Eleventh Circuit Addresses Assignment of Benefits

On December 19, 2023, the US Court of Appeals for the Eleventh Circuit (the Eleventh Circuit) filed an opinion in W.A. Griffin, MD v. Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. , per curiam, affirming the decision of the district court that an assignment of benefits by a patient to a medical provider did not include sufficiently explicit language to transfer the right to bring nonpayment, statutory penalty suits under ERISA.

Plaintiff W.A. Griffin (Griffin) is a medical provider who sued Blue Cross Blue Shield (BCBS) under ERISA Section 502(c)(1)(B), seeking statutory penalties of up to $100 per day for failing to comply with requests to provide plan documents. Griffin had obtained an assignment of benefits from a patient and claimed a derivative right to sue BCBS under that assignment. The district court dismissed Griffin’s complaint and the Eleventh Circuit affirmed that dismissal.

As in South Coast Specialty Surgery Center, Inc. v. Blue Cross of California dba Anthem Blue Cross (the South Coast case), reported in the Compliance Corner article on January 17, 2024, the Eleventh Circuit quoted itself from a 2021 opinion that a healthcare provider “may obtain derivative standing for payment of medical benefits through a written assignment from a plan participant or beneficiary.”

The Eleventh Circuit also reiterated that a written assignment of the right to recover benefits provided by an ERISA plan does not necessarily transfer the right to pursue nonpayment claims, including statutory penalties. This case, therefore, turned on whether the assignment of benefits gives Griffin the right to bring both payment and nonpayment (breach of fiduciary duties and statutory penalties) claims.

The Eleventh Circuit concluded that the assignment upon which Griffin relied did not include sufficiently explicit language to transfer the right to bring nonpayment, statutory penalty suits under ERISA. In the South Coast case, the provider was allowed to submit claims to the plan administrator and to sue the administrator when the administrator declined to pay. But in Griffin, the provider could not sue the administrator for failing to comply with a request for plan documents.

In a second case brought by Griffin, also based on an assignment of benefits and decided two days later, the Eleventh Circuit found that the health plan contained an express anti-assignment provision prohibiting participants from assigning benefits to third parties. Holding that an “unambiguous anti-assignment provision in an ERISA-governed welfare benefit plan is valid and enforceable,” the Eleventh Circuit affirmed the district court’s dismissal of Griffin’s case.

Although the ultimate outcomes of these decisions differ, the takeaway is that medical providers may generally submit claims and sue the plan administrator for the payment of claims through an assignment of benefits. However, an assignment of benefits does not convey a participant’s (patient’s) right to sue to enforce nonpayment claims (such as the failure to abide by fiduciary duties like providing plan documents upon request) unless the assignment has specific wording to that effect.

Although insurers and TPAs typically address claims on behalf of a group health plan, plan sponsors should be aware of these recent decisions and the provisions of their plan documents regarding the limitations of participants’ assignment of benefits to healthcare providers.

W.A. Griffin, MD v. Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. »