# Caris MPI v. UnitedHealthcare

> Court of Appeals for the Fifth Circuit · July 16, 2024 · 108 F.4th 340

URL: https://www.frixlaw.com/law-library/cases/10471417

## Case

- **Court:** Court of Appeals for the Fifth Circuit
- **Decided:** July 16, 2024
- **Citations:** 108 F.4th 340
- **Precedential status:** Published
- **Opinion:** Opinion
- **Nature of suit:** Private Civil Federal
- **Cited by:** 13 later opinions in the Frix Law Library

## Citator (automated)

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## Opinion text

Case: 23-10901 Document: 74-1 Page: 1 Date Filed: 07/16/2024

United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit

____________ FILED
July 16, 2024
No. 23-10901 Lyle W. Cayce
____________ Clerk

Caris MPI, Incorporated, doing business as Caris Life
Sciences,

Plaintiff—Appellant,

versus

UnitedHealthcare, Incorporated; United Healthcare
Services, Incorporated; UnitedHealthcare Community
Plan of Texas, L.L.C.; Unitedhealthcare Benefits of
Texas, Incorporated; Optum Incorporated,

Defendants—Appellees.
______________________________

Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:21-CV-3101
______________________________

Before Clement, Engelhardt, and Wilson, Circuit Judges.
Cory T. Wilson, Circuit Judge:
Caris MPI, Inc. (Caris) sued UnitedHealthcare, Inc. (United) in
Texas state court, alleging various state law claims. United removed the case,
asserting federal officer jurisdiction under 28 U.S.C. § 1442(a)(1), and Caris
moved to remand. The district court denied Caris’s motion and then
dismissed Caris’s claims without prejudice for failure to exhaust
administrative remedies under the Medicare Act, 42 U.S.C. §§ 1395–1395lll.
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We agree that federal officer jurisdiction exists in this case. But the
district court erred in dismissing Caris’s claims because “the administrative
review process attendant to [Medicare] Part C does not extend to claims in
which an enrollee has absolutely no interest,” such that there are no
administrative remedies for Caris to exhaust. RenCare, Ltd. v. Humana
Health Plan of Tex., Inc., 395 F.3d 555, 559 (5th Cir. 2004). Accordingly, we
affirm in part, reverse in part, and remand for further proceedings.
I.
Caris is a private healthcare provider that specializes in cancer
diagnostic testing. United is a private insurance company that contracts with
the Centers for Medicare and Medicaid Services (CMS) to provide health
insurance through the Medicare Advantage program. This case arises from
United’s attempt to recoup money it paid to Caris for services provided to
United’s Medicare Advantage enrollees. We briefly explain the relationship
between providers, insurance companies, and CMS under Medicare
Advantage and then detail the specific background of this case.
A.
Congress created the Medicare Advantage program, also known as
Medicare Part C, as an alternative to traditional Medicare. See U.S. Dep’t
of Health & Hum. Servs., Understanding Medicare
Advantage Plans 1 (2023), medicare.gov/Pubs/pdf/12026-
Understanding-Medicare-Advantage-Plans.pdf. That program gives
enrollees the choice to obtain benefits through private insurance companies
rather than from the government. See id at 1–2. Private companies that
insure Medicare Advantage enrollees are called Medicare Advantage
Organizations (MAOs). 42 C.F.R. § 422.2. MAOs receive fixed payments

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from CMS based on the number of enrollees in the company’s Medicare
Advantage plan. 42 U.S.C. § 1395w-23(a)(1)(A). 1
MAOs are empowered to determine “whether an [enrollee] is entitled
to receive a health service under [Medicare] and the amount (if any) that the
individual is required to pay with respect to such service.” Id.
§ 1395w-22(g)(1)(A). These are known as “organization determinations.”
42 C.F.R. § 422.566. Organization determinations include an MAO’s
“refusal to provide or pay for services, in whole or in part, . . . that the
enrollee believes should be furnished or arranged for” by the MAO. Id.
§ 422.566(b)(3). Parties to an organization determination are not limited to
enrollees and MAOs. Id. § 422.574. Relevant to this case, “parties to [an]
organization determination [include] . . . [a]n assignee of the enrollee (that is,
a physician or other provider who has furnished a service to the enrollee and
formally agrees to waive any right to payment from the enrollee for that
service).” Id. § 422.574(b).
MAOs “must provide meaningful procedures” for resolving disputes
concerning organization determinations. 42 U.S.C. § 1395w-22(f); see 42
C.F.R. § 422.566(a). If an MAO decides that services are not covered by
Medicare, the MAO must notify the enrollee in writing. 42 U.S.C.
§ 1395w-22(g)(1)(B). The enrollee may challenge the organization
determination using the MAO’s internal process. Id. § 1395w-22(g)(2); 42
C.F.R. § 422.582. If the MAO affirms its organization determination, “the
issues that remain in dispute must be reviewed and resolved by an
_____________________
1
Parts of the Medicare Act, and courts construing the law, refer to “Medicare +
Choice” instead of “Medicare Advantage.” See, e.g., 42 U.S.C. § 1395w-23(a)(1)(A);
RenCare, 395 F.3d at 556. That is because the Medicare + Choice program was renamed
the Medicare Advantage program in December 2003. See CMS.gov, Health Plans –
General Information, https://www.cms.gov/medicare/enrollment-renewal/health-plans,
(last visited July 8, 2024).

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independent, outside entity.” 42 C.F.R. § 422.592(a); see 42 U.S.C.
§ 1395w-22(g)(4). If the enrollee is dissatisfied with the independent entity’s
decision, the enrollee has a right to a hearing before CMS. 42 U.S.C.
§ 1395w-22(g)(5); 42 C.F.R. § 422.600. If the enrollee remains dissatisfied,
he or she may seek judicial review of the organization determination, but only
after the enrollee has completely exhausted his or her administrative
remedies under the Medicare Act and its regulations. See 42 U.S.C.
§ 1395w-22(g)(5) (incorporating the judicial review procedure under 42
U.S.C. § 405(g)); Heckler v. Ringer, 466 U.S. 602, 617 (1984) (noting that
exhaustion is a “prerequisite to jurisdiction” under 42 U.S.C. § 405(g)).
Notwithstanding the foregoing process, once “an enrollee has no further
liability to pay for services that were furnished by an MA[O], a determination
regarding th[ose] services is not subject to appeal.” 42 C.F.R.
§ 422.562(c)(2).
MAOs engage healthcare providers to provide medical services
enrollees need. 42 U.S.C. § 1395w-22(d)(1); 42 C.F.R. § 422.200. These
relationships can be structured in two ways. First, an MAO may enter an
“explicit agreement” with a provider, whereby the MAO agrees to pay pre-
determined rates for specific treatments. See 42 U.S.C. § 1395w-22(j)(6). An
MAO’s payments to “contracted providers” are governed solely by the
terms of the contract. 42 C.F.R. § 422.520(b)(2). Second, “[a]ny provider
. . . that does not have in effect a contract establishing payment amounts for
services furnished to a beneficiary enrolled in a[] [Medicare Advantage]
plan” is a “noncontract provider.” Id. § 422.214(a)(1). The MAO is
required to pay noncontract providers the “amount the provider would have
received under original Medicare.” Id. §§ 422.100(b)(2), 422.216(a)(2).
Once an MAO determines that an enrollee is entitled to receive a
health service under his or her Medicare Advantage plan and the enrollee has
met his or her cost-sharing obligations (i.e., deductibles or co-pays), the

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Medicare Act limits the enrollee’s liability for further payments. See id.
§ 422.504(g). The Act achieves this by requiring contracted providers to
accept the pre-determined contract rates as “payment in full,” and by
requiring noncontracted providers to accept the Medicare rate as “payment
in full.” 42 U.S.C. § 1395w-22(k)(1), (k)(2)(A)(i). Further, if a noncontract
provider participates in Medicare and receives payment, then the provider
“may not collect from an enrollee more than the cost-sharing established by
the [Medicare Advantage] fee-for-service plan.” 42 C.F.R. § 422.216(b)(2).
MAOs “must adopt and maintain arrangements satisfactory to CMS to
protect its enrollees from incurring liability . . . for payment of any fees that
are the legal obligation of the MA[O].” Id. § 422.504(g)(1). Consequently,
MAOs are prohibited from recouping from enrollees any payments the MAO
makes to providers. See id.
B.
Caris has provided cancer diagnostic services to United’s Medicare
Advantage customers for over ten years. Caris and United had no written
contract during that period. Rather, they interacted “according to their
longstanding course of dealings, representations . . . , and implied
contracts.” 2 Summarized, Caris obtained preauthorization from United
before providing its services; based on that preauthorization, Caris provided
patients the requested services; Caris then sent United requests for payment
using agreed-upon billing codes; and United paid the claims.

_____________________
2
The parties dispute whether this relationship makes Caris a “contracted
provider” or a “noncontract provider.” That distinction gets to the heart of United’s
preemption defense. See infra Part III.B.1. Because we are only determining whether
removal of this case was proper, we leave the merits of that question for the district court.
See Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286, 297 n.10 (5th Cir. 2020) (en banc).

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In 2020, United audited Caris’s past claims and determined that Caris
had used incorrect billing codes between February 2016 and July 2018,
resulting in overpayments of $1,276,711.29. United began recouping the
purported overpayments by offsetting them against new payment claims
from Caris. Caris timely followed United’s internal process to challenge
United’s recoupment. After United rejected Caris’s internal appeals, Caris
filed suit against United in Texas state court. Caris alleged state law claims
including breach of implied contract, unjust enrichment, conversion, and
estoppel.
United then filed a notice of removal invoking federal officer
jurisdiction under 28 U.S.C. § 1442(a)(1). As one of its colorable federal
defenses justifying removal, United asserted that Caris was required to
exhaust its administrative remedies through CMS before filing suit. Caris
responded with a motion to remand. Considering Caris’s motion, the district
court raised the concern that, “should [it] deny the motion to remand,” it
might lack subject matter jurisdiction because Caris failed to exhaust its
administrative remedies under the Medicare Act. The district court
therefore directed the parties to conduct jurisdictional discovery on the issue.
After an evidentiary hearing, the district court denied Caris’s motion
to remand, concluding that federal officer jurisdiction existed. It then
dismissed Caris’s claims without prejudice, finding that Caris failed to
exhaust its administrative remedies as required by the Medicare Act. Caris
timely appealed.
II.
We review a district court’s denial of a motion to remand de novo.
Allen v. Walmart Stores, L.L.C., 907 F.3d 170, 182 (5th Cir. 2018). Likewise,
we review a dismissal for lack of subject matter jurisdiction de novo. Gilbert
v. Donahoe, 751 F.3d 303, 306–07 (5th Cir. 2014).

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III.
We first discuss the district court’s denial of Caris’s motion to remand
and then address its dismissal of Caris’s claims for failure to exhaust.
A.
“[F]ederal officer removal under 28 U.S.C. § 1442 is unlike other
removal doctrines: it is not narrow or limited.” St. Charles Surgical Hosp.,
L.L.C. v. La. Health Serv. & Indem. Co., 990 F.3d 447, 450 (5th Cir. 2021)
(quoting Texas v. Kleinert, 855 F.3d 305, 311 (5th Cir. 2017)). Though the
defendant maintains the burden to establish the existence of jurisdiction, “we
review the district court’s order . . . ‘without a thumb on the remand side of
the scale.’” City of Walker v. La. through Dep’t of Transp. & Dev., 877 F.3d
563, 569 (5th Cir. 2017) (quoting Kleinert, 855 F.3d at 311). The district court
concluded that United met its burden to establish jurisdiction. We agree.
To remove a case under § 1442(a), a defendant must show four things:
“(1) it has asserted a colorable federal defense, (2) it is a ‘person’ within the
meaning of the statute, (3) that has acted pursuant to a federal officer’s
directions, and (4) the charged conduct is connected or associated with an
act pursuant to a federal officer’s directions.” Latiolais v. Huntington Ingalls,
Inc., 951 F.3d 286, 296 (5th Cir. 2020) (en banc). Neither party disputes that
United is a “person” within the meaning of § 1442(a). See Savoie v.
Huntington Ingalls, Inc., 817 F.3d 457, 461–62, (5th Cir. 2016), overruled on
other grounds by Latiolais, 951 F.3d 286. We address the remaining elements
in turn.
1.
United asserts that it raised two colorable federal defenses in its notice
of removal: Caris failed to exhaust its administrative remedies, and Caris’s

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state law claims are preempted by the Medicare Act. 3 “To be ‘colorable’
[an] asserted federal defense need not be ‘clearly sustainable.’” Latiolais,
951 F.3d at 296 (quoting Jefferson County v. Acker, 527 U.S. 423, 432 (1999)).
In other words, a colorable federal defense does not require the party
asserting federal officer removal jurisdiction “to win [its] case before [it] can
have [the case] removed.” Id. (quoting Acker, 527 U.S. at 431) (internal
quotation marks omitted). “Instead, an asserted federal defense is colorable
unless it is ‘immaterial and made solely for the purpose of obtaining
jurisdiction’ or ‘wholly insubstantial and frivolous.’” Id. at 297 (quoting
Zeringue v. Crane Co., 846 F.3d 785, 790 (5th Cir. 2017)).
According to Caris, if the district court “erred as a matter of law in
holding that Caris was required to exhaust its claims[,] [i]t follows that
[United] lack[s] a colorable exhaustion defense.” Not so. That United’s
exhaustion defense fails on the merits, as we discuss infra, does not mean its
defense was not colorable when asserted. In pressing this defense, United
relied on this court’s unpublished opinion in Trinity Home Dialysis, Inc. v.
WellMed Networks, Inc., No. 22-10414, 2023 WL 2573914, at *5 (5th Cir. Mar.
20, 2023), which held that a similarly situated provider was required to
exhaust administrative remedies before suing an MAO for a payment dispute.
As we will explain, Trinity is distinguishable from this case, but United’s
reliance on Trinity was not “wholly insubstantial or frivolous.” See Latiolais,
951 F.3d at 297. And other courts have held that providers like Caris must
first exhaust administrative remedies before filing suit, e.g., Tenet
Healthsystem GB, Inc. v. Care Improvement Plus S. Cent. Ins. Co., 875 F.3d 584

_____________________
3
United raised a third federal defense—immunity under the Medicare Act—in its
notice of removal. But it does not discuss that defense in its brief on appeal, so we do not
consider it. See Rollins v. Home Depot USA, 8 F.4th 393, 397 (5th Cir. 2021) (“A party
forfeits an argument . . . by failing to adequately brief the argument on appeal.”).

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(11th Cir. 2017)—including the district court here, which, after all, ruled in
United’s favor. Thus, we cannot say that United’s exhaustion defense was
“immaterial and made solely for the purpose of obtaining jurisdiction.”
Latiolais, 951 F.3d at 297. Though United’s defense is ultimately unavailing,
it was colorable for purposes of federal officer removal. See id.
United’s federal preemption defense is also colorable for purposes of
federal officer removal. 4 The preemption provision for Medicare Advantage
provides that “[t]he standards established under this part shall supersede any
State law or regulation . . . with respect to [Medicare Advantage] plans [that]
are offered by MA[O]s under this part.” 42 U.S.C. § 1395w-26(b)(3).
Further, the Medicare Advantage regulations require that “[a]ny provider
. . . that does not have in effect a contract establishing payment amounts for
services furnished to a beneficiary . . . must accept, as payment in full, the
amounts that the provider could collect if the beneficiary were enrolled in
original Medicare.” 42 C.F.R. § 422.214(a)(1) (emphasis added). Based on
these provisions, other courts have held that state law quasi-contract claims
like those brought by Caris are preempted by the Medicare Act. See, e.g.,
Tenet, 875 F.3d at 591 (stating that “[t]he Medicare Act and its implementing
regulations . . . expressly forbid noncontract providers from raising”
quantum meruit or quasi-contract claims); Do Sung Uhm v. Humana, Inc.,
620 F.3d 1134, 1148–50 (9th Cir. 2010) (finding that Congress likely
“intended to expand the preemption provision beyond those state laws and

_____________________
4
The district court did not discuss this defense, as it sustained United’s exhaustion
argument. Caris avers that we should remand the case and allow the district court “to
decide the preemption question in the first instance.” But, at least as to whether United
has asserted a colorable defense, we “may affirm . . . on any ground supported by the record
and presented to the district court.” R J Reynolds Tobacco Co. v. FDA, 96 F.4th 863, 887
(5th Cir. 2024) (alteration in original) (quoting Wantou v. WalMart Stores Tex., L.L.C., 23
F.4th 422, 430 (5th Cir. 2022)).

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regulations inconsistent with the enumerated standards”); Prime Healthcare
Servs. v. Humana Ins. Co., 298 F. Supp. 3d 1316, 1319–22 (C.D. Cal. 2018)
(finding the plaintiff’s quasi-contract claims to be preempted). This court
has yet to rule on the issue.
Caris cites no contrary caselaw. Nevertheless, it argues that United
fails to carry its burden for its affirmative defense. But that is not for us to
decide today. See Latiolais, 951 F.3d at 297 n.10 (cautioning courts to “avoid
premature merits determination . . . . even if a federal defense makes sharp
demands” (internal quotation marks omitted)). At the very least, United’s
preemption defense is “plausible” and therefore colorable as required by 28
U.S.C. § 1442(a). See id. at 297.
2.
Next, we consider whether United has acted pursuant to a federal
officer’s direction. 5 Id. at 296. “We construe the ‘acting under’ requirement
broadly.” Trinity, 2023 WL 2573914, at *3 (citing Watson v. Philip Morris
Cos., Inc., 551 U.S. 142, 147 (2007)). A removing defendant need not prove
that its “conduct was precisely dictated by a federal officer’s directive.” St.
Charles, 990 F.3d at 454. “Instead, the ‘acting under’ inquiry examines the
relationship between the removing party and the relevant federal officer . . . .”
Id. at 455. A relationship is sufficiently close if the federal officer exercises
“subjection, guidance, or control” over the removing party and that party is
assisting or helping carry out a federal officer’s duties, as opposed merely to
“complying with the law.” Watson, 551 U.S. at 151–52. When a contractor
helps the Government perform a job that, “in the absence of a contract . . . ,
_____________________
5
By only referencing it in a footnote, Caris likely forfeited its argument that United
was not acting pursuant to a federal officer’s direction. See Rollins, 8 F.4th at 397 n.1. Still,
we briefly address the point to explain how United’s recoupment of payments is associated
with an act made pursuant to CMS’s direction.

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the Government itself would have had to perform,” and that relationship
involves “detailed regulation, monitoring, or supervision,” the private
contractor is “acting under” a federal officer’s direction. See id. at 153–54.
As discussed, CMS contracts with United to effectuate Medicare
coverage for program enrollees. In that regard, United is helping CMS carry
out its duties by providing insurance coverage that CMS would have
otherwise been required to provide in the absence of its contract with United.
United is also subject to “detailed regulation, monitoring, [and] supervision”
through its contract with CMS. See id. at 153. As an example, United’s
contract with CMS requires United to “develop, compile, evaluate, and
report to CMS” data regarding United’s fiscal soundness and “all
information that is necessary for CMS to administer and evaluate” the
Medicare Advantage program. Relevant to this case, United is required to
maintain detailed accounting records regarding services provided to
enrollees and allows CMS to audit those records at any time during that
period. Beyond those contractual obligations, the Medicare Act subjects
MAOs like United to extensive oversight. See 42 U.S.C. §§ 1395w-21–28;
42 C.F.R. §§ 422.1–422.2615. Given United’s role in fulfilling the mandate
of the Medicare Act and CMS’s broad oversight of that role, this element for
federal officer jurisdiction is met.
3.
Finally, we address whether United’s payment recoupment is
connected or associated with an act made pursuant to CMS’s direction.
Traditionally, to invoke federal officer jurisdiction, the removing party was
required to show a “causal connection” between the defendant’s action
taken pursuant to the Government’s direction and the plaintiff’s injury. See,
e.g., Savoie, 817 F.3d at 462. However, in Latiolais, this court rejected the
“causal nexus” test and embraced the broader “connected or associated”

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test set forth by the Removal Clarification Act. See 951 F.3d at 291–96; cf. St.
Charles, 990 F.3d at 454 (recognizing that “though the ‘acting under’ and
‘connection’ elements may often ride in tandem toward the same result, they
are distinct”).
Though this court has yet precisely to delimit the contours of the less
stringent “connected or associated” test, see Plaquemines Parish v. Chevron
USA, Inc., 84 F.4th 362, 375 (5th Cir. 2023), United easily meets the Latiolais
standard. United’s contract with CMS allows CMS periodically to audit
United’s records regarding services provided to enrollees. At the evidentiary
hearing conducted by the district court, United testified that its contract with
CMS requires United to “take action” if it finds improper payments or
overpayments during those audits. Indeed, United stated that the purpose of
its audit of Caris was to “ensure that it complied with the CMS guidelines
that [United] was obligated to follow.” Even Caris’s expert admitted that
United’s actions in conducting the audit were “governed by the manuals, the
procedures, the guidelines, and the regulations that have been promulgated
by CMS.” This evidence, which Caris does not dispute, clearly shows
United’s recoupment of payments was “connected or associated” with its
obligations to CMS under their contract.
To recap: Because United established all four elements of federal
officer jurisdiction under 28 U.S.C. § 1442, the district court properly denied
Caris’s remand motion and retained jurisdiction over Caris’s claims.
B.
We reach a different conclusion regarding the district court’s
dismissing Caris’s claims for failure to exhaust. Relying on this court’s
decision in Trinity, the district court held that Caris was required to exhaust
administrative remedies because United’s recoupment of prior payments
was an organization determination. It distinguished RenCare because, unlike

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the provider in that case, Caris nowhere waived its right to seek payment
from enrollees via a written contract. Caris contends that the district court
misinterpreted Trinity and RenCare. According to Caris, under RenCare, the
dispositive question is not whether the parties traveled under a written
contract, but whether an enrollee has an interest in the dispute. We agree
with Caris.
Like this case, RenCare involved a payment dispute between an MAO,
Humana, and a healthcare provider, RenCare. 395 F.3d at 556–57. Unlike
this case, Humana and RenCare’s relationship was governed by a written
contract. See id. at 558 (referencing the “parties’ privately-agreed-to
payment plan”). After Humana and RenCare “became embroiled in a
dispute over reimbursement,” RenCare sued Humana in Texas state court
for breach of contract, among other state law claims. Id. at 557. Humana
removed the case, asserting federal question jurisdiction under 28 U.S.C.
§ 1331, and RenCare moved to remand. Id. The district court denied
RenCare’s motion 6 and dismissed RenCare’s claims, “finding that RenCare
had failed to exhaust its administrative remedies under the Medicare Act.”
Id. RenCare appealed both rulings. Id.
Reversing the district court, this court made two distinct holdings.
First, it held that RenCare’s claims did not arise under the Medicare Act
because the claims were not “inextricably intertwined” with a claim for
Medicare benefits. See id. at 557–59 (citing Heckler, 466 U.S. at 602). Rather,
it found that “[a]t bottom, RenCare’s claims [were] claims for payment
pursuant to a contract between private parties.” Id. at 559. Second, it held

_____________________
6
The district court only partially denied RenCare’s remand motion. See RenCare,
395 F.3d at 557. It remanded RenCare’s claims relating to Humana’s non-Medicare
Advantage customers. Id. That distinction is not pertinent here because Caris is only
“pursuing monies recouped from previous Medicare Advantage payments.”

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that “the administrative review process attendant to Part C [i.e., Medicare
Advantage] does not extend to claims in which an enrollee has absolutely no
interest.” Id. The panel explained:
As is evident from the regulations, the administrative review
process focuses on enrollees, not health care providers, and is
designed to protect enrollees’ rights to Medicare benefits.
. . . Humana’s failure to pay RenCare is not an organization
determination subject to the mandatory exhaustion of
administrative remedies. No enrollee has requested an
organization determination or appeal. No enrollee has been
denied covered service or been required to pay for a service.
Rather, the [Medicare Advantage] enrollees in this case bear
no financial risk inasmuch as they have already received the
services for which RenCare seeks reimbursement. In fact,
there is a complete absence of [Medicare Advantage]
beneficiary interest in this dispute. The only interest at issue is
RenCare’s interest in receiving payment under its contract
with Humana.

Id. at 559–60.
RenCare’s first holding was premised on the written contract between
RenCare and Humana. Our court repeatedly emphasized that “[t]he dispute
[was] solely between Humana and RenCare” as it was “based on [their]
privately-agreed-to payment plan.” Id. at 558. And the existence of that
contract prevented the case from “arising under” the Medicare Act; the case
instead presented only an unadorned breach of contract claim. See id. at 558–
59. But RenCare’s contract-based holding has limited bearing on this case
because United removed Caris’s claims under our federal-officer
jurisdiction, not our federal-question jurisdiction.
By contrast, RenCare’s enrollee-interest analysis did not turn on the
existence of a contract, and this second holding is dispositive as to whether
Caris was required to exhaust administrative remedies before suing United.

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Here, as there, “[n]o enrollee has requested an organization determination
or appeal”; “[n]o enrollee has been denied [a] covered service or been
required to pay for a service”; and all enrollees have already received the
services for which United seeks recoupment. See RenCare, 395 F.3d at 559–
60. Regardless of whether Caris is a contract or non-contract provider, it is
prohibited from seeking additional payments from enrollees if it loses this
case. See 42 U.S.C. § 1395w-22(k)(1), (k)(2)(A)(i). And if United loses, it is
prohibited from recouping any costs from enrollees. See 42 C.F.R.
§ 422.504(g)(1). Thus, “there is a complete absence” of enrollee interest in
this dispute. RenCare, 395 F.3d at 560. The only question is whether United
can recoup payments it made to Caris for services already performed. Not
only was Caris not required to exhaust administrative remedies before filing
suit, “there [were] no administrative remedies for [Caris] to exhaust.” Id.
United responds that any reliance on RenCare is misplaced because
RenCare involved a dispute in which an MAO and a provider had an “express
written agreement.” But as just discussed, in determining whether RenCare
was required to exhaust administrative remedies, this court did not focus on
whether the parties had a written contract; the focus was on whether any
enrollee had an interest in the dispute. See id. at 559–60.
United points to Trinity for support, but that is problematic for two
reasons. First, Trinity is distinguishable from this case because it involved an
MAO’s ongoing refusal to reimburse a healthcare provider for services after
the MAO determined that the services did not qualify for reimbursement
under the Medicare Act. See 2023 WL 2573914, at *1. There is no question
that an MAO’s “refusal to provide or pay for services . . . that the enrollee
believes should be furnished or arranged for by the MA[O]” is an
organization determination that is subject to exhaustion. 42 C.F.R.
§ 422.566(b)(3). That is consistent with RenCare because an adverse
coverage determination means that an enrollee is not entitled to receive a

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No. 23-10901

desired service. Clearly, enrollees have a direct interest in such a dispute. By
contrast, United began recouping payments made to Caris between February
2016 and July 2018 for services already preapproved and performed. United
fails to show how a billing dispute between an MAO and provider for past
services rendered has a direct impact on enrollees.
Second, even if Trinity were not distinguishable, we are bound by this
court’s decision in RenCare. As an unpublished opinion, Trinity is not
binding precedent; RenCare, a published opinion, is. Gate Guard Servs., L.P.
v. Perez, 792 F.3d 554, 560 n.3 (5th Cir. 2015) (citing 5th Cir. R. 47.5).
Further, “[w]hen panel opinions appear to conflict, we are bound to follow
the earlier opinion.” H&D Tire and Automotive-Hardware, Inc. v. Pitney
Bowes Inc., 227 F.3d 326, 330 (5th Cir. 2000). Thus, even assuming tension
between RenCare and Trinity, RenCare remains our controlling case.
Lastly, United argues that the relevant statutory and regulatory
provisions demonstrate that Caris is acting as a party to an organization
determination and therefore must exhaust administrative remedies.
Specifically, United asserts that Caris is an “assignee” of enrollee claims, as
defined by 42 C.F.R. § 422.574(b). According to United, “it doesn’t
matter” whether an enrollee actually assigned his or her claim to Caris
because an assignee includes any “provider who has furnished a service to
[an] enrollee and [has] formally agree[d] to waive any right to payment from
the enrollee for that service.” See § 422.574(b); see also Tenet, 875 F.3d at
590–91 (distinguishing RenCare and holding that § 422.574(b)
“unambiguously defines” noncontract providers as assignees). But RenCare
expressly rejected that argument, such that an enrollee must actually have a
claim to assign for § 422.574(b) to apply. See 395 F.3d at 560. As detailed
above, no such claim exists in this case. Instead, as in RenCare, “[Caris] is
pursuing its own claims against [United].” Id. Thus, United’s recoupment

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No. 23-10901

of payments to Caris “is not an organization determination that [Caris] could
appeal within the mandatory administrative review mechanism.” Id.
* * *
RenCare is clear: The administrative review process for Medicare
Advantage claims set forth in the Medicare Act and its implementing
regulations “focuses on enrollees, not health care providers.” Id. at 559.
When there is a complete lack of enrollee interest in a payment dispute
between an MAO and a provider, as in this case, there are no administrative
remedies for the provider to exhaust. The district court therefore erred in
dismissing Caris’s claims for failure to do so.
IV.
For the foregoing reasons, we AFFIRM the district court’s denial of
Caris’s remand motion. We REVERSE the district court’s dismissal of
Caris’s claims for failure to exhaust and REMAND for proceedings
consistent with this opinion.
AFFIRMED in part; REVERSED in part; REMANDED.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10471417. Public record. Not legal advice.