United Behavioral Health v. Maricopa Integrated Health System

IN THE
SUPREME COURT OF THE STATE OF ARIZONA
UNITED BEHAVIORAL HEALTH, A CALIFORNIA CORPORATION AND ITS
SUBSIDIARY PACIFICARE BEHAVIORAL HEALTH, INC.,
Plaintiffs/Appellants,
v.
MARICOPA INTEGRATED HEALTH SYSTEM, AN ARIZONA SPECIAL TAXING
DISTRICT,
Defendant/Appellee.
UNITED BEHAVIORAL HEALTH, A CALIFORNIA CORPORATION,
Plaintiff/Appellee,
v.
AURORA BEHAVIORAL HEALTH CARE – TEMPE, LLC; AND AURORA
BEHAVIORAL HEALTH SYSTEM, LLC,
Defendants/Appellants.
No. CV-15-0239-PR
Filed August 25, 2016
Appeal from the Superior Court in Maricopa County
The Honorable Michael J. Herrod, Judge
The Honorable Douglas L. Rayes, Judge
Nos. CV2013-003331; CV2013-016433
AFFIRMED IN PART, REVERSED AND REMANDED IN PART
Opinion of the Court of Appeals, Division One
237 Ariz. 559, 354 P.3d 1118 (App. 2015)
VACATED AND REMANDED
COUNSEL:
John C. West, Robert M. Kort (argued), Lewis Roca Rothgerber Christie
LLP, Phoenix, Attorneys for United Behavioral Health and PacifiCare
Behavioral Health, Inc.
UNITED BEHAVIORAL HEALTH V. MARICOPA
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Opinion of the Court
Russell A. Kolsrud, Mark S. Sifferman (argued), Clark Hill PLC, Scottsdale,
Attorneys for Maricopa Integrated Health System, Aurora Behavioral
Health Care – Tempe, LLC, and Aurora Behavioral Health System, LLC
David L. Abney, Dana R. Roberts, Knapp & Roberts, P.C., Scottsdale; and
Geoffrey M. Trachtenberg, Levenbaum Trachtenberg, PLC, Phoenix,
Attorneys for Amici Curiae Law Firms
JUSTICE TIMMER authored the opinion of the Court, in which VICE
CHIEF JUSTICE PELANDER, JUSTICES BRUTINEL and BERCH (RETIRED)
and JUDGE VÁSQUEZ joined. ∗
JUSTICE TIMMER, opinion of the Court:
¶1 Medicare Part C, 42 U.S.C. §§ 1395w-21 et seq., permits
enrollees to obtain Medicare-covered healthcare services from private
healthcare organizations and their third-party contractors. The Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001 et seq.,
regulates health plans offered by private employers to employees. We
today hold that the administrative appeals process provided under the
Medicare Act preempts arbitration of Medicare-related coverage disputes
between private healthcare administrators and providers, even though
arbitration would otherwise be required by the parties’ contracts and the
Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq. We remand to the
court of appeals to decide whether ERISA similarly preempts arbitration of
ERISA-related coverage disputes.
I. BACKGROUND
¶2 Congress passed the Medicare Act in 1965 to provide a federal
health insurance program for qualified enrollees, most of whom are either
∗Chief Justice Scott Bales and Justice Clint Bolick recused themselves from
this case. Pursuant to article 6, section 3 of the Arizona Constitution, the
Honorable Rebecca White Berch, retired Justice, and the Honorable Garye
L. Vásquez, Judge of the Arizona Court of Appeals, Division Two, were
designated to sit in this matter.
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elderly or disabled. 42 U.S.C. §§ 1395 et seq. For many years, enrollees
could obtain healthcare benefits only through Parts A and B of the Act,
which is administered by the Centers for Medicare and Medicaid Services
(“CMS”), a division of the Department of Health and Human Services
(“HHS”). See Douglas v. Indep. Living Ctr. of S. Cal., Inc., 132 S. Ct. 1204, 1207-
08 (2012).
¶3 In 1997, Congress enacted Part C, commonly known as the
Medicare Advantage Program, to permit enrollees to obtain Part A and Part
B coverage through private organizations, known as Medicare Advantage
Organizations (“MA Organization” or “Organization”). 42 U.S.C.
§§ 1395w-21, 1395w-27. CMS contracts with MA Organizations through a
bidding process. Id. § 1395w-24(A). Among other things, Organizations
agree to comply with all Medicare laws, CMS rules, and federal coverage
guidelines. Id., § 1395y(a)(1)(A); 42 C.F.R. § 422.101(a), (b)(1)-(3), (c). MA
Organizations offer Medicare benefits, not private insurance. Cf. Pagarigan
v. Superior Court, 126 Cal. Rptr. 2d 124, 134 (Ct. App. 2002) (noting that the
relationship between MA Organizations and Part C enrollees is “not
between an insurer and its policyholder, but rather, between Medicare . . .
and Medicare beneficiaries”).
¶4 CMS pays an MA Organization a fixed monthly “capitation”
fee for each Medicare beneficiary served by the Organization. 42 U.S.C.
§ 1395w-23. The Organization thereafter assumes the financial risk of
providing health care services to those enrollees. Id. § 1395w-25(b). MA
Organizations can either provide services directly or contract with third-
party healthcare providers to provide services. 42 C.F.R. §§ 422.100(a),
422.202.
¶5 Petitioners Maricopa Integrated Health System (“MIHS”) and
Aurora Behavioral Health Care – Tempe and Aurora Behavioral Health
System, LLC (“Aurora”) (collectively, “Providers”) operate acute inpatient
psychiatric hospitals. They entered into Facility Participation Agreements
(“Agreements”) with respondent United Behavioral Health, Inc. (“UBH”),
an MA Organization that issues and administers various types of health
insurance plans, including Medicare Advantage plans and ERISA-
regulated plans. MIHS and Aurora provide mental health and substance
abuse treatment services to Medicare enrollees enrolled with UBH (“MA
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Plan Members”). Aurora also provides these services to members of
ERISA-regulated plans administered by UBH (“ERISA Plan Members”).
¶6 The Agreements require MIHS and Aurora to obtain
authorization from UBH before providing healthcare services to MA Plan
Members and ERISA Plan Members. Providers must accept UBH’s
payment for services as “payment in full” for services rendered to enrollees
and cannot collect from them for unpaid services deemed medically
unnecessary by UBH, unless enrollees agree to pay for these services.
¶7 The dispute in these cases concerns whether continued
inpatient treatment by Providers was medically necessary, and therefore
compensable, for several MA Plan Members and ERISA Plan Members
initially hospitalized for mental health evaluations or treatment. UBH
denied authorization for extended inpatient care as not medically
necessary. Providers nonetheless continued providing inpatient care and
sought reimbursement, which UBH denied.
¶8 Providers demanded arbitration with the American
Arbitration Association pursuant to arbitration provisions in the
Agreements, which are governed by the FAA. UBH filed separate lawsuits
against MIHS and Aurora to stay the arbitration proceedings and determine
arbitrability, with conflicting results. In the case against MIHS, the trial
court found that the dispute was subject to arbitration and refused to stay
the arbitration proceedings. In the case against Aurora, the court stayed the
arbitration proceedings, ruling that the dispute concerned coverage and
must be resolved through Medicare and ERISA administrative procedures.
¶9 The court of appeals consolidated the cases for purposes of
appeal. It held that although the FAA presumptively favors arbitration,
Congress overrode this presumption in the Medicare context by adopting
an extensive administrative appeals process to resolve coverage disputes.
United Behavioral Health v. Maricopa Integrated Health System, 237 Ariz. 559,
563, 565 ¶¶ 13, 24, 354 P.3d 1118, 1122, 1124 (App. 2015). The court
determined that Providers’ claims are coverage disputes that turn on
construction of Medicare benefit plans and applicable Medicare standards.
Id. at 567 ¶¶ 33–34, 354 P.3d at 1126. It therefore concluded that
administrative review is Providers’ exclusive remedy, making the disputes
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concerning MA Plan Members nonarbitrable. Id. ¶ 35; id. at 565 ¶ 24, 354
P.3d at 1124.
¶10 The court of appeals did not decide whether ERISA claims are
subject to arbitration. Id. at 567 ¶¶ 36, 40, 354 P.3d at 1126. The record was
unclear whether Aurora has standing to assert ERISA claims, so the court
remanded for the trial court to make that determination. Id. at ¶ 40.
¶11 We granted Providers’ petition for review because it presents
issues of statewide importance. We have jurisdiction pursuant to article 6,
section 5 of the Arizona Constitution and A.R.S. § 12-120.24.
II. DISCUSSION
A. Scope of the arbitration provisions
¶12 The arbitration provisions in the Agreements are sufficiently
broad to encompass the disputes here. They require the parties to arbitrate
disputes “about their business relationship” (MIHS Agreement) and
“arising out of their business relationship” (Aurora Agreement). Although
the Agreements do not explicitly define “business relationship,” they
implicitly do so by setting forth the terms and conditions under which
Providers participate in UBH’s networks. Because Providers’ entitlement
to payment for unauthorized services concerns the terms and conditions of
the parties’ relationship, the arbitration provisions, unless preempted,
apply to these disputes.
B. Preemption
¶13 The Agreements provide that because they affect interstate
commerce, the FAA applies. The FAA establishes “a liberal federal policy
favoring arbitration agreements” and requires courts to enforce these
agreements “unless the FAA’s mandate has been overridden by a contrary
congressional command.” CompuCredit Corp. v. Greenwood, 132 S. Ct. 665,
669 (2012). Contrary to Providers’ argument, this “command” does not
have to be expressly stated. Congressional intent may be deduced from the
statute’s text, history, or “an inherent conflict between arbitration and the
statute’s underlying purposes.” Shearson/Am. Express, Inc. v. McMahon, 482
U.S. 220, 227 (1987).
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¶14 UBH contends that Congress provided exclusive procedures
in the Medicare Act and in ERISA for resolving coverage disputes that
preempt arbitration here. UBH, as the party resisting arbitration, bears the
burden to prove preemption. See CompuCredit, 132 S. Ct. at 672 n.4.
Whether arbitration is preempted is a question of law we decide de novo.
See Hutto v. Francisco, 210 Ariz. 88, 90 ¶ 7, 107 P.3d 934, 936 (App. 2005).
1. The Medicare Act
¶15 Congress has decreed that all claims “arising under” the
Medicare Act must be resolved through HHS administrative review
procedures. See Heckler v. Ringer, 466 U.S. 611, 614–15 (1984) (citing 42
U.S.C. § 405(g)). A claim arises under the Medicare Act if “both the
standing and the substantive basis for the presentation” of the claim is the
Medicare Act or if the claim is “inextricably intertwined” with a claim for
Medicare benefits. Id. at 614–15. Funneling such claims through the Act’s
administrative procedures promotes uniformity and consistency in
administering Medicare. Cf. Weinberger v. Salfi, 422 U.S. 749, 765 (1975)
(“Exhaustion is generally required as a matter of preventing premature
interference with agency processes, so that the agency may function
efficiently and so that it may have an opportunity to correct its own errors,
to afford the parties and the courts the benefit of its experience and
expertise, and to compile a record which is adequate for judicial review.”).
If a claim is “wholly collateral” to the Medicare Act’s review provisions and
outside HHS’s expertise, it is not subject to administrative review. See
Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 212 (1994) (citing Heckler, 466
U.S. at 618).
¶16 Providers’ claims are based not on the Medicare Act but on
state contract law. Thus, we consider (1) whether the claims are inextricably
intertwined with claims for Medicare benefits, as UBH argues, or instead
are wholly collateral to the Medicare Act, as Providers contend, and (2) if
inextricably intertwined, whether the Act provides administrative review
procedures for disputes between an MA Organization and its Providers
that do not directly involve enrollees.
(a) Are Providers’ claims inextricably intertwined with claims for
Medicare benefits?
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¶17 Providers rely on cases from other jurisdictions to argue that
the dispute here concerns a “wholly collateral” payment claim for which no
administrative review exists. RenCare, Ltd. v. Humana Health Plan of Tex.,
Inc., 395 F.3d 555 (5th Cir. 2004), is representative of these cases. The issue
there was whether RenCare, a provider, was required to exhaust
administrative remedies before suing Humana, an MA Organization, to
recover payment for kidney dialysis services provided to Humana
enrollees. 1 Id. at 556–57. RenCare had waived the right to seek
reimbursement from Humana enrollees, making RenCare’s sole remedy to
recover payment from Humana. Id. at 558. The Fifth Circuit found that
RenCare’s claim was not inextricably intertwined with a claim for Medicare
benefits because Humana had approved the services for which RenCare
sought payment, no Humana enrollee sought benefits or was at risk of
paying for services, and the government had no financial stake in the
outcome. Id. The court concluded that “[w]ith neither [Humana enrollees]
nor the government having any financial interest in the resolution of this
dispute, RenCare’s claims are not intertwined, much less ‘inextricably
intertwined,’ with a claim for Medicare benefits.” Id. at 559; see also Christus
Health Gulf Coast v. Aetna, Inc., 237 S.W.3d 338, 344 (Tex. 2007) (concluding
that hospitals did not need to exhaust administrative remedies to assert a
claim against an MA Organization that concerned payment for
indisputably covered services).
¶18 Providers’ claims are distinguishable from the payment
disputes in RenCare and Christus Health. Unlike the MA Organizations in
those cases, UBH did not refuse to pay for covered services; it disputed that
the extended services at issue were medically necessary and thus covered.
These are coverage disputes that cannot be resolved by applying the
Agreements’ payment provisions. Cf. 42 C.F.R. § 422.566 (providing that an
MA Organization’s refusal to provide medical services to an enrollee is an
“organization determination” governed by the Act); Lone Star OB/GYN
Assocs. v. AETNA Health Inc., 579 F.3d 525, 531 (5th Cir. 2009) (holding that
a coverage claim includes a determination of what benefits are covered
1 When RenCare was decided, Medicare Part C referred to
“Medicare+Choice plans.” In 2003, Congress renamed those plans
“Medicare Advantage plans.” See Medicare Prescription Drug,
Improvement, and Modernization Act, Pub. L. No. 108-173, § 201 (a)-(c)
(2003).
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under the terms of a plan). Resolution turns on whether UBH correctly
applied Medicare standards to determine that continued in-patient care for
the MA Plan Members was not covered—a matter inextricably intertwined
with a claim for benefits and falling within HHS’s expertise. Cf. Cmty.
Health Ctr. v. Wilson-Coker, 311 F.3d 132, 134 (2d Cir. 2002) (“Medicare . . . is
administered, for the most part, by intermediaries, who must apply a
uniform set of standards established by federal law . . . .” (internal citation
omitted)); Ex parte Blue Cross and Blue Shield of Ala., 90 So. 3d 158, 167 (Ala.
2012) (distinguishing RenCare because the provider’s claims against the MA
Organization were not based exclusively on the parties’ payment plan, but
instead involved questions of coverage and compliance with the Medicare
Act that had affected enrollees and could affect future enrollees).
¶19 We conclude that Providers’ claims are inextricably
intertwined with claims for Medicare benefits and therefore arise from the
Medicare Act.
(b) Are Medicare administrative review procedures available to
Providers?
¶20 Providers also rely on RenCare and Christus Health to argue
that the Medicare Act’s administrative procedures are unavailable to them,
and therefore the Act cannot preempt arbitration. The RenCare court
concluded that the Act’s administrative review process “focuses on
enrollees, not health care providers, and is designed to protect enrollees’
rights to Medicare benefits.” 395 F.3d at 559. If the enrollee has no further
obligation to pay for furnished services, the court ruled, “a determination
regarding these services is not subject to appeal.” Id. (quoting 42 C.F.R.
§ 422.562(c)(2)). No enrollee had requested an organization determination
or appealed from one, id., and no Humana enrollee had been denied a
covered service or was required to pay for a service, id. at 559–60. The court
therefore found that Humana’s refusal to pay RenCare was not an
organization determination that could be appealed through the Act’s
mandatory administrative procedures. Id. at 560; see also Christus Health,
237 S.W.3d at 343 (relying on RenCare to conclude that Medicare’s
administrative procedures are not applicable to a medical provider’s
contractual claim for payment from MA Organization for provided
services).
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¶21 Although the Act’s administrative procedures focus on
enrollees’ interests, they also apply to contract providers in a dispute with
an MA Organization when that dispute, at bottom, challenges an
organization determination that denied services as medically unnecessary.
“Any provider that furnishes, or intends to furnish, services to the enrollee”
can request an organization determination, and any provider “who has
furnished a service to the enrollee and formally agreed to waive any right
to payment from the enrollee for that service” or that has “an appealable
interest” is a party to the organization determination with full appeal rights.
42 C.F.R. §§ 422.566(c)(ii), 422.574(b), (d), 422.578—.626; see also
Establishment of the Medicare+Choice Program, 63 Fed. Reg. 34968, 35026 (Jun.
26, 1998) (interpreting federal law to permit certain providers to be parties
to organization determinations and to exercise appeal rights). Providers
waived their rights to payment from enrollees in the Agreements and
provided uncompensated services to enrollees. Under § 422.574(b) and (d),
therefore, Providers were parties to the organization determination with
full appeal rights.
¶22 Relying on 42 C.F.R. § 422.562(c)(2), the court in RenCare
concluded that appeal rights are extinguished if an enrollee has no interest
in the outcome. 395 F.3d at 559. That regulation provides that “[i]f an
enrollee has no further liability to pay for services that were furnished by
an MA organization, a determination regarding these services is not subject
to appeal.” We understand this provision as applying only to an enrollee’s
appeal rights. It is included among general provisions addressing an MA
Organization’s responsibilities and an enrollee’s rights; it does not focus on
contract providers. And although it makes sense to disallow an enrollee’s
appeal when that enrollee has no financial interest at stake, it does not
follow that a contract provider who remains unpaid for services rendered
should be denied appeal rights merely because the enrollee bears no
liability. Most importantly, if § 422.562(c)(2) applies to extinguish a contract
provider’s administrative appeal rights, the provision would conflict with
regulations making a contract provider a party to an organization
determination with full appeal rights when that provider has waived the
right to payment from the enrollee. See 42 C.F.R. §§ 422.574(b), .578—.626;
see also Nitro-Lift Techs., L.L.C. v. Howard, 133 S. Ct. 500, 504 (2012) (noting
the time-honored interpretive principle that a specific statute governs a
general one). The provisions are harmonized by interpreting § 422.562(c)(2)
as applying only to an enrollee’s appeal rights.
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¶23 We are also persuaded by policy considerations to conclude
that the Act’s mandatory administrative procedures apply to Providers.
Although neither the enrollees nor the government has a direct financial
stake in this dispute, HHS directs and controls how MA Organizations
administer benefits, and it therefore has an interest in developing the law
on what is “medically necessary.” 2 See 42 C.F.R. §§ 422.1 et seq.; Shalala v.
Ill. Council on Long Term Care, Inc., 529 U.S. 1, 12–13 (2000) (noting that
channeling Medicare benefit coverage claims to HHS assures that the
agency has a greater opportunity to apply, interpret, or revise its own
policies and regulations); Heckler, 466 U.S. at 605 (“The Medicare Act
authorizes the Secretary to determine what claims are covered by the Act
‘in accordance with the regulations prescribed by him.’”). If contract
providers are precluded from pursuing administrative review of adverse
coverage decisions, these matters will be resolved in arbitration (assuming
it is either required or selected) or in state or federal courts. In these
scenarios, HHS would be prevented from applying its expertise to coverage
issues, thereby risking inconsistent results and an uneven development of
the law.
¶24 Providers also argue that we should defer to CMS’s view that
the Act’s administrative procedures do not apply to resolve disputes
between contract providers and MA Organizations. (UBH, in contrast,
maintains that contract providers can challenge organization
determinations through the Act’s administrative review procedures.)
Providers cite the Medicare Managed Care Manual, Chapter 13, § 70.1,
which states, without explanation, that non-contract providers can be
parties to an organization determination and have appeal rights but that
“contract providers do not have appeal rights.” And in other cases, CMS’s
designee has refused to consider an appeal involving a request by a contract
provider for payment from an MA Organization, contending that only non-
2 In 2006, Congress amended the Medicare Act Part C to provide that
an MA Organization’s costs directly affect the Organization’s bid for a CMS
contract the next year, which in turn impacts the government’s capitation
payment amounts. See 42 U.S.C. § 1395w-24(b). If Providers prevail in this
case and UBH is required to reimburse them for unpaid services, the
government’s capitation rates for the next year will increase. Thus, unlike
the situation in RenCare, the government here has an indirect financial stake
in Providers’ claims.
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contract providers have appeal rights. These positions are accurate
regarding pure payment disputes that do not involve coverage issues
between contract providers and MA Organizations. But they conflict with
the regulations if the payment dispute concerns an organization
determination regarding coverage, see supra ¶ 21, and do not persuade us
to reach a different result. Cf. Cent. Laborers’ Pension Fund v. Heinz, 541 U.S.
739, 748 (2004) (“[N]either an unreasoned statement in the manual nor
allegedly longstanding agency practice can trump a formal regulation with
the procedural history necessary to take on the force of law.”).
¶25 Finally, Providers argue that UBH admitted that arbitration
was available to resolve the disputes here. UBH denied benefit coverage
for a patient after completing an internal appeal process. (The record does
not show whether the patient was an MA Plan Member.) In a letter to MIHS
communicating this decision, UBH enclosed an informational form
concerning a provider’s rights that stated: “Is arbitration available? Yes,
you may seek arbitration to address disputes not resolved after completion
of the formal Provider Dispute process, as described in your contract with
us and/or applicable state law.” It is unclear whether this provision applies
to coverage disputes. The UBH provider manual states that the “Provider
Dispute Resolution process” applies to payment disputes “regulated by the
Agreement, rather than the Member’s Benefit Plan.” Even so, the above-
quoted language is, at most, “what Wigmore calls a ‘quasi admission,’
which is ‘nothing but an item of evidence’ and ‘is therefore not in any sense
final or conclusive.’” Reed v. Hinderland, 135 Ariz. 213, 216, 660 P.2d 464, 467
(1983) (quoting 4 Wigmore, Evidence § 1059 at 27 (Chadbourn rev. 1972)).
¶26 We conclude that Providers can avail themselves of the
Medicare Act’s administrative review procedures. Providers must present
their claims to HHS. 3 If HHS refuses to allow Providers to pursue these
remedies on the basis that they do not apply to contract providers, this
would foreclose the Providers’ ability to use the Act’s administrative
review procedures, and Providers could then exercise their arbitration
3 At oral argument before this Court, UBH acknowledged that
Providers have administrative appeal rights but suggested that appeal of
the claims here may be time-barred. We do not address the time-bar issue
or whether UBH would be estopped from asserting that defense, as these
issues have not been briefed and are not before us.
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rights. Cf. Shalala, 529 U.S. at 19 (stating that there is no requirement to
channel review through the agency if it would “mean no review at all”);
Heckler, 466 U.S. at 617 (explaining that presentment of claim for benefits to
HHS is nonwaivable but HHS can waive full pursuit of administrative
remedies); Koerpel v. Heckler, 797 F.2d 858, 862 (10th Cir. 1986) (noting that
the exhaustion of administrative remedies requirement can be excused “if
exhaustion would be futile.”).
2. ERISA
¶27 Providers argue that the court of appeals misapplied the FAA
by concluding that whether Aurora’s claims concerning ERISA Plan
Members can be arbitrated requires a determination that Aurora has
standing to assert these claims. UBH responds that requiring the trial court
to determine standing is permissible as it would not involve the merits of
an arbitrable dispute.
¶28 When asked to decide whether a dispute is subject to
arbitration governed by the FAA, a court is limited to deciding whether an
arbitration agreement exists and whether it encompasses the dispute. See
Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000).
It must carefully avoid deciding the merits of an arbitrable claim or any
defenses to it. See Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469,
478 (9th Cir. 1991) (“Our role is strictly limited to determining arbitrability
and enforcing agreements to arbitrate, leaving the merits of the claim and
any defenses to the arbitrator.”).
¶29 To decide whether Aurora’s ERISA-related claim is arbitrable,
the court of appeals was tasked with deciding whether ERISA preempted
arbitration through a “contrary congressional command.” See CompuCredit,
132 S. Ct. at 669. Whether Aurora has standing to pursue its claim has no
bearing on whether Congress intended to preempt arbitration for ERISA-
related claims. The standing issue, and any other defenses UBH might have
to Aurora’s claim, must be left to the arbitrator if the claim is subject to
arbitration. Republic of Nicaragua, 937 F.2d at 478. The court must assume
that Aurora has asserted a viable claim and determine whether ERISA
provides mandatory, exclusive procedures for adjudicating that claim. We
remand to the court of appeals for this purpose.
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C. Request for attorney fees
¶30 Providers request an award of attorney fees pursuant to
A.R.S. § 12-341.01. Because Providers are not the successful parties, we
decline the request. If Aurora is ultimately successful before the court of
appeals regarding the ERISA-related claims, it may renew its request before
that court.
III. CONCLUSION
¶31 Providers’ coverage claims are inextricably intertwined with
claims for Medicare benefits, and they therefore are subject to the Medicare
Act. The Act provides mandatory administrative review procedures for
these disputes, which preempt arbitration. The trial court in Aurora’s case
correctly stayed arbitration of the Medicare-related claims; the trial court in
MIHS’s case incorrectly refused to stay the arbitration.
¶32 The court of appeals erred by deciding that whether Aurora’s
ERISA-related claims are arbitrable depends on whether Aurora has
standing to assert this claim. The court should decide on remand whether
this claim is arbitrable without considering the standing issue or whether
any valid defenses to the claim exist.
¶33 We vacate the court of appeals’ opinion and remand for
further proceedings on Aurora’s claims concerning ERISA Plan Members.
We affirm the trial court judgment in the Aurora lawsuit with respect to
Providers’ claims concerning the MA Plan Members. We reverse the trial
court judgment in the MIHS lawsuit and remand for entry of judgment
staying arbitration proceedings.
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