Tuesday, October 29, 2013, 8:35 PM

District Court in Florida Further Defines Parameters of Medical Provider’s Standing to Sue under ERISA.

Under ERISA §502(a)(1)(B), participants and beneficiaries are the only ones with standing to sue an employee benefit plan for benefits. Consequently, for a medical provider who seeks payment from an employee health plan for medical services rendered to a plan participant, the provider has no standing, unless it has a written assignment from the patient/plan participant. See e.g. Hobbs v. BCBS Alabama, 276 F 3d 1236 (11th Cir. 2001). The medical provider’s standing is wholly derivative of the plan participant’s rights.

The boundaries of the medical provider’s standing under ERISA were recently tested in the United States District Court for the Southern District of Florida. In MRI Scan Center v. MedSolutions/CIGNA, 2013 U.S. Dist. LEXIS 66741 (2013), the Plaintiff, MSC, provided imaging services to patients, including participants of employee health benefit plans insured by CIGNA. Plaintiff alleged that CIGNA had improperly inflated the cost of services by adding its own administrative fees, in order to charge higher premiums. MSC alleged that this practice was a breach of CIGNA’s fiduciary duty to the plans and plan participants in violation of ERISA. MSC brought its claim under ERISA §502(a)(3), under which standing is limited to participants, beneficiaries and fiduciaries. MSC claimed that it had proper standing in the same way that it had when it sought payment of benefits under ERISA §502 (a)(1)(B) - through written assignments from its patients who were participants of plans insured by CIGNA.

Not so fast, CIGNA argued; the assignments granted from patients/plan participants to MSC were not broad enough to cover a claim for breach of fiduciary duty. The Court agreed: “An assignment of the right to direct payment of benefits will not assign patients’/assignors’ right to bring causes of action under other ERISA provisions that are not related to the reimbursement of benefits.” Dismissing MSC’s claims against CIGNA on these grounds, the Court did not reach the issue of whether MSC could have established all elements of standing, particularly injury, under Article III. The question left for another day: Would broader language in the assignments be all that a provider needs, or do hurdles still remain under Article III?


Blogger Katherine Lange said...

This month, the 11th Circuit held likewise: Sanctuary Surgical Center v. Aetna, 2013 U.S. App. LEXIS 22653, *13 (11th Cir., Nov. 5, 2013)

November 21, 2013 at 3:28 PM  

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