Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...
Sept. 11 — Health plan participants' assignment of benefits to health-care providers needn't explicitly state that the participants are assigning their right to bring a lawsuit under ERISA in order for the provider to bring suit under the federal statute, the U.S. Court of Appeals for the Third Circuit ruled.
The appeals court rejected Aetna Inc.'s argument that a patient's assignment of benefits must explicitly state that the participant is assigning the right to sue before a provider has standing to bring an Employee Retirement Income Security Act action to recover benefits. An assignment of benefits that gives the health-care provider the right to payment of benefits implicitly gives that provider the right to sue under ERISA to recover such benefits, the court said.
North Jersey Brain & Spine Center (NJBSC) filed an ERISA lawsuit against Aetna after it refused to pay for medical services NJBSC provided to health plan participants. Aetna argued that NJBSC didn't have ERISA standing because, although the participants had assigned their right to benefits to the center, the assignments didn't transfer to it the right to bring a lawsuit under ERISA to recover benefits. NJBSC is a neurosurgical medical practice in Bergen County, N.J.
The U.S. District Court for the District of New Jersey agreed with Aetna and dismissed the lawsuit for lack of standing. NJBSC appealed, arguing that it had standing under ERISA by virtue of the assignment of benefits it received from the participant.
The appeals court reversed, agreeing with NJBSC that the participant assignments gave it standing to sue Aetna under ERISA even if the assignments didn't explicitly state that they carried with them the right to sue to recover benefits.
“We hold that as a matter of federal common law, when a patient assigns payment of insurance benefits to a healthcare provider, that provider gains standing to sue for that payment under ERISA §502(a). An assignment of the right to payment logically entails the right to sue for non-payment,” Judge Michael A. Chagares said in writing for the court.
The court noted that every federal appeals court to have considered the issue has found that assignments of the right to payment of benefits carry with them the right to sue under ERISA to recover such benefits.
The court cited some policy reasons that supported its ruling: namely, that patients will be more likely to seek health-care services and doctors will be more likely to treat if they know that the assignment of benefits can be enforced against insurers in court. “It does not seem that the interests of patients or the intentions of Congress would be furthered by drawing a distinction between a patient’s assignment of her right to receive payment and the medical provider’s ability to sue to enforce,” the court said.
The opinion was joined by Judges Thomas M. Hardiman and Patty Shwartz.
NJBSC was represented by Mazie Slater Katz & Freeman, LLC, Roseland, N.J. Aetna was represented by Connell Foley LLP, Cherry Hill, N.J.
To contact the reporter on this story: Jo-el J. Meyer in Washington at email@example.com
To contact the editor responsible for this story: Cathleen O'Connor Schoultz at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)