ERISA-Third Circuit Holds That Health Care Service Provider, To Whom Benefit Claim Was Assigned, Has Standing To Sue The Insurer For Health Benefits

In North Jersey Brain & Spine Center v. Aetna, No. 14-2101 (3rd Cir. 2015), the plaintiff, North Jersey Brain & Spine Center (“NJBSC”), was appealing an order entered by the district court dismissing its complaint for lack of standing under ERISA. The question presented on appeal was whether a patient’s explicit assignment of payment of insurance benefits to her healthcare provider, without direct reference to the right to file suit, is sufficient to give the provider standing to sue for those benefits under ERISA § 502(a), 29 U.S.C. § 1132(a).

Upon analyzing the case, the Third Circuit Court of Appeals (the “Court”) found that such an assignment does confer standing. It held, as a matter of federal common law and in accordance with the other Circuits, when a patient assigns payment of insurance benefits to a healthcare provider, that provider gains standing to sue for that payment under ERISA § 502(a). An assignment of the right to payment logically entails the right to sue for non-payment. Therefore, the Court reversed the order of the District Court and remanded the case for further proceedings.

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