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Kennedy v. Deere & Co.





Appeal from the Circuit Court of Rock Island County; the Hon. David DeDoncker, Judge, presiding.


Rehearing denied May 19, 1986.

Plaintiffs are chiropractors who sued in the circuit court of Rock Island County to recover unpaid charges for services rendered to patients who are participants or beneficiaries of defendant Deere and Company's health insurance plan. Subsequent to the initial filing by plaintiff Kennedy, several similar complaints were brought by other providers of chiropractic services. The suits were consolidated in the circuit court of Rock Island and will be referred to in the singular for purposes of this disposition. After several amendments, the suit emerged as a two-count complaint alleging breach of contract and discrimination in payments, and claiming benefits payable pursuant to section 1132(e)(1) of the Federal Employee Retirement Income and Security Act (ERISA or the Act) (29 U.S.C. § 1132(e)(1) (1982)).

Plaintiffs allege that they are assignees of their patients' claims for benefits under defendant's health care plan which is regulated by ERISA and that in each instance the patient has also signed a claim form, provided by defendant for its employees' convenience, authorizing payment directly to the health care provider. On motion of defendant, and relying on the holding and reasoning of Cameron Manor, Inc. v. United Mine Workers of America (W.D. Pa. 1983), 575 F. Supp. 1243, the trial court dismissed plaintiffs' complaint on the ground that plaintiffs lacked standing to sue under section 1132(a)(1)(B) of the Act. That section, in pertinent part, provides:

"(a) A civil action may be brought —

(1) by a participant or beneficiary —

(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan; * * *." 29 U.S.C. § 1132(a)(1)(B) (1982).

The issue presented for our review is whether the execution of forms authorizing the employer to pay benefits directly to a provider and purporting to transfer the right to claim health benefits under an employees' health care plan covered by ERISA confers on the provider the right to sue pursuant to section 1132(a)(1)(B) of the Act. For purposes of our review, all facts well pleaded in plaintiffs' complaint are regarded as true and admitted. Sturm v. Block (1979), 72 Ill. App.3d 306, 390 N.E.2d 912.

Resolution of the issue before us begins with our consideration of the Cameron Manor opinion. There, the Federal district court ruled that plaintiff, a nursing care facility, was precluded from bringing suit under ERISA because it was neither a "participant" nor a "beneficiary" of an employee benefit plan. The court considered the plaintiff provider's contention that it was a "beneficiary" entitled to file a civil suit under section 1132(a)(1)(B). The term "beneficiary" is defined in section 1002(8) of the Act to mean "a person designated by a participant or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder." (575 F. Supp. 1243, 1245, quoting 29 U.S.C. § 1002(8).) The court then explained that "`[b]eneficiary' in the context of the various provisions of ERISA carries the connotation of a person, other than the employee-participant, who is covered by the plan's provisions — e.g., a spouse or dependent. Furthermore, the act of `designation' would appear to be such formal election as that contained in 29 U.S.C. § 1055, rather than the patient's choice of facility." The court continued, "[T]he declared purpose of the Act is to protect and educate those persons covered by such plans, and there is no indication that Congress intended by this statute to insure that health care facilities be paid. While Plaintiff may indeed be entitled to a `benefit' through operation of the plan — i.e., payment for services — we conclude that the term as employed in the statute does not permit of a construction broad enough to include a provider of health services to participants. See, Hibernia Bank v. International Brotherhood of Teamsters, 411 F. Supp. 478 (N.D. Cal. 1976); National Bank of North America v. Local 553 Pension Fund, 463 F. Supp. 636 (E.D.N.Y. 1978)." 575 F. Supp. 1243, 1245-46.

Defendant here urges a broad reading of Cameron Manor to preclude all suits by providers, at least to the extent that such providers are selected by the employee, rather than by the employer. In so arguing, defendant acknowledges that, unlike the plaintiffs in this case, plaintiff in Cameron Manor did not allege that it was an assignee for purposes of claiming benefits payable under the employer's health care plan or that it had written authorization to receive payments directly from the plan. Defendant attempts to dismiss this distinguishing factor by characterizing the execution of assignment/authorization forms as a "fleeting and informal act, * * * simply a matter of `where do I sign?'" Plaintiffs, on the other hand, maintain that this distinction is all important, and that defendant's and the trial court's reliance on Cameron Manor is, therefore, misplaced.

The two forms completed by the employees, which plaintiffs here contend give them standing to sue as beneficiaries or participants under defendant's plan, read as follows:

"For value received, I hereby assign to (doctor) the extent of my bill for health care services, any and all claims which I may have:

(a) For benefits provided under any policy of insurance or other health care plan * * *."

"AUTHORIZATION TO PAY (Employee: sign below only if payment is to be made ...

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