Doctor Lacks Standing to Bring ERISA Claims Due to Health Plans’ Anti-Assignment Provisions

In Griffin v. Coca-Cola Refreshments USA, Inc., No. 18-10417, __F.3d__, 2021 WL 712419 (11th Cir. Feb. 24, 2021), the Eleventh Circuit decided consolidated appeals brought by Dr. Wakitha Griffin, a dermatologist in Atlanta, Georgia, who has filed several appeals in this court seeking in-network payments (though an out-of-network provider) for treatment she has provided to patients under ERISA-governed health plans. These patients assigned their right to payment under the health plans to Dr. Griffin, but the plans asserted anti-assignment provisions in defense of the claims Dr. Griffin asserted against them. Given the history of Dr. Giffin’s litigation of these similar issues, the court decided to publish this decision and appointed Dr. Griffin counsel sua sponte. The court noted that the “appeals raise an unsettled issue about whether an ERISA plan administrator or its claims agent may waive its right to rely on an anti-assignment provision in an ERISA-covered plan,” but it declined to decide that issue because even if waiver is available, Defendants did not waive their ability to assert the anti-assignment defense.

Did the patients legally assign Griffin the right to bring the breach of fiduciary duty and statutory penalties claims (the “non-payment-related claims”) as well as benefit claims?  The court said no. While the parties do not dispute that the assignments’ language purports to convey to Dr. Griffin a right to bring the claim for unpaid benefits, the assignments do not include the right to bring fiduciary and statutory penalty claims. The assignments state: “This is a direct legal assignment of my rights and benefits under the policy.” Dr. Griffin contends that “rights and benefits under the policy,” expressly assigns the right to bring both payment and non-payment-related claims. The court found this argument contradicted by the assignments themselves, which contain checkboxes outlining the scope of the assignments. “None of the paragraphs mention breach of fiduciary duty or statutory penalty claims.” The district court properly dismissed the non-payment-related claims.

Do the anti-assignment provisions apply to Griffin’s claims for underpayment of benefits and/or the non-payment claims? The court found that Dr. Griffin’s payment claim does not survive the language of the plans’ anti-assignment provisions, where the language in the plans at issue is unambiguous, and thus, enforceable.

The Coca-Cola Plan says a participant “may not assign or alienate any payment with respect to any Benefit,” and “no amount payable at any time shall be subject in any matter to alienation by assignment of any kind. Any attempt to assign any such amount shall be void.” The Delta Plan provides that “the participant shall not have any right to alienate, commute, anticipate or assign (either at law or in equity) all or any portion of any benefit, payment or distribution under the Plan.” A separate provision states: “the participant will not have any right to alienate, commute, anticipate or assign all or any portion of any benefit, payment or distribution under the plans.”

The anti-assignment provisions make the assignments voidable rather than void ab initio and thus are enforceable unless and until they are challenged. “To put it another way, the existence of those provisions did not automatically nullify the assignments, and thus equitable doctrines are available.”

If the anti-assignment provisions apply to some or all the claims, are Defendants estopped from relying on the anti-assignment provisions or have they otherwise waived the right to assert them? The court rejected Dr. Griffin’s argument that Defendants waived their right to rely on the anti-assignment provisions because they did not alert her to their existence prior to litigation. “Waiver is the voluntary, intentional relinquishment of a known right.” The circuit courts have fashioned federal common law to address waiver where a defendant relies on a contractual provision to defeat a claim. The circuits to address this issue have come to different conclusions and the Eleventh Circuit has “left open the question of whether waiver principles might apply under the federal common law in the ERISA context. The court continued to leave open the question because even if waiver applies in the ERISA context, it is not available under the facts of this case. The defendants did not expressly relinquish their right to assert the anti-assignment clauses in litigation. Simply ignoring her request for plan documents and any anti-assignment provisions is insufficient to show that the claims administrator voluntarily or intentionally abandoned a contractual defense to litigation.

The court also rejected Dr. Griffin’s argument that Defendants are equitably estopped from relying on the anti-assignment provisions because they did not respond to her pre-litigation inquiries as to whether the plans contained such provisions. For equitable estoppel to apply in the ERISA context, a plaintiff must show that the relevant plan provisions are ambiguous, and the plan administrator made representations to the plaintiff that constitute an informal interpretation of ambiguity. Here, the anti-assignments provisions are not ambiguous. And if they were, none of the defendants made any representation to Dr. Griffin that informally interpreted the provisions.

Failure to State a Claim. Notwithstanding all the above, even if Dr. Griffin had statutory standing to bring claims for payment under ERISA, Dr. Griffin would still fail to state a claim because she is not entitled to more compensation for her services. Dr. Griffin was an out-of-network provider. Because the patients are not entitled to full reimbursement for out-of-network care, neither is Dr. Griffin.