A federal district court recently allowed claims under the Employee Retirement Income Security Act (ERISA) and the No Surprises Act to proceed but dismissed various other claims. More specifically, the court refused to dismiss an ERISA fiduciary breach claim for failing to make certain required disclosures and a claim under the No Surprises Act for failing to update a provider directory.
In Orrison v. Mayo Clinic, 2025 WL 2688798 (D. Minn. 2025), a plan participant sued a self-insured health plan and its third-party claims administrator for allegedly violating ERISA, the No Surprises Act, and other federal laws. Her claims stemmed from the plan's denial of out-of-network mental treatment for her child. She chose the provider by using the claims administrator's online tool that incorrectly omitted some nearby in-network providers. As a result of her reliance on this tool, the plan participant incurred significant out-of-network costs.
The plan and its administrator moved to dismiss all the participants' claims. While the court granted the motion to dismiss as to most of the claim, two claims survived. The court allowed the plan participant's ERISA fiduciary breach claim to proceed, which was based on an alleged failure to disclose certain information about the pricing methodology for out-of-network providers. The court also allowed a claim under the No Surprises Act to move forward, which arose from the alleged failure to maintain an accurate provider database. In so ruling, the court rejected the plan's argument that violations of the No Surprises Act occur only when provider directories list out-of-network providers as in-network, finding no legal support for the claim.
This case serves as a reminder to plans and plan administrators that they must maintain accurate and complete provider network directories to avoid legal disputes and high out-of-network costs for plan participants. Furthermore, they should focus on transparency in disclosing reimbursement determinations to plan participants and beneficiaries to prevent breach of fiduciary duty claims under ERISA.
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