Glen Ridge SurgiCenter, LLC v. Horizon Blue Cross Blue Shield of New Jersey, Inc

A District Court in New Jersey ruled that a course of dealing between a health benefits plan and a non-participating provider may be sufficient to establish a waiver of an anti-assignment provision in an ERISA health care plan. Glen Ridge SurgiCenter (“GRS”) sued Horizon Blue Cross Blue Shield of New Jersey, Inc. (“Horizon”), a provider of ERISA employer-sponsored benefits plans, seeking to recover increased reimbursements for services provided to beneficiaries. Although GRS is not a participating provider under Horizon’s benefits plan, GRS has long provided services to Horizon patients in exchange for an assignment of benefits, rendering GRS a “beneficiary” entitled to enforce the terms of the benefits plan under § 502(a) of ERISA. The relationship between GRS and Horizon, GRS claims, has always involved discussing patient coverage under health care policies, direct submission of claim forms, and direct reimbursement of medical costs. For example, GRS alleges in the Complaint that “topics GRS discusses with Horizon include: the existence, nature, and extent of the patient’s out-of-network coverage; whether specific procedures are covered under the applicable insurance policy; the amounts of applicable co-payments and deductibles; pre-existing conditions; whether the patient has satisfied applicable requirements for authorizations or referrals, such as authorizations from Horizon or referrals from a primary care physician, without which (when required) GRS will not go forward with a procedure; and other issues concerning the patient’s insurance coverage.”

In its motion to dismiss, Horizon argued that GRS lacked standing to sue under ERISA because anti-assignment provisions in Horizon’s plans rendered any assignments obtained by GRS invalid. Noting that the Third Circuit has not yet ruled on the enforceability of anti-assignment clauses, the Court recognized that many other Circuits had accepted the enforceability of such clauses, and thus they are potentially valid.

Although the court agreed with Horizon that it would be possible to avoid waiving an anti-assignment provision by authorizing certain forms of conduct in a benefits plan or, as here, if a state law required direct reimbursements to be made to a non-participating provider, the Court held that in this case, “the Complaint alleges a course of conduct beyond direct reimbursement for medical services.” Specifically, “[t]he Complaint described regular interaction between Horizon and GRS prior to and after claim forms are submitted, without mention of Horizon’s invocation of the anti-assignment clause.” Thus, the Court denied Horizon’s motion to dismiss this count of the Complaint.