AMERICAN ORTHOPEDIC & SPORTS MEDICINE, on assignment of Joshua S., Appellant
INDEPENDENCE BLUE CROSS BLUE SHIELD; HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY
Argued: November 15, 2017
Appeal from the United States District Court for the District
of New Jersey (D.N.J. No. 2-16-cv-08988) Honorable Jose L.
Linares, U.S. District Judge
S. Saltman [Argued] Counsel for Appellant
M. Danielski [Argued] Gerald J. Dugan Dugan Brinkmann
Maginnis & Pace Counsel for Appellee Independence Blue
Cross Blue Shield
Michael E. Holzapfel [Argued] Becker LLC Counsel for Appellee
Horizon Blue Cross Blue Shield of New Jersey
Before: AMBRO, KRAUSE, and RENDELL, Circuit Judges
KRAUSE, CIRCUIT JUDGE.
the evolution of managed healthcare and the advent of
provider networks and other cost-control mechanisms, many
insurers in recent years have incorporated into their health
insurance plans clauses that purport to bar insureds from
assigning their claims to any third party-even the healthcare
provider that rendered the service. This appeal presents the
question whether such "anti-assignment clauses" are
enforceable, or whether, as argued by the healthcare provider
in this case whose claim was dismissed for lack of standing,
they are antithetical to the Employee Retirement Income
Security Act ("ERISA") and to public policy. For
the reasons that follow, we conclude that anti-assignment
clauses in ERISA-governed health insurance plans are
enforceable, and we will therefore affirm the judgment of the
Factual and Procedural History
October 2015, Appellant American Orthopedic and Sports
Medicine performed shoulder surgery on "Joshua, " a
patient who was covered by a health insurance plan issued by
Appellees (the "Insurers").
the surgery, Appellant charged Joshua for the procedure.
Because Appellant did not participate in the Insurers'
network, it was not limited to the fee schedule prescribed by
the Insurers. Instead, it charged Joshua a total of $58, 400
and submitted a claim in that amount to the Insurers on
Joshua's behalf. The claim form identified the various
medical services rendered to Joshua and indicated that he had
"authorize[d] payment of medical benefits" to
Appellant. J.A. 38. As Appellant's charges far exceeded
the plan's allowed reimbursement, the Insurers responded
by processing Joshua's claim according to its
out-of-network cap of $2, 633, applying his deductible of $2,
000 and his 50% coinsurance of $316, issuing him a small
reimbursement check for the remaining $316, and informing him
that he would still owe Appellant the remaining $58, 083.
Appellant appealed its claim through the Insurers'
internal administrative process. At the same time, it
arranged for Joshua to sign a document entitled
"Assignment of Benefits & Ltd. Power of Attorney,
" which reflected that Joshua was assigning to Appellant
his right to pursue claims under his health insurance plan
for the surgery and, in the alternative, that he granted to
Appellant a limited power of attorney to recover the payment
on his behalf through an arbitration or lawsuit. J.A. 36.
After the Insurers apparently denied the appeal, Appellant
sued them in New Jersey state court for violations of ERISA
and its implementing regulations, and for breach of contract.
At that point, the Insurers removed the suit to federal court
and moved to dismiss, pointing out that Joshua's
insurance plan included an anti-assignment clause that
stated, "[t]he right of a Member to receive benefit
payments under this Program is personal to the Member and
is not assignable in whole or in part to any person,
Hospital, or other entity, " Independence Response to
Court Letter *90 (filed Nov. 10, 2017) (emphasis added),
arguing that Appellant therefore lacked standing to sue. The
District Court agreed and dismissed Appellant's
complaint, and this appeal followed.
Jurisdiction and Standard of Review
District Court had jurisdiction under 28 U.S.C. § 1331,
and we have jurisdiction under 28 U.S.C. § 1291. We
exercise plenary review over a District Court's decision
to dismiss for lack of standing. Leuthner v. Blue Cross
& Blue Shield of Ne. Pa., 454 F.3d 120, 124 (3d Cir.
2006). To the extent that the Insurers "contest the
sufficiency of the pleadings, " we "only consider
the allegations of the complaint and documents referenced
therein" and we do so "in the light most favorable
to the plaintiff." In re Schering Plough Corp.
Intron/Temodar Consumer Class Action, 678 F.3d 235, 243
(3d Cir. 2012) (quoting Gould Elecs. Inc. v. United
States, 220 F.3d 169, 176 (3d Cir. 2000)).
contends it has standing to sue here, first, because
anti-assignment clauses in ERISA-governed health insurance
contracts are unenforceable against healthcare providers and,
second, because even if those clauses are enforceable, the
Insurers waived their right to enforce it in this case. If we
conclude the anti-assignment clause here is enforceable
against healthcare providers, Appellant raises a third
argument in the alternative, i.e., that we should remand to
allow it an opportunity to correct the deficiencies in
Joshua's Power of Attorney and pursue Joshua's claims
on his behalf in an agency capacity. We address these
arguments in turn.
Enforceability of ...