United Behavioral Health v. Maricopa Integrated Health System – 6/23/2015

July 9, 2015

Arizona Court of Appeals Division One holds that healthcare providers cannot compel a health insurance plan to arbitrate Medicare coverage claims.

Aurora Behavioral Health and Maricopa Integrated Health System (collectively the “Providers”) entered into an agreement with United Behavioral Health allowing them to provide mental-health and substance-abuse health care services to members of Medicare and ERISA plans administered by United.  When United denied coverage for services that the Providers had provided under the plans, the Providers sought to arbitrate the claims pursuant to the agreement’s arbitration provision, which requires the parties to “resolve any disputes about their business relationship” in arbitration.  United refused and the Providers filed separate actions in superior court to enforce the arbitration clause.  The Arizona Court of Appeals consolidated the cases after the superior court denied United’s motion to stay the arbitration in MIHS’s case, but granted the motion in Aurora’s case.

On appeal, the Court affirmed the trial court’s order staying arbitration and reversed the order compelling arbitration as to the claims involving Medicare coverage.  The Court concluded that, although the language of the arbitration clause was broad enough to encompass the parties’ dispute, the Providers could not compel arbitration of the Medicare coverage claims because Congress enacted a specific procedure for resolving Medicare coverage disputes and compelling arbitration of the claims would conflict with the Medicare statutes. 

As to the ERISA claims, the Court vacated the trial court’s order compelling arbitration because Aurora was neither a participant nor a beneficiary with respect to the claims and the record was unclear as to whether Aurora received a valid assignment of the claims. 

Judge Gould authored the opinion; Judges Portley and Thompson concurred.