Fifth Circuit Revives Emergency Physician Groups’ ERISA Claims Against Out-of-State Blue Cross Plans

In Angelina Emergency Medicine Associates PA v. Blue Cross and Blue Shield of Alabama, No. 24-10306, —F.4th—-, 2025 WL 2268126 (5th Cir. Aug. 8, 2025), a significant decision for out-of-network healthcare providers, the Fifth Circuit partially reversed a district court ruling that had thrown out ERISA and contract claims brought by Texas emergency physician groups against 24 out-of-state Blue Cross Blue Shield affiliates. The court’s opinion clarifies how assignments of benefits, anti-assignment clauses, and exhaustion requirements apply when emergency providers seek reimbursement for patients’ care.

Fifty-six Texas emergency medicine physician groups (the “Physician Groups”) staff hospital ER departments as facility-based providers. These groups were out-of-network with the defendant Blue Cross plans (the “Blue Plans”) but treated Blue Plan members who presented at Texas ERs. In keeping with common emergency care practice, patients typically signed hospital intake forms assigning their insurance benefits to the providers.

Under the ACA’s “greatest-of-three” rule for out-of-network emergency services, plans must pay the highest of three benchmarks: the in-network rate, the plan’s usual out-of-network formula, or Medicare rates. The Physician Groups alleged the Blue Plans—via in-state “host” plan Blue Cross Blue Shield of Texas (BCBSTX)—failed to pay compliant amounts on 290,000 claims. After settlements and narrowing to representative “bellwether” claims, the district court granted summary judgment for the Blue Plans on all remaining claims, finding lack of standing, failure to exhaust, and other procedural bars.

The district court held that most assignments did not validly transfer rights to the Physician Groups because they were made to “health care providers” or similar categories rather than naming the groups directly. The Fifth Circuit disagreed, finding the term “provider” ambiguous enough to include physician groups, especially when describing facility-based practitioners. Under Texas law, ambiguities create fact issues about intent, and the court emphasized that summary judgment was premature without allowing extrinsic evidence on industry practice.

The district court also ruled some assignments failed because they didn’t expressly grant a right to sue. The Fifth Circuit rejected this formalism, noting that assignments of “all rights” or “all insurance benefits” can include the right to sue without magic words.

However, for 29 claims with no written assignments, the appellate court upheld dismissal. The physician groups’ witness lacked personal knowledge of hospital intake practices across dozens of facilities, making his declaration insufficient under Rule 56.

Many Blue Plan contracts contained anti-assignment clauses barring members from transferring rights. The district court applied the strict ERISA estoppel test from Mello v. Sara Lee Corp., requiring a material misrepresentation, detrimental reliance, and “extraordinary circumstances.” The Fifth Circuit held this was the wrong framework for these plaintiffs, who were not plan participants and never saw the contracts. Instead, the earlier Hermann Hospital precedent applies—where a plan that withholds an anti-assignment defense while engaging in payment discussions can be equitably estopped from invoking the clause later.

Here, the Physician Groups alleged the Blue Plans partially paid claims, communicated about appeals, and never provided the plan documents despite requests—paralleling Hermann’s facts. The panel remanded for fact-finding on whether the Blue Plans’ conduct bars enforcement of anti-assignment clauses.

The Blue Plans also argued dismissal was warranted because the Physician Groups did not exhaust the member appeals process in the plan documents. The groups had instead followed the publicly available provider appeals process in the BlueCard manual, submitting disputes to BCBSTX as required for providers.

The Fifth Circuit found a genuine dispute as to whether the groups could have known about the member appeals process without access to the plan documents—which they had repeatedly requested through the provider process. The court criticized the Blue Plans’ circular reasoning: providers supposedly needed to follow the member process described in the plan but could only obtain the plan by following that same member process.

Citing Meza v. Gen. Battery Corp., 908 F.2d 1262 (5th Cir. 1990) and Bourgeois v. Pension Plan for Emps. of Santa Fe Int’l Corps., 215 F.3d 475 (5th Cir. 2000), the panel explained that when a plan’s failure to furnish documents prejudices a claimant’s ability to exhaust, exhaustion can be excused. Whether the Blue Plans’ conduct excused exhaustion here requires further factual development.

The Fifth Circuit affirmed dismissal only for claims with no written assignment in evidence. For the rest, it vacated summary judgment and remanded for:

• Determinations on whether assignments to “providers” included the Physician Groups.
• Whether certain assignments conveyed a right to sue.
• Whether the Blue Plans are estopped from invoking anti-assignment clauses under Hermann.
• Whether exhaustion was excused due to failure to provide plan documents.