Fifth Circuit: Complaints Seeking Plan Benefits Need Not Quote Provisions, Especially When Insurers Refuse to Provide Documents

This pleading standard makes sense because — as the Court recognized — individuals seeking benefits and health care providers suing as their assignees often do not have easy access to these plan documents.

The case, Innova Hospital San Antonio, Limited Partnership v. Blue Cross & Blue Shield of Georgia, Inc., __ F.3d __, was brought by a Texas hospital against several Blue Cross, Anthem, and related defendant payers that administered or insured health plans covering the hospital’s patients. The complaint alleged that the hospital provided services to patients after the patients assigned their benefits to the hospital and the hospital verified the patients’ coverage with the payers. The hospital claimed that the payers systematically underpaid the hospital’s medical claims, contrary to the terms of the health plans that required payment of out-of-network claims at “reasonable and customary” or “usual, customary, and reasonable” amounts. The complaint sought over $58 million.

The district court granted the payers’ motion to dismiss the hospital’s claims for (a) benefits under ERISA § 502(a)(1) against ERISA plans and payers, and (b) state law breach of contract against non-ERISA plans and payers. The district court held that the complaint was insufficient because it did not identify the specific plan provisions on which it was based. This was despite the fact that the hospital had detailed numerous and varied attempts it had made to obtain the plan documents — many of which were directly thwarted by the insurers who refused to produce them.

In reversing the lower court on the ERISA benefits claim, the Fifth Circuit held: “Simply put, ERISA plaintiffs should not be held to an excessively burdensome pleading standard that requires them to identify particular plan provisions in ERISA contexts when it may be extremely difficult for them to access such plan provisions.” Not requiring specific quotes from benefit plans is in line with the pleading standards under the Federal Rules of Civil Procedure and Supreme Court precedent addressing those standards, explained the Fifth Circuit panel. The Court’s opinion detailed the largely unsuccessful efforts of the plaintiff hospital to obtain copies of the plan documents, through requests to the defendant payers both before and during litigation. “Our holding underscores the principle that when discoverable information is in the control and possession of a defendant, it is not necessarily the plaintiff’s responsibility to provide that information in her complaint,” said the Court.

The Fifth Circuit reversed the dismissal of the hospital’s breach of contract claim for similar reasons, holding that the elements of the claim—the existence of valid contracts, performance, breach, and damages — were alleged without requiring specific quotes from the non-ERISA plan documents.