Second Circuit Reminds Healthcare Providers To Seek Relief From Insurance Companies Under Their Own Contracts, Not The Insureds' Contracts

In Rojas v. Cigna Health and Life Ins. Co., 793 F.3d 253, 258 (2d Cir. 2015), the Second Circuit joined several other circuits in holding that "healthcare providers are not 'beneficiaries' of an ERISA welfare plan by virtue of their in-network status or their entitlement to payment." As a result, they do not have standing to sue under ERISA, barring the existence of other factors.

Background

The plaintiffs in Rojas were a medical practice and its two owners (collectively Rojas). Rojas was an in-network medical provider for the defendants, Cigna Health and Life Insurance Company and Connecticut General Life Insurance Company (collectively Cigna). The Cigna Benefit Plan at issue provided that "All medical benefits are payable to you [the patient]. However, at the option of [Cigna], all or part of them may be paid directly to the person or institution on whose charge [the] claim is based. ... When benefits are paid to you or your Dependent, you or your Dependent is responsible for reimbursing the Provider." Cigna-covered Rojas patients would assign to Rojas the right to collect payment for their medical services directly from Cigna.

In 2013, Cigna performed a routine investigation of reimbursement claims filed by Rojas to determine whether they were consistent with Cigna's coverage requirements about medical necessity. Cigna determined that they were not because Rojas was ordering blood tests to test for allergies instead of skin tests as required by Cigna coverage. Cigna determined that it had overpaid Rojas $844,344.52 for the allergy blood tests and demanded reimbursement. After further discussions, Cigna terminated Rojas as an in-network provider.

District Court Finding

Rojas filed a lawsuit in the United States District Court for the Southern District of New York alleging, among other things, that its termination as an in-network provider was a violation of the anti-retaliation provision of ERISA, 29 U.S.C. §1140, and demanding that it be reinstated as an in-network provider. Rojas also moved for a temporary restraining order (TRO) and a preliminary injunction to prevent Cigna from terminating it as an in-network provider. The district court denied the request for a TRO, finding that Rojas lacked standing under ERISA; ERISA anti-retaliation claims may be brought only by a "participant, beneficiary, or fiduciary" of an ERISA plan, and the court found that Rojas was not a "beneficiary" under ERISA.

Second Circuit Conclusion

On appeal to the...