In order to facilitate proper claim reimbursements and to file health benefit claims on behalf of your patients, your Assignment of Benefits and Designated Authorized Representative Form(s) must be updated to include a Limited Special Power of Attorney based on the court decision below. We have prepared this document for our clients and can do the same for you – please contact us today should you need assistance.
Third Circuit Validates Anti-Assignment Clauses under ERISA Plans; Recognizes Power of Attorney as a Valid Means to Challenge Payment
On May 16, 2018, the United States Court of Appeals for the Third Circuit affirmed a lower court decision upholding the right of ERISA-based insurance contracts and benefit plans to prohibit assignment of rights by patients to providers through unambiguous anti-assignment clauses. In American Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield, et al., 2018 WL 2289879 (D.N.J. 2018), the Court concluded there was no basis to depart “from the general rule that courts will enforce the terms of an agreement that was freely negotiated between contracting parties”. The effect of this ruling is to limit the right of providers under ERISA plans to directly sue carriers for additional benefits under the plan or for claims of breach of fiduciary duty. As a result, the right of providers, as an assignee under an ERISA plan, to directly and legally challenge payments, has been eliminated for those plans that maintain unambiguous anti-assignment clauses. In light of this ruling, we expect to see an increase in plans adopting anti-assignment clauses.
However, the Court did leave open the right of providers under an ERISA plan to challenge payment through a ‘power of attorney’ granted by the patient to the provider. The Third Circuit rejected the argument of Independence that the anti-assignment clause applied equally to a power of attorney. Specifically, the Court stated “our holding today that the anti-assignment clause is enforceable means that Joshua, the plan beneficiary, did not transfer the interest in his claim, but it does not mean that Joshua cannot grant a valid power of attorney”. By leaving open the right of a provider to pursue claims as a ‘power of attorney’, the Court negated the impact of its ruling on the anti-assignment clauses for those practices that maintain the right paperwork as part of the patient intake file. The right to challenge payment through a well-drafted power of attorney and complaint was also recently confirmed by the United States District Court of New Jersey in The Center for Orthopedics and Sports Medicine V. Anthem Blue Cross Life and Health Insurance Company, 2018 WL 1440325 (D.N.J. March 22, 2018).