October 2025
TO: ALL INTERESTED PHYSICIANS
As reported in the NYS Health Law Journal, in the matter Karkare on behalf of JN v. Int’l Ass’n of Bridge, 140 F.4th 60 (2d Cir. 2025), the Second Circuit Held that Power of Attorney Does Not Bestow Medical Provider with Standing to Sue Under ERISA
In 2022, a surgeon affiliated with a medical practice, performed surgery on patient to repair a meniscus root tear in the patient’s knee. At the time of the surgery, The Patient was a plan beneficiary of an Insurance Fund, under which the practice was an out-of-network provider.
Once the procedure was completed, the medical practice submitted an invoice to the union’s claim’s administrator, Empire Blue Cross Blue Shield (Empire), for a total amount of $153,579.94. Of that amount, the Union paid only $1,095.92 pursuant to its Summary Plan Description, which provided for reimbursement for out-of-network providers pursuant to the customary charges in the patient’s geographical area for similar services.
Following the medical practice’s exhaustion of Empire’s internal appeals process, plaintiff-physician, also a surgeon practicing with the medical practice, obtained a power of attorney from the patient, and brought the instant action, asserting that the union violated its obligations under Section 502(a) (1)(B) of ERISA when it limited the reimbursement for the patient’s surgery to $1,095.92.
The district court sua sponte, (on its own), ordered plaintiff to show cause why in light of the “requirement that a physician must demonstrate a valid assignment of a claim from a beneficiary to maintain a cause of action for unpaid benefits under ERISA,” the matter should not dismissed for failing to plausibly allege a valid assignment. In response, plaintiff argued that no assignment was necessary because the power of attorney was sufficient to allow plaintiff to maintain a cause of action under ERISA on behalf of the patient. Disagreeing, the district court dismissed the complaint. Plaintiff appealed the decision to the Court of Appeals for the Second Circuit.
The issue on appeal was whether plaintiff, as attorney-infact who purportedly received a power of attorney from the patient plan member, has standing to bring an ERISA action for unpaid medical fees absent a valid assignment of the claim. As the court explained, to establish standing to maintain an ERISA action, the plaintiff must satisfy two distinct components: (1) he or she must “assert a constitutionally sufficient injury arising from the breach of a statutorily imposed duty” (i.e. constitutional standing under Article III of the United States Constitution) and (2) he or she must “identify a statutory endorsement of the action.” As the court further explained, to establish constitutional standing, a plaintiff must establish: (1) an injury in fact; (2) a sufficient “causal connection between the injury and conduct complained of;” and (3) a likelihood that “the injury will be redressed by a favorable decision.”
Plaintiff did not argue that he suffered any direct injury as a result of the Union’s alleged breach of the patient’s plan given that he was not even the surgeon who treated the patient. Instead, plaintiff argued that he was suing purely in a representative capacity on behalf of the patient for injuries purportedly suffered by the patient pursuant to a power of attorney.
As the court explained, however, a power of attorney “does not transfer an ownership interest in [a] claim, but instead only authorizes the grantee to act as an agent or an attorney-in-fact for the grantor.” An assignment of claims, in contrast, “transfers legal title or ownership of those claims and thus fulfills the constitutional requirement of an injury-infact.”
In short, as the court explained, the party must plead a “proprietary interest in [a] claim and not simply the ability to pursue the claim on behalf of another.” Because the allegations in the complaint indicated that plaintiff was in fact suing in his own name and for his own benefit, the court concluded that the power of attorney was “of no moment,” and that plaintiff lacked constitutional standing to maintain the action. Because plaintiff lacked Article III standing, the district court lacked subject matter jurisdiction to adjudicate the dispute and properly dismissed the action.
Nevertheless, the court determined that plaintiff’s lack of standing did not necessarily render the action an “incurable nullity,” since, based on the complaint, it seemed likely that the patient has standing to maintain the ERISA claim. Reiterating the precedent holding that “the real party in interest” can be substituted into the action, the court remanded the action to the district court to permit the actual patient to move to be substituted into the action or to otherwise submit an amended complaint that properly asserts the ERISA claim on behalf of the patient.