March 22, 2012
Authored by: benefitsbclp
A recent South Carolina federal district court case underscores the importance of a robust anti-assignment clause in health plan documents. In the case, the court held that a hospital could not stand in the shoes of a plan participant and sue a health plan to force payment of benefits to the hospital. Prior to receiving treatment, the participant had signed a standard form assigning his benefits to the hospital. When the plan denied benefits, the hospital sued to force the plan to pay.
The plan in question had a strong anti-assignment provision. The court basically said that the plan’s anti-assignment clause governed and rendered the participant’s assignment invalid. The court said that the fact that the plan could, and did, pay benefits directly to providers on behalf of participants in other circumstances did not change the result. The court stated that the direct payment of benefits to providers