Ahn v. Cigna Health & Life Insurance Co., No. 25-1723, ___ F.4th ___, 2026 WL 1813215 (3d Cir. June 24, 2026), aff’g No. 2:19-cv-07141, 2025 WL 830217 (D.N.J. Mar. 17, 2025) | Healthcare Ally Management of California, LLC v. WSP USA, Inc., No. 24-3479, ___ F.4th ___, 2026 WL 2319896 (9th Cir. Aug. 11, 2026), aff’g in part and rev’g in part No. CV 22-4814-DMG, 2024 WL 2880204 (C.D. Cal. May 1, 2024)

Healthcare / Payor-Provider Disputes · ERISA Preemption · Out-of-Network Reimbursement

Updated October 18, 2026, to reflect post-decision filings. See the dated update under What to Watch.

Introduction

Out-of-network providers face a structural problem. ERISA lets participants and beneficiaries sue for benefits, but not providers, so a provider without an effective assignment of benefits from the patient must look to state law. Plans answer that ERISA § 514(a), which preempts state laws that “relate to” an employee benefit plan, closes that door. Two circuits, seven weeks apart, have now taken up that answer from opposite ends of the claims process. On June 24, 2026, in Ahn v. Cigna Health & Life Insurance Co., the Third Circuit held that ERISA preempts a physician’s defamation claim over what Cigna told its members, in explanation of benefits (EOB) forms, about why his claims were denied. On August 11, 2026, in Healthcare Ally Management of California, LLC v. WSP USA, Inc., the Ninth Circuit held that ERISA does not preempt a surgery center’s negligent misrepresentation claim over what the plan’s administrator told it on a verification call before the surgery, while affirming dismissal of a companion promissory estoppel claim. The Ninth Circuit didn’t cite Ahn, and the two cases involve different conduct at different points in the claims process. Read together, however, they suggest a line drawn through the life of a claim: what a plan says to a provider before the service, and what it says to its members afterward. Or they could mean different approaches to the same preemption by different circuits. Read on for more.

Factual Background and Litigation Proceedings

The Ahn Litigation

Dr. Jeffrey M. Ahn is an otolaryngologist licensed in New Jersey and New York who does not participate in Cigna’s provider network. He alleged that Cigna denied his claims about 50 times and that many of the EOBs it sent explained the denials on the ground that Cigna didn’t pay for services by unlicensed providers, effectively telling his patients he wasn’t licensed to practice medicine. Dr. Ahn filed suit in 2019 in New Jersey state court for defamation, defamation per se, and tortious interference. The case was removed to federal court. The district court first deferred the preemption question because it couldn’t tell from the complaint which EOBs related to ERISA plans. After discovery, Cigna showed that the plans were governed by ERISA, Dr. Ahn offered no contrary evidence, and he didn’t challenge that finding on appeal. Ahn, 2026 WL 1813215, at *1 & n.1. Discovery also showed that after Dr. Ahn appealed the denials, Cigna allowed them in whole or in part, or denied them for a reason unrelated to his licensure. Id. at *1.

Federal jurisdiction rested on diversity, so preemption arose only as Cigna’s § 514(a) defense. Id. at *2 n.2. The District Court for the District of New Jersey granted Cigna summary judgment on ERISA preemption grounds. The Third Circuit affirmed, holding that communicating benefits determinations to members is a central matter of plan administration, and, independently, that state defamation law can’t regulate EOB content without undermining uniform plan administration.

The Healthcare Ally Management Litigation

In Healthcare Ally Management, La Peer Surgery Center, an out-of-network provider, sought coverage verification from Aetna, which administered WSP USA’s employee health plan, before surgery on an Aetna member. According to the complaint, Aetna said the plan would pay at the usual, customary, and reasonable (UCR) rate and not on the Medicare Fee Schedule. Aetna ultimately paid at the Medicare rate, which came to five percent of La Peer’s bill. La Peer’s successor, Healthcare Ally Management of California (HAMOC), sued, and the Central District of California dismissed its state-law claims as preempted. The Ninth Circuit reversed on the negligent misrepresentation claim and affirmed dismissal of the promissory estoppel claim under its 2024 decision in Bristol SL Holdings, Inc. v. Cigna Health & Life Insurance Co., 103 F.4th 597 (9th Cir. 2024).

The Ninth Circuit described the verification call as a standard feature of out-of-network practice: a provider without a contract calls the administrator “to confirm that the patient is eligible for coverage, to ascertain that the particular procedure is covered, and to learn the likely reimbursement rate.” Healthcare Ally Management, 2026 WL 2319896, at *2. Aetna allegedly said that “payment would not be based on the Medicare Fee Schedule,” and neither defendant mentioned any limiting plan term or gave La Peer a copy of the plan. Id. The complaint doesn’t say whether the plan explained why it paid the Medicare rate. Id. at *3.

The patient assigned reimbursement rights to La Peer, which assigned them to HAMOC, but the district court held that HAMOC lacked derivative standing to bring an ERISA benefits claim, and HAMOC didn’t appeal that ruling. Id. at *2 n.3, *3 & n.6, *5 n.8. After removal, HAMOC had dropped its contract and Unfair Competition Law claims, leaving negligent misrepresentation and promissory estoppel.

Legal Analysis

• For the Third Circuit, the EOB is the plan’s statutory duty, so a defamation claim over its contents targets plan administration. ERISA § 503 requires plans to give written notice to any participant or beneficiary whose claim is denied, “setting forth the specific reasons for such denial.” 29 U.S.C. § 1133(1). Cigna discharges that duty with the EOB, so the court held that its statements about the reasons for a denial are “inseparable from Cigna’s duty to provide a written explanation of claim denials under ERISA.” Ahn, 2026 WL 1813215, at *3. Relying on Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141, 148 (2001), the court held that communicating claim decisions to members is a “central matter of plan administration.” Id.
  • The Fifth Circuit’s support. The court relied on Mayeaux v. Louisiana Health Service & Indemnity Co., 376 F.3d 420 (5th Cir. 2004), which affirmed dismissal of a physician’s tort claims challenging an insurer’s “handling, review, and disposition of a request for coverage.” Ahn, 2026 WL 1813215, at *3 (quoting Mayeaux, 376 F.3d at 432). Such claims, Mayeaux said, “would undoubtedly jeopardize the relationships among the traditional ERISA entities, of which the treating physician is not one.” Id. (quoting Mayeaux, 376 F.3d at 433).
  • The physician’s argument. Dr. Ahn argued that calling a physician unlicensed has nothing to do with fiduciary standards. The court said that was the wrong question: “the relevant inquiry is not whether defaming providers is central to an administrator’s fiduciary duties. It is not. The right question to ask is whether communicating benefits determinations to subscribers and beneficiaries is a central matter of plan administration. It is.” Ahn, 2026 WL 1813215, at *4.
• The Third Circuit’s second, independent ground is uniformity. Because ERISA already gives participants and beneficiaries a way to challenge benefits decisions, the court said, “there is no need to subject explanation of benefits forms to state tort claims like defamation.” Id. at *4. Otherwise, administrators wording a denial would have to account for the common law of every state where members live or get care. The court held that “allowing state defamation laws to regulate the content of EOBs would undermine uniformity in plan administration.” Id.
• The Third Circuit turned aside the physician’s authorities without retreating from them. Dr. Ahn argued that a claim that neither seeks plan benefits nor requires more than a cursory look at the plan isn’t preempted, relying on the Third Circuit’s decision in Plastic Surgery Center, P.A. v. Aetna Life Insurance Co., 967 F.3d 218 (3d Cir. 2020). The court responded that “Plastic Surgery applied the same standards we apply today.” Ahn, 2026 WL 1813215, at *4. It also noted that Dr. Ahn had no assignment, and that an assignment would bear only on an ERISA § 502(a) claim, “a claim that Dr. Ahn concedes he has not asserted here.” Id.
• For the Ninth Circuit, the provider-administrator relationship isn’t one ERISA regulates. Under the Ninth Circuit’s “relationship test” for “connection with” preemption, “the pertinent question is not whether an ERISA-regulated relationship exists but whether the claim itself bears upon that relationship. It does not.” Healthcare Ally Management, 2026 WL 2319896, at *7. Because § 502(a) gives providers no cause of action, the court read the provider-administrator relationship as one Congress didn’t mean to regulate. Id. The court relied on Depot, Inc. v. Caring for Montanans, Inc., 915 F.3d 643 (9th Cir. 2019). Id.
• The claim isn’t one a patient could assign. On “reference to” preemption, the court asked whether the claim is one “that a participant, beneficiary, or their assignee could have asserted as a § 502(a) benefits claim or is otherwise dependent on an ERISA-covered plan.” Id. at *8. It followed its own decisions in Meadows v. Employers Health Insurance, 47 F.3d 1006 (9th Cir. 1995), and Cedars-Sinai Medical Center v. National League of Postmasters of the United States, 497 F.3d 972 (9th Cir. 2007), and the Fifth Circuit’s decision in Access Mediquip L.L.C. v. UnitedHealthcare Insurance Co., 662 F.3d 376 (5th Cir. 2011), vacated, 678 F.3d 940 (5th Cir.), reinstated on reh’g, 698 F.3d 229 (5th Cir. 2012) (en banc). The patient got the covered surgery, so the claim doesn’t turn on any denial of benefits. “Because the injury alleged is not rooted in a plan term,” the claim is nonderivative, and HAMOC sues as an “independent entity claiming damages.” Healthcare Ally Management, 2026 WL 2319896, at *12 (quoting Meadows, 47 F.3d at 1008).
  • Consulting the plan isn’t enough. The parties may look to the plan on whether Aetna had reasonable grounds for its statement, but consulting a plan, or using it to calculate damages, doesn’t require preemption, and damages could be measured by the value of the services. Id. at *13.
  • Existence or extent of coverage. The court declined to distinguish between misstatements about whether there is coverage and misstatements about how much: “A misrepresentation regarding the existence of coverage causes the same financial injury to a provider as a misrepresentation about the extent of coverage.” Id. It described its conclusion as “in line with those of several other circuits,” citing decisions of the Fifth, Eighth and Eleventh Circuits. Id. at *14.
• The Ninth Circuit’s view of congressional purpose. Nothing in ERISA, the court said, suggests Congress meant a provider’s state-law remedy to disappear only when the patient’s coverage is employer-sponsored. Id. at *14. Where a plan bars assignments, preemption would mean “providers would simply be stuck with the bill, regardless of what the plan administrator told them.” Id. at *15.
• The plans’ position, and why promissory estoppel came out differently. WSP and Aetna’s principal argument was that Bristol controls. Id. at *15. There, a treatment facility claimed that Cigna’s verification calls created oral contracts, but Cigna had denied the claims under a plan term permitting denial for fee-forgiveness, and the court held the contract and promissory estoppel claims preempted. The panel agreed that Bristol controls the promissory estoppel claim, because the causes of action “are therefore analogous in all legally meaningful respects.” Id. at *16. But it held that Bristol had expressly left negligent misrepresentation open, and that the contract theory there was “an attempt to supplant the terms of an ERISA plan with a new, legally enforceable agreement.” Id. at *15, *17. Timing mattered too: Cigna didn’t know of the fee-forgiveness when it first made its statements, while HAMOC alleges that Aetna knew when it took the call that it wouldn’t pay the UCR rate. Id. at *17.
• Tension or reconciliation. The two opinions don’t address each other, and they are arguably reconcilable on their facts. Ahn involved statements to beneficiaries that ERISA requires; Healthcare Ally Management emphasized that the claim before it “concerns only representations made by the plan administrator about the content of a plan and would not change the benefits due to the beneficiary.” Id. at *18. Each side will still find language to use. Plans can point to Ahn’s uniformity reasoning, and to Mayeaux’s description of the provider as outside the “traditional ERISA entities,” as reasons to resist state-law liability for what administrators say about coverage. Providers can point to Healthcare Ally Management’s reading of that same outsider status as a reason state law must remain available to them. Both courts drew on the Fifth Circuit, Ahn on Mayeaux and Healthcare Ally Management on Access Mediquip, and both cited the Third Circuit’s Plastic Surgery Center decision.

Holding

Ahn: Affirmed. ERISA § 514(a) preempts a provider’s state-law defamation per se claim based on allegedly false statements in EOB forms sent to beneficiaries, on two independent grounds: it governs a central matter of plan administration, and it interferes with nationally uniform plan administration.

Healthcare Ally Management: Affirmed in part, reversed in part and remanded. ERISA § 514(a) does not preempt an out-of-network provider’s California negligent misrepresentation claim based on coverage and rate representations a plan administrator made on a verification call before services were rendered, under either the “connection with” or the “reference to” test. ERISA preempts the provider’s promissory estoppel claim under Bristol.

What to Watch

• The merits on remand in Healthcare Ally Management. The court noted that “it is far from obvious that HAMOC’s claim can succeed on the merits.” Healthcare Ally Management, 2026 WL 2319896, at *17 n.13. HAMOC wasn’t the provider, and it will have to prove what was asked and said on the call, what La Peer knew about how Aetna applied the UCR and Medicare rates, and whether Aetna and WSP intended to induce reliance. Id.
• Further review. Absent a rehearing petition, a petition for certiorari in Healthcare Ally Management would be due November 9, 2026.
• Update (October 18, 2026). After obtaining an extension, WSP and Aetna petitioned for panel rehearing and rehearing en banc on September 23, 2026. The Ninth Circuit denied the petition on October 16, 2026, and no judge requested a vote on rehearing en banc. Order, Healthcare Ally Management, No. 24-3479 (9th Cir. Oct. 16, 2026), Dkt. No. 54. A petition for certiorari is now due January 14, 2027, 90 days after the denial. See Sup. Ct. R. 13.3.
• The ground between the call and the EOB. Ahn addressed statements to beneficiaries in EOBs; Healthcare Ally Management addressed statements to a provider before treatment. Neither addressed a plan’s post-service statements to the provider itself, or an EOB that repeats a pre-service misstatement.
• Verification-call claims in the Third Circuit. Bristol, as quoted in Healthcare Ally Management, listed Plastic Surgery Center among decisions permitting providers’ misrepresentation-of-coverage claims to proceed. Healthcare Ally Management, 2026 WL 2319896, at *16. Ahn said Plastic Surgery Center applied the same standards it did, and didn’t address pre-service representations.

What This Means for Resolving Payor-Provider Disputes

Preemption is usually the first fight in an out-of-network payment case. These decisions sort it by timing and audience. In the Third Circuit, a tort claim challenging what the plan told its members about a benefits decision is preempted, giving plans a firm answer to providers who recast a denial as defamation or a similar tort. In the Ninth Circuit, a negligent misrepresentation claim that rests on what the administrator told the provider before the service survives preemption at the pleading stage, while a promissory estoppel claim on the same facts doesn’t.

That moves the dispute from a legal question to a factual one, and the factual one is narrow: what was said on the call, what the administrator knew when it said it, and what the provider’s services were worth. Verification calls usually leave records on both sides. A provider with a well-documented call, or a plan that can show its statement matched what it knew at the time, has a clearer view of its exposure than either had while the case turned on a preemption motion. And the Ninth Circuit’s own caution about the merits gives both sides a reason to value the claim realistically. Disputes that turn on a shared record, rather than an open legal question, tend to resolve. Other circuits may view these issues differently, creating uncertainty in the legal landscape and making resolution more difficult.

John Libby is an arbitrator, mediator, and settlement counsel with LibbyADR LLC. This post contains his own summaries of the decisions discussed, prepared for general informational purposes only. The summaries are not intended to be a complete statement of any court’s reasoning, nor should they be taken to indicate how he would rule as an arbitrator in any particular case. In addition, the summaries are not legal advice, nor should they be construed as legal advice. Readers should not act on these posts, but should review the decisions themselves and consult with legal counsel.