Blue Cross and Blue Shield of Georgia, Inc., Blue Cross Blue Shield Healthcare Plan of Georgia, Inc., and Anthem Insurance Companies, Inc. (collectively BCBS) must now face a suit alleging that their 2017-revised emergency room claim process violated portions of the Employee Retirement Income Security Act (ERISA) and the Patient Protection and Affordable Care Act (ACA). The plaintiffs, the American College of Emergency Physicians (ACEP) and the Medical Association of Georgia (MAG) appealed to the Eleventh Circuit after the trial court found that the groups failed to state a claim upon which relief could be granted and that they lacked standing.
According to the Oct. 22 opinion, ACEP and MAG are “organizations dedicated to promoting the ‘rights of their physician members, and patients alike, for the delivery of the highest quality of care.’” The ACEP has over 38,000 members including emergency room physicians. Physician members of ACEP and MAG require their patients to assign their health insurance benefits to the physicians, including the right to payment for emergency healthcare and treatment, and the right to appeal health insurers’ denial of such claims.
In 2017, BCBS implemented a new emergency department visit review process. Under the new process, a BCBS physician would review a patient’s claim and determine, under the prudent layperson standard, whether seeking emergency treatment was justified based on the symptoms presenting at the time of the visit. In the latter half of 2017, BCBS reviewed 10,000 claims (out of 51,000 received claims) for emergency room visits in Georgia and denied 3,500 of them. BCBS claimed that its emergency department review process appropriately applied the prudent layperson standard.
In their October 2018 first amended complaint, ACEP and MAG alleged that BCBS violated the ACA’s “prudent layperson” standard with its new review process and sought declaratory and injunctive relief for violations of the ACA and ERISA. The district court granted the defendants’ motion and dismissed the complaint, finding several faults therein.
The lower court first held that the pleadings failed to “identify a specific instance in which the defendants emergency department review ‘improperly applie[d] the prudent layperson standard.’” The appellate court disagreed with this holding, finding that the plaintiffs did not take issue with individual denials, rather they “challenge[d] the ED review policy writ large.” The court held that the plaintiffs alleged facts sufficient to question whether BCBS’s policy abided by the prudent layperson standard.
The appellate panel also found that the lower court wrongly decided the standing question: whether the organizations could enforce the rights of their members. The Eleventh Circuit held that precedent confers standing upon beneficiaries of assignment, such as ACEP and MAG, to seek equitable relief. The panel explained that “the district court ignored precedent to the contrary,” when it held otherwise.
ACEP and MAG argued that “the new ED review policy harms their members because it resulted in and will continue to result in ‘retrospective denials of payment for emergency department care.’” The panel bought this argument, reasoning that the ER doctor members suffered harm when BCBS denied claims, and member physicians were not paid for services rendered.
The judges also held that the member organizations had alleged associational standing, disagreeing that each claim would require individualized analysis about whether each insured had assigned their benefits, and other inquiries. Instead, the panel repeated that ACEP and MAG “allege that the ED review policy as a whole is illegal,” rather than individual denials of claims.