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ML BeneBits

Two cases decided on May 23 by Judge Esther Salas in the US District Court for the District of New Jersey (Univ. Spine Ctr. v. Aetna, Inc. and Univ. Spine Ctr. v. United Healthcare – both unpublished decisions) reiterate the importance of including clear anti-assignment language in health plans to prevent healthcare providers from circumventing plan terms to obtain payment.

In this age of skyrocketing health costs, plan sponsors typically work with their advisors and insurers to craft reimbursement structures for services under their health plans. This often includes a lower reimbursement rate for certain out-of-network services. In recent years, many plans have had more claims from out-of-network providers trying to circumvent these design decisions and seek full reimbursement from the plans.

To enable their claims, providers often require participants to sign assignment agreements when they receive services. Then, the providers request documents under ERISA and seek full reimbursement from the plan through the appeals process. A provider’s document request often includes ominous language with case citations and may be dozens of pages long. Responding can be a hassle, but less so if the plan includes well-crafted anti-assignment language.

In these recent cases, the plaintiff—the same spinal injury treatment center in both cases—provided medical services to a plan participant in each plan and demanded that the plans reimburse them more than $178,000 in one case and almost $350,000 in the other. The plans’ reimbursement structures each reimbursed just a fraction of this. Rather than being satisfied with the standard plan reimbursement, the provider requested the relevant plan documents and appealed for the additional roughly $175,000 and $325,000 reimbursement from each of the respective (unrelated) plans. The plans both ignored the respective requests, and the provider sued.

When the plans (separately) defended that they had clear and unambiguous anti-assignment provisions that prevented the provider from suing, the court agreed. In both cases, the court found that the anti-assignment language was valid and enforceable and dismissed the provider’s case.

The cases allude to a few ways that may improve the enforceability of (but are not necessarily required to enforce) an anti-assignment provision:

  1. Include the language in both the plan document and the summary plan description (if they are not one and the same)
  2. Explicitly indicate that the language applies to healthcare providers
  3. Specify that any attempted assignment is void or invalid if performed without the plan’s consent and that the plan will not recognize any such assignment

Considering these pointers, plan sponsors may want to review their plan documents and summary plan descriptions to ensure they include the appropriate anti-assignment language.