Source: http://hbiyfb.web2001.cz/366-fac3701-assignment-of-benefits.php
Timestamp: 2019-04-23 03:02:13+00:00

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When the patient is the beneficiary of an ERISA plan, providers may face difficulties enforcing an AOB to obtain payment. The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that governs health benefit plans, among others. ERISA health benefit plans are employment-based plans that provide coverage for medical care. ERISA sets the standards of conduct for fiduciaries that manage an employee benefit plan, and the terms of the ERISA plan can act to limit what an ERISA plan payor is required to pay. Furthermore, such plans can attempt to limit who can be the recipient of plan benefits. As will be discussed below, some ERISA plans attempt to limit a provider’s right to receive payments based on an AOB.
Because of plan limitations on payments that are often found in ERISA plans, ERISA fiduciaries may deny all or part of provider claims. If the provider is out-of-network and has no contract with the plan or its third party administrator (such as Aetna, United HealthCare, or Blue Cross Blue Shield), then the provider must choose to forego the payment, pursue the patient for the amounts owed (if permitted by relevant state law), or pursue any available administrative appeals and/or litigation against the payor.
Traditionally, AOBs include vague language that the provider has been assigned the right to “pursue payment” from an available payor, including an ERISA plan, without specifically assigning the right to take all necessary action, including, but not limited to, pursuing available administrative appeals or filing suit. Some ERISA plans have sought to capitalize on the lack of a specific assignment of the right to sue to pursue benefits. In these cases, the ERISA plans will deny the provider’s claim, thereby forcing the provider to file suit. Once the provider files suit, the ERISA plan will argue that because the AOB does not specifically include the right to sue, the provider does not have standing to file suit to pursue the payment at issue.
As the healthcare arena continues to evolve after the enactment of the Patient Protection and Affordable Care Act (PPACA), payors are continuously looking for ways to avoid or minimize payments to providers to reduce costs. If a provider pursues a claim through litigation, an ERISA plan’s first defense is to claim that the provider lacks standing to file suit. This tactic is not new, and some federal courts have reached inconsistent conclusions regarding whether an assignment of the right to payment confers standing to sue.17 Until there is a definitive answer or until providers revise their AOBs to clearly include language that the plan beneficiary has assigned the right to pursue payment, inclusive of all necessary steps, including pursuing administrative appeals and/or filing suit, ERISA plans will likely continue to challenge a provider’s standing in these cases.
The above cases dealt with the narrower issue of whether an AOB is sufficient to confer standing on a provider to file suit against an ERISA plan to seek payment for services rendered. Other courts have addressed whether providers, through an AOB, have standing to pursue additional claims, other than for payment, under ERISA.
Does the provider have the right to collect payment and/or benefits from the insurance company?
Providers must ensure that the AOB clearly assigns the right to payment to the provider and the right of the provider to receive the payment. Furthermore, providers must ensure that the AOBs are properly executed by the patient or the plan participant. If the AOB purports to assign the right of payment to more than one provider, then all of the providers should be listed clearly in the AOB to ensure that each provider preserves its right to pursue and receive payment.
If the provider has the right to collect payment, does the AOB contain the necessary language to confer standing on the provider to pursue administrative appeals and file suit? Does the AOB include the right to file suit for payment alone or does it confer greater rights?
At a minimum, the AOB must assign the provider the right to pursue and receive payment. Assuming that a claim will be denied, the AOB should include an assignment of the right to pursue all administrative appeals and litigation as necessary to pursue payment. If a provider is interested in possibly making claims other than for payment under ERISA, it is imperative that a provider include broader language that includes the right to pursue all causes of action, including, but not limited to the right to pursue payment and other ERISA claims.
Moreover, in order for providers to ensure that they have the best chance at receiving payment for services rendered to ERISA plan beneficiaries, it is imperative that providers routinely review and revise their AOBs. Although PPACA gave providers additional protections by including a claimant’s authorized representative in the definition of claimant in 29 C.F.R. 2590.715-2719, as it relates to internal claims and appeals processes, this protection likely will not extend to the right to file suit.
In order to avoid future problems, providers must include the right to receive benefits directly, as well as an assignment of the right to pursue payment, other alleged ERISA violations, and other causes of action against a payor. Failure to include these specific assignments could limit a provider’s ability to recover and, ultimately, hurt the provider’s bottom line.
*The information in this article is not intended as legal advice. By reading this article, no attorney/client relationship is formed.
Jessica Guobadia is a commercial attorney whose practice focuses on business and contract law, including healthcare reimbursement and employment disputes. Although located in The Woodlands, Texas, Ms. Guobadia represents providers throughout the State of Texas. She can be reached at jguobadia@turekdevore.com or (281) 296-6920.
If the provider is contracted with the insurer, then the patient will generally only owe a patient responsibility portion, including deductibles, copayments, and coinsurance. In many instances, providers will also submit a bill to an out-of-network insurer in an attempt to be paid the allotted portion, pursuant to the plan, from the applicable payor, leaving the remaining balance to be paid by the patient.
CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165, 176 n.10 (3d Cir. 2014).
N. Jersey Brain & Spine Ctr. v. Aetna, Inc., 801 F. 3d 369 (3rd Cir. 2015).
Notice of Removal, North Jersey Brain & Spine Center v. Aetna, Inc., No. 2:13-cv-05286, In the United States District Court for the District of New Jersey (D. N.J. September 4, 2013).
NJBSC filed suit against Aetna in the New Jersey Superior Court for non-payment of benefits pursuant to Section 502(a) of ERISA, 29 U.S.C. § 1132(a). Based upon the ERISA claims, Aetna removed the case to federal court, as federal courts generally have exclusive jurisdiction of ERISA claims. N. Jersey Brain & Spine Ctr., supra, 801 F. 3d at 371.
625 Fed. Appx. 169 (3rd Cir. 2015).
Productive MD, LLC v. Aetna Health & Aetna Life Ins Co., 969 F. Supp. 2d 901, 913 (M.D. Tenn. 2013) (citing Cromwell v. Equicor Equitable HCA Corp., 944 F.2d 1272, 1277 (6th Cir. 1991)) (held assignment of the “payment of medical benefits ... for services rendered” was sufficient to confer standing.); TouroInfirmary v. Am. Mar. Officer, 2007 U.S. Dist. LEXIS 86574 (E.D. La. Nov. 21, 2007) (held language that authorized direct payment to the provider and made patients responsible for charges not paid by the health plan did not confer standing on the provider to file suit under ERISA).
2014 U.S. Dist. LEXIS 184550 (N.D. Texas – Dallas, July 21, 2014).
2015 U.S. Dist. LEXIS 61306 (S.D. Fl. May 11, 2015).
The payments at issue were due to Peacock, not Ambrosia Treatment Center; therefore, the suit was filed by Peacock as affiliate of Ambrosia Treatment Center. The Durable Power of Attorney at issue provided that the patient appointed Ambrosia Treatment Center as the patient’s attorney–in-fact to “present, with respect to obtaining payment end/or [sic] reimbursement for hospital, medical, chemical dependency treatment and other health care services rendered to the Principal by Ambrosia Treatment Center […] and any of its affiliates, including, but not limited to […] making of claims against insurers, or other third-party payers[,] [i]nstituting and prosecuting and/or defending litigation, arbitration and/or other dispute resolution proceedings, compromise and/or statement of claims and/or disputes.” Id at *3-5.
Id at *7-8 (citing Sanctuary Surgical Centre, Inc. v. Aetna, Inc.., 546 Fed. App’x 846 (11th Cir. 2013) (Unpub’d Op.).
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