Columbia Hospital at Medical City of Dallas Subsidiary LP et al v. Anthem Health Plans of Virginia Inc

1
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
COLUMBIA HOSPITAL AT
MEDICAL CITY DALLAS
SUBSIDIARY, L.P. d/b/a MEDICAL
CITY DALLAS, et al.
Plaintiffs,
v.
ANTHEM HEALTH PLANS OF
VIRGINIA INC. d/b/a ANTHEM
BLUE CROSS AND BLUE SHIELD
Defendant.
§
§
§
§
§
§
§
§
§
§
§
§
§
§
Civil Action No. 3:25-CV-0689-X
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Anthem Health Plans of Virgina Inc. d/b/a
Anthem Blue Cross and Blue Shield’s (“Anthem” or “Home Plan”) motion to dismiss.
(Doc. 27). After reviewing the motion, response, reply, and applicable law, the Court
DENIES Anthem’s motion to dismiss and ORDERS the case to arbitration.
I. Background
This case involves a reimbursement dispute between a group of acute care
hospitals in North Texas and a health insurance company over medical care provided
to three patients. Plaintiffs Columbia Hospital at Medical City of Dallas Subsidiary,
L.P. d/b/a Medical City Dallas d/b/a Medical City Heart and Spine Hospitals and
Columbia Plaza Medical Center of Fort Worth Subsidiary, L.P. d/b/a Medical City
Fort Worth (collectively, “Medical City”) treated patients insured under health plans
administered by Anthem. Anthem is a licensee of the Blue Cross Blue Shield
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 1 of 10 PageID <pageID>

2
Association (Blue Cross) authorized to offer Blue Cross and Blue Shield-branded
health plans in Virgina.
Medical City entered into a Hospital Agreement with non-party Blue Cross
Blue Shield of Texas (“Blue Cross Texas” or the “Host Plan”). Medical City contends
the Agreement applies to patients enrolled in any Blue Cross-branded plan, including
those administered by out-of-state licensees such as Anthem, and entitles Medical
City to negotiated payment rates for medically necessary services.
For patients insured by out-of-state Blue Cross licensees, Medical City submits
claims through the BlueCard Program. Under that program, Medical City submits
claims to the Host Plan (Blue Cross Texas) which forwards the claims to the patient’s
Home Plan (Anthem) for coverage determination. The Home Plan then approves or
denies payment, and the Host Plan transmits that decision and any payment to
Medical City.
Between 2021 and 2022, Medical City provided care to three Anthem-insured
patients. Although the patients’ diagnoses and treatments differed, Medical City
alleges that all care was medically necessary, it communicated with Anthem through
Blue Cross Texas in accordance with BlueCard Program procedures, and Anthem
partially paid for one patient’s treatment. Anthem ultimately denied reimbursement
for the remaining claims, citing lack of medical necessity or failure to obtain
preauthorization, which Medical City asserts to be a breach of the patients’ plans
with Anthem. Anthem did not assert during the internal appeals process that it
lacked a contractual obligation to Medical City.
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 2 of 10 PageID <pageID>

3
Upon admission to Medical City every patient executes Conditions of
Admission, assigning their insurance benefits and related rights to Medical City.
Medical City asserts standing to sue based on the patients’ assignments of benefits.
Medical City seeks $342,007.83 in unpaid reimbursement from Anthem and
asserts four claims: breach of contract (Count I), breach of an implied-in-fact contract
(Count II), breach of the health plans (Count III), and breach of contract for
non-ERISA plans (Count IV). Anthem moves to dismiss Count III under Rule 12(b)(1)
for lack of derivative standing; Counts I, II, and IV under Rule 12(b)(6) for failure to
state a claim; and, alternatively, seeks to compel arbitration under Rule 12(b)(3).
II. Legal Standard
A. 12(b)(1)
Federal Rule of Civil Procedure Rule 12(b)(1) allows a party to move for
dismissal for “lack of subject matter jurisdiction.”1 Standing under ERISA § 502 is
subject to challenge through Rule 12(b)(1).2 A court should address Rule 12(b)(1)
motions “before addressing any attack on the merits.”3
B. 12(b)(6)
To survive a Rule 12(b)(6) dismissal, a complaint must “state a claim upon
which relief can be granted.”4 The complaint must allege sufficient facts “to state a
1 FED. R. CIV. P. 12(b)(1).
2 Lee v. Version Commc’ns, Inc., 837 F.3d 523, 533 (5th Cir. 2016).
3 Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).
4 FED. R. CIV. P. 12(b)(6).
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 3 of 10 PageID <pageID>

4
claim to relief that is plausible on its face.”5 And there must be enough facts for the
Court to be able to “draw the reasonable inference that the defendant is liable for the
misconduct alleged.”6
In its evaluation, the Court construes the complaint liberally in favor of the
plaintiff and accepts all well pled facts in the complaint as true.7 But conclusory
statements or legal conclusions are not credited.8
C. 12(b)(3)
The Fifth Circuit has indicated that a Rule 12(b)(3) motion is “a proper method
for seeking dismissal in favor of arbitration.”9 The Federal Arbitration Act requires
district courts to compel arbitration if there is a valid arbitration agreement
encompassing the dispute.10 In determining whether the parties agreed to arbitrate
the dispute, a court must consider: (1) whether there is a valid agreement to arbitrate
between the parties, and (2) whether the dispute in question falls within the scope of
that arbitration agreement.11 If an agreement includes a valid delegation clause,
then a court may not reach the second step.12
5 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
6 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
7 Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000).
8 See Ashcroft, 556 U.S. at 678.
9 Cure & Assocs., P.C. v. LPL Fin. LLC, 118 F.4th 663, 667 n.2 (5th Cir. 2024).
10 9 U.S.C. § 3.
11 Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins., 921 F.3d 522, 530 (5th
Cir. 2019).
12 Kubala v. Supreme Prod. Servs., Inc., 830 F.3d 199, 201–02 (5th Cir. 2016).
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 4 of 10 PageID <pageID>

5
III. Analysis
A. Medical City plausibly pled derivative standing.
Medical City has plausibly pled that the patients completed a valid assignment
of benefits in completing the Conditions of Admissions form at Medical City, which is
sufficient to create derivative standing.
“It is well established that a healthcare provider, though not a statutorily
designated ERISA beneficiary, may obtain standing to sue derivatively to enforce an
ERISA plan beneficiary’s claim.”13 “[A] health care provider who has a valid
assignment from the plan participant or beneficiary has derivative standing to bring
a cause of action to recover benefits from an ERISA-governed [] plan.”14
The Fifth Circuit held “standing to bring an action founded on ERISA is a
jurisdictional matter.”15 However, the Fifth Circuit also held that where “a case
turns on the validity of an assignment of contractual rights, that is not a question of
Article III standing but one of contractual standing.”16 Therefore, a challenge to a
plaintiff’s right to bring a suit is not a subject-matter issue under Rule 12(b)(1), but
rather an inquiry into the merits of a certain claim to be analyzed under Rule
12(b)(6).17 A healthcare provider need only allege it obtained an assignment of
13 Harris Methodist Fort Worth v. Sales Support Servs. Inc. Empl. Health Care, 426
F.3d 330, 333–34 (5th Cir. 2005).
14 Tango Transp. v. Healthcare Fin. Servs. LLC, 322 F.3d 888, 889 (5th Cir. 2003).
15 Cobb v. Cent. States, 461 F.3d 632, 635 (5th Cir. 2006).
16 Maxim Crane Works, L.P. v. Zurich Am. Ins., 11 F.4th 345, 351 (5th Cir. 2021) (per
curium) (cleaned up).
17 Id. at 350.
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 5 of 10 PageID <pageID>

6
benefits and rights from each patient to meet the pleading standard regarding
standing.18
An insurance provider may waive an anti-assignment provision by failing to
assert it when negotiating a claim.19 Regardless, courts have held that the motion to
dismiss stage is “too early in the litigation to determine whether [a party] is estopped
from asserting anti-assignment or waiver of its anti-assignment provisions.”20
Here, Medical City alleges in its complaint that each patient or their legal
representative signed a form, called the Conditions of Admission, that includes an
assignment of the patient’s health insurance benefits.21 Notwithstanding Anthem’s
contentions, the Court does not need to determine the exact nature and scope of the
assignments at this stage.22 Therefore, taking Medical City’s allegations in its
complaint as true, the Court finds its allegations plausibly pled an assignment
provision exists to confer derivative standing to Medical City through the patients’
18 North Cypress Med. Ctr. Operating Co. v. CIGNA Healthcare, 782 F. Supp.2d 294,
300–03 (S.D. Tex. 2011) (abrogated on other grounds); Lone Star 24 HR ER Facility v. Blue
Cross Blue Shield of Tex., No. SA-22-CV-01090-JKP, 2003 WL 5729947, at *4–5 (W.D. Tex.
Sept. 5, 2023).
19 St. Davids Healthcare Partnership, L.P., LLP v. Anthem Blue Cross Life and Health
Insurance Company, Case No. 1-23-CV-0591-ADA, at *6 (W.D. Tex. Dec. 27, 2023) (citing
Hermann Hosp. v. MEBA Med. And Benefits Plan, 959 F.2d 569, 574 (5th Cir. 1992) (finding
when a hospital sued an insurance provider for a disputed payment amount and the
insurance provider raised the anti-assignment clause in litigation for the first time, the
insurance provider was estopped from arguing the anti-assignment provision rendered the
assignment invalid)).
20 Id., at *7.
21 Doc. 23 at 11.
22 See Texienne Physicians Med. Ass’n, PLLC v. Health Care Serv. Corp., 2023 WL
2799726, at *12 (N.D. Tex. April 4, 2023) (Fish, J.) (holding “the court does not need to
determine the scope of the assignments” at the 12(b)(1) motion to dismiss stage).
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 6 of 10 PageID <pageID>

7
signed Conditions of Admission form. Medical City has sufficiently pled derivative
standing, and Anthem’s Rule 12(b)(1) motion to dismiss Count III is DENIED.
B. Medical City plausibly pled a claim for breach of contract.
Medical City has plausibly alleged that Anthem breached the Agreement.
Although Anthem is a non-signatory to the Agreement, Medical City alleges Anthem
is an affiliate of Blue Cross Texas and therefore is bound by the Agreement.
Generally, a contract binds only its signatories.23 However, an assignee of
benefits under contract may be held liable for obligations under the contract if an
express or implied assumption occurred.24 Specifically, “[a]n implied assumption of
obligations may arise when the benefit received by the assignee is so entwined with
the burden imposed by the assignor’s contract that the assignee is estopped from
denying assumption and the assignee would otherwise be unjustly enriched.”25
Medical City does not allege that Anthem signed the Agreement, but it alleges
that Anthem, as an affiliate of Blue Cross Texas, accessed the benefits of the
Agreement. Medical City further alleges that Anthem impliedly assumed the
Agreement’s obligations by accessing those benefits and agreeing to be bound by its
terms. Although implied assumption is generally disfavored, courts frequently find
23 BML Stage Lighting, Inc. v. Mayflower Transit, Inc., 14 S.W.3d 395, 400 (Tex.
App.—Houston [14th Dist.] 2000, no pet.).
24 NextEra Retail of Tex., LP v. Inv’rs Warranty of Am., Inc., 418 S.W.3d 222, 226 (Tex.
App.—Houston [1st Dist.] 2013, pet. denied).
25 Id. at 226–27 (cleaned up).
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 7 of 10 PageID <pageID>

8
it in cases where an out-of-state licensee refuses to pay under a general medical
services agreement.26
Here, Anthem processed the claims in dispute, made a partial payment for one
patient, and communicated with Medical City through Blue Cross Texas pursuant to
the Blue Card Program procedures regarding claim denials. Notably, Anthem denied
the claims based on alleged lack of medical necessity and failure to obtain
preauthorization—not because it was not bound by the Agreement.
At this stage, Anthem’s conduct plausibly supports an inference that it
impliedly assumed the Agreement’s obligations. Accordingly, dismissal is not
appropriate. Medical City has plausibly pled a claim for breach of contract, and
Anthem’s Rule 12(b)(6) motion to dismiss Count I is DENIED.
C. The Court construes Anthem’s 12(b)(3) motion as an
unopposed motion to compel arbitration.
Anthem requests that, “in the event that Count I survives dismissal under
Rule 12(b)(6)” the Court compel arbitration—which the Court construes as a motion
to compel arbitration.27
A third-party non-signatory may compel arbitration under the doctrine of
equitable estoppel when the signatory “raises allegations of substantially
26 See, e.g., Innova Hosp. San Antonio, Ltd. P'ship v. Blue Cross & Blue Shield of
Georgia, Inc., 892 F.3d 719, 732 (5th Cir. 2018).
27 Doc. 27 at 15.
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 8 of 10 PageID <pageID>

9
interdependent and concerted misconduct by both the nonsignatory and one or more
signatories to the contract.”28
The parties agree that the Agreement at issue contains a valid arbitration
clause, including a delegation clause governing the arbitrability of claims. 29 Anthem
invokes the arbitration clause under the doctrine of equitable estoppel.30
Because the parties agree that the Agreement contains a valid arbitration
clause—including a delegation clause governing arbitrability—and that Medical
City’s claims arise out of and relate directly to the Agreement, the Court must enforce
the arbitration agreement under the Federal Arbitration Act.31 Accordingly, the
Court construes Anthem’s Rule 12(b)(3) motion as an uncontested motion to compel
arbitration and GRANTS it. Because the valid arbitration agreement and delegation
clause deprive the Court of jurisdiction to decide the merits of the remaining claims,
the Court refrains from analyzing the remaining grounds for dismissal and DENIES
WITHOUT PREJUDICE the remainder of Anthem’s Rule 12(b)(6) motion.
IV. Conclusion
Accordingly, the Court DENIES Anthem’s motion to dismiss. The Court
ORDERS the parties to promptly arbitrate the claims set forth in this matter and
28 Grigson v. Creative Artists Agency L.L.C., 210 F.3d 524, 527–28 (5th Cir. 2000).
29 “The Agreement under which Plaintiffs sue does contain valid alternative dispute
clauses.” Doc. 27 at 15. Medical City is “amenable to pursuing arbitration.” Doc. 33 at 7.
30 Grigson, 210 F.3d 524, 526.
31 9 U.S.C. § 3.
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 9 of 10 PageID <pageID>

10
ORDERS the parties to update the Court every three months with a status report
on the state of arbitration proceedings.
IT IS SO ORDERED this 6th day of January, 2026.
___________________________________
BRANTLEY STARR
UNITED STATES DISTRICT JUDGE
Case 3:25-cv-00689-X Document 35 Filed 01/06/26 Page 10 of 10 PageID <pageID>