Hermann Estoppel Revived and Provider Assignments Clarified: The Fifth Circuit’s Framework for Out‑of‑Network ERISA Claims in Angelina Emergency Med. v. Blue Cross

Introduction

In Angelina Emergency Medicine Associates PA v. Blue Cross, the Fifth Circuit granted panel rehearing, withdrew its prior opinion, and issued a substantial clarification of ERISA provider litigation doctrine in the context of out-of-network emergency services billed through the BlueCard program. Fifty-six Texas emergency medicine groups (the Physician Groups) sued twenty-four out-of-state Blue Cross affiliates (the Blue Plans) alleging systemic underpayments on approximately 290,000 claims. After a bellwether process, the district court granted summary judgment to the Blue Plans across 182 representative claims on overlapping grounds: lack of derivative standing due to defective assignments, anti-assignment clauses, and failure to exhaust administrative remedies (often insisting on “member” appeals rather than “provider” appeals).

The Fifth Circuit vacates in significant part and remands, holding that the district court applied incorrect legal standards and prematurely resolved factual disputes. The court:

• Recognizes that assignment language to “providers” or “facility-based physicians” is ambiguous in scope; extrinsic evidence may be used to prove that physician groups are covered by such assignments under Texas law.
• Holds that assignments transferring “all rights” and “all insurance benefits” include the right to sue; a specific “right to sue” incantation is unnecessary where the assignment’s scope is otherwise comprehensive.
• Affirms dismissal only for claims lacking any written assignment, rejecting a generic Rule 30(b)(6) declaration that lacked personal knowledge of hospital practices.
• Separates and revitalizes Hermann estoppel from “ERISA estoppel”: a plan that delays payment and withholds plan terms can be equitably estopped from invoking anti-assignment clauses against a non-party assignee, even if ERISA estoppel’s “extraordinary circumstances” requirement is not met.
• Clarifies exhaustion: assignee-providers ordinarily must exhaust member-level remedies, but futility, obstruction, or regulatory noncompliance can excuse exhaustion, and plan failures can trigger “deemed exhaustion” under 29 C.F.R. § 2560.503-1(l)(1).

This opinion has immediate significance for provider reimbursement litigation, especially in multistate BlueCard claims and emergency medicine contexts predating the No Surprises Act.

Summary of the Opinion

• Disposition: The court affirms summary judgment only as to bellwether claims for which the Physician Groups produced no written assignments. It vacates and remands as to all remaining claims for factual development under corrected legal standards.
• Assignments to “Providers”: The term “provider” (and similar role-based descriptors) is ambiguous, permitting extrinsic evidence to show it encompasses physician groups. Texas ambiguity doctrine controls; summary judgment was premature.
• Scope of Assigned Rights: Assignments conveying “all rights” and “all benefits” include the right to sue. The district court erred in concluding otherwise.
• Anti-Assignment Clauses: The district court misapplied ERISA estoppel to bar claims. The proper framework includes Hermann Hospital v. MEBA equitable estoppel, which can prevent insurers from sandbagging with anti-assignment clauses after prolonged dealings and partial payments where the provider lacked access to plan terms.
• Exhaustion of Remedies: Although assignees “stand in the shoes” of members and generally must use member appeals, the BlueCard provider-appeal pathway, plan silence, and failures to disclose plan procedures can excuse or deem exhaustion under ERISA regulations. The district court’s across-the-board exhaustion rulings are vacated.

Analysis

Precedents Cited and Their Influence

• Hermann Hospital v. MEBA Medical & Benefits Plan, 959 F.2d 569 (5th Cir. 1992):
  • Held an insurer was estopped from asserting an anti-assignment clause after years of delay and partial engagement when the provider-assignee had no access to plan terms.
  • Angelina treats Hermann’s equitable estoppel as distinct from later-adopted ERISA estoppel, reinforcing that plans cannot “lie behind the log” on anti-assignment defenses when their conduct misleads non-party providers.
• Mello v. Sara Lee Corp., 431 F.3d 440 (5th Cir. 2005):
  • Adopted ERISA estoppel with elements of material misrepresentation, reasonable detrimental reliance, and extraordinary circumstances.
  • Angelina clarifies Mello’s ERISA estoppel does not displace Hermann’s equitable estoppel against anti-assignment sandbagging where assignees lack plan access.
• Dialysis Newco, Inc. v. Community Health Systems Group Health Plan, 938 F.3d 246 (5th Cir. 2019):
  • Enforced anti-assignment clauses; emphasized the difference between mere direct-payment authorization and a full assignment of rights; distinguished Hermann on timing (eve-of-litigation assignment vs. years of claim handling).
  • Angelina harmonizes Dialysis Newco with Hermann: anti-assignment remains enforceable, but estoppel may apply where the plan’s conduct mirrors Hermann’s prolonged delay and concealment.
• King v. Baylor University, 46 F.4th 344 (5th Cir. 2022); Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587 (Tex. 1996):
  • Texas contract law: ambiguity exists where multiple reasonable interpretations persist after applying construction rules; ambiguity creates a fact issue on intent.
  • These authorities support allowing extrinsic evidence to interpret “provider” or role-based assignment language.
• Quality Infusion Care, Inc. v. Health Care Service Corp., 628 F.3d 725 (5th Cir. 2010); Bourgeois v. Pension Plan for Employees of Santa Fe Int’l Corps., 215 F.3d 475 (5th Cir. 2000):
  • Assignees stand in the shoes of members and generally must exhaust plan remedies; failure to exhaust can bar suit but equitable exceptions may apply.
  • Angelina applies these principles yet opens a pathway for exceptions where plans obstruct access to member-level procedures or fail to disclose required information.
• Meza v. General Battery Corp., 908 F.2d 1262 (5th Cir. 1990); Hall v. National Gypsum Co., 105 F.3d 225 (5th Cir. 1997):
  • Exhaustion serves important purposes; claimant’s diligence in seeking plan documents matters; refusal to provide plan documents can justify excusing exhaustion.
  • Angelina leverages these to fault the district court’s rigid exhaustion rulings amidst evidence of plan-side non-disclosure and circular referrals.
• Dwyer v. United Healthcare Ins. Co., 115 F.4th 640 (5th Cir. 2024):
  • Recognized that waiver and estoppel can apply under ERISA in appropriate contexts.
  • Angelina’s reading aligns with Dwyer’s openness to equitable doctrines without conflating Hermann with ERISA estoppel.
• Access Mediquip, L.L.C. v. UnitedHealthcare Ins. Co., 698 F.3d 229 (5th Cir. 2012) (en banc) (per curiam):
  • Clarified provider standing must be derivative under ERISA, tethered to valid assignments.
  • Angelina faithfully applies this backdrop while expanding what counts as a valid assignment sufficient to sue.
• Additional procedural cases and principles:
  • Coury v. Prot, 85 F.3d 244 (5th Cir. 1996) (subject-matter jurisdiction cannot be waived).
  • Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337 (5th Cir. 2007) (summary judgment standards).
  • 29 C.F.R. § 2560.503-1(j), (l)(1) (content of adverse benefit determination; deemed exhaustion on procedural noncompliance).
  • 45 C.F.R. § 147.138(b)(3)(i) (ACA “greatest-of-three” rule for emergency services; not adjudicated here but contextual background).

Legal Reasoning

1) Who is the “Provider”? Ambiguity and Extrinsic Evidence

The assignments used hospital registration forms with role-based descriptors (e.g., “any practitioner providing care and treatment,” “Hospital and other Healthcare Providers/Practitioners”). The district court treated “provider” as referring only to individual physicians or the hospital, excluding physician groups. The Fifth Circuit disagreed: in ordinary usage, “provider” can include entities as well as individuals, and no case law or contract definition resolves the term’s scope in this context. Applying Texas law, the court held the term is ambiguous; thus, the district court erred by refusing extrinsic evidence (including business practices and course of dealing) on whether the physician groups were within the class of assigned recipients. That fact question precludes summary judgment.

The court distinguishes Innova Hospital (where an assignment named a specific entity but a different entity sued) as inapposite; here, the assignments are class-based rather than entity-specific, inviting a broader interpretive inquiry.

2) Do “All Rights/Benefits” Include the Right to Sue?

For thirty-three claims, the district court concluded the assignments conveyed only administrative appeal rights or direct payment authorization, not the right to sue. The Fifth Circuit rejects that narrow reading. Assignments referring to “all rights, title, interest and benefits,” sometimes coupled with authorization to pursue legal remedies or appeal denials, are sufficient to confer a right to sue; no talismanic phrase is required. The court draws on Dialysis Newco’s distinction between direct-payment authorization and a full assignment, finding the assignments here tilt toward the latter.

3) No-Writing Assignments: Rule 56 and Personal Knowledge

For twenty-nine bellwethers with no written assignment, the providers relied on a Rule 30(b)(6) declaration from a management company executive lacking personal knowledge of hospital registration practices across dozens of facilities. The Fifth Circuit affirms dismissal as to those claims. While assignments need not be written as a matter of substantive law, Rule 56 requires declarations based on personal knowledge with admissible facts. The generalized declaration was insufficient; this is a practical reminder to preserve written assignments and to ensure any testimonial substitute is grounded in personal knowledge of the specific providers’ and hospitals’ routines.

4) Anti-Assignment Clauses: Hermann Estoppel Is Distinct from ERISA Estoppel

The district court conflated two distinct doctrines. ERISA estoppel (Mello) requires material misrepresentation, reasonable detrimental reliance, and extraordinary circumstances. Hermann equitable estoppel is different: where a non-party provider lacked access to plan terms and the plan delayed or partially engaged with the claims over time, the plan can be estopped from invoking an anti-assignment clause it never timely raised. Angelina holds the latter doctrine remains good law and is not subsumed by ERISA estoppel.

On the facts presented, the Physicians Groups received partial payments, pursued appeals through the BlueCard provider process, and requested plan documents that were not provided. The Blue Plans argue member appeals were required—but those procedures were embedded in plan documents the providers could not access. This pattern resembles Hermann, not Dialysis Newco’s eve-of-suit assignment. The court remands for claim-by-claim factual development on plan access and the parties’ interactions to determine whether Hermann estoppel applies to bar anti-assignment defenses.

5) Exhaustion: Member Appeals, Exceptions, and “Deemed Exhaustion”

As assignees, the Physician Groups generally must exhaust member-level appeals. But the record shows they followed the BlueCard provider-appeal pathway—exactly as the Blue Plans’ Rule 30(b)(6) witness said providers must do—and the host plan (BCBSTX) sometimes offered no response, sent materials back, or referred them to home plans that in turn referred them back to BCBSTX. Meanwhile, requests for plan documents and appeal procedures went unanswered.

The Fifth Circuit identifies multiple grounds that can excuse or deem exhaustion:

• Equitable exceptions such as futility, obstruction, or failure to provide plan information (Meza; Bourgeois; Hall).
• Regulatory noncompliance: when a plan fails to follow § 2560.503-1’s procedural rules (including the requirement to provide a description of review procedures and time limits, § 2560.503-1(j)), the claim is “deemed exhausted” per § 2560.503-1(l)(1).

The district court’s categorical exhaustion rulings ignored substantial evidence of plan-side non-disclosure and circular referrals. At minimum, factual disputes preclude summary judgment. The same logic undermines the district court’s parallel exhaustion dismissals of the small subset of non‑ERISA contract claims.

Impact

• Provider Standing Expanded Through Evidence:
  Assignments using class-based role language (“provider,” “facility-based physician”) can confer derivative standing on physician groups, subject to extrinsic proof. Providers should collect and present evidence of industry custom, hospital registration workflows, and course of dealing to show the intended scope of such assignments.
• Assignment Drafting Guidance:
  Explicitly granting “all rights, title, interest, and benefits” and authorizing pursuit of legal remedies strengthens provider standing. While a specific “right to sue” clause is not required, clear language reduces disputes.
• Anti-Assignment Clauses: Limits on Insurer Sandbagging:
  Plans remain free to draft and enforce anti-assignment clauses, but not after prolonged engagement and partial payment where the assignee lacked access to plan terms. Hermann estoppel is a powerful check on strategic delay and non-disclosure. Plan administrators must promptly disclose plan terms and defenses.
• Exhaustion Recalibrated in BlueCard Context:
  Although assignees generally must use member appeals, the BlueCard architecture (host vs. home plan) and plan-side silence can make member appeals practically inaccessible. Insurers who fail to provide required notices and procedures risk “deemed exhaustion,” allowing immediate judicial review.
• Litigation Strategy and Evidence:
  The opinion prioritizes claim-specific facts. On remand, parties must address: who had the plan documents and when; what each plan told providers about appeals; how partial payments were communicated; and whether providers diligently requested plan documents. Broad-brush summary judgment will rarely be appropriate in similar multistate BlueCard disputes.
• Emergency Medicine and Pre–No Surprises Act Claims:
  For legacy disputes governed by the ACA’s “greatest-of-three” rule, Angelina clarifies procedural pathways without resolving rate methodology. It sets precedents that will influence how similar pre-2021 emergency claims are litigated throughout the Fifth Circuit.

Complex Concepts Simplified

• Assignment of Benefits:
  A patient can transfer (assign) rights under a health plan to a provider. The provider then sues derivatively—standing in the patient’s shoes—subject to the plan’s limits. Assignments can be narrow (just direct payment) or broad (“all rights and benefits,” including the right to sue).
• Anti-Assignment Clause:
  A plan term barring members from assigning legal rights/benefits to providers. Enforceable in the Fifth Circuit—unless equitably estopped under Hermann because the plan delayed, partially paid, and hid the clause from a non-party assignee.
• ERISA Estoppel vs. Hermann Estoppel:
  ERISA estoppel (Mello) is a demanding doctrine requiring misrepresentation, reliance, and extraordinary circumstances. Hermann estoppel is a separate equitable rule preventing a plan from sandbagging with anti-assignment where it delayed and the provider lacked access to plan terms.
• Exhaustion of Administrative Remedies:
  Usually, an assignee must follow the member appeal process before suing. But if the plan does not disclose procedures, misdirects the provider, or violates ERISA claims-procedure rules, courts may excuse or deem exhaustion complete.
• BlueCard Host vs. Home Plan:
  For out-of-state members, the local “host” plan processes claims and communicates with providers, but the member’s “home” plan applies the member’s plan terms. Confusion can arise when provider and member appeal systems diverge and plan documents are not shared with providers.
• Summary Judgment and Ambiguity:
  Courts cannot decide disputed facts at summary judgment. If a contract term (like “provider”) is reasonably susceptible to multiple meanings, extrinsic evidence is admissible and fact-finding is required.

Conclusion

Angelina Emergency Med. v. Blue Cross is a major Fifth Circuit clarification for provider ERISA litigation. It restores and distinguishes Hermann’s equitable estoppel from ERISA estoppel, curbs opportunistic reliance on anti-assignment clauses when plan behavior misleads non-party assignees, and insists on plan compliance with ERISA’s claims-procedure regime. It recognizes that role-based assignment language can validly encompass physician groups, and that “all rights/benefits” assignments carry the right to sue.

On exhaustion, the court balances the assignee’s obligation to use member appeals with the realities of BlueCard processing and the statutory and regulatory requirement that plans disclose procedures. Where plans fail to do so, courts may excuse or deem exhaustion satisfied.

Practically, plans should promptly disclose plan documents and defenses and ensure their adverse benefit determinations meet regulatory content standards. Providers should preserve written assignments, use comprehensive language in assignment forms, document their efforts to obtain plan documents, and create a clear record of appeals pursued. By remanding for claim-specific factual development, the Fifth Circuit sets a roadmap for resolving complex, multistate provider reimbursement disputes that turns on evidence, not categorical shortcuts.