- Connecticut State Dental Association v. Anthem Health Plans Inc. No. 08-15268 (11th Cir. Dec. 30, 2009)
- March 9, 2010 | Authors: Matthew T. Fornataro; Arthur N. Lerner
- Law Firm: Crowell & Moring LLP - Washington Office
The Eleventh Circuit Court of Appeals ruled that ERISA completely preempted provider claims against an insurer arising from alleged underpayments for services rendered to ERISA beneficiaries.
Plaintiffs - two participating dental providers - sued Anthem Health Plans, Inc. ("Anthem") in state court for various claims, including breach of contract, violation of the Connecticut Unfair Trade Practices Act ("CUPTA") and negligent representation, alleging underpayments made to participating providers for services rendered. The plaintiffs were both members of the Connecticut State Dental Association ("CSDA"), which filed a separate but similar complaint in state court alleging a single count against Anthem for violations of CUTPA. Anthem removed both actions to federal court on the basis of complete preemption under ERISA. The district court granted Anthem's motions to dismiss both complaints.
Noting that providers generally do not have standing to assert ERISA claims against an insurer, the court found that claims forms authorizing payment of dental benefits to the plaintiffs were sufficient to establish derivative standing. The court found that the dentists' claims implicated ERISA because they involved the right of payment, i.e., the systematic denial and reduction of reimbursement for services through improper denials.
The court ultimately concluded that plaintiffs' state law claims were completely preempted by ERISA and the action was therefore properly removed to federal court. The court, however, remanded CSDA's complaint, finding that the CSDA state law claim seeking damages on behalf of its members was not completely preempted because it lacked standing to sue under ERISA.