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D.N.J.- Anti-assignment clauses and their effects on a third party's right to sue

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  • D.N.J.- Anti-assignment clauses and their effects on a third party's right to sue

    In a recent case from the District of New Jersey, the court wrestles with the effect of anti-assignment provisions on the ability of a medical provided to file an ERISA claim in the shoes of the patient.

    After obtaining an assignment of benefits from the patient, University Spine Center (Plaintiff) sought to recover reimbursement from Aetna (Defendant) for medical services that Plaintiff provided to the patient. After exhausting the internal appeals process, Plaintiff brought this ERISA action against Defendant. At issue, was whether the anti-assignment clause in the health benefits plan bared the patient from assigning Plaintiff his right to sue under ERISA.

    Defendant argues that any purported assignment of right from Patient, the plan participant, is void since the applicable health benefits plan contains an anti-assignment clause that expressly prohibits Patient from assigning his rights and/or benefits. (ECF No. 7-1 at 6). Both parties agree that the anti-assignment clause in Defendant’s insurance plan states that Patient “may not assign [his or her] benefits or rights under this plan.” (ECF No. 7-4). Defendant claims that this clause, therefore, deprives Plaintiff of standing to bring the current action. (ECF No. 7-1 at 6).
    Conversely, Plaintiff argued that the anti-assignment clause was invalid because it did not specify that any attempted assignment would be voided. Plaintiff further argued that the clause was unenforceable against it as a health care provider. The court, however, did not find either argument persuasive.

    The Court rejects both of Plaintiffs arguments because they are contrary to the recognized law in this district. Though the Third Circuit has not specifically spoken on the enforceability of anti-assignment clauses in ERISA-governed plans, a majority of circuits, as well as courts in the Third Circuit, have given effect to anti-assignment provisions such as the one in this case and denied standing.
    The entire opinion is attached below.
    Attached Files