Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 QUICKMED DIAGNOSTIC, INC., Case No. 25-cv-2902-BAS-JAC 12 Plaintiff, ORDER GRANTING IN PART AND 13 v. DENYING IN PART DEFENDANTS’ MOTION TO DISMISS (ECF No. 16) 14 ANTHEM BLUE CROSS LIFE AND HEALTH INSURANCE COMPANY; 15 BLUE CROSS OF CALIFORNIA; DOES 16 1-300, 17 Defendants. 18 19 During the COVID-19 pandemic, Plaintiff Quickmed Diagnostic, Inc. administered 20 numerous COVID-19 diagnostic tests to individuals with ERISA-governed benefit plans 21 or Medicare Advantage (“MA”) plans.1 An out-of-network provider, Plaintiff relied on 22 23 1 The Employee Retirement Income Security Act of 1974 (“ERISA”) provides federal protections 24 for private employer-sponsored health plans. An employer-sponsored health plan regulated by ERISA can 25 be either (a) “self-funded,” where the employer pays claims from its own assets and bears the financial risk, typically hiring a third-party administrator to process claims; or (b) “fully-insured,” where the 26 employer pays a premium to a private insurance company, which bears the risk and both administers and pays claims. 27 Title XVIII of the Social Security Act, commonly known as the Medicare Act, offers the elderly and disabled federally subsidized health insurance coverage through the option of Medicare Advantage 28 1 federal laws—in particular, the FFCRA and CARES Act —for reimbursement of its testing 2 services. But insurers allegedly underpaid or failed to pay many of Plaintiff’s 3 reimbursement claims. Plaintiff now sues numerous defendants—entities that administered 4 the plans and the plans themselves—in related cases before this Court.3 5 The Ninth Circuit has foreclosed a private right of action under the FFCRA and 6 CARES Act. Plaintiff thus sues under ERISA, as an assignee of the plan beneficiaries. 7 Apparently, Plaintiff relies on the substantive law of the FFCRA and CARES Act while 8 seeking standing through ERISA. 9 In substance, the FFCRA required health plans and health insurance issuers to cover 10 COVID-19 testing services, and the CARES Act specified the reimbursement rate for such 11 services, which included the provider’s publicly listed cash price. As relief, Plaintiff seeks 12 to recover the publicly listed cash price for its diagnostic testing services that were 13 allegedly unpaid or underpaid by Defendants for ERISA-governed benefit plans. And, 14 under state law theories, Plaintiff seeks to recover reimbursement for its services to MA 15 plan members. 16 Presently before the Court is Defendants’ motion to dismiss Plaintiff’s complaint. 17 (ECF No. 16.) The motion to dismiss is fully briefed. (ECF Nos. 16, 22, 26.) The Court 18 finds Defendants’ motion suitable for determination on the papers submitted. See Fed. R. 19 Civ. P. 78(b); Civ. L.R. 7.1(d)(1). Upon review, the Court GRANTS IN PART and 20 DENIES IN PART Defendants’ motion. 21 22 23 24 25 2 In response to the COVID-19 pandemic, Congress passed two statutes: the Families First Coronavirus Response Act (“FFCRA”) and the Coronavirus Aid, Relief, and Economic Security Act 26 (“CARES Act”). 3 The related cases before this Court are: Quickmed Diagnostic, Inc. v. Cigna Health Corp., No. 27 25-cv-03114-BAS-JAC (S.D. Cal. filed Nov. 12, 2025); Quickmed Diagnostic, Inc. v. Aetna Health and Life Ins. Co., No. 25-cv-03131-BAS-JAC (S.D. Cal. filed Nov. 12, 2025); and Quickmed Diagnostic, Inc. 28 1 I. BACKGROUND 2 A. Procedural Background 3 In July 2025, Plaintiff filed an action in San Diego Superior Court against 4 Defendants. (Felahi Decl. ¶ 2, ECF No. 16-1.) Plaintiff had informally provided a 5 spreadsheet of over 500,000 outstanding claims; some of those claims involved individuals 6 covered by ERISA and/or Medicare plans. (Id. ¶¶ 3, 6.) Defendants sought removal to 7 federal court, in part given ERISA’s broad preemption power. (Id. ¶ 6.) In October 2025, 8 the case was removed to the Honorable Roger T. Benitez then transferred to the Honorable 9 Anthony J. Battaglia. Quickmed Diagnostic, Inc. v. Anthem Blue Cross Life and Health 10 Ins. Co., No. 25-cv-02256-AJB-KSC (S.D. Cal.) (the “First Federal Action”). 11 Once in federal court, Plaintiff provided an amended complaint on September 29, 12 2025. (First Federal Action, ECF No. 6.) The same day, Plaintiff filed a motion to remand, 13 arguing that its complaint did not raise federal statutory claims. (First Federal Action, ECF 14 No. 7 at 2 (“The Complaint asserted causes of action based solely on state law. It does not 15 include a single cause of action under federal law, nor does it even mention ERISA or 16 Medicare Advantage anywhere in the pleading.”).) 17 Before Plaintiff’s motion to remand could be fully briefed, the parties filed a joint 18 motion to remand. (First Federal Action, ECF No. 9.) The joint motion stipulates: on 19 “October 1, 2025, the Parties confirmed, pursuant to Plaintiff’s Motion for Remand and 20 Amended Complaint, that Plaintiff does not seek recovery in the underlying action based 21 on (i) assignments of benefits from beneficiaries of a self-funded employee benefit plan 22 subject to the Employee Retirement Income Security Act (“ERISA”), or (ii) recovery based 23 on claims for services provided to enrollees of Medicare Advantage plans administered 24 under federal authority.” (Id.) Apparently, Plaintiff “Quickmed had always intended to file 25 a separate federal lawsuit for claims where it was seeking relief directly under ERISA as 26 an assignee of benefits[.]” (First Federal Action, ECF No. 7 at 2.) 27 Judge Battaglia granted the joint motion to remand on October 14, 2025. (First 28 Federal Action, ECF No. 10.) The case was closed. (Id.) Then, on October 27, 2025, 1 Plaintiff refiled in federal court, alleging its federal statutory claims along with state law 2 claims before this Court. (ECF No. 1.)4 3 B. Factual Background 4 Plaintiff Quickmed Diagnostic, Inc. operated a diagnostic laboratory during the 5 COVID-19 pandemic. (Compl. ¶ 1, ECF No. 1.) Plaintiff administered COVID-19 tests to 6 individuals covered by ERISA-governed plans or MA plans. (Compl. ¶¶ 2, 3.) Plaintiff 7 required an assignment of benefits before rendering testing services. (Compl. ¶ 33.) 8 Plaintiff now sues the plans, insurers, and claims administrators in related cases 9 before this Court for failing to properly reimburse its claims. (Compl. ¶¶ 4, 5.) Specifically, 10 Plaintiff alleges that many claims went unpaid or underpaid without adequate explanation. 11 (Compl. ¶¶ 54–56.) For other claims, Defendants paid Plaintiff the minimum lawful 12 amount or a fraction of Plaintiff’s publicly listed cash price. (Compl. ¶ 54.) Further, 13 Plaintiff alleges that it appealed all unpaid and underpaid claims but received no adequate 14 explanation or relief. (Compl. ¶¶ 55, 57, 67–71.) 15 In this action, Plaintiff sues Anthem Blue Cross Life and Health Insurance Company 16 and Blue Cross of California, the latter allegedly a wholly-owned or controlled subsidiary 17 and/or affiliate of the former (collectively, “Defendants”).5 (Compl. ¶¶ 11–14.) Plaintiff 18 pleads that Defendants were either (a) insurers for fully-insured plans, or (b) claims 19 administrators for self-funded plans or MA plans. (Compl. ¶¶ 11–14, 17, 27–28.) Plaintiff 20 21 4 Plaintiff does not acknowledge the pertinent procedural history in its briefing or the complaint. 22 (ECF Nos. 1, 22.) And in the civil cover sheet filed in the present action, Plaintiff did not mention the related, previous case dismissed barely two weeks prior; Plaintiff left the section completely blank. (ECF 23 No. 1-1.) The Court is unclear as to the procedural strategy at play. Under Civil Local Rule 40.1(f), if counsel has reason to believe that a pending action is related to 24 another pending action in the Southern District or any other federal or state court (whether pending, 25 dismissed, or otherwise terminated), counsel must promptly file and serve on all known parties a notice of related case, providing a brief statement of their relationship and whether assignment to a single district 26 judge would likely save judicial effort and promote other economies. Here, neither party filed a notice of related cases pursuant to the local rule. The Court notes the failure of both parties, especially Plaintiff, to 27 properly acknowledge this procedural history on the docket. 5 The parties submitted a joint motion to dismiss Defendant Elevance Health Inc. from the action 28 1 alleges that Defendants exercised sufficient control and discretion over the claims at issue 2 to render them proper defendants. (Compl. ¶¶ 14–17, 35.) In addition to named Defendants, 3 Plaintiff brings claims against several groups of Doe Defendants; in doing so, Plaintiff sues 4 the plans themselves, which were allegedly contractually obligated to pay the benefits at 5 issue.6 (Compl. ¶ 50.) 6 Plaintiff identifies five plans in the complaint as exemplars. (Compl. ¶ 70.) And 7 Plaintiff seeks reimbursement for claims administered from February 11, 2021, through 8 March 16, 2023. (Compl. ¶ 50.) 9 Plaintiff alleges that it is an out-of-network provider and thus has no directly 10 negotiated rate with Defendants for the COVID-19 tests at issue.7 (Compl. ¶¶ 45, 51.) This 11 distinction matters because Plaintiff states that federal law—the FFCRA and CARES 12 Act—mandated coverage of out-of-network COVID-19 testing and provided instructions 13 on how to calculate the rate for testing, given the circumstances of the pandemic. (Compl. 14 ¶¶ 22, 45.) 15 Section 6001 of the FFCRA required health plans and health insurance issuers— 16 which Plaintiff alleges Defendants are—to cover COVID-19 testing and “items and 17 services” related to testing without cost-sharing, prior authorization, or other medical 18 management requirements during the pandemic. (Compl. ¶¶ 41–43.) Section 3202(a) of the 19 CARES Act, which amended the FFCRA, separately established the applicable 20 reimbursement rate for COVID-19 testing, requiring health plans and health insurance 21 22 23 6 Patients are enrolled in plans; and plans are insured or administered by Defendants. Does 1–100 are alleged to be the ERISA-governed employee welfare benefit plans and group health plans; Does 101– 24 200 are alleged to be Medicare Advantage Organizations or downstream Medicare Advantage entities; 25 Does 201–300 are unidentified parties alleged to be agents or employees of a plan or an administrator. (Compl. ¶¶ 18–21, ECF No. 1.) 26 7 The difference between in-network and out-of-network providers can be explained as follows: “In-network providers agree to render health care services to plan beneficiaries at a discounted rate, in 27 exchange for greater access to the plan’s subscribers. Out-of-network providers do not agree to provide services at any set rate, and so do not receive the same level of facilitated access to plan members.” Bristol 28 1 issuers to pay providers the negotiated rate or, absent one, the provider’s publicly listed 2 cash price. (Compl. ¶ 44.) 3 Plaintiff alleges that it posted the pricing for its tests on its website, reflecting a 4 $350.00 charge for a PCR test, $100.00 for high-throughput testing, and $50.00 for sample 5 collection. (Compl. ¶¶ 49, 52.) Plaintiff seeks reimbursement at its publicly listed cash 6 price. (Compl. ¶ 51.) 7 For MA plans, Plaintiff alleges that they were required to cover diagnostic testing 8 pursuant to federal law, where federal law includes the Medicare Act, the FFCRA and 9 CARES Act, and other regulatory and sub-regulatory guidance issued by the agency 10 Centers for Medicare & Medicaid Services (“CMS”), which regulates MA plans. (Compl. 11 ¶ 38.) Defendants were allegedly required to reimburse Plaintiff for its testing services in 12 accordance with federal law and CMS guidance. (Id.) 13 The rate an MA plan must pay an out-of-network provider is governed by 42 C.F.R. 14 § 422.214, which requires MA organizations to reimburse non-contracted providers at the 15 rate original Medicare would have paid for the same service. (Compl. ¶¶ 36, 40.) And 16 original Medicare covers diagnostic tests deemed medically necessary; COVID-19 tests 17 fell within the category of necessary. (Compl. ¶ 40.) 18 Plaintiff asserts federal question jurisdiction under 29 U.S.C. § 1001 and 28 U.S.C. 19 § 1442(a)(1); Plaintiff also invokes 28 U.S.C. § 1367(a) for supplemental jurisdiction of 20 the state-law claims. Plaintiff’s complaint alleges fourteen (14) causes of action, which 21 includes a few federal statutory claims and an assortment of state law actions: 22 1. For Benefits Under 29 U.S.C. § 1132(a)(1)(B) Against Administrator 23 Defendants, ERISA Plan Defendants, and/or General Doe Defendants; 24 2. For Breach of Fiduciary Duty Against Administrator Defendants, ERISA 25 Plan Defendants, and/or General Doe Defendants; 26 3. Violation of the FFCRA and CARES Act Against All Defendants; 27 4. Violation of California’s Unfair Competition Law (“UCL”) – California 28 Business and Professions Code § 17200 et seq. Against All Defendants; 1 5. Money Had and Received Against All Defendants; 2 6. Open Book Account Against All Defendants; 3 7. Account Stated Against All Defendants; 4 8. Promissory Estoppel Against All Defendants; 5 9. Unjust Enrichment Against All Defendants; 6 10. Breach of Implied-In-Law Contract Against All Defendants; 7 11. Breach of Implied-In-Fact Contract Against All Defendants; 8 12. Quantum Meruit Against All Defendants; 9 13. Violation of § 1342.2 of the California Health and Safety Code / California 10 Insurance Code § 10110.7 Against All Defendants; 11 14. Declaratory Relief – California Code of Civil Procedure § 1060 Against All 12 Defendants. 13 Along with other relief, Plaintiff seeks: (1) an order compelling Defendants to pay 14 for the services provided to individuals in accordance with ERISA and the terms of the 15 applicable ERISA plans; and (2) to the extent any of the ERISA plans prohibits the 16 assignment of the patient’s benefits to Quickmed, for an order compelling Defendants to 17 pay Plaintiff the reasonable value of the services provided to each patient. (Prayer for Relief 18 ¶¶ 1–2, ECF No. 1.) 19 Defendants’ motion seeks to dismiss all claims with prejudice or, in the alternative, 20 to strike parts of the complaint. 21 II. LEGAL STANDARDS 22 A. FRCP 12(b)(1) – Subject Matter Jurisdiction 23 “Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. 24 Co. of Am., 511 U.S. 375, 377 (1994). “They possess only that power authorized by 25 Constitution and statute[.]” Id. 26 Under Rule 12(b)(1), one can move to dismiss for lack of subject-matter jurisdiction. 27 See Fed. R. Civ. P. 12(b)(1). A defendant may challenge the plaintiff’s jurisdictional 28 allegations through either a facial or factual attack. See Leite v. Crane Co., 749 F.3d 1117, 1 1121 (9th Cir. 2014). “In a facial attack, the challenger asserts that the allegations contained 2 in a complaint are insufficient on their face to invoke federal jurisdiction.” Safe Air for 3 Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “By contrast, in a factual attack, 4 the challenger disputes the truth of the allegations that, by themselves, would otherwise 5 invoke federal jurisdiction.” Id. 6 B. FRCP 8(a) and 12(b)(6) – Failure to State a Claim 7 Rule 8(a)(2) requires “a short and plain statement of the claim showing that the 8 pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A Rule 12(b)(6) motion tests that 9 standard by seeking dismissal for failure to state a claim upon which relief can be granted. 10 See Fed. R. Civ. P. 12(b)(6). 11 To survive a motion to dismiss, a complaint must contain more than “labels and 12 conclusions” or “a formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. 13 v. Twombly, 550 U.S. 544, 555 (2007). While legal conclusions may provide the framework 14 of a complaint, “they must be supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 15 662, 679 (2009). The plaintiff must plead “factual content that allows the court to draw the 16 reasonable inference that the defendant is liable for the misconduct alleged”—in other 17 words, enough to render the claim plausible. Id. at 678 (citing Twombly, 550 U.S. at 570). 18 In ruling on a motion to dismiss, the court accepts the complaint’s factual allegations 19 as true and construes the pleadings in the light most favorable to the nonmoving party. See 20 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The 21 court may not look beyond the complaint. See United States v. Ritchie, 342 F.3d 903, 907 22 (9th Cir. 2003). 23 If dismissal is warranted, the court considers whether to grant leave to amend. Leave 24 should be freely given “when justice so requires.” Fed. R. Civ. P. 15(a)(2). At the same 25 time, “a district court may dismiss without leave where a plaintiff’s proposed amendments 26 would fail to cure the pleading deficiencies and amendment would be futile.” Cervantes v. 27 Countrywide Home Loans, Inc., 656 F.3d 1034, 1041 (9th Cir. 2011). 28 1 C. FRCP 12(f) – Motion to Strike 2 Rule 12(f) of the Federal Rules of Civil Procedure provides that a court may strike 3 from a pleading “an insufficient defense or any redundant, immaterial, impertinent, or 4 scandalous matter.” Fed. R. Civ. P. 12(f). “[T]he function of a 12(f) motion to strike is to 5 avoid the expenditure of time and money that must arise from litigating spurious issues by 6 dispensing with those issues prior to trial[.]” Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 7 880, 885 (9th Cir. 1983). 8 “Motions to strike are generally regarded with disfavor because of the limited 9 importance of pleading in federal practice[.]” Neilson v. Union Bank of Cal., 290 F. Supp. 10 2d 1101, 1152 (C.D. Cal. 2003). “[The] motion . . . should not be granted unless the matter 11 to be stricken clearly could have no possible bearing on the subject of the litigation.” Platte 12 Anchor Bolt, Inc. v. IHI, Inc., 352 F. Supp. 2d 1048, 1057 (N.D. Cal. 2004) (internal 13 citations omitted). And if the Court holds “any doubt,” it “should deny the motion.” Id. 14 III. ANALYSIS 15 The Court first addresses the federal claims under ERISA, including whether 16 Plaintiff has standing to assert its claims and whether Plaintiff was required to exhaust its 17 administrative remedies. The Court then considers whether ERISA preempts Plaintiff’s 18 state-law claims. Next, the Court examines whether Plaintiff was required to exhaust 19 administrative remedies for its claims against MA plans. Finally, the Court turns to 20 Plaintiff’s declaratory relief claim and Defendants’ request to strike. 21 A. Claims Under ERISA 22 The Employee Retirement Income Security Act of 1974 sets standards in private 23 industry for employer-sponsored health benefit plans. See Aetna Health Inc. v. Davila, 542 24 U.S. 200, 208 (2004) (citing 29 U.S.C. § 1001(b)). Importantly, ERISA gives members of 25 health plans the right to sue insurers and administrators for plan benefits and breaches of 26 fiduciary duty. 29 U.S.C. § 1132(a)(1), (3); see also Pilot Life Ins. Co. v. Dedeaux, 481 27 U.S. 41, 54 (1987). ERISA thus effectuates “a careful balancing of the need for prompt and 28 1 fair claims settlement procedures against the public interest in encouraging the formation 2 of employee benefit plans.” Pilot Life, 481 U.S. at 54. 3 1. Standing 4 ERISA enumerates which parties possess a right of action “to recover benefits due 5 under the terms of a plan, to enforce rights under the terms of the plan, or to clarify rights 6 to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B) (citation 7 modified); Reynolds Metals Co. v. Ellis, 202 F.3d 1246, 1247 (9th Cir. 2000). Plaintiff does 8 not fall within an enumerated category in the statute. But the Ninth Circuit has repeatedly 9 recognized derivative standing through assignment; in short, members of health plans can 10 assign their benefits to healthcare providers. See S. Coast Specialty Surgery Ctr., Inc. v. 11 Blue Cross of Cal., 90 F.4th 953, 958 (9th Cir. 2024) (“ERISA [] permits the assignment 12 of health and welfare benefits to a healthcare provider, and it allows such a provider to 13 bring derivative claims on behalf of its patients.”); Spinedex Physical Therapy USA Inc. v. 14 United Healthcare of Ariz., Inc., 770 F.3d 1282, 1289 (9th Cir. 2014) (“As a non- 15 participant health care provider, Spinedex cannot bring claims for benefits on its own 16 behalf. It must do so derivatively, relying on its patients’ assignments of their benefits 17 claims.”); Misic v. Bldg. Serv. Emps. Health & Welfare Tr., 789 F.2d 1374, 1377 (9th Cir. 18 1986) (“ERISA does not forbid assignment by a beneficiary of his right to reimbursement 19 under a health care plan to the health care provider.”). 20 Here, Plaintiff plausibly pleads derivative standing through an assignment. See 21 Almont Ambulatory Surgery Ctr., LLC v. UnitedHealth Grp., Inc., 99 F. Supp. 3d 1110, 22 1130 (C.D. Cal. 2015) (interpreting the assignment clause at the motion to dismiss stage, 23 where the plaintiff provided the text of the assignment). The assignment language states, 24 in relevant part: “I understand that as a courtesy, Laboratory and/or its authorized agents 25 will make every reasonable effort to obtain insurance reimbursement for ordered tests. I 26 understand that I am making an assignment of my insurance plan benefits to Laboratory 27 and/or its authorized agents.” (Compl. ¶ 64.) 28 1 But Defendants highlight that several plans—identified through the informally 2 produced spreadsheet during state court proceedings—contain anti-assignment language. 3 Anti-assignment clauses in ERISA plans are valid and enforceable. See Davidowitz v. Delta 4 Dental Plan of Cal., Inc., 946 F.2d 1476, 1481 (9th Cir. 1991). The Court first addresses 5 whether it will consider the plans’ anti-assignment language offered by Defendants. 6 Second, the Court will briefly turn to the anti-assignment provisions themselves. 7 Defendants have provided numerous plan documents and ask the Court to consider 8 them as incorporated by reference into the complaint. (Loppnow Decl. at 7, ECF No. 16- 9 2.) At the motion to dismiss stage, the Court lacks the benefit of discovery and is limited 10 in what it can consider without converting the motion to dismiss into a motion for summary 11 judgment. See Fed R. Civ. Proc. 12(d). 12 The incorporation by reference doctrine permits a court to look beyond the pleadings 13 without converting a Rule 12(b)(6) motion into one for summary judgment. See Van 14 Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002). Incorporation by 15 reference is appropriate when: (1) a plaintiff’s claim depends on a document or the contents 16 of the document have been alleged in the complaint, (2) the document is not attached to 17 the complaint but the defendant attaches it to his moving papers, and (3) the parties do not 18 dispute the authenticity of the document. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th 19 Cir. 2005). If a document is incorporated by reference, the court may treat it as if it were 20 part of the complaint. See United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). 21 Plaintiff identifies five plans as exemplars in the complaint, but Defendants do not 22 submit the language of those plans. Rather, Defendants submit different plans, identified 23 through an informally produced spreadsheet during the state-court proceedings. Because 24 the complaint neither refers to nor relies upon the plans Defendants now offer, those plans 25 cannot be treated as part of the complaint through incorporation by reference. See Khoja v. 26 Orexigen Therapeutics, Inc., 899 F.3d 988, 1002–03 (9th Cir. 2018) (explaining that 27 incorporation is proper only where the complaint “refers extensively to the document or 28 the document forms the basis of the claim,” and cautioning that a defendant may not use 1 unmentioned documents merely to create a defense “to the well-pled allegations in the 2 complaint”). The Court therefore declines to consider the proffered plans and evaluates the 3 Rule 12(b)(6) motion on the allegations in the complaint. On those allegations, Plaintiff 4 adequately pleads derivative standing based on its assignments. 5 Further, even if the Court were to consider the anti-assignment clauses identified, 6 the Court cannot determine the validity and applicability of the clauses at this stage. See 7 Beverly Oaks Physicians Surgical Ctr., LLC v. Blue Cross & Blue Shield of Ill., 983 F.3d 8 435, 440–41 (9th Cir. 2020) (discussing that a plan administrator “waive[s] the right to 9 enforce an anti-assignment provision” if the administrator is aware of the assignment yet 10 fails to “raise the anti-assignment provision as a basis to deny benefits” during claim 11 processing). Exercising its discretion, the Court declines to consider the anti-assignment 12 clauses and thereby convert the motion to dismiss into a motion for summary judgment. 13 See Fed. R. Civ. P. 12(d); Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 14 1207 (9th Cir. 2007). 15 In summary, the Court does not decide whether an anti-assignment clause applies or 16 whether Defendants waived the right to enforce an anti-assignment clause on this 17 undeveloped record. See, e.g., Martin Luther King, Jr. Cmty. Hosp. v. Cmty. Ins. Co., No. 18 2:16-cv-03722-ODW (RAOx), 2017 WL 8186738, at *4 (C.D. Cal. Mar. 21, 2017) (“As 19 the language of the anti-assignment provision is susceptible to two different interpretations, 20 the parties’ rights and obligations thereunder cannot be resolved at the pleading stage.”). 21 Therefore, the Court denies the motion to dismiss based on standing. 22 2. Exhaustion 23 Although “ERISA does not require a participant or beneficiary to exhaust 24 administrative remedies prior to seeking judicial review,” the Ninth Circuit has 25 “recognized a prudential exhaustion requirement.” McAfee v. Metro. Life Ins. Co., 368 F. 26 App’x 771, 772 (9th Cir. 2010); Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 27 F.3d 620, 626 (9th Cir. 2008). If a failure to exhaust is clear on the face of the complaint, 28 a defendant may move for dismissal under Rule 12(b)(6). See Norris v. Mazzola, No. 15- 1 cv-04962-JSC, 2016 WL 1588345, at *6 (N.D. Cal. Apr. 20, 2016) (rejecting a failure to 2 exhaust argument relying on the face of the complaint). 3 Here, Plaintiff’s complaint sufficiently alleges administrative exhaustion. (Compl. 4 ¶¶ 54–57, 67–71.) Plaintiff alleges it filed claims for benefits, many claims went unpaid, 5 and it appealed all unpaid and underpaid claims but received no adequate explanation or 6 relief from Defendants. (Id.) Although Defendants argue that Plaintiff is required to 7 specifically identify at least one plan that has been exhausted, the Court cannot find such a 8 requirement in the case law. And Plaintiff alleges that Defendants failed to follow 9 reasonable claims procedures; in other words, Plaintiff states that exhaustion was 10 inadequate or futile. See Bilyeu v. Morgan Stanley Long Term Disability Plan, 683 F.3d 11 1083, 1088 (9th Cir. 2012) (holding that the district court abused its discretion by 12 dismissing the plaintiff’s denial-of-benefits claim for a failure to exhaust administrative 13 remedies because, as alleged, the defendant did not act consistent with reasonable claims 14 procedures). Therefore, the Court denies Defendants’ motion to dismiss the ERISA claim 15 for failure to exhaust administrative remedies. 16 3. Claim for Benefits Under ERISA § 502(a)(1)(B) 17 Plaintiff seeks to recover benefits allegedly due to it under the ERISA plans. As a 18 threshold matter, the language of the assignment clause contemplates assignment of a claim 19 to recover benefits. 20 To satisfy pleading standards, a plaintiff must allege not only the existence of an 21 ERISA plan but also identify “the provisions of the plan that entitle [it] to benefits.” Doe 22 v. CVS Pharmacy, Inc., 982 F.3d 1204, 1213 (9th Cir. 2020) (quotation omitted). 23 Here, Plaintiff does not identify the provisions of the plan. Plaintiff does, however, 24 identify two emergency federal statutes that allegedly entitle it to benefits. This case thus 25 presents a situation where Congress provided the relevant provisions that entitle Plaintiff 26 to benefits under the plans. See, e.g., Genesis Lab’y Mgmt. LLC v. United Health Grp., 27 Inc., No. 21cv12057 (EP) (JSA), 2023 WL 2387400, at *5 (D.N.J. Mar. 6, 2023) (“[T]his 28 Court finds that Section 6001 of the FFCRA and Section 3202 of the CARES Act must be 1 considered together with ERISA because they impose legal requirements on ERISA 2 plans.”). Congress has imposed, through legislation, substantive coverage requirements on 3 ERISA governed plans in the past. When Congress enacted the Affordable Care Act, for 4 example, it amended ERISA to incorporate various provisions; specifically, Congress 5 required ERISA governed plans to cover pre-existing conditions. See, e.g., Iwata v. Intel 6 Corp., 349 F. Supp. 2d 135, 152 (D. Mass. 2004). 7 Without deciding whether Plaintiff can recover reimbursements under the 8 substantive terms of the FFCRA or CARES Act, the Court finds Plaintiff’s allegations 9 sufficient to state a plausible claim. The cited federal laws show Congress required 10 Defendants to cover diagnostic testing for ERISA-governed plans. And the CARES Act 11 specified how the payment should be calculated. Plaintiff’s claims are not unmoored, 12 broadly stating it should be reimbursed; instead, Plaintiff has pointed to specific federal 13 law that sets up a reimbursement structure for a required plan service. Plaintiff has stated 14 a plausible claim. Cf., Fortitude Surgery Ctr. LLC v. Aetna Health Inc., No. CV-24-02650- 15 PHX-KML, 2025 WL 1432906, at *3 (D. Ariz. May 19, 2025) (“While Fortitude was not 16 required to ‘recite every relevant term of every relevant plan,’ it needed to ‘do more than 17 broadly allege . . . [a] generalized obligation’ for Aetna to provide payment.” (citation 18 omitted)). 19 And, at the motion to dismiss stage, the Court cannot say that seeking to enforce the 20 FFCRA and CARES Act through ERISA plans is legally inappropriate. For example, the 21 district court in Saloojas granted leave to amend to allow the plaintiff to assert substantive 22 CARES Act claims under ERISA. See Saloojas, Inc. v. Aetna Health of Cal., Inc., No. 22- 23 cv-01696-JSC, 2022 WL 2267786, at *6 (N.D. Cal. June 23, 2022) (“Although amendment 24 of a CARES Act claim would be futile, Plaintiff argues that it could amend its complaint 25 to state a claim under ERISA. Without the benefit of full briefing, the Court cannot 26 conclude that such claim would fail as a matter of law.”), aff’d, 80 F.4th 1011 (9th Cir. 27 2023). Plaintiff’s claim is not asserting a statutory right but seeking to recover benefits 28 under ERISA-governed benefit plans that were affected by statute. See, e.g., Diaz v. United 1 Agr. Emp. Welfare Ben. Plan & Tr., 50 F.3d 1478, 1483 (9th Cir. 1995) (seeking to enforce 2 the statutory requirements of the Consolidated Omnibus Budget Reconciliation Act 3 (COBRA) under an ERISA plan); cf. Risby v. Nielsen, 768 F. App’x 607 (9th Cir. 2019) 4 (“The Supreme Court has clarified that a claim asserting a statutory right may be brought 5 only to the extent that the statute grants a private right of action.” (emphasis in original) 6 (citing Ziglar v. Abbasi, 582 U.S. 120, (2017))). 7 Accordingly, the Court denies Defendants’ motion to dismiss the claim for benefits 8 under ERISA § 502(a)(1)(B). 9 4. Claim for Breach of Fiduciary Duty Under ERISA § 502(a)(2) 10 Plaintiff also asserts that Defendants breached their fiduciary duty obligations under 11 ERISA. Those who control plans have fiduciary responsibilities. See Varity Corp. v. Howe, 12 516 U.S. 489, 502 (1996) (noting that ERISA limits the scope of fiduciary activity to 13 discretionary acts of plan “management” and “administration”); see also Bafford v. 14 Northrop Grumman Corp., 994 F.3d 1020, 1025–26 (9th Cir. 2021) (“An ERISA fiduciary 15 must discharge its duties solely in the interest of the participants and beneficiaries and for 16 the exclusive purpose of providing benefits to participants and their beneficiaries[.]” 17 (citation modified)). But Plaintiff has not adequately pled derivative standing through 18 assignment for a fiduciary duty claim. 19 The Ninth Circuit has instructed that courts should rely on the language of the 20 assignment as well as context to determine whether patients intended to assign the right to 21 assert a breach of fiduciary duty claim. See Spinedex Physical Therapy USA Inc. v. United 22 Healthcare of Arizona, Inc., 770 F.3d 1282, 1292 (9th Cir. 2014) (“The Assignment 23 nowhere indicates that, by executing the assignment, patients were assigning to Spinedex 24 rights to bring claims for breach of fiduciary duty.”); Britton v. Co–op Banking Grp., 4 25 F.3d 742, 746 (9th Cir.1993) (“[I]t is essential to an assignment of a right that the [assignor] 26 manifest an intention to transfer the right to another person. . ..” (quoting Restatement 27 (Second) of Contracts § 324 (1981))). 28 1 Here, Plaintiff has sufficiently alleged Defendants’ control over the administration 2 of benefits under the plans. (Compl. ¶¶ 15–16 (a)-(j), 35.) But the assignment clause’s 3 limited scope precludes a breach of fiduciary duty claim. Once more, the relevant 4 assignment language reads: “I understand that as a courtesy, Laboratory and/or its 5 authorized agents will make every reasonable effort to obtain insurance reimbursement for 6 ordered tests. I understand that I am making an assignment of my insurance plan benefits 7 to Laboratory and/or its authorized agents.” (Compl. ¶ 64.) Relying on the language and 8 context, the assignment language restricts itself to reimbursement of benefits, nothing 9 more. Cf. Infoneuro Grp. v. Aetna Life Ins. Co., No. 2:16-cv-05083-AB (JCx), 2019 WL 10 3006549, at *2, *7 (C.D. Cal. May 3, 2019), aff’d, No. 22-55239, 2023 WL 2052781 (9th 11 Cir. Feb. 16, 2023) (finding a proper assignment of fiduciary duty where the heading 12 specified assignment of fiduciary duty and the form began, “In addition to the assignment 13 of the medical benefits and/or insurance reimbursement above, I also assign and/or convey 14 to the above named health care provider any legal or administrative claim. . .”). 15 Other than conclusory allegations, Plaintiff does not allege an independent fiduciary 16 relationship. Accordingly, the Court grants the motion to dismiss the fiduciary duty claim 17 with leave to amend, should Plaintiff have other grounds to allege in good faith that plan 18 members assigned Plaintiff their right to bring claims for fiduciary responsibilities. 19 B. Claims Under the FFCRA and CARES Act 20 As Plaintiff acknowledged in the complaint, there is no private right of action— 21 either explicit or implicit—under the CARES Act, and by extension the FFCRA. (Compl. 22 ¶¶ 92–93.) Saloojas, Inc. v. Aetna Health of Cal., Inc., 80 F.4th 1011, 1016 (9th Cir. 2023) 23 (“We therefore hold that the CARES Act does not grant a private right of action to a 24 provider of COVID-19 diagnostic testing to enforce § 3202.”).8 Here, Plaintiff lacks 25 26 8 The Ninth Circuit in Saloojas also addressed the lack of a private right of action in the FFCRA, stating: 27 Moreover, the CARES Act was passed soon after FFCRA and expands on the requirements in § 6001(a) of FFCRA. Section 6001 of FFCRA contains 28 1 standing, according to Ninth Circuit precedent. Therefore, the Court grants Defendants’ 2 motion to dismiss the FFCRA and CARES Act claims. The Court also denies leave to 3 amend these claims because any amendment would be futile. 4 C. Claims Under State Law 5 Plaintiff raises an assortment of state law claims against Defendants. To the extent 6 Plaintiff seeks to recover benefits from an ERISA plan in this suit, Plaintiff’s state law 7 claims are preempted. And to the extent Plaintiff seeks to recover from MA plans, Plaintiff 8 has failed to allege exhaustion. The Court addresses each point in turn. 9 1. ERISA Preemption 10 Defendants move to dismiss Plaintiff’s state law claims. First, Defendants argue that 11 the Court lacks subject matter jurisdiction to decide the state law claims, assuming the 12 Court dismissed the federal claims. Second, Defendants assert that the state law claims are 13 preempted by ERISA. Finally, Defendants argue that the state law claims are both factually 14 deficient and time-barred. 15 The purpose of ERISA is to “provide a uniform regulatory regime over employee 16 benefit plans.” Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004). To that end, ERISA 17 includes expansive pre-emption provisions, see 29 U.S.C. § 1144, which are intended to 18 ensure that employee benefit plan regulation would be “exclusively a federal concern.” 19 Alessi v. Raybestos–Manhattan, Inc., 451 U.S. 504, 523 (1981). Specifically, ERISA 20 preempts “any and all State laws insofar as they may now or hereafter relate to any 21 employee benefit plan” that ERISA covers. 29 U.S.C. § 1144(a). A court can decide 22 preemption of state law claims under § 1144(a) at the motion to dismiss stage. See Wise v. 23 24 25 agencies—Health and Human Services, Labor, and the Treasury. FFCRA § 26 6001(b), (c). Again, the fact that these provisions provide an enforcement mechanism but only through the Secretaries suggests a lack of 27 congressional intent to create a private right of action for providers. Saloojas, Inc. v. Aetna Health of California, Inc., 80 F.4th 1011, 1016 (9th Cir. 2023). 28 1 Verizon Commc’ns, Inc., 600 F.3d 1180, 1191 (9th Cir. 2010) (affirming a district court’s 2 dismissal of “state law claims as preempted by ERISA’s broad preemption provision”). 3 The statute preempts only those claims that “relate to” an ERISA plan. The Supreme 4 Court has identified two categories of state law claims that relate to an ERISA plan: (1) 5 claims that have a “reference to” an ERISA plan, and (2) claims that have an impermissible 6 “connection with” an ERISA plan. Depot, Inc. v. Caring for Montanans, Inc., 915 F.3d 7 643, 665 (9th Cir. 2019) (quoting Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 319 8 (2016)). But ERISA preemption does not apply “if the state law has only a tenuous, remote, 9 or peripheral connection with covered plans[.]” Dishman v. UNUM Life Ins. Co. of Am., 10 269 F.3d 974, 984 (9th Cir. 2001) (citation omitted). 11 The “reference to” prong preempts state law claims that operate as “alternative 12 enforcement mechanisms” to § 502(a)’s comprehensive civil enforcement scheme, 13 Dishman, 269 F.3d at 981 (citation omitted); that “challenge the administration of ERISA 14 plan benefits,” Greany v. W. Farm Bureau Life Ins. Co., 973 F.2d 812, 818 (9th Cir. 1992); 15 or that are “premised on the existence of an ERISA plan” such that the plan “is essential to 16 the claim’s survival,” Depot, 915 F.3d at 665 (citation omitted). In short, when a plaintiff’s 17 state law claim is “[i]n reality” a “challenge [to] the administration of ERISA plan 18 benefits,” it is preempted and may not proceed. Greany, 973 F.2d at 818. 19 Here, Plaintiff’s state law claims are preempted because they at least have a 20 “reference to” the ERISA plans. Plaintiff’s state law claims arise out of the same facts and 21 seek the same relief as the ERISA benefit reimbursement claim.9 See Stone v. Travelers 22 Corp., 58 F.3d 434, 437 (9th Cir. 1995) (“Stone’s claim under the California FEHA clearly 23 relates to the ERISA plans in the most direct way; his claim is founded in the denial of 24 benefits to which he claims he is entitled under those plans. Accordingly, his FEHA claim 25 26 9 Plaintiff’s state law theories are not permissible alternative or inconsistent pleadings. See, e.g., 27 Lewis v. Activision Blizzard, Inc., No. C 12-1096 CW, 2012 WL 5199505, at *4 (N.D. Cal. Oct. 22, 2012) (“Thus, a state law claim that is preempted by copyright law may not be plead under the guise of an 28 1 is preempted.”); see also Korman v. ILWU-PMA Claims Off., No. 2:18-cv-07516-SVW- 2 JPR, 2019 WL 1324021, at *15 (C.D. Cal. Mar. 19, 2019) (“To recover under a contract 3 theory or bad faith theory would require the [c]ourt to analyze the terms of the ERISA 4 Plan[.]”). And Plaintiff does not here allege state law claims against non-ERISA-governed 5 plans, which Plaintiff is already adjudicating in state court. 6 On the face of the complaint, the state law claims seek reimbursement of benefits 7 under an ERISA plan; in other words, Plaintiff’s state law claims are alternative means to 8 collect payment of its cash price for testing services. 9 • California’s Unfair Competition Law: “Administrator Defendants, MA Plan 10 Defendants, and/or General Doe Defendants have engaged in unfair business 11 practices by refusing to properly pay Quickmed for critical COVID-19 testing and 12 services and in turn retaining monies intended to provide medical services for their 13 members, in a manner which is unethical and contrary to public policy.” (Compl. ¶ 14 102.) 15 • Money Had and Received: “Quickmed asserts that Administrator Defendants, MA 16 Plan Defendants, and/or General Doe Defendants owe it money.” (Compl. ¶¶ 114, 17 120, 123.) 18 • Open Book Account: “Administrator Defendants, MA Plan Defendants, and/or 19 General Doe Defendants owe Quickmed money on the account in an amount of the 20 difference between a reasonable rate and/or Quickmed’s publicly listed cash price 21 and the amount that Administrator Defendants, MA Plan Defendants, and/or General 22 Doe Defendants paid of the claims at issue, plus applicable interest and penalties.” 23 (Compl. ¶ 127.) 24 • Account Stated: “Defendant owes Quickmed money from previous financial 25 transactions involving the payment for COVID-19 testing and services rendered for 26 Defendant and Administrator Defendants, MA Plan Defendants, and/or General Doe 27 Defendants’ members.” (Compl. ¶¶ 131–33.) 28 1 • Promissory Estoppel: “Consequently, Administrator Defendants, MA Plan 2 Defendants, and/or General Doe Defendants caused Quickmed to suffer damages, 3 for which Administrator Defendants, MA Plan Defendants, and/or General Doe 4 Defendants are liable, in the amount to be proven at trial, plus interest and applicable 5 fees and/or penalties.” (Compl. ¶ 142.) 6 • Unjust Enrichment: “As a result of Administrator Defendants, MA Plan Defendants, 7 and/or General Doe Defendants’ actions and omissions, Administrator Defendants, 8 MA Plan Defendants, and/or General Doe Defendants owe Quickmed an amount to 9 be proven at trial, plus penalties, interest, and, inter alia, attorneys’ fees.” (Compl. ¶ 10 147.) 11 • Breach of Implied-in-Law Contract: As set forth herein, for out-of-network COVID- 12 19 testing and services, under SB 510, Administrator Defendants, MA Plan 13 Defendants, and/or General Doe Defendants have a statutory duty to pay providers 14 at a reasonable rate, plus interest, and under the CARES Act, Administrator 15 Defendants, MA Plan Defendants, and/or General Doe Defendants have a statutory 16 duty to pay providers at the providers’ publicly listed cash price. (Compl. ¶¶ 149, 17 151–52.) 18 • Breach of Implied-in-Fact Contract: “Quickmed then billed Administrator 19 Defendants, MA Plan Defendants, and/or General Doe Defendants for performing 20 such services, with the expectation that Quickmed would be paid.” (Compl. ¶¶ 156– 21 60.) 22 • Quantum Meruit: “Administrator Defendants, MA Plan Defendants, and/or General 23 Doe Defendants are obligated to pay Quickmed a reasonable rate, plus interest and 24 applicable fees and/or penalties.” (Compl. ¶¶ 167–69.) 25 • California Health & Safety Code/Insurance Code claim (Cal. Health & Safety Code 26 §1342.2 / Ins. Code §10110.7): “Section 1342.2 (and corresponding language in 27 California Insurance Code § 10110.7) mandates that health care service plans, such 28 1 are responsible for paying providers for out-of-network COVID-19 testing and 2 services provided to the plan’s members.” (Compl. ¶¶ 171, 176–77.) 3 As mentioned, ERISA’s preemption clause is not absolute. The Ninth Circuit has 4 allowed, for example, the state law claim of negligent misrepresentation to survive the 5 reach of the preemption clause, especially where there was no ERISA action pending. See, 6 e.g., Healthcare Ally Mgmt. of Cal., LLC v. WSP USA, Inc., No. 24-3479, 2026 WL 7 2319896 (9th Cir. Aug. 11, 2026) (rejecting ERISA preemption of a negligent 8 misrepresentation claim where the plaintiff lacked derivative standing to recover benefits 9 under ERISA); The Meadows v. Employers Health Insurance, 47 F.3d 1006, 1010 (9th Cir. 10 1995) (rejecting ERISA preemption of a negligent misrepresentation claim where the 11 plaintiff lacked derivative standing because the patients were not yet ERISA beneficiaries 12 when the unlawful statement was made).10 But reimbursement of benefits under state law 13 indicates an alternative enforcement mechanism to ERISA’s comprehensive civil 14 enforcement scheme. 15 Because ERISA preempts Plaintiff’s state law claims as pled, the Court does not 16 address Defendant’s secondary arguments that Plaintiff’s allegations are time-barred and 17 deficient on the merits. Accordingly, the Court grants Defendants motion to dismiss the 18 state law claims against ERISA-governed plans. The state law claims pertaining to ERISA 19 plans are dismissed without prejudice. 20 2. Medicare Act Exhaustion 21 The Medicare Act offers a federally subsidized health insurance program that covers 22 the elderly and disabled. See 42 U.S.C § 1395w–26 et seq. An agency housed within the 23 24 10 The Ninth Circuit has also considered in its analysis the potential lack of recourse. See 25 Healthcare Ally Mgmt. of California, LLC v. WSP USA, Inc., No. 24-3479, 2026 WL 2319896 (9th Cir. Aug. 11, 2026) (“In such a scenario, preemption of a negligent misrepresentation claim would leave 26 providers with no recourse—under either state law or ERISA—when they rely on a plan’s coverage representations that later prove false.”); Bafford v. Northrop Grumman Corp., 994 F.3d 1020, 1031 (9th 27 Cir. 2021) (“Holding both that Hewitt’s calculations were not a fiduciary function and that state-law claims are preempted would deprive Plaintiffs of a remedy for the wrong they allege without examination of the 28 1 Department of Health and Human Services, CMS, administers Medicare. See 42 U.S.C § 2 1395b–9; 42 C.F.R. § 400.200. Under Part A and Part B of the Medicare insurance 3 program, the government pays health care providers on a fee-for-service basis. See 42 4 U.S.C § 1395w–26 et seq. 5 Part C of the Medicare insurance program, however, allows users to enroll in a 6 private health insurance plan that contracts with the government. See 42 U.S.C §§ 1395w– 7 21 to –29; 42 C.F.R. § 422 et seq. Part C also goes by the name: Medicare Advantage 8 Program or MA plan. Id. And the private entities contracting with the government are 9 known as Medicare Advantage Organizations (“MAO”). Id. The MAOs provide health 10 care services that would have been covered under Medicare Part A and Part B. See 42 11 U.S.C. §§ 1395w–23(a)(1). 12 Plaintiff alleges that Defendants are MAOs that administer and pay for Medicare- 13 covered services for their enrollees through an MA plan. (Compl. ¶¶ 17, 37.) Plaintiff 14 identifies as a non-contract provider that was allegedly unreimbursed for its testing 15 services.11 (Compl. ¶ 173.) In response, Defendants argue Plaintiff has failed to allege 16 exhaustion of administrative remedies under the Medicare Act, and thus the Court lacks 17 jurisdiction. See Do Sung Uhm v. Humana, Inc., 620 F.3d 1134, 1140 (9th Cir. 2010) (“The 18 issue of exhaustion bears on the district court’s jurisdiction.”). 19 The Medicare Act requires claimants to exhaust administrative remedies before 20 bringing claims that arise under the Medicare Act in federal court.12 See 42 U.S.C. § 405(h). 21 Section 405(h)—the Medicare Act’s exhaustion provision for claims “arising under” the 22 Medicare Act—channels judicial review exclusively through 42 U.S.C. § 405(g), making 23 11 Non-contract providers, also referred to as out-of-network providers, seek reimbursement from 24 the Medicare Advantage Organization (“MAO”) after providing services to a Medicare Part C enrollee; 25 non-contract providers are reimbursed based on rates set by the Medicare Act and related regulations. See 42 C.F.R. § 422.214. The MAO is required to pay noncontract providers the amount the provider would 26 have received under original Medicare. See id. §§ 422.100(b)(2), 422.216(a)(2). 12 The exhaustion requirement applies even where suit is brought against an MAO. See Glob. 27 Rescue Jets LLC v. Kaiser Found. Health Plan, Inc., No. 19CV1737-L-NLS, 2020 WL 7024640, at *3 (S.D. Cal. Nov. 30, 2020), (noting that an “MA organization is a government officer or employee for 28 1 it “the sole avenue for judicial review.” Heckler v. Ringer, 466 U.S. 602, 614–15 (1984). 2 Under this framework, “[j]udicial review of claims arising under the Medicare Act is 3 available only after the Secretary [of Health and Human Services] renders a ‘final decision’ 4 on the claim, in the same manner as is provided in 42 U.S.C. § 405(g)[.]” Id. at 605. And 5 “a ‘final decision’ is rendered on a Medicare claim only after the individual claimant has 6 pressed his claim through all designated levels of administrative review.” Id. at 606. 7 Medicare payment decisions involve a multi-layer administrative review beginning with a 8 request for payment. See Glob. Rescue Jets, LLC v. Kaiser Found. Health Plan, Inc., 30 9 F.4th 905, 914 (9th Cir. 2022). 10 But, as noted, the statute requires exhaustion only of claims that arise under the 11 Medicare Act. In Heckler, the Supreme Court held that claims arise under Medicare for 12 purposes of § 405(h) if “both the standing and the substantive basis for the presentation” 13 of the claims is the Medicare Act. 466 U.S. at 614–15 (citing Weinberger v. Salfi, 422 U.S. 14 749, 760–61 (1975)). The Court also explained that claims “inextricably intertwined” with 15 a claim for Medicare benefits arise under Medicare. Id. at 624. 16 Plaintiff does not assert a claim directly under the Medicare Act; instead, Plaintiff 17 brings numerous state law claims. Because California law provides the substantive basis 18 for each of Plaintiff’s claims, the Court must decide whether the state law claims are 19 “inextricably intertwined” with a claim for Medicare benefits. See Prime Healthcare 20 Servs., Inc. v. Humana Ins. Co., No. CV 16-01097-BRO (JEMx), 2016 WL 6591768, at *7 21 (C.D. Cal. Nov. 4, 2016) (“Even a state law claim may ‘arise under’ the Medicare Act.”). 22 “[W]here, at bottom, a plaintiff is complaining about the denial of Medicare 23 benefits,” the claim “arises under” the Medicare Act. Uhm, 620 F.3d at 1142–43; Kaiser v. 24 Blue Cross of Cal., 347 F.3d 1107, 1114–15 (9th Cir. 2003) (concluding that Medicare 25 reimbursements to providers should be considered a claim for benefits for exhaustion 26 purposes). 27 Here, the state law claims are inextricably intertwined with the Medicare Act 28 because they seek reimbursement for benefits owed under the statute. See Heckler, 466 1 U.S. at 614–17 (deciding that the claim was ultimately one for benefits under the Act and 2 therefore “inextricably intertwined” with the Medicare Act). As enumerated in the ERISA 3 preemption section above, Plaintiff fails to explain how its state law claims are anything 4 more than an attempt to be reimbursed for under- or non-payment of Medicare benefits. 5 For example, Plaintiff’s UCL claim is not found on misrepresentations about coverage start 6 dates; instead, it rests on the interpretation of benefits due under the MA plans. See also 7 Uhm, 620 F.3d at 1143 (“The Uhms’ unjust enrichment claim fares no better, as it seeks to 8 vindicate the same alleged injury, based upon the same alleged promises, and thereby to 9 enforce the benefit requirements of the Act via an implied contract, rather than an express 10 one.”). 11 And Plaintiff does not raise a separate legal theory that happens to involve a 12 Medicare plan. Cf. Kaiser, 347 F.3d at 1115 (noting that plaintiffs’ defamation and invasion 13 of privacy claims were arguably not subject to the exhaustion requirement); Prime 14 Healthcare, 2016 WL 6591768, at *8 (discussing that “claims do not ‘arise under’ the 15 Medicare Act, when they ‘at bottom [are] not seeking to recover benefits’” (citation 16 omitted)). Thus, all claims alleged need to be exhausted.13 17 18 13 Plaintiff responds that the Fifth Circuit’s reasoning in Caris should apply here; the Fifth Circuit 19 does not require exhaustion when the enrollee lacks an interest in the reimbursement dispute. See Caris MPI, Inc. v. UnitedHealthcare, Inc., 108 F.4th 340, 351 (5th Cir. 2024) (“When there is a complete lack 20 of enrollee interest in a payment dispute between an MAO and a provider, as in this case, there are no 21 administrative remedies for the provider to exhaust.”). Similar to the facts in Caris, the facts in this case reflect a provider seeking reimbursement from 22 an MAO, where the enrollee apparently lacks an interest given FFCRA 6003. The Ninth Circuit has not sanctioned this exception. And Ninth Circuit precedent generally contradicts the Fifth Circuit’s opinion 23 in RenCare, Ltd. v. Humana Health Plan of Tex., Inc., 395 F.3d 555, 559 (5th Cir. 2004), on which the Caris court rests its reasoning. See, e.g., Prime Healthcare Huntington Beach, LLC v. SCAN Health Plan, 24 210 F. Supp. 3d 1225, 1232 (C.D. Cal. 2016) (“The Ninth Circuit is at odds in this regard with the Fifth 25 Circuit in RenCare[.]”). To the extent Plaintiff cites to in-circuit case law applying RenCare, the discussion pertains to 26 private contract disputes. See, e.g., Liberty Dialysis-Hawaii LLC v. Kaiser Found. Health Plan, Inc., No. CV 17-00318 JMS-RLP, 2017 WL 4322385, at *5 (D. Haw. Sept. 28, 2017) (“Liberty’s contract dispute 27 with Kaiser Foundation will not require a determination or redetermination of any Medicare decision.”); but see Wang v. United Healthcare of Washington, Inc., No. 2:23-CV-01434-LK, 2025 WL 593094, at *7 28 1 Because Plaintiff’s claims arise under Medicare, it must proceed under 42 U.S.C. § 2 405(g). But Plaintiff has neither alleged that it exhausted administrative remedies nor 3 alleged that it meets the conditions for waiver of exhaustion. Cf. Kaiser Found. Health 4 Plan, Inc. v. Burwell, 147 F. Supp. 3d 897, 904 (N.D. Cal. 2015) (explaining that the 5 plaintiff administratively exhausted by, for example, appealing to a private contractor that 6 reviews Medicare disputes). Although Plaintiff states that it has complained of unpaid or 7 underpaid claims to Defendants (Compl. ¶ 57), Plaintiff does not allege that it appealed to 8 a private independent contractor pursuant to 42 C.F.R. § 422.592, requested a hearing 9 before an administrative law judge (“ALJ”) pursuant to 42 C.F.R. § 422.600, or requested 10 review of the ALJ’s decision by the Medicare Appeals Council (“Council”) pursuant to 42 11 C.F.R. § 422.608. Given there is no final decision as required by Section 405(g), the Court 12 cannot review Plaintiff’s claims arising under the Medicare Act. See, e.g., Kaiser, 347 F.3d 13 at 1116 (“Because the plaintiffs have not exhausted available administrative review, the 14 district court lacked jurisdiction to consider those of their claims that arise under Medicare, 15 and dismissal on those claims is affirmed.”). 16 All of Plaintiff’s state law claims are inextricably intertwined with claims for 17 benefits under Part C of the Medicare Act. They therefore “arise under” the Act. Plaintiff 18 thus must seek administrative exhaustion before seeking recourse before this Court for 19 reimbursement claims under the Medicare Act. For that reason, the Court grants 20 Defendants’ motions to dismiss for lack of subject matter jurisdiction over the state law 21 claims seeking reimbursement of MA plans. 22 D. Claim for Declaratory Relief 23 California Code of Civil Procedure § 1060 states that a party can bring an original 24 action for a declaration of rights or duties, and the court may make a binding declaration 25 of the rights or duties. See Cal. Civ. Proc. Code § 1060. A court can grant such relief when 26 27 only dispute is between Dr. Wang and United over their negotiated contract.”). Therefore, given Ninth 28 1 there is an “actual controversy relating to the legal rights and duties of the respective 2 parties.” Id. 3 Here, given that the ERISA claim for reimbursement of benefits survives 4 Defendants’ motion to dismiss, Plaintiff presents evidence of an actual controversy. Cf. 5 Hackert v. Cigna Health & Life Ins. Co., No. 2:15-cv-1248 KJM CKD PS, 2016 WL 6 6611594, at *5 (E.D. Cal. Nov. 9, 2016) (granting summary judgment on a claim for 7 declaratory relief where it is “undisputed that plaintiff is a non-participating provider, that 8 defendants pay non-participating or out-of-network providers pursuant to the terms of the 9 applicable insurance policy and that plaintiff was paid pursuant to those policies”). 10 Accordingly, the Court denies Defendants’ motion to dismiss the claim for declaratory 11 relief at this stage. 12 E. Request to Strike 13 In the alternative, Defendants’ motion seeks to strike the following allegations: (1) 14 Plaintiff’s third cause of action for the FFCRA/CARES Act violation, (2) all references to 15 Medicare claims, and (3) Plaintiff’s requests for equitable relief under both its federal and 16 state causes of action. Here, the referenced material is not wholly redundant, immaterial, 17 impertinent, or scandalous. Thus, the Court declines to strike any portion of the complaint 18 at this stage of litigation. 19 IV. CONCLUSION 20 This case requires one to remember the circumstances of the COVID-19 pandemic. 21 Congress required health plans and health insurance issuers to provide coverage of 22 COVID-19 testing, and Plaintiff provided diagnostic services to individuals covered by 23 ERISA-governed plans and MA plans. Now, Plaintiff alleges that Defendants have unpaid 24 or underpaid outstanding claims for its diagnostic testing services. In this suit, Plaintiff 25 seeks reimbursement from plans, insurers, and claim administrators of ERISA-governed 26 and MA plans, raising federal and state law claims. As alleged, some claims cannot survive 27 the plausibility pleading standard or fail for lack of jurisdiction. 28 1 Accordingly, upon review, the Court GRANTS IN PART and DENIES IN PART 2 || Defendants’ motion to dismiss. Specifically: 3 e The Court DENIES Defendants’ motion to dismiss the claim for benefits under 29 4 U.S.C. § 1132(a)(1)(B); 5 e The Court GRANTS with leave to amend Defendants’ motion to dismiss the claim 6 for breach of fiduciary duty under § 502(a)(2); 7 e The Court GRANTS without leave to amend Defendants’ motion to dismiss the 8 claim for violation of the FFCRA and CARES Act; 9 e The Court GRANTS with leave to amend Defendants’ motion to dismiss for lack 10 of jurisdiction Plaintiff's Medicare claims, given Plaintiff's failure to exhaust; e The Court GRANTS with leave to amend Defendants’ motion to dismiss the state 12 law claims, given ERISA’s preemption provision; 13 e The Court DENIES Defendants’ motion to dismiss the request for declaratory relief; 14 and 15 e The Court DENIES Defendants’ motion to strike. 16 Plaintiff does not have leave to add new claims or parties without the Court’s permission. Plaintiff shall file any amended complaint on or before September 18, 2026. 18 If Plaintiff declines to file an amended complaint by that deadline, then Defendants shall 19 file an answer to the complaint by October 2, 2026. 20 IT IS SO ORDERED. 21 22 || DATED: August 26, 2026 (yi. Duhark 23 Hon. Cynthia Bashant, Chief Judge United States District Court 25 26 27 28 47