Opinion ID: 2422265
Heading Depth: 1
Heading Rank: 4

Heading: Davila Prong One: Step One

Text: As explained above, § 502(a)(1)(B) provides that a civil action may be brought by a participant or beneficiary of an ERISA plan to enforce certain rights under that plan pursuant to ERISA. See 29 U.S.C. § 1132(a)(1)(B) (emphasis supplied). Generally, § 502(a) is narrowly construed to permit only the enumerated parties to sue directly for relief. See Franchise Tax Bd. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 27, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983); accord Chemung Canal Trust Co. v. Sovran Bank/Maryland, 939 F.2d 12, 14 (2d Cir.1991). However, we have carv[ed] out a narrow exception to the ERISA standing requirements to grant standing to healthcare providers to whom a beneficiary has assigned his claim in exchange for health care. Simon v. Gen. Elec. Co., 263 F.3d 176, 178 (2d Cir.2001); accord Tango Transp. v. Healthcare Fin. Servs., 322 F.3d 888, 891 (5th Cir.2003) (collecting cases); see also Pascack Valley Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 400 n. 7 (3d Cir.2004) (Almost every circuit to have considered the question has held that a health care provider can assert a claim under § 502(a) where a beneficiary or participant has assigned to the provider that individual's right to benefits under the plan[.]). Here, each of the reimbursement forms that provide the basis for Montefiore's suit contain a Y for yes in the space certifying that the patient has assigned his claim to the hospital. Accordingly, pursuant to our holding in Simon, 263 F.3d 176, the first step of the first prong of the Davila test is satisfied: Montefiore is a health care provider to whom beneficiaries of the Plan have assigned their claims, and therefore is the type of party that can bring a claim against the Fund regarding benefits pursuant to § 502(a)(1)(B). [8] That said, Montefiore vigorously contests the notion that it obtained valid assignments, arguing that an attempt to assign ERISA benefits to an in-network provider is a nullity[.] In support of its argument, Montefiore relies upon dicta in Sewell v. 1199 Nat'l Benefit Fund for Health & Human Servs., 187 Fed.Appx. 36, 39 n. 1 (2d Cir.2006), a non-precedential summary order in which we stated: Where the patient receives services from a participating provider, . . . it is not clear that the patient has anything to assign because the patient is entitled only to healthcare at no cost, not reimbursement. If the participant or beneficiary has no right to payment to assign to the participating provider, it is doubtful that the `narrow exception' [for healthcare providers] to ERISA's otherwise stringent standing requirement would apply. As the District Court correctly observed in its Opinion & Order of November 11, 2009, these stray comments are neither binding precedent nor even the holding of the case in which they appear. But more importantly, they do not accurately reflect the nature of the legal right at issue here. The right to health care at no cost (or at less cost, where a co-payment or co-insurance fee is involved) is made possible only by arrangements to have one's health care provider reimbursed for the balance of the fee for services. Indeed, the difference between receiving health care at no cost and receiving direct reimbursement of one's costs is largely one of form, rather than of substance. This reality, in and of itself, is sufficient to support our holding that patients may assign their rights to in-network providers. However, even if we assume for the sake of argument that a provider would continue to provide medical services to beneficiaries at low or no cost despite an inability to enforce beneficiaries' rights under ERISAquite an assumptionthe fact remains that beneficiaries arguably would be liable for whatever costs the provider was unable to recover from a benefit plan, and would have a right to reimbursement of those costs pursuant to ERISA and to the terms of the plan. For example, Montefiore's contract with MagnaCare expressly permits Montefiore to obtain payment (by billing or, if necessary, by suit) directly from patients in the event that Montefiore does not receive payment from the Fund. As Montefiore's counsel conceded at oral argument, in the event that a patient is charged or sued by Montefiore, his right to reimbursement from the Fund is a right that the patient may assign to Montefiore. Montefiore's contract with Horizon, on the other hand, is silent as to whether Montefiore can seek full reimbursement directly from patients; however, even under that contract, patients are likely to be held liable for the services they receive indeed, it does not take a stretch of the imagination to expect that a patient who receives medical care will be required to pay for it. [9] See Cagle v. Bruner, 112 F.3d 1510, 1515 (11th Cir.1997) (If provider-assignees cannot [receive a valid assignment so that they may] sue the ERISA plan for payment, they will bill the participant or beneficiary directly for the insured medical bills, and the participant or beneficiary will be required to bring suit against the benefit plan when claims go unpaid. On the other hand, if provider-assignees can sue for payment of benefits, an assignment will transfer the burden of bringing suit from plan participants and beneficiaries to providers[,] [who] are better situated and financed to pursue an action for benefits owed for their services. For these reasons, the interests of ERISA plan participants and beneficiaries are better served by allowing provider-assignees to sue ERISA plans. (citations omitted)); Hermann Hosp. v. MEBA Med. & Benefits Plan, 845 F.2d 1286, 1289 n. 13 (5th Cir.1988) (Many providers seek assignments of benefits to avoid billing the beneficiary directly and upsetting his finances and to reduce the risk of non-payment. If their status as assignees does not entitle them to federal standing against the plan, providers would either have to rely on the beneficiary to maintain an ERISA suit, or they would have to sue the beneficiary.). Accordingly, plaintiff Montefiore's argument that it cannot receive a valid assignment of benefits is without merit. We hold that beneficiaries may assign their rights under ERISA § 502(a)(1)(B) to health care providers that have contracted to bill a benefit plan directly, as the beneficiaries did in this case. [10]