UNIVERSITY SPINE CENTER v. HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY

Filing 20

OPINION. Signed by Chief Judge Jose L. Linares on 12/12/2017. (ld, )

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

Civil Action No.: 17-193 (ILL)
UNIVERSITY SPINE CENTER,
On assignment ofRobert S.

OPINION

Plaintiff,
v.
HORIZON BLUE CROSS BLUE SHIELD OF
NEW JERSEY,
Defendant.

LINARES, Chief District Judge.
This matter comes before the Court by way of Defendant Horizon Blue Cross Blue Shield
of New Jersey’s (“Defendant”) Motion for Summary Judgment pursuant to Federal Rule of Civil
Procedure 56 and Local Federal Rule of Civil Procedure 56.1. (ECF No. 14). Plaintiff University
Spine Center (“Plaintiff’) has submitted opposition, (ECF No. 18), and Defendant has submitted
a reply, (ECF No. 19). The Court decides this matter without oral argument pursuant to Federal
Rule of Civil Procedure 78. For the reasons set forth below, the Court grants Defendant’s Motion
for Summary Judgment.
I.

BACKGROUND

In December 2015, surgeons affiliated with Plaintiff performed an in-patient spinal surgery
on Robert S. (“Patient”). (ECF No. 14-2 (“Def. SMF”)

¶J

1). The total cost of the surgery was

$136,160. (Id.

¶

12—13). Patient has an employee welfare benefit plan (“the Plan”) that was

issued by Defendant. (Id.

¶J 2—4).

The terms and conditions of the Plan are set out in its Benefit

Booklet, which provides that Defendant will reimburse for covered charges. (Id.

¶

5, 8). The

Benefit Booklet also contains an anti-assignment clause, which states that an employee may direct
Defendant to pay health care benefits to a provider, like Plaintiff, who provided the covered
services and that Defendant can pay either the covered person or the provider.

(Id.

¶

27).

Furtherniore, the anti-assignment clause states that Patient “may not assign his or her right to take
legal action under the Policy to such provider.” (Id.).
As the Plan allows, Plaintiff submitted a request for reimbursement to Defendant. (Id.

¶J

12—13). Though it is disputed whether the amount was properly reached under the Plan, the parties
agree that Defendant reimbursed $44,744.68 to Plaintiff.

(Id.

¶

22).

Plaintiff contested the

reimbursement in various appeals, but was repeatedly informed by Defendant that the claims were
reimbursed at “the plan-prescribed amount.”

(Id.

¶

23).

Accordingly, Plaintiff received an

assignment of rights from Patient under the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C.
$91,415.32. (Id.

¶ 26).

§

1002, et seq., and filed this pending action to recover the remaining
Plaintiff brought the following claims against Defendant: (1) Breach of

Contract1; (2) Failure to Make all Payments pursuant to the Plan under 29 U.S.C.
(3) Breach of Fiduciary Duty under 29 U.S.C.

§

§

1 132(a)(3), 29 U.S.C.

§

§

I 132(a)(l)(B);

I 104(a)(1), and 29 U.S.C.

1105(a); and (4) Failure to EstablishlMaintain Reasonable Claims Procedures under 29 C.F.R.

2560.503-1. (ECF No. 1-1 (“Cornpl.”)

¶

15—47). Defendant now moves for summary judgment.

(ECF No. 14).

Plaintiff has agreed to voluntarily dismiss its Breach of Contract Claim. (ECF No. 1$ at 1). Therefore, the Court
need not analyze this claim and grants Defendant’s Motion for Summary Judgment as to Count I.

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LEGAL STANDARD

H.

Summary judgment is appropriate when, there exists no “genuine dispute as to any material
fact” and the movant is entitled to judgment as a matter of law. See fed. R. Civ. P. 56(a). “[T]he
moving party must show that the non-moving party has failed to establish one or more essential
elements of its case on which the non-moving party has the burden of proof at trial.” McCabe v.
Ernst & Young, LLP, 494 F.3d 41$, 424 (3d Cir. 2007) (citing Cetotex Corp.

V.

Catrett, 477 U.s.

317, 322—23 (1986)).
The Court must consider all facts and their reasonable inferences in the light most favorable
to the non-moving party. See Pa. Coat Ass’n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995). If a
reasonable juror could return a verdict for the non-moving party regarding material disputed
factual issues, summary judgment is not appropriate. See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 249 (1986) (“[A]t the summary judgment stage the judge’s function is not himself to
weigh the evidence and determine the truth of the matter but to determine whether there is a
genuine issue for trial.”).
III.

DISCUSSION

Counts II, III, and IV of Plaintiffs Complaint are governed by ERISA. Under

§

502(a) of

ERISA “a participant or beneficiary” may bring a civil action to, inter alia, “recover benefits due
to him under the ten-ns of his plan, to enforce his rights under the terms of the plan, or to clarify
his rights to future benefits under the terms of the plan.” 29 U.S.C.

§

1132(a). Accordingly,

standing to sue under ERISA is “limited to participants and beneficiaries.” Pascack Valley Hosp.,
Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 38$ F.3d 393, 400—01 (3d Cir. 2004)
(holding that if plaintiff lacks standing to sue under ERISA, then the Court also lacks federal

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subject matter jurisdiction to hear the claim). As ERISA is silent on the issue of standing, Third
Circuit precedent sets forth that a healthcare provider may bring a cause of action by acquiring
derivative standing through an assignment of rights from the plan participant or beneficiary to the
healthcare provider. N.J Brain & Spine Ctr. v. Aetna, Inc., $01 F.3d 369, 372 (3d Cir. 2015).
“Healthcare providers that are neither participants nor beneficiaries in their own right may obtain
derivative standing by assigmnent from a plan participant or beneficiary.” Id. (citing CardioNet,
Inc. v. Cigna Health Corp., 751 F.3d 165, 176 n.10 (3d Cir. 2014)).
As a consequence, the issue presently before this Court hinges upon whether Patient
successfully assigned his rights to Plaintiff under the terms of the Plan. Defendant argues that any
purported assignment of right from Patient is void since the Benefit Booklet contains an anti
assigmuent clause that expressly prohibits Patient from assigning his rights and/or benefits. (ECF
No. 14-1 at 10). It is undisputed that the anti-assignment clause states that Patient “may not assign
his or her right to take legal action under the Policy to such provider.” (Def. SMF ¶ 27). Defendant
claims that this clause, therefore, deprives Plaintiff of standing to bring the current action. (ECF
No. 14-1 at 10).
In opposition, Plaintiff argues that the anti-assignment clause is invalid because it does not
specify that any attempted assignment would be voided. (ECF No. 1 8 at 7). Plaintiff further argues
that the anti-assignment clause is unenforceable against it as a health care provider, relying on a
decision from the Court of Appeals for the Fifth Circuit. (ECF No. 1$ at 8). This fifth Circuit
decision interpreted anti-assignment clauses, such as the one at issue here, to apply only to thirdparty assignees who may obtain assignments to cover unrelated debts. Hermann Hosp. v. MEBA
Med. & Benefits Plan, 959 F.2d 569, 575 (5th Cir. 1992) (“We interpret the anti-assignment clause
as applying only to unrelated, third-party assignees—other than the health care provider of
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assigned benefits—such as creditors who might attempt to obtain voluntary assignments to cover
debts having no nexus with the Plan or its benefits, or even involuntary alienations such as
attempting to garnish payments for plan benefits.”), overrtded on other grounds by Access
Mediquip, L.L.C. v. United Health Care Ins. Co., 698 F.3d 229 (5th Cir. 2012).
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. See, e.g., Physicians Mttltispecialty Grp. v. Health Care Plan ofHorton Homes,
Inc., 371 F.3d 1291, 1296 (11th Cir. 2004) (“[Am unambiguous anti-assignment provision in an
ERTSA-govemed welfare benefit plan is valid and enforceable.”); LeTottrl?eatt Lfelike Orthotics
& Prosthetics, Inc. v. Wal-Mart Stores, Inc., 298 F.3d 348, 353 (5th Cir. 2002) (reversing district

court by holding that anti-assignment clause in ERISA plan was enforceable and distinguishing
Hermann Hosp., 959 F.2d at 575); City ofHope Nat’t Med. Ctr. v. HeatthPltts Inc., 156 F.3d 223,
229 (1st Cir. 199$) (“[W]e hold that ERISA leaves the assignability or non-assignability of health
care benefits under ERISA-regulated welfare plans to the negotiations of the contracting parties.”);
St. Francis Reg’l Med. Ctr. v. Blue Cross & Bltte Shield of Kan., Inc., 49 F.3d 1460, 1465 (10th
Cir. 1995) (“ERISA’s silence on the issue of assignability of insurance benefits leaves the matter
to the agreement of the contracting parties.”); Davidowitz v. Delta Dental Plan, Inc., 946 f.2d
1476, 1481 (9th Cir. 1991) (“The court concludes that ERISA welfare plan payments are not
assignable in the face of an express non-assignment clause in the plan.”); Advanced Orthopedics
& Sports Med. v. Bltte Cross Blue Shield of Mass., No. 14-7280 (FLW), 2015 U.S. Dist. LEXIS
93855, at *9 (D.N.J. July 20, 2015) (“[C]ourts routinely enforce anti-assignment clauses contained

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in ERISA-governed welfare plans.”); Prof’t Orthopedic Assocs., PA v. CareFirst BttteC’ross

BttteShield, No. 14-44$6 (MAS), 2015 U.S. Dist. LEXIS $4996, at *10 (D.N.J. June 30, 2015)
(“[T]he majority of circuits addressing the [anti-assignment enforceability] question as well as
other courts in this district have considered the issue and held such provisions to be enforceable.”);
Specialty Surgery ofMiddtetown v. Aetna, No. 12-4429 (JLL), 2014 U.S. Dist. LEXIS $5371, at
*10 (D.N.J. June 24, 2014) (“Courts in the District of New Jersey have thus far held that
unambiguous anti-assignment provisions in group healthcare plans are valid and enforceable.”).
In light of the foregoing, the Court has carefully reviewed the anti-assignment provision
and finds it to be clear and unambiguous. As noted above, the anti-assignment clause indisputably
states that Patient “may not assign his or her right to take legal action under the Policy to stich
provider.” (Def. SMF

¶ 27).

The clear meaning of this language is that Patient is prohibited from

assigning his right to bring suit to Plaintiff. As the Court acknowledged above, a clear and
unambiguous anti-assignment clause like the one in this case is enforceable in this district. See
Cohen v. Indep. Blue c’ross, $20 F. Supp. 2d 594, 604—06 (D.N.J. 2011) (upholding similar antiassignment clause language). Therefore, the Court concludes that the anti-assignment clause is
valid and bars Plaintiffs claims.
CONCLUSION
For the aforementioned reasons, Defendant’s Motion for Summary Judgment is hereby
granted. An appropriate Order accompanies this Opinion.
Date: December A2017

United States District Court

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