Fifth Circuit Clarifies Equitable Estoppel & Assignment Ambiguities in ERISA Provider Claims:
Commentary on Angelina Emergency Medicine Associates PA v. Blue Cross (5th Cir. 2025)

1. Introduction

The United States Court of Appeals for the Fifth Circuit’s decision in Angelina Emergency Medicine Associates PA v. Blue Cross addresses long-standing procedural and substantive hurdles that out-of-network medical providers face when suing ERISA and non-ERISA health plans for underpayment. Fifty-six Texas emergency-medicine groups (“Physician Groups”) challenged partial reimbursements made by twenty-four out-of-state Blue Cross Blue Shield plans (“Blue Plans”). After the district court granted summary judgment to the insurers on 182 representative “bellwether” claims, the Fifth Circuit affirmed in part, vacated in part, and remanded for further proceedings.

The dispute raised three recurring issues in provider litigation:

1. Whether generic, hospital-obtained patient assignments of benefits validly transfer the right to sue to unaffiliated physician groups;
2. Whether anti-assignment clauses in plan documents bar provider suits, and if so, when an insurer may be estopped from invoking those clauses;
3. Whether providers must exhaust administrative remedies through the plan member appeals process when the provider appeals pathway proves futile or opaque.

In answering these questions the Fifth Circuit carved out two important doctrinal clarifications:

• It distinguished Hermann Hosp. v. MEBA–style equitable estoppel from the later-developed three-part “ERISA estoppel” test in Mello v. Sara Lee, thereby reviving a broader form of estoppel available to non-participant assignees when plan documents are withheld.
• It confirmed that ambiguous assignment language (“any practitioner providing care” or “health care provider”) presents a triable fact issue, precluding summary judgment unless extrinsic evidence shows the parties’ intent.

2. Summary of the Judgment

The Court:

• Affirmed summary judgment as to 29 bellwether claims for which the Physician Groups possessed no written assignments.
• Vacated summary judgment on the remaining 153 claims because the district court:
  • Misapplied Texas contract principles when it found the assignments unambiguously excluded the Physician Groups;
  • Applied the wrong legal standard—Mello’s “ERISA estoppel”—rather than Hermann’s equitable estoppel when evaluating anti-assignment clauses;
  • Ignored factual disputes regarding whether resort to the member appeals process was futile or impossible.
• Remanded for fact-finding on (i) the intended scope of the assignments, (ii) knowledge and availability of plan documents, (iii) applicability of exhaustion exceptions.

3. Analysis

3.1 Precedents Cited & Their Influence

• Hermann Hospital v. MEBA Medical & Benefits Plan, 959 F.2d 569 (5th Cir. 1992)
  • Recognized equitable estoppel where an insurer withholds an anti-assignment clause for years while partially paying claims.
  • The panel treats Hermann as a distinct line of authority from “ERISA estoppel,” reviving its broader protective reach.
• Mello v. Sara Lee Corp., 431 F.3d 440 (5th Cir. 2005)
  • Formally adopted “ERISA estoppel” requiring (1) misrepresentation; (2) reasonable/detrimental reliance; (3) extraordinary circumstances.
  • The district court erroneously applied this stringent test; the Fifth Circuit says it governs plan participants—not third-party providers lacking the plan.
• Dialysis Newco, Inc. v. Community Health Systems Group Health Plan, 938 F.3d 246 (5th Cir. 2019)
  • Upheld an anti-assignment clause where the assignment occurred after treatment and the plan language was clear.
  • The panel distinguishes Dialysis Newco because assignments here were executed before emergent care and providers lacked access to the plans.
• Quality Infusion Care, Inc. v. HCSC, 628 F.3d 725 (5th Cir. 2010) & Bourgeois v. Santa Fe Int’l, 215 F.3d 475 (5th Cir. 2000)
  • Provide the baseline rule that assignees “stand in the shoes” of members and generally must exhaust internal remedies—subject to futility/inadequacy exceptions.
• Innova Hospital San Antonio LP v. HCSC, 2019 WL 13177034 (N.D. Tex.)
  • District-court opinion relied on for distinct-entity rule; Fifth Circuit distinguishes its facts.

3.2 Court’s Legal Reasoning

1. Ambiguous Assignment Language
   • “Health care provider,” “practitioner,” or “agents” are not terms of art with fixed meaning.
   • Under Texas contract law, an ambiguity exists if the language is susceptible to multiple reasonable interpretations; extrinsic evidence becomes admissible.
   • Thus, summary judgment inappropriate without weighing evidence of hospitals’ intent to include facility-based physician groups.
2. Scope of Rights Transferred
   • Assignments transferring “all rights, title, interest and benefits” or authorizing appeals suffice to include the right to sue; no magic words required.
3. Absence of Written Assignments
   • For 29 claims, providers relied on a corporate representative’s declaration lacking personal knowledge. Rule 56(c)(4) requires personal knowledge; dismissal affirmed.
4. Anti-Assignment Clauses & Estoppel
   • District court conflated Hermann equitable estoppel with Mello ERISA estoppel.
   • The panel clarifies two separate doctrines and instructs courts to consider whether, under Hermann, withholding plan documents or partial payment creates equitable estoppel against later invocation of anti-assignment language.
5. Administrative Exhaustion
   • Providers pursued the only process described in the public BlueCard Manual (provider appeals to host plan).
   • Insurers never supplied plan documents despite repeated requests; thus, the member appeals route was unknowable and potentially futile.
   • Under Meza and Bourgeois, such circumstances may excuse exhaustion.

3.3 Likely Impact

• Provider Litigation: Makes it easier for non-contracted providers to withstand early dismissal by pleading ambiguity in assignment forms and by documenting efforts to obtain plan documents.
• Plan Drafting & Administration: Insurers now on notice that silence or delay in raising anti-assignment clauses can waive them; plans may heighten efforts to supply documents promptly.
• District-Court Practice: Reinforces the duty to parse distinct estoppel doctrines and to avoid sua sponte summary-judgment grounds absent notice and factual development.
• Patient Experience: Encourages clearer assignment forms and could reduce surprise billing by empowering providers to challenge under-payments effectively.

4. Complex Concepts Simplified

• Assignment of Benefits (AOB): A patient’s written transfer to a provider of the right to collect insurance payments and, sometimes, to pursue legal action.
• Facility-Based Provider: Doctors who practice within a hospital (e.g., ER physicians) but bill separately from the hospital facility.
• Anti-Assignment Clause: Policy language forbidding members from assigning their rights; enforceable unless the insurer’s conduct creates estoppel or waiver.
• ERISA vs. Non-ERISA Plans: Employer-sponsored plans fall under ERISA; individual or governmental plans usually do not. The governing law affects remedies and exhaustion.
• Provider vs. Member Appeals: “Provider appeals” are contractual processes allowing doctors to dispute payments. “Member appeals” are ERISA-mandated procedures for the insured themselves.
• Estoppel: A principle preventing a party from asserting a right or defense when its earlier conduct made the contrary impression. Under ERISA:
  • Hermann Estoppel – focuses on insurer’s silence or deceptive delay about plan restrictions.
  • “ERISA Estoppel” (Mello) – requires misrepresentation, reliance, and extraordinary circumstances for participants/beneficiaries.

5. Conclusion

The Fifth Circuit’s partial reversal in Angelina Emergency Medicine injects renewed vigor into providers’ ability to press underpayment claims against ERISA plans. By distinguishing Hermann equitable estoppel from the stricter Mello test, the Court expands the circumstances under which insurers may be barred from wielding anti-assignment clauses—especially when they delay disclosure of plan terms. The opinion also confirms that broad, role-based assignment language can create factual disputes unsuitable for summary judgment, and that exhaustion of administrative remedies is not a trap for the unwary when the plan’s own conduct obscures the proper path. Going forward, insurers will need to furnish plan documents promptly and raise anti-assignment defenses early, while providers should preserve evidence of their assignment practices and information requests. The decision thus marks a significant precedent on ERISA procedure and provider standing in the Fifth Circuit and potentially beyond.