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.
ERISA displaces state-law claims that "relate to" an employer benefit plan. Applying its 1991 Cromwell decision, the court held that provider claims built on a plan administrator's assurances about coverage or reimbursement terms fall within that bar, whatever label the claims carry. Because the providers' claims turned on the terms of La-Z-Boy's plan, they were preempted.
For employers that sponsor ERISA health plans and the companies that administer them, the decision reaffirms that shield within the Sixth Circuit. Out-of-network providers cannot use state misrepresentation law to recover the gap between what they were told by phone and what a plan actually paid. The court marked the opinion for publication, making it binding precedent in the circuit.
That protection may not extend everywhere. In a separate concurring opinion, one judge agreed the panel was bound by Cromwell but called the decision an "outlier" that "sits uncomfortably" beside rulings in other circuits. He wrote that he would read it as narrowly as possible.
The court did not decide whether Blue Cross's statements were false. It assumed the providers' allegations were true only to resolve the preemption question, then dismissed on that legal ground. The court also stressed that its holding was narrow. The decision has not yet received an official reporter citation.
