Second Circuit Affirms Dismissal of Out-of-Network Provider’s ERISA Claim Where Provider Failed to Establish Beneficiary Status or Valid Assignment and Abandoned Claim on Appeal

In Emsurgcare, Emergency Surgical Assistant v. Hager, No. 25-1975-CV, 2026 WL 1378672 (2d Cir. May 18, 2026), Plaintiffs-Appellants Emsurgcare and Emergency Surgical Assistant (together, “Emsurgcare”) provided emergency surgical services to Plaintiff in 2018 at a Los Angeles hospital. Emsurgcare billed Oxford Health Plans (NY), Inc. and Oxford Health Insurance (together, “Oxford”) $103,500 for those services. Oxford paid $3,475. Emsurgcare sued Plaintiff and Oxford in California state court to recover the $100,025 balance plus interest. The case was removed to federal court. Emsurgcare asserted breach of contract and account stated claims against Plaintiff and brought claims against Oxford for violating ERISA § 1132(a)(1)(B), tortious interference with contractual relations, and tortious interference with prospective economic advantage.

The United States District Court for the Central District of California dismissed Emsurgcare’s claims against Plaintiff, holding that balance billing — charging a patient for the remaining costs after an insurer rejects payment requests — is illegal under California law and that the contract between Plaintiff and Emsurgcare was therefore unenforceable. The district court transferred Emsurgcare’s remaining claims against Oxford to the United States District Court for the Southern District of New York pursuant to a forum selection clause in Plaintiff’s health plan. In the Southern District, Emsurgcare conceded that its tortious interference claims could not proceed in light of the California district court’s ruling that its contract with Plaintiff was unenforceable. The Southern District then dismissed Emsurgcare’s ERISA claim, holding that Emsurgcare failed to allege that it was a beneficiary of Plaintiff’s health plan or a proper assignee, either of which is required to state a claim under § 1132(a)(1)(B). See Giordano v. Thomson, 564 F.3d 163, 168 (2d Cir. 2009).

On appeal, the Second Circuit affirmed both dismissals. As to the claim against Plaintiff, Emsurgcare argued not that either district court erred on the merits, but that both decisions could not simultaneously be correct — leaving Emsurgcare without recourse against anyone. The court rejected that argument. Emsurgcare relied on a footnote in Prospect Medical Group v. Northridge Emergency Medical Group, 45 Cal.4th 497 (2009), contending that California law requires patient liability when a provider has no recourse against a health care service plan. The Second Circuit disagreed, noting that Prospect expressly stated it was offering “no opinion” on that precise question. Because Emsurgcare offered no further analysis of the California statutes addressed in Prospect, the court found no basis to disturb the dismissal of the claim against Plaintiff. As to the ERISA claim against Oxford, the court deemed it abandoned because Emsurgcare did not argue on appeal that the Southern District erred in dismissing it. The court similarly rejected Emsurgcare’s request to reinstate its tortious interference claims against Oxford, as that request was contingent on revival of the contract claim against Plaintiff, which the court declined to disturb.