ERISA Doesn’t Bar Claim That Acceptance Of Discounted Rates Was Contract Breach

The Employee Retirement Income Security Act does not preempt a medical center’s claim that a health care reimbursement plan breached its contract with the center by asking for discounted rates even after making late payments, the U.S. Court of Appeals for the Third Circuit ruled July 29 in an unpublished decision (Community Medical Center v. Local 464A UFCW Welfare Reimbursement Plan, 3d Cir., No. 04-1613, unpublished 7/29/05).

Reversing a lower federal court, the appeals court said the medical center lacked standing under ERISA and, therefore, could not pursue a claim under the federal statute because there was no evidence that it obtained assignment of benefits from two plan participants.

The appeals court noted that the case was governed by its recent decision in Pascack Valley Hospital Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393 (3d Cir. 2004) (13 HLR 1593, 11/4/04). In Pascack Valley, a three-judge panel of the Third Circuit ruled that ERISA did not preempt a hospital’s breach of contract claims against the same health care reimbursement plan involved in the instant litigation.

Pascack Valley was decided by the Third Circuit after the lower federal court in the instant case ruled that ERISA preempted the medical center’s claim, and thus the lower court was without the guidance of Pascack Valley when it rendered its decision, the appeals court noted.

No Evidence of Assignment

The opinion is available at http://www.ca3.uscourts.gov/opinarch/041613np.pdf on the Web.