Health Law Daily Wrap Up, GENERAL HEALTH CARE NEWS—5th Cir.: ERISA reimbursement claims by Texas emergency physician groups revived against out-of-state Blue Cross plans, (Oct 28, 2025)

By Martin A. Steinberg, J.D.

Texas emergency physician groups alleged that 24 out-of-state Blue Cross Blue Shield plans underpaid approximately 290,000 out-of-network emergency-care claims in violation of patients’ assignments of benefits.

The Fifth Circuit vacated in part a district court’s summary judgment that had dismissed reimbursement claims brought by 56 Texas emergency-medicine physician groups against 24 out-of-state Blue Cross Blue Shield plans. The Providers alleged that the Blue Plans, through Blue Cross Blue Shield of Texas, underpaid more than 290,000 out-of-network emergency-care claims despite valid patient assignments of benefits. The appellate court held that the district court erred in treating the assignments as unambiguous, failing to consider extrinsic evidence about the meaning of “provider,” and applying the wrong legal standards to determine the scope of rights transferred, the effect of anti-assignment clauses, and whether ERISA’s administrative-exhaustion requirement was satisfied or excused. While affirming dismissal of claims lacking written assignments, the court remanded the remaining claims for factual determinations on assignment validity, estoppel against enforcing anti-assignment provisions, and potential exceptions to exhaustion (Angelina Emergency Medicine Associates, PA v. Blue Cross and Blue Shield of Alabama, No. 24-10306 (5th Cir. Oct. 23, 2025)).

Background. The Providers filed suit in 2018, later amending their complaint to add the out-of-state Blue Cross Blue Shield (BCBS) plans, alleging underpayment of approximately 290,000 out-of-network emergency-care claims and asserting causes of action under ERISA and contract law. After partial settlements eliminated more than 75% of the claims, the district court selected 182 bellwether claims for summary judgment. These claims differed in the form and scope of the patient assignments, some assigning benefits only to hospitals, others to hospitals and physicians or their agents, and twenty-nine for which no written assignments were produced. The district court granted summary judgment for all defendants, holding that the Providers lacked standing because of defective or missing assignments, unenforceable transfers of rights, and anti-assignment clauses in the plans. It also ruled that most claims failed for lack of administrative exhaustion or timeliness, entering final judgment for the Blue Plans.

ERISA standing. The Fifth Circuit affirmed summary judgment only as to the 29 claims lacking written assignments, but vacated the remainder and remanded for factual findings on the validity and scope of the assignments, the enforceability of anti-assignment provisions, and whether equitable estoppel precludes the Blue Plans from invoking those clauses. Because healthcare providers can sue under ERISA only as assignees of plan participants, the appellate court reviewed the four bases for dismissal: (1) the Providers were not named in the assignments, (2) the assignments lacked a right to sue, (3) assignments were missing, and (4) the plans contained anti-assignment clauses, and upheld only the third.

First, the panel held that the district court erred in construing assignments to “health care providers” or “facility-based physicians” as excluding the Providers. The term “provider” is ambiguous, encompassing both individual physicians and the providers who employ them. Under Texas contract law, ambiguity creates a fact question requiring extrinsic evidence of intent, making summary judgment inappropriate.

Second, the appellate court rejected the view that the assignments conferred only a right to payment, not to litigation. Many forms expressly transferred “all rights, title, interest and benefits,” authorized direct payment, and empowered the assignee to pursue “legal remedies” or appeals. Such language, the court held, necessarily includes the right to sue; no authority requires that phrase to appear explicitly.

Third, the appellate court agreed that summary judgment was proper for the 29 claims lacking written assignments. The substitute declaration from SCP Health’s revenue-assurance director was insufficient under Rule 56(c)(4) because it lacked personal knowledge of the assignment practices across numerous hospitals and physician entities.

Finally, the court found that the district court applied the wrong legal standard to the anti-assignment clauses. The lower court relied on ERISA estoppel, which requires proof of misrepresentation and extraordinary circumstances, rather than the equitable rule in Hermann Hospital v. MEBA Medical & Benefits Plan, 959 F.2d 569 (5th Cir. 1992). Under Hermann, an insurer that delays invoking an anti-assignment clause after engaging in payment discussions may be estopped from relying on it—particularly when the provider lacked access to plan documents. The Providers’ evidence of partial payments, repeated communications, and unanswered requests for plan copies placed the case within Hermann’s scope, not Dialysis Newco v. Community Health Systems Group Health Plan, 938 F.3d 246 (5th Cir. 2019). The district court’s conflation of the two doctrines imposed an unduly stringent test.

Administrative remedies. The Fifth Circuit also vacated the dismissal for failure to exhaust administrative remedies. The district court had found that the Providers used the wrong appeals process, but the appellate panel held that factual disputes remained about which process applied and whether the Blue Plans’ conduct excused exhaustion. ERISA regulations require reasonable claims procedures, typically mandating exhaustion before litigation. Two distinct procedures governed these claims: the provider appeals process, outlined in the public BlueCard manual, and the member appeals process, contained in individual plan documents. As assignees, the Providers followed the provider process as instructed by BlueCard rules, submitting appeals to Blue Cross Blue Shield of Texas (BCBSTX), the in-state “host plan.” Deposition testimony confirmed that BCBSTX received and processed these appeals for the out-of-state “home” plans.

Although assignees usually must follow the member appeals process, the court held that exhaustion can be excused where administrative remedies are futile, inadequate, or inaccessible. The Providers repeatedly requested copies of the plans to identify the correct procedure, but were never given them. Instead, BCBSTX alternated between ignoring the appeals, mailing them back without explanation, or directing the Providers to out-of-state plans that, in turn, referred them back to Texas. The failure to supply plan documents can render remedies exhausted or unavailable. Having followed every public instruction yet still denied access to the governing plans, the Providers faced a circular impossibility that excused exhaustion under both equitable principles and 29 C.F.R. § 2560.503-1(l)(1), which deems remedies exhausted when a plan fails to follow required procedures.

Accordingly, the Fifth Circuit vacated summary judgment on this ground as well and remanded for further proceedings to resolve factual disputes regarding exhaustion and applicable equitable exceptions.

The Case is No. 24-10306.

Judge: Higginson, S.

Attorneys: Ashley Charles Parrish (King & Spalding, L.L.P.) for Angelina Emergency Medicine Associates PA, Athens Emergency Medicine Associates PA, Bluff Creek Emergency Medicine Associates, PA and Atascosa Emergency Medicine Associates PA. Jonathan M. Herman (Herman Law Firm) for Blue Cross and Blue Shield of Alabama. Michael Christopher Drew (Jones Walker, L.L.P.) for Usable Mutual Insurance Co. d/b/a Arkansas Blue Cross and Blue Shield.

Companies: Angelina Emergency Medicine Associates PA; Athens Emergency Medicine Associates PA; Bluff Creek Emergency Medicine Associates, PA; Atascosa Emergency Medicine Associates PA; Blue Cross and Blue Shield of Alabama; Usable Mutual Insurance Co. d/b/a Arkansas Blue Cross and Blue Shield

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