Anti-Assignment Provision Survives ERISA Challenge
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Anti-Assignment Provision Survives ERISA Challenge

In a case of first impression concerning ERISA preemption the Fifth Circuit considered whether a healthcare provider had standing to bring a lawsuit against a plan for underpayment based on an anti-assignment provision in the plan. The plaintiff argued the provision was either ambiguous or the provision was rendered unenforceable by a Tennessee statute. The case involved a three-way dispute between an ERISA plan and its administrator, a third-party processor, and a healthcare provider. In the absence of any precedent, the court ruled simply that as a matter of plain and ordinary meaning a state statute requiring plan administrators to honor assignments made to third-party healthcare providers would necessarily “relate to” the administration of those plans and is thus preempted by ERISA.

Dialysis Newco Inc v Community Health Systems Group Health Plan