On Monday a case was removed from the Circuit Court of Hamilton County, Tennessee to the Eastern District of Tennessee. The case was filed by Sovereign Health of California against Blue Cross Blue Shield of Tennessee. The case is regarding the validity of assignments of benefits for members of health plans funded through the Employee Retirement Income Security Act (ERISA).
The plaintiffs are out of network medical providers in the state of California that have provided services to ERISA-plan-insured members of the defendant insurer. As mental health services providers, the plaintiffs said they routinely obtain assignments of benefits from the patients in order to pursue appeals rights with insurance companies without requiring the assistance of the patients, which can be difficult especially for mental health patients.
The plaintiffs are suing Blue Cross, alleging that the insurer is attempting to prevent paying any out of network medical providers by misleading the out of network plaintiffs about whether the claims are assignable, then paying the plaintiffs directly instead of the provider, refusing to honor assignments, even if the patient’s ERISA plan specifically permits them, and not informing the insureds that assignments of benefits will not be honored and that the insured is responsible for remitting the payments received from the defendant back to the medical provider. The plaintiffs argue that this leads to extra expense as they must recover from the patients, who already suffer mentally and may not be capable of ensuring full payment from the defendant, as well as appealing as necessary.
Plaintiffs are suing for recovery of benefits under ERISA and breach of contract regarding the contract between the patients and the insurance plans. Plaintiffs are represented by Eric Buchanan & Associates, PLLC. Defendants are represented by Waller, Lansden, Dortch & Davis, LLP .