An assignment is defined as “the transfer of rights or property” and may be tangible in nature, such as a paper document evidencing one’s intent to transfer rights or property to another. However, an assignment may also be intangible, such as an instruction or an act that allows one party to receive funds due to another party; which is called an equitable assignment.
The basic tenets of an assignment are:
- Intent to transfer the rights or benefits under a contract.
- That the individual receiving the assignment accepted those rights/benefits for valuable consideration (consideration=medical benefits).
Assignment of Benefits
The common form of assigning one’s right in a personal injury protection (PIP) insurance case is called an “assignment of benefits.” Believe it or not, assignments of benefits, and the practical implications of the same, remain a hotly contested area of the law. Both plaintiff and defense attorneys are constantly seeking to overturn this niche of PIP law.
When an individual is injured in a car accident, he/she may seek medical treatment from a medical provider. The medical provider will request that the patient sign an assignment of benefits. This document is usually signed on the patient’s initial office visit. The assignment of benefits is a document that transfers the patient’s rights to recover insurance “benefits” from the insurance carrier to the medical provider.
The assignment from the patient to the medical provider confers standing in the medical profession to bring suit for unpaid or underpaid medical services. In laymen’s terms, standing gives the medical provider the right to initiate litigation against the insurance company to recover payment for the valuable medical services that they provide their patients. This standing conveys subject matter jurisdiction to the provider. The provider becomes the plaintiff in the lawsuit and must have this “standing,” which is not retroactive in nature, at the time that the lawsuit is filed. Thus, a medical provider would be best served to have a patient sign an assignment of benefits on the initial visit to ensure the proper standing to initiate litigation. Without standing, a medical provider cannot pursue legal action (PIP ACTION) against an insurer for unpaid or underpaid medical services/benefits.
What form must an assignment take?
For many years, both county and circuit courts went back and forth regarding what form an assignment of benefits must take. A common question that needed judicial intervention was as follows: Must a document evidencing the intent to transfer property to another actually contain the words, “assignment of benefits,” and if so, what specific language must be executed?
This question was answered as a definitive no, and so long as the intent to transfer medical benefits was shown, the transfer was upheld. In 2012, the case of Advanced MRI Diagnostics v. State Farm Mutual Auto. Ins. Co. was heard, and the court held that there was no legal distinction between a direction to pay and an assignment of benefits. Thus, the title of the document played no role in conferring standing on the medical provider.
What is a direction to pay?
A direction to pay is very similar to an assignment for benefits, in that a patient signs the document directing the insurance carrier to pay benefits to the medical provider. The court held that the “intent to assign benefits of insurance” was good enough to confer standing on the medical provider. This case also stood for the proposition that the insurance carrier has no standing to challenge an assignment of benefits. Despite the insurance carrier’s persistence, this case does in fact limit the defenses the insurance carrier is able to bring forward in a PIP suit. This fight will continue until the district court of appeals finally settles this issue once and for all. However, it is essential to have the patient sign either an assignment of benefits or a direction to pay to ensure standing to bring a lawsuit for unpaid or improperly paid PIP Benefits.
Another case, Center for Diagnostic Imaging v. State Farm Mutual Auto basically reaffirmed the previous case mentioned regarding Advanced MRI Diagnostics. This case held that standing is conferred when a document states that a medical provider is to be paid all applicable medical benefits. Thus, an assignment of benefits or a direction to pay needs only to indicate intent to pay the medical provider all benefits from the insurance carrier. Filler language is not required in a document transferring the right to receive medical benefits/payments from the insurance carrier.
Filler Language includes: “I give Provider X the right to bring a lawsuit on my behalf, I grant Provider X these specific benefits, and that the Provider shall receive X, Y, Z benefit.”
Standing is attained as soon as an assignment or direction to pay is executed by the medical provider, stating that said provider is to receive all applicable medical benefits. This case stands for the proposition that there is absolutely no legal distinction between a direction to pay and an assignment of benefits.
Is there a PIP statute that requires certain language in a direction to pay or assignment of benefits?
Currently, there is no Florida PIP statute pursuant to Section 627.736 specifying the language that must be contained in a direction to pay or an assignment of benefits. However, it is essential for any medical provider to specify the terms of the arrangement. There must be a clear-cut intent for the patient to transfer/assign all rights/claims for benefits of insurance to the medical provider. It is equally as important for the patient to sign the document and date the same. The assignment of benefits should likewise state the name of the medical provider at the top of the document. The name of the provider at the top of the document should mirror the name of the provider’s corporation.
It is crucial to seek advice from an attorney in the realm of assignment for benefits/directions to pay. Many insurance carriers are listing defective assignments, and “mere directions to pay” as affirmative defenses. The insurance carriers are withholding payment due to what they term “defective assignments.” It is important to have a PIP litigation attorney to safeguard your rights and ensure prompt payment from the insurance carrier.