In North Jersey Brain & Spine Ctr. v. Aetna, Inc., — F.3d –, 2015 WL 5295125 (3d Cir. Sep. 11, 2015), the court addressed the question “whether a patient’s explicit assignment of payment of insurance benefits to her healthcare provider, without direct reference to the right to file suit, is sufficient to give the provider standing to sue for those benefits under ERISA § 502(a)[.]”
The plaintiff is a neurosurgical practice, which received assignments from several Aetna-insured patients before surgery, stating: “I authorize [NJBSC] to appeal to my insurance company on my behalf…. I hereby assign to [NJBSC] all payments for medical services rendered to myself or my dependents.” Plaintiff later sued Aetna for benefits, and the district court granted Aetna’s motion to dismiss, holding that an assignment of payments did not convey the right to sue. In so doing, the district court acknowledged that other district courts in the circuit were split on this issue.
The 3d Circuit resolved the split.
The court began by noting that ERISA allows participants and beneficiaries to sue for benefits under a plan, and that healthcare providers can “obtain derivative standing by assignment from a plan participant or beneficiary.” But ERISA does not say how that assignment is to be accomplished, requiring courts to fill in the gaps.
The court then held: “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…. After all, the assignment is only as good as payment if the provider can enforce it.”
In support of its holding, the court stated that “[e]very United States Court of Appeals to have considered this question has found, as we do, that an assignment of benefits is sufficient to confer ERISA standing.” (Citing decisions from 1st, 5th, 6th and 9th Circuits). The court stated that there is a “public interest in uniform interpretation of ERISA.”
The court also explained that there were significant advantages to permitting participants and beneficiaries to assign benefits – including increased access to care – and that the “value of such assignments lies in the fact that providers, confident in their right to reimbursement and ability to enforce that right against insurers, can treat patients without demanding they prove their ability to pay up front. … These advantages would be lost if an assignment of payment of benefits did not implicitly confer standing to sue.”