the‌ ‌healthcare‌ ‌industry,‌ ‌dialysis‌ ‌providers‌ ‌are‌ ‌subject‌ ‌to‌ ‌an‌ ‌“alternative‌ ‌basis‌ ‌for‌ ‌payment”;‌‌‌ ‌the‌ ‌Plan‌ ‌reimburses‌ ‌at‌ 87.5%‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌rate.‌ ‌Patient‌ ‌A‌ ‌was exposed‌ ‌to‌ ‌higher‌ ‌copayments,‌ ‌coinsurance‌ ‌amounts,‌ ‌and‌ ‌deductibles and ‌was‌ ‌allegedly‌ ‌at‌ ‌risk‌ ‌of‌ ‌liability‌ ‌for‌ ‌the‌ ‌balance‌ ‌of‌ ‌what‌ ‌was‌ ‌not‌ ‌reimbursed‌ .‌ ‌The‌ ‌Plan‌ ‌identified‌ ‌dialysis‌ ‌as‌ ‌subject‌ ‌to‌ ‌heightened‌ ‌scrutiny,‌ ‌ ‌which‌ ‌allegedly‌ ‌incentivizes‌ ‌dialysis‌ ‌patients‌ ‌to‌ ‌switch‌ ‌to‌ ‌Medicare. Patient‌ ‌A‌ ‌switched‌ ‌to‌ ‌Medicare.‌ ‌DaVita‌ ‌and‌ ‌Patient‌ ‌A‌ ‌sued,‌ ‌alleging‌ ‌that‌ ‌the‌ ‌Plan‌ ‌treats‌ ‌dialysis‌ ‌providers‌ ‌differently‌ ‌from‌ ‌other‌ ‌medical‌ ‌providers‌ ‌in‌ ‌violation‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌Secondary‌ ‌Payer‌ ‌Act‌ ‌(MSPA)‌ ‌and‌ ‌ERISA.‌ ‌ ‌ ‌ The‌ ‌Sixth‌ ‌Circuit‌ ‌reversed,‌ ‌in‌ ‌part,‌ ‌the‌ ‌dismissal‌ ‌of‌ ‌the‌ ‌claims.‌ ‌A‌ ‌conditional‌ ‌payment‌ ‌by‌ ‌Medicare‌ ‌is‌ ‌required‌ ‌as‌ ‌a‌ ‌precondition‌ ‌to‌ ‌suing‌ ‌under‌ ‌the‌ ‌MSPA’s‌ ‌private‌ ‌cause‌ ‌of‌ ‌action;‌ ‌the‌ ‌complaint‌ ‌sufficiently alleges ‌such‌ ‌a‌ ‌payment‌.‌ ‌DaVita‌ ‌plausibly‌ ‌alleged‌ ‌that‌ ‌the‌ ‌Plan‌ ‌violates‌ ‌the‌ ‌nondifferentiation‌ ‌provision‌ ‌of‌ ‌the‌ ‌MSPA,‌ ‌resulting‌ ‌in‌‌ ‌denials‌ ‌of‌ ‌benefits‌ ‌and‌ ‌unlawful‌ ‌discrimination‌ ‌under‌ ‌ERISA.‌ ‌ View "DaVita, Inc. v. Marietta Memorial Hospital Employee Health Benefit Plan" on Justia Law

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The plaintiffs are participants in the Allergan Savings and Investment Plan, which provides various investment options, including an employee stock ownership feature for buying Allergan stock. According to the plaintiffs, the defendants were Plan fiduciaries and owed them commensurate duties under the Employee Retirement Income Security Act (ERISA). They claim that, although the public was unaware, the defendants knew or should have known that, before the divestiture of its generic-drug business, Allergan had conspired with other generic-drug manufacturers to fix prices, thereby artificially boosting its financial performance and its stock price. The plaintiffs cited inquiries from members of Congress and the Antitrust Division of the Department of Justice, seeking information about large price increases in certain generic drugs. The plaintiffs do not allege that Allergan was ever charged in connection with the investigation but claim that the defendants’ failure to remove Allergan stock as a Plan investment option or otherwise take action to protect Plan participants, violated ERISA.The Third Circuit affirmed the dismissal of the complaint. Even viewed in the light most favorable to the plaintiffs, the well-pled factual allegations fail to support a plausible inference that Allergan conspired with competitors to fix prices. Because all of the plaintiffs’ causes of action ultimately rest on the premise that the defendants knew or should have known about that supposed illegal conduct, the absence of allegations sufficient to support the existence of it is fatal to each of their claims. View "In re: Allergan ERISA Litigation" on Justia Law