Keith Feder, M.D., Inc. v. U.S. Bancorp

Background

Kevin Feder, M.D., Inc. is a medical-services provider that treated R.M., a beneficiary of the U.S. Bank Medical and Wellness Plan. The plan is governed by the Employee Retirement Income Security Act (ERISA). Feder obtained an assignment from R.M. that purported to transfer R.M.’s right to receive plan benefits to Feder.

The plan documents prohibited participants from assigning benefits or related claims to non-network providers or other third parties without the required consent. They also stated that direct payments to a provider would not create an assignment or waive the anti-assignment provision.

Feder billed U.S. Bancorp for nearly $550,000 in services and received about $30,000. Feder sent appeal letters and alleged that it provided the assignment to United Healthcare Services, Inc. (UHS), the plan’s third-party claims administrator. Feder also alleged that it asked UHS or U.S. Bancorp to identify any anti-assignment provision, but neither did so.

Motion to Dismiss

U.S. Bancorp moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. ERISA generally permits a plan participant or beneficiary to sue for benefits. A healthcare provider may sue as an assignee only when the assignment is authorized by the plan. The court explained that valid anti-assignment provisions can eliminate a provider’s statutory standing—the legal ability to bring the claim.

Feder did not dispute that the plan’s anti-assignment provision covered its assignment from R.M. Instead, Feder argued that U.S. Bancorp waived enforcement of the provision by failing to raise it during the claims and appeals process.

Waiver Analysis

The court adopted a common-law approach under which waiver means intentionally giving up a known right. The court held that routine claim processing, appeals, or payment to an assignee, standing alone, does not waive an anti-assignment provision. Waiver is more plausible when the plan knows about the assignment and engages in conduct inconsistent with enforcing the provision.

The court concluded that Feder’s allegations about sending bills, filing appeals, receiving partial payment, and communicating about the claims described routine processing and did not show that U.S. Bancorp intentionally gave up its right. Feder’s allegation that it sent the assignment to UHS and asked for confirmation of an anti-assignment provision went further. But Feder did not allege that it sent the assignment directly to U.S. Bancorp.

Feder instead relied on the theory that UHS acted as U.S. Bancorp’s agent. The court held that the complaint offered only legal conclusions about that agency relationship and did not provide facts showing U.S. Bancorp’s consent, UHS’s acquiescence, and U.S. Bancorp’s control. The court therefore held that Feder had not adequately pleaded waiver by U.S. Bancorp or an agency theory that would attribute UHS’s conduct to U.S. Bancorp.

Because the anti-assignment provision remained enforceable against Feder on the allegations in the complaint, the court held that Feder lacked statutory standing to seek R.M.’s benefits and that the complaint had to be dismissed. The court did not decide U.S. Bancorp’s argument that the complaint also failed to satisfy the general pleading requirements of Rule 8.

Leave to Amend and Disposition

The court granted U.S. Bancorp’s motion to dismiss. It also granted Feder permission to file an amended complaint curing the identified deficiencies within 30 days of the order’s entry. The court stated that the deficiencies did not appear incurable.

For purposes of a possible amended complaint, the court observed that Feder’s allegations plausibly described waiver by UHS: Feder allegedly told UHS it was an assignee, asked UHS to confirm whether the plan contained an anti-assignment provision, and received no response despite UHS’s alleged knowledge. The court emphasized that intent to waive is generally a factual question that cannot be resolved on a motion to dismiss. Feder would still need to plead facts supporting the agency relationship with U.S. Bancorp.

If Feder fails to file an amended complaint within 30 days, the complaint will be dismissed without prejudice. Judge Laura M. Provinzino signed the order on May 12, 2025.