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11th Cir. – Unpublished – Assignment May Apply to Self-Funded Plans

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  • 11th Cir. – Unpublished – Assignment May Apply to Self-Funded Plans

    Here’s a new case out of the Eleventh Circuit entitled Biohealth Medical Laboratory, Inc. v. Cigna Health and Life Insurance Company. This case involves medical providers, pursuant to a patient assignment, suing ERISA plans for payment of benefits. The court is specifically addressing the narrow issue of whether the self-funded plans, as defendants, fall under the scope of the assignment contract. The court finds that the District Court erred in ruling on the motion to dismiss.

    It was improper for the district court to interpret the contract when considering the motion to dismiss. The parties do not even agree on which jurisdiction’s statutes are meant to give meaning to the collateral source language in the Assignment. The Laboratories aver that Florida’s statutes were incorporated into the Assignment through the collateral source clause. Cigna says there is no reason why the statutes of Florida and not some other jurisdiction should be chosen. There is at least ambiguity on this point, and that alone is sufficient to render discovery into extrinsic evidence essential before the contract can be definitively interpreted. See Geter v. Galardi S. Enters., Inc., 43 F. Supp. 3d 1322, 1328 (S.D. Fla. 2014) (“[T]he Court may not engage in contract interpretation at the motion to dismiss stage, as these arguments are more appropriate for summary judgment.”) (internal quotation omitted). See also John M. Floyd & Assocs., Inc. v. First Fla. Credit Union, 443 F. App’x 396, 398 (11th Cir. 2011) (per curiam) (applying Florida law); Davis v. BancInsure, Inc., No. 3:12-CV-113-TCB, 2013 WL 1223696, at *3 (N.D. Ga. Mar. 20, 2013) (applying Georgia law).
    The court finds that the assignment against self-funded plans would not operate in opposition to ERISA purposes.

    ERISA’s purposes would not be thwarted by interpreting the Assignment to include self-funded plans. We have recognized in general terms that an assignment of the right to sue to a healthcare provider facilitates an employee’s receipt of healthcare benefits as providers are “better situated and financed to pursue an action for benefits owed for their services.” Cagle v. Bruner, 112 F.3d 1510, 1515 (11th Cir. 1997) (internal quotation omitted). This benefit of shifting the burden of bringing suit is equally served whether the plan is a traditional insurance plan or a self-funded plan. Seen from the perspective of the patient, Cigna’s role is largely the same for both types of plans—Cigna handles the administrative functions of claims processing and benefits disbursement. Given this, it is plausible based on the pleadings to construe “my insurance company” in the Assignment as being the party responsible for processing and paying benefit claims under the plan without regard to the ultimate bearer of the financial risk.
    The opinion is attached below.
    Attached Files
    Last edited by Nathan Bax; 09-08-2017, 09:54 AM.