Orrison v. Mayo Clinic
- Jeffrey Bryan
- 0:24-cv-01124
- U.S. District Court · District of Minnesota
- 19
In Orrison v. Mayo Clinic, Judge Jeffrey M. Bryan partially dismissed and partially allowed to proceed a lawsuit by Mayo Clinic employee Sherry Orrison, who alleged that Mayo and its claims administrator violated federal health benefits laws by providing a faulty provider directory, hiding how out-of-network reimbursements were calculated, and other misconduct.
Employees and beneficiaries of employer-sponsored, self-funded health plans governed by ERISA who seek to challenge their plan's failure to disclose out-of-network reimbursement methodologies, maintain accurate provider directories, or provide adequate explanations of benefit denials. Also relevant to plan administrators and claims administrators facing similar allegations under ERISA, the No Surprises Act, and the Mental Health Parity Act.
What happened
In Orrison v. Mayo Clinic (File No. 24-CV-01124), Sherry Orrison, a Mayo Clinic employee in Scottsdale, Arizona, sued Mayo Clinic and MMSI, Inc. (operating as Medica, the claims administrator for her health plan) under several federal laws. Orrison alleged that an online provider search tool wrongly showed no nearby in-network mental health providers for her teenage son, forcing her to use more expensive out-of-network care for years. She also alleged that the defendants refused to explain how they calculated out-of-network reimbursement rates, gave her conflicting information about her deductible and out-of-pocket totals, and otherwise mishandled her health plan benefits. Her lawsuit raised nine claims under ERISA (the federal law governing employer health plans), the federal anti-racketeering law (RICO), the Mental Health Parity Act, and the No Surprises Act, among others.
The defendants asked the court to throw out all nine claims. The court evaluated each claim to determine whether Orrison's complaint contained enough specific factual allegations to move forward, applying the standard that a complaint must state a plausible claim for relief—not just legal conclusions or vague assertions. The court found that several of Orrison's claims lacked sufficient factual detail: her RICO claim failed because she did not adequately allege that the defendants intentionally defrauded her; her claim for underpaid benefits failed because she did not point to any specific plan term that was violated; her Mental Health Parity Act claim was too general; and three additional claims for equitable relief were waived because her attorneys did not address them in response to the defendants' motions.
Judge Jeffrey M. Bryan granted the motions to dismiss in part and denied them in part. Three counts (equitable relief claims that Orrison's lawyers failed to defend) were dismissed with prejudice, meaning they cannot be refiled. Several other counts—including the RICO claim, the underpaid benefits claim, and the Mental Health Parity Act claim—were dismissed without prejudice, meaning Orrison may attempt to refile them with more detailed allegations. However, two significant claims survived entirely: Orrison's claim that the defendants breached their fiduciary duty under ERISA by refusing to disclose how out-of-network reimbursement rates were calculated, and her claim that the defendants violated the No Surprises Act by maintaining an inaccurate provider database that omitted in-network providers. The case moves forward on those surviving claims.
The detailed version
- Orrison v. Mayo Clinic, File No. 24-CV-01124 (JMB/SGE), United States District Court, District of Minnesota
- Jeffrey M. Bryan
- September 19, 2025
Parties
Plaintiff Sherry M. Orrison is an employee of Mayo Clinic residing in Scottsdale, Arizona. Defendant Mayo Clinic served as the Plan Administrator of a self-funded health care plan governed by ERISA (the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.). Defendant MMSI, Inc. (referred to in the opinion as 'Medica') served as the Claims Administrator for the plan.
Background
Orrison's claims stem from her attempts to obtain mental health treatment for her teenage son, a plan beneficiary, beginning in 2019. She alleges: (1) Medica's online provider search tool omitted local in-network mental health providers, falsely suggesting none existed and forcing her to use more costly out-of-network providers for years; (2) despite repeated requests, defendants refused to disclose the methodology used to calculate the non-network provider reimbursement rate (NNPRA), preventing her from anticipating out-of-pocket costs; and (3) defendants provided conflicting information about her satisfied deductible and out-of-pocket maximum amounts for 2022 and 2023.
Claims in First Amended Complaint (FAC)
Count I: civil RICO (18 U.S.C. § 1962); Count II: underpaid benefits under ERISA § 502(a)(1)(B) (29 U.S.C. § 1132(a)(1)(B)); Count III: failure to provide accurate Explanations of Benefits (EOBs); Count IV: breach of ERISA fiduciary duties; Count V: deprivation of a full and fair review under ERISA § 503 (29 U.S.C. § 1133); Count VI: equitable relief; Count VII: violation of the Mental Health Parity and Addiction Equity Act (Parity Act); Count VIII: violation of the No Surprises Act (NSA), 29 U.S.C. § 1185i; Count IX: additional equitable relief.
Legal Standard
Under Federal Rule of Civil Procedure 12(b)(6), the court accepts factual allegations as true but not conclusory statements or legal conclusions dressed as facts. The complaint must plead enough facts to make the claim 'plausible on its face' under Twombly (550 U.S. 544) and Iqbal (556 U.S. 662). Fraud-based claims require the heightened pleading particularity of Rule 9(b).
Count I — RICO (dismissed without prejudice)
Civil RICO requires allegations of predicate racketeering acts listed in 18 U.S.C. § 1961(1). Orrison identified three alleged predicates: mail fraud (§ 1341), wire fraud (§ 1343), and 'Health Care Offenses' (§§ 24, 1027, 1241, 1343). The court held that the 'Health Care Offenses' are not listed predicate acts under § 1961(1) and cannot sustain a RICO claim. As to mail and wire fraud, Rule 9(b) requires pleading the 'who, what, when, and how' of the alleged fraud scheme. After setting aside conclusory allegations (e.g., 'countless and nearly constant acts of mail and wire fraud'), the remaining factual assertions—an inaccurate search tool, unexplained EOBs, and conflicting deductible tallies—did not adequately allege intent to defraud or reckless disregard for the truth. The court also noted concerns about insufficient allegations of a RICO enterprise and pattern of racketeering but did not resolve those elements given the intent deficiency. Dismissed without prejudice.
Count II — Underpaid Benefits under ERISA § 502(a)(1)(B) (dismissed without prejudice)
Claims under this section can only allege violations of the actual terms of the ERISA-governed plan. The FAC failed to identify any specific plan provision that was violated. Orrison's allegations about misuse of NNPRA pricing, failure to comply with state laws, and discouraging out-of-network use did not identify any plan term. Dismissed without prejudice.
Count IV — Breach of Fiduciary Duty (partially denied, partially dismissed without prejudice)
To state an ERISA fiduciary breach claim, a plaintiff must allege: (1) defendant acted as a fiduciary; (2) defendant breached fiduciary duties; and (3) plaintiff was injured. The court applied the Eighth Circuit's more lenient pleading approach for ERISA claims (Braden v. Wal-Mart, 588 F.3d 585), recognizing that plan beneficiaries often lack access to internal information before discovery.
- Theory 1 — Failure to disclose NNPRA pricing methodology (DENIED): Orrison alleged that despite numerous requests, defendants refused to explain how out-of-network reimbursement rates were calculated, telling her only that amounts were 'negotiated on a claim-by-claim basis' and 'fluctuate throughout the year.' EOBs did not identify the NNPRA pricing method. Under ERISA's duty of loyalty and prudence (29 U.S.C. § 1104(a)(1)), making materially misleading statements or withholding material information can constitute a fiduciary breach. Materiality is fact-intensive and generally not resolved at the motion to dismiss stage (Braden). These allegations were sufficient. The court also rejected defendants' arguments that: (a) the claim was duplicative of the benefits claim; and (b) defendants had no statutory obligation to disclose NNPRA method, explaining that ERISA fiduciary duties are not limited to expressly enumerated disclosure obligations (citing Varity Corp. v. Howe, 516 U.S. 489).
- Theory 2 — Unauthorized out-of-network reductions (dismissed without prejudice): Failed for the same reason as Count II—no identification of a plan term allegedly violated.
- Theory 3 — Conflicting deductible/out-of-pocket maximum information (dismissed without prejudice): The FAC alleged discrepancies between the Medica Member Portal and Medica's internal Health Rules System but failed to identify which figure was incorrect and which was correct. Without identifying the misleading statement, the court could not assess materiality or reliance (required under Boyd v. ConAgra Foods, 879 F.3d 314).
Count V — Full and Fair Review under ERISA § 503 (denied)
Under 29 U.S.C. § 1133 and 29 C.F.R. § 2560.503-1, plans must provide written specific reasons for benefit denials and allow claimants access to documents relevant to their claims. The court found Orrison's allegations—repeated requests for explanation of how out-of-network rates were calculated, met each time with vague responses or silence—sufficient to state a claim. The court rejected defendants' argument that Orrison failed to request 'NNPRA pricing methods' by name, finding her requests for explanation of allowed-amount calculations were sufficient. The court also rejected Mayo's argument that it should be dismissed from this count, noting allegations that Orrison sought documents from Mayo and was denied. Note: the remedy for § 1133 violations is generally limited to procedural relief (remand to plan administrator).
Count VII — Mental Health Parity and Addiction Equity Act (dismissed without prejudice)
The Parity Act prohibits plans from imposing more restrictive limitations on mental health benefits than on medical/surgical benefits. The FAC included only general, conclusory assertions that defendants violated the Act due to a 'disparate number' of in-network mental health providers. Orrison identified no specific plan provision treating mental health claims differently from medical claims and no specific mental health claim that was handled less favorably than a comparable medical claim. These 'threadbare' allegations were insufficient under Iqbal. Note: the court declined to consider additional facts raised in Orrison's opposition brief that were not in the FAC, citing the rule that a complaint cannot be amended by briefing.
Count VIII — No Surprises Act (partially denied, partially dismissed without prejudice)
The NSA (29 U.S.C. § 1185i) imposes requirements on group health plans regarding provider database accuracy, verification processes, and response protocols.
- §§ 1185i(a)(2) and (3) — verification and response processes (dismissed without prejudice): FAC contained only conclusory allegations; insufficient.
- § 1185i(a)(4) — provider database requirement (denied): This provision requires plans to maintain a publicly accessible database of in-network providers and facilities for plan years beginning on or after January 1, 2022. Orrison alleged that from 2019 to 2023 the Medica search tool inaccurately omitted in-network providers within 50 miles of her home, leading her to mistakenly believe no in-network providers existed. The court held these allegations sufficient. The court rejected defendants' argument that the NSA only applies when an out-of-network provider is incorrectly listed as in-network (overinclusive database), finding no textual support for that limitation in the statute. Note: available relief is limited to equitable relief under 29 U.S.C. § 1132(a)(3); relief is also temporally limited because the NSA took effect January 1, 2022, and the FAC concedes the database was accurate as of March 31, 2023.
Counts III, VI, and IX — Equitable relief claims (dismissed with prejudice)
Orrison's opposition brief did not respond to defendants' motions to dismiss these three counts. The court treated this as a waiver and dismissed all three with prejudice, meaning they cannot be refiled.
Disposition Summary
- Counts III, VI, IX: Dismissed WITH prejudice (waived by failure to oppose) - Counts I, II, VII: Dismissed WITHOUT prejudice (may be refiled with additional factual allegations) - Count IV (portions re: unauthorized plan reductions and conflicting deductible information): Dismissed WITHOUT prejudice - Count IV (portion re: failure to disclose NNPRA pricing methodology): Motions DENIED — proceeds - Count V (full and fair review): Motions DENIED — proceeds - Count VIII (§§ 1185i(a)(2) and (3)): Dismissed WITHOUT prejudice - Count VIII (§ 1185i(a)(4), provider database): Motions DENIED — proceeds
Reviewer note from the AI+
Read the full 19-page opinion on CourtListener, the free public archive maintained by the Free Law Project.