Health Care Providers and ERISA Standing Based on Patient Assignments of Payment

North Jersey Brain & Spine Center v. Aetna, Inc., 801 F.3d 369 (3d Cir. 2015).  Judge Chagares’s concise opinion in this case today crystallized the issue near the outset.  “The question presented on appeal is 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), 29 U.S.C. § 1132(a).”  The District Court had found that the provider lacked standing in that circumstance.  Today, the Third Circuit reversed that ruling and reinstated the case.  In doing so, the panel resolved a split among District Courts that had led the court below in this case to certify the issue for review under 28 U.S.C. §1292(b) as “a controlling question of law as to which there is substantial ground for difference of opinion.”

The panel exercised plenary review of this standing issue.  Because defendant attacked plaintiff’s standing based on the pleading alone, Judge Chagares “accept[ed] as true all material allegations of the complaint, and … construe[d] the complaint in favor of the complaining party.”

There was no question that an ERISA plan participant or beneficiary can sue under §502(a) to recover benefits due to him or her under applicable plan terms.  CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165 (3d Cir. 2014), had made clear that the participant or beneficiary can assign those rights to a healthcare provider, thereby conferring “derivative standing” on the provider.

The question here was how detailed the language of the assignment must be in order to give the provider standing to sue.  Aetna contended that “an assignment must explicitly include not just the right to payment but also the patient’s legal claim to that payment if a provider is to file suit.”  Plaintiff, on the other hand, argued that “an assignment of the right to payment is sufficient” to confer standing on the provider.  The statute itself was silent on the issue.

The panel agreed with plaintiff.  “An assignment of the right to payment logically entails the right to sue for non-payment.”  Judge Chagares observed that every other Court of Appeals to confront this issue had ruled as the panel did here.

Judge Chagares stated that the intent of Congress was to “protect … the interests of participants in employee benefit plans” and serve patients’ interests by increasing their access to care.  “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 that right.”  The whole purpose of assignments to providers is to ensure 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.  Patients increase their access to healthcare and transfer responsibility for litigating unpaid claims to the provider, which will ordinarily be better positioned to pursue those claims.”

Moreover, conferring standing “advances the public interest in uniform interpretation of ERISA” Circuit Court lines.  For all those reasons, the panel reversed the dismissal for lack of standing and remanded the case for further proceedings.