A single phone call and a promised rate weren't enough to save a six-figure claim
Employee Retirement Income Security Act (ERISA) blocked medical providers from suing over a health plan's reimbursement - after they billed $342,296 and collected $1,598.40.
La-Z-Boy sponsors a health benefit plan for its employees, governed by the Employee Retirement Income Security Act of 1974. In early 2022, a plan participant the court called "Patient AA" sought care from several out-of-network providers.
Before treating the patient, the providers called Blue Cross Blue Shield of Michigan, the plan's administrator, to check what the plan would pay. According to the complaint, Blue Cross representatives said reimbursement would follow the "usual, customary, and reasonable" rate, a common industry standard. The providers treated the patient and billed $342,296.
Blue Cross paid $1,598.40, an amount the providers said was based on Medicare, not the rate they were promised.
The providers sued La-Z-Boy and Blue Cross in March 2024, bringing state-law claims for negligent misrepresentation and promissory estoppel. They alleged the oral assurances were false and that they relied on them to provide care.
The case never reached that question. A federal district court in Michigan dismissed the claims, ruling that ERISA preempted them. On August 19, 2026, the US Court of Appeals for the Sixth Circuit agreed.
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