“2nd Cir. Denies Standing to Providers, Rejects Claims of Beneficiary Status”
Focus on Remedies. Jennifer Rudenick Ecklund, with Thompson & Knight LLP, Dallas, said the court’s decision did not necessarily break new ground but serves as a reminder for providers that they need to ensure that network provider agreements contain provisions that will allow them to obtain necessary remedies, including reinstatement, for any breaches by the health insurer.
‘‘The court essentially reaffirmed who qualifies as a traditional ERISA-covered entity, holding that health care providers have no standing as ‘beneficiaries’ for purposes of an equitable relief claim brought under ERISA,’’ Ecklund told Bloomberg BNA.
Although the providers wanted to avail themselves of the injunctive relief available under ERISA’s antiretaliation provisions, based on the argument that they were ‘‘beneficiaries’’ because they were entitled to a ‘‘benefit’’—reimbursement—or, alternatively, because the patients assigned their benefits to them, the court rejected the notion that an ‘‘assignment of benefits’’ conferred that special legal status on the providers absent specific language to that effect, she said.
‘‘Even if the assignment had been worded to assign the patient’s anti-retaliation rights under ERISA, it is unclear that the court would have given effect to such an assignment,’’ Ecklund continued. ‘‘Rather, the court viewed the providers’ arguments as a sort of an end-run around the arbitration requirements of the network participation agreement—which would most often be the source of these providers’ rights and remedies for any dispute with the insurer,’’ she said.
‘‘Practically speaking, the decision should remind providers to take care to ensure that the arbitration provisions of their provider agreements afford them injunctive relief in the courts where possible, to ensure that real remedies are available in circumstances which threaten their participation in a particular carrier’s network,’’ Ecklund told Bloomberg BNA.
‘‘Luckily, many states have statutory anti-retaliation provisions available for the protection of health care providers,’’ she added.