Dialysis Newco, Incorporated v. Commty Hlth Sys Tr, 938 F.3d 246

Community Health Systems (plan administrator) adopted an ERISA-governed health plan with an express anti-assignment clause and a rule that benefits "must not exceed the Usual and Customary Charges."
H.S., a covered employee, received out-of-network hemodialysis from Dialysis Newco, which submitted claims and initially was paid in full but, beginning December 2012, was paid only ~8% after MedPartners/Global Excel capped "usual and customary" at 200% of Medicare.
H.S. signed two "Assignment of Benefits" forms (one authorizing claim submission and direct payment; a later one purported to assign legal claims), and the provider appealed administratively without success; the administrator did not respond to a second-level appeal.
The provider sued under ERISA seeking ~$776,193 for unpaid treatments. The district court held the plan's anti-assignment clause ambiguous (construed against plan) and alternatively that Tennessee law invalidated anti-assignment clauses, so the provider had standing; it remanded merits issues to the administrator.
On appeal, the Fifth Circuit held the anti-assignment clause unambiguous (prohibiting assignment and suits by third parties) and held Tennessee's statute requiring enforceable assignments preempted by ERISA; the court reversed, vacated, and rendered dismissal for lack of jurisdiction.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the plan's anti-assignment clause is ambiguous	Provider: clause is ambiguous and must be construed against drafter, permitting assignment/standing	Plan: clause unambiguously forbids assignment and suits by third parties	Held: clause is unambiguous and prohibits assignment/derivative standing
Whether Tenn. Code Ann. §56-7-120(a) (invalidating anti-assignment clauses) is preempted by ERISA	Provider: Tennessee statute applies to plans chosen-law and renders anti-assignment unenforceable	Plan: state statute is valid and Rapides (allowing direct-payment rules) controls	Held: statute is preempted—it "relates to" plan administration and interferes with nationally uniform administration
Whether the provider has standing to sue under ERISA	Provider: Assignment / direct-payment authorization gave derivative standing to sue	Plan: anti-assignment bars assignment so provider lacks standing	Held: provider lacked standing; case dismissed for lack of federal jurisdiction
Whether Rapides controls to preserve state direct-payment/assignment rules	Provider: Rapides permits state rules requiring honor of assignments/direct payments	Plan: Rapides limited to direct-payment authorizations and is distinguishable	Held: Rapides is distinguishable; Tennessee statute requires honoring assignments (not mere direct payments) and is preempted

LeTourneau Lifelike Orthotics & Prosthetics, Inc. v. Wal-Mart Stores, Inc., 298 F.3d 348 (5th Cir. 2002) (anti-assignment clause with similar language barred provider's suit for benefits)
Dallas Cty. Hosp. Dist. v. Assocs.’ Health and Welfare Plan, 293 F.3d 282 (5th Cir. 2002) (plan-language permitting assignments to network providers created ambiguity that defeated a broad anti-assignment clause)
La. Health Serv. & Indem. Co. v. Rapides Healthcare Sys., 461 F.3d 529 (5th Cir. 2006) (held a Louisiana statute requiring honoring direct-payment authorizations was not preempted; court here distinguished Rapides)
Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936 (2016) (recognized broad scope of ERISA preemption where state law interferes with plan administration)
Texas Pharmacy Ass’n v. Prudential Ins. Co. of Am., 105 F.3d 1035 (5th Cir. 1997) (state law that dictated plan-structure choices related to ERISA and was preempted)
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (abuse-of-discretion standard applies where plan grants administrator discretionary authority)
Principal Mut. Life Ins. Co. v. Charter Barclay Hosp., Inc., 81 F.3d 53 (7th Cir. 1996) (distinguishes an assignment from a mere authorization to direct payment)