MDNews - San Antonio

++++++++++++ + + ++++++++++++ LEGAL +++ +++ WARNING: M Your Assignment of Benefits Form May Leave You Empty-Handed By Debra W. Biehle ANY PHYSICIANS GIVE little thought to their assignment of benefits form. It is one of many documents a patient must sign upon admission. However, the precise language within the assignment of benefits form becomes critical when a nonparticipating provider files suit in a reimbursement dispute. Once litigation is under way, insur- ance companies typically challenge the nonparticipating provider's right to maintain the lawsuit based on lack of standing. In the legal context, "standing" means the right to "stand in the shoes" of the patient and assert any claims the patient could have asserted against the insurance company. For the nonparticipating provider, standing is usually obtained via the assignment of benefits form. In certain cases, even a "bare bones" assignment is sufficient to confer standing on the provider. However, the issue is greatly complicated by the fact that, in the vast majority of cases, the plan at issue is governed by the Employee Retirement Income Security Act (ERISA). ERISA strictly limits the persons who may bring suit to recover benefits under an ERISA-governed plan. For the unwary medical practice, an insufficient assignment of benefits can destroy its chances of recovery. Under ERISA, a civil action may be brought by a plan "participant," "beneficiary" or "fiduciary." Given that a physician does not fall within these categories, you must obtain derivative standing to bring suit as a beneficiary via the assignment of benefits form. Texas courts have repeatedly held that patients may validly assign their rights under a benefits plan to a health care provider. However, the fact that it can be done does not mean that every assign- ment of benefits form contains the necessary language to clear the hurdles set out by ERISA. A recent opinion out of the Southern District of Texas serves as a warning to all providers, particularly nonparticipating providers, to review and update their assignment of benefits forms. In N. Cypress Med. Ctr. Operating Co. v. MedSolutions, Inc., 2010 U.S. Dist. LEXIS 119455 (S.D. Tex. Nov. 10, 2010), North Cypress Medical Center, a Houston-area hospital, filed suit against MedSolutions, a third-party administrator. MedSolutions moved to dismiss the claims, alleging that North Cypress Medical Center, a nonparticipating provider, did not have standing to assert its claims under the ERISA-governed plans. The court recognized that a plan beneficiary may assign his or her right to sue, thereby giving the assignee provider deriva- tive standing. However, the court noted that the burden of establishing standing rests with the provider. North Cypress Medical Center argued that it had standing based upon the assignment of benefits form received from its patients. MedSolutions countered that the assignment only gave North Cypress the "right to recover benefits for services rendered; nothing more and nothing less." In essence, MedSolutions claimed that the assignment did not effectively assign the types of claims asserted by North Cypress Medical Center, particularly the claims for breach of fiduciary duties under ERISA. In determining whether the assign- ment was sufficient, the court focused on the precise language in the assign- ment, which stated, in part: I HEREBY IRREVOCABLY ASSIGN AND TRANSFER TO THE HOSPITAL A N D / O R HOSPITAL- B A S E D 12 | San Antonio MD NEWS s MDNEWS.COM

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