Why Out-of-Network Providers Need a Limited Power of Attorney from Patients After Recent Appellate Court Decision

Many OON providers utilize assignment of benefit forms so that a provider can be paid by an insurance company directly or the provider can dispute nonpayment or under payment instead of this action being taken by the patient. However, last week in American Orthopedic & Sports Medicine, v. Independence Blue Cross Blue Shield; Horizon Blue Cross Blue Shield of New Jersey, the 3rd Circuit Court of Appeals determined that anti-assignment clauses in health benefit plans are enforceable. OON providers cannot be assigned the benefit of their patient’s health benefits to seek proper reimbursement from insurers in court if the patient’s insurance plan includes an unambiguous anti-assignment clause. However, the court specifically provided a workaround on this limitation if an OON provider receives a valid Limited Power of Attorney that would allow the provider to sue insurance companies in court in the shoes of its patient.

In American Orthopedic & Sports Medicine, v. Independence Blue Cross Blue Shield; Horizon Blue Cross Blue Shield of New Jersey the OON provider obtained an Assignment of Benefit from the insurance beneficiary and sought proper payment for OON services rendered to its patient under ERISA laws. However, the insurance plan document specifically prohibited an Assignment of Benefits from a beneficiary to a provider. While the court held that unambiguous anti-assignment clauses are valid, OON providers can still engage in several steps to receive proper OON benefits including:

  • Seek prior authorization to provide and be reimbursed for OON services
  • Seek and review summary plan documents early in the OON benefit appeal process to determine if the plan has an anti-assignment clause
  • Pursue administrative appeals with insurers to obtain proper reimbursement
  • Utilize a valid Limited Power of Attorney to act as the patient in litigation in federal court, effectively defeating an anti-assignment clause

Frier Levitt has helped OON providers obtain reasonable reimbursement that can be employed even where a patient’s plan has an anti-assignment clause. A valid Limited Power of Attorney may need to meet requirements under more than one state law and should be drafted by a knowledgeable attorney. 

Contact Frier Levitt today to speak to an attorney for help fighting for reasonable OON benefit reimbursement.