United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
case is before the Court on the Motion to Stay and Compel
Arbitration (“Motion”) [Doc. # 9] filed by
Defendant Columbia Hospital Medical City at Dallas,
Subsidiary, L.P. d/b/a Medical City Dallas Hospital
(“Columbia”). Plaintiff IMA, Inc.
(“IMA”) filed a Response [Doc. # 14], and
Defendant filed a Reply [Doc. # 15]. Having reviewed the full
record and the applicable legal authorities, the Court
denies the Motion.
the third-party administrator of the Central Management
Company, LLC Employer Health Plan (the “CMC
Plan”). Columbia provided medical services to a CMC
Plan member, and believes IMA incorrectly processed the claim
April 1, 2012, Healthsmart Preferred Care, Inc.
(“Healthsmart”) and HCA North Texas Division,
Inc. (“HCA”) entered into a Hospital Agreement
(“Hospital Contract”), attached to the Complaint
[Doc. # 1] as Exhibit 2. Neither Columbia nor IMA is a party
to the Hospital Contract, but Exhibit B to the Hospital
Contract identifies codes and reimbursement rates for certain
services when provided by Columbia (“Medical City
Dallas Hospital”). The Hospital Contract contains a
Dispute Resolution section that provides for binding
arbitration. See Hospital Contract, ¶ 5.7(2).
ten years earlier, IMA had entered into a TPA (Third Party
Administrator) Agreement (“IMA Contract”) with
PPOplus, LLC (“PPO”), which IMA signed on
December 19, 2002. Under the IMA Contract, IMA agreed to pay
claims of Participating Providers (defined to include a
hospital “who has entered into a contractual agreement
with PPO to provide Covered Services to Beneficiaries”)
“in accordance with the applicable Plan and the PPO
Contracted Rates.” See IMA Contract [Doc. #
1-3], ¶ 2.2. “Plan” is defined in the IMA
Contract to mean a health benefits plan that has entered into
an agreement with IMA (which would include the CMC Plan), and
“PPO Contracted Rates” is defined to mean
“the rates or fees agreed upon by PPO and Participating
Provider.” See id., ¶ 1.9; ¶ 1.8.
The IMA Contract does not contain an arbitration provision.
in July 2002, PPO had entered into a Network Cross Access
Agreement (“Network Agreement”) with Healthsmart,
a party to the 2012 Hospital Contract. In the Network
Agreement, Healthsmart and PPO agreed to the “repricing
of claims in conformity with the provisions of Schedule C . .
..” See Network Agreement, ¶ 6(c).
Therefore, as of July 2002, it appears that PPO agreed to
reimburse Participating Hospitals in the Healthsmart network
at the rate set forth in Schedule C to the Network Agreement.
It appears also that Healthsmart and HCA agreed to different
reimbursement rates, attached to the Hospital Contract as
Exhibit B, when they entered into the April 2012 Hospital
Contract. The reimbursement rates, whether from the Network
Agreement in 2002 or the Hospital Contract in 2012, are
contained in an attachment to the relevant contract, and are
not set forth in the contracts themselves.
2019, Columbia filed a demand for arbitration with the
American Arbitration Association. Columbia claims that IMA is
obligated to pay for the medical services Columbia provided
to a CMC Plan member, and that IMA is required to arbitrate
the dispute. Columbia bases its claim that IMA is required to
participate in arbitration on the Dispute Resolution section
of the 2012 Hospital Contract between Healthsmart and HCA.
filed this lawsuit seeking a declaratory judgment that it is
not obligated to arbitrate the dispute with Columbia.
Columbia filed the Motion to Stay and Compel Arbitration,
which has been fully briefed and is now ripe for decision.
STANDARD FOR MOTION TO COMPEL ARBITRATION
in enacting the Federal Arbitration Act (the
“Act”) directed courts to treat arbitration
agreements as “valid, irrevocable, and
enforceable.” See Epic Sys. Corp. v. Lewis, __
U.S. __, 138 S.Ct. 1612, 1621 (2018) (citing 9 U.S.C. §
2). The Act establishes “a liberal federal policy
favoring arbitration agreements.” Id. (quoting
Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 24 (1983)).
first inquiry in deciding a request to compel arbitration is
whether the parties entered into an agreement to arbitrate.
See Kubala v. Supreme Prod. Servs., Inc., 830 F.3d
199, 201 (5th Cir. 2016); Trammell v. AccentCare,
Inc., 776 Fed.Appx. 208, 209 (5th Cir. June 7, 2019).
“Arbitration is ‘a matter of contract and a party
cannot be required to submit to arbitration any dispute which
he has not agreed so to submit.'” PaineWebber
Inc. v. The Chase Manhattan Private Bank (Switzerland),
260 F.3d 453, 462 (5th Cir. 2001) (quoting United
Steelworkers of Amer. v. Warrior & Gulf Nav. Co.,
363 U.S. 574, 582 (1960)). “Although there is a strong
federal policy favoring arbitration, this federal policy
favoring arbitration does not apply to the determination of
whether there is a valid agreement to arbitrate between the
parties.” Will-Drill Resources, Inc. v. Samson
Resources Co., 352 F.3d 211, 214 (5th Cir. 2003)
(internal quotations and citations omitted).
admits, as it must, that IMA is not a party to the Hospital
Contract. Columbia argues that IMA is nonetheless required to
arbitrate this dispute because the Hospital Contract and the
IMA Contract are “unified, ” and because IMA
accepted direct benefits under the Hospital Contract.