IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

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.

No. 1 CA-CV 14-0027

1 CA-CV 14-0421

(Consolidated)

Appeal from the Superior Court in Maricopa County

No. CV2013-003331

The Honorable Michael J. Herrod, Judge

AFFIRMED IN PART; REVERSED IN PART; VACATED AND 

REMANDED IN PART

COUNSEL

Brownstein Hyatt Farber Schreck LLP, Phoenix

By John C. West, Robert M. Kort and Chase A. Bales

Counsel for Plaintiffs/Appellants

Clark Hill PLC, Scottsdale

By Russell A. Kolsrud and Mark S. Sifferman

Counsel for Defendant/Appellee
UNITED, et al. v. MIHS

Opinion of the Court

2

OPINION

Presiding Judge Andrew W. Gould delivered the opinion of the Court, in 

which Judge Maurice Portley and Judge Jon W. Thompson joined.

G O U L D, Judge:

¶1 This appeal presents the question of whether two health care 

providers, Aurora Behavioral Healthcare (“Aurora”) and Maricopa 

Integrated Health System (“MIHS”) (collectively the “Providers”), may 

compel arbitration of coverage claims arising under Medicare and ERISA 

health care plans. The Providers seek to compel arbitration pursuant to an 

arbitration clause in their agreement with United Behavioral Health 

(“UBH”), the entity which administers the subject Medicare and ERISA 

benefit plans. The arbitration clause is expressly governed by the Federal 

Arbitration Act (“FAA”). See 9 U.S.C. § 1, et seq.

1

¶2 UBH cannot be compelled to arbitrate the Providers’ 

Medicare coverage claims. We conclude that Congress intended 

Medicare’s administrative procedure to provide the exclusive remedy for 

resolving Medicare coverage claims, and that this procedure overrides the 

FAA’s presumption favoring arbitration. 

¶3 However, because the record is not clear as to whether Aurora 

has standing to assert its ERISA coverage claims, we do not address the 

arbitrability of Aurora’s ERISA claims. We therefore vacate the trial court’s 

order compelling arbitration of Aurora’s ERISA claims, and remand for 

further proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

¶4 UBH administers various types of health insurance plans,

including Medicare and ERISA benefit plans. Aurora and MIHS are 

facilities that provide mental-health and substance-abuse treatment. The 

Providers each entered into a Facility Participation Agreement (“Facility 

Agreement”) with UBH allowing them to participate in UBH networks that 

provide mental-health and substance-abuse health care services. The 

 

1 Absent material revisions after the relevant dates, statutes and rules 

cited refer to the current version unless otherwise indicated. 
UNITED, et al. v. MIHS

Opinion of the Court

3

Facility Agreement contains an arbitration clause that states the parties will 

“resolve any disputes about their business relationship,” and if they are 

unable to do so, the dispute will be submitted to binding arbitration. 

¶5 In these consolidated cases, members of Medicare and ERISA 

plans administered by UBH received acute inpatient psychiatric care from 

the Providers. MIHS provided care to members with Medicare benefit 

plans; Aurora provided care to members with either Medicare or ERISA 

benefit plans. 

¶6 The Providers obtained pre-authorization from UBH for an 

initial term of acute inpatient care for each member. When the Providers 

sought authorization to extend care beyond the initially authorized period, 

UBH denied coverage. 

¶7 In its denial letters UBH stated that (1) coverage for services 

was determined by the terms of each member’s benefit plan, and (2) in each 

instance acute inpatient care was not covered because it was not medically 

necessary. Despite receiving UBH’s letters denying coverage, the Providers 

elected to continue providing acute inpatient care. 

¶8 In order to obtain reimbursement for their services, the 

Providers sought to arbitrate the disputed claims, but UBH refused. As a 

result, the Providers filed actions in superior court to enforce the arbitration 

clause in the Facility Agreement. In response, UBH filed motions to stay 

arbitration on the grounds the claims were not arbitrable. 

¶9 In MIHS’ case, the trial court denied UBH’s motion to stay 

arbitration, concluding that MIHS’ claims were subject to the arbitration 

clause in the Facility Agreement. In Aurora’s case, the trial court granted 

UBH’s motion to stay arbitration, stating that Aurora’s claims were 

“coverage disputes,” and therefore “must be decided by the terms of the 

various Benefit Plans and pursuant to the exclusive Medicare grievance 

procedures that apply to those claims.” 

¶10 Both decisions were appealed separately; however, because 

these appeals present identical factual and legal issues, we have 

consolidated them on appeal. 
UNITED, et al. v. MIHS

Opinion of the Court

4

DISCUSSION

I. The FAA and the Arbitration Clause

¶11 The Providers contend that the language of the arbitration 

clause in the Facility Agreement is extremely broad, requiring the parties to 

arbitrate any disputes about their business relationship. As a result, the 

Providers argue UBH is contractually bound to submit their claims to 

binding arbitration. 

¶12 The Facility Agreement provides that the question of 

arbitrability is governed by the FAA. Under the FAA, “[d]eterminations 

of arbitrability, like the interpretation of any contractual provision, are 

subject to de novo review.” Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 719 

(9th Cir. 1999); see AT&T Tech., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 

648 (1986) (stating that arbitrability is, as a matter of contract, a question of 

law for a court to decide). 

¶13 The FAA “embodies a strong federal policy in favor of 

arbitration.” CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165, 173 (3d Cir. 

2014) (quoting Sweet Dreams Unltd., Inc. v. Dial-A-Mattress Int’l. Ltd., 1 F.3d 

639, 641 (7th Cir. 1993)). “Congress, however, may override the [FAA’s] 

presumption favoring arbitration agreements by a contrary provision in 

another statute. The burden of demonstrating such congressional intent 

rests with the party opposing arbitration.” Bird v. Shearson Lehman/Am. 

Express, Inc., 926 F.2d 116, 119 (2d Cir. 1991) (citing Shearson/Am. Express, 

Inc. v. McMahon, 482 U.S. 220, 226 (1987)). Congress’ intent “’will be 

deducible from [the statute’s] text or legislative history,’ or from an inherent 

conflict between arbitration and the statute’s underlying purposes.” 

McMahon, 482 U.S. at 227. 

¶14 In this case, the language of the arbitration clause is extremely 

broad; it reaches beyond the Facility Agreement to encompass all aspects of 

the parties’ business relationship. See Lakeland Anesthesia, Inc. v. United 

Healthcare of La., Inc., 871 So. 2d 380, 392 (La. Ct. App. 2004) (stating that an 

arbitration provision that covers “any disputes about their business 

relationship” is not limited in scope to the agreement itself); Aztec Med. 

Servs., Inc. v. Burger, 792 So. 2d 617, 623-24 (Fla. Dist. Ct. App. 2001) (same). 

¶15 Based on the broad language of the arbitration clause and the 

FAA’s presumption favoring arbitration, we conclude the Providers may 

compel arbitration unless there is a contrary provision in Medicare or 

ERISA expressing Congress’ intent that these claims are nonarbitrable. 
UNITED, et al. v. MIHS

Opinion of the Court

5

II. Medicare Statutory Scheme

¶16 In determining whether arbitration of the Providers’ claims 

conflicts with the Medicare Act, we must examine the text and legislative 

history of the Act. See McMahon, 482 U.S. at 227. 

¶17 “Medicare is a federal health insurance program benefitting 

individuals who are over 65, or have a disability, or are suffering from endstage renal disease.” Estate of Ethridge v. Recovery Mgmt. Sys., Inc., 235 Ariz. 

30, 33, ¶ 7 (App. 2014); see 42 U.S.C. § 1395c. The Medicare program is 

administered by the Centers for Medicare and Medicaid Services (“CMS”), 

a division of the Department of Health and Human Services (“HHS”). 42 

U.S.C. §§ 1395hh, -1395kk; Estate of Ethridge, 235 Ariz. at 33, ¶ 7. Medicare 

provides two options for hospital and medical benefits: (1) Medicare Parts 

A and B, or traditional Medicare, and (2) Medicare Part C, known as 

Medicare Advantage. 42 U.S.C. § 1395w-21; Estate of Ethridge, 235 Ariz. at 

34, ¶ 10. 

A. Medicare Part C

¶18 Here, UBH administered Medicare Part C plans. Medicare 

Part C provides Medicare beneficiaries with the option of contracting with 

a private insurance company to obtain Medicare benefits. 42 U.S.C. 

§§ 1395w-21, 1395w-27; Estate of Ethridge, 235 Ariz. at 34, ¶ 10. Under 

Medicare Part C, CMS contracts with private insurers, or Medicare 

Advantage Organizations (“MAOs”), to provide medical benefits for

Medicare beneficiaries; in return, the MAOs receive a fixed monthly 

capitation payment for each Medicare beneficiary enrolled in their benefit 

plan. 42 U.S.C. §§ 1395w-21, --23(a), --1395w-27, --1395w-28; Estate of 

Ethridge, 235 Ariz. at 35, ¶ 16. MAOs then contract with health care 

providers to furnish medical services. 42 U.S.C. § 1395w-23(a)(1)(A); 

RenCare, Ltd. v. Humana Health Plan of Tex., Inc., 395 F.3d 555, 557-59 (5th

Cir. 2004); 42 C.F.R. § 422.2. Under an MAO’s contract with CMS, a

capitation fee is paid regardless of the value of services provided to the 

beneficiary, and the MAO assumes full financial risk for providing

Medicare benefits to the beneficiary. 42 U.S.C. § 1395w-25(b); RenCare, 395 

F.3d at 557-59.

¶19 Despite the differences in traditional Medicare and Medicare 

Part C, the benefits under both options are Medicare benefits. 42 U.S.C § 

1395w-21(a). Medicare Part C is a “federal program operated under 

[f]ederal rules,” and thus, while Part C participants may elect to “opt out” 

of traditional Medicare, they do not opt out of Medicare. H. R. Rep. No. 
UNITED, et al. v. MIHS

Opinion of the Court

6

108-391, at 557 (2003); see Estate of Ethridge, 235 Ariz. at 33, ¶ 10. The 

Medicare Trust fund subsidizes the benefits for both Part C and traditional 

Medicare. 42 U.S.C. § 1395w-23(f); 42 C.F.R. § 422.322; see RenCare, 395 F.3d 

at 558-59 (discussing traditional Medicare payments). Thus, Part C does

not offer beneficiaries private insurance or private insurance policies; the 

MAOs are government contractors furnishing Medicare benefits. See, e.g., 

United States v. Lopez-Diaz, 940 F. Supp. 2d 39, 47 (D.P.R. 2013) (stating that 

Medicare Part C benefits are not furnished by “‘privately owned insurance 

companies, which pay from private funds and not from Medicare funds’”; 

rather, a Part C plan “is a type of Medicare health plan offered by a private 

company that contracts with Medicare to provide beneficiaries with 

Medicare benefits.”); Pagarigan v. Superior Court, 126 Cal. Rptr. 2d 124, 134

(Cal. App. 2d Dist. 2002) (stating that the relationship between Medicare 

Part C enrollees and a MAO is “not between an insurer and its policyholder, 

but rather, between Medicare. . . and Medicare beneficiaries through the 

intermediary of Medicare health care service plans contracted with the 

federal government to provide Medicare benefits.”).

B. Congressional Regulation of Medicare Part C Coverage 

¶20 Congress and the Secretary of HHS2 have promulgated 

numerous statutes and regulations concerning standards for Medicare Part 

C coverage.

3 Do Sung Uhm v. Humana, Inc., 620 F.3d 1134, 1150 (9th Cir. 

2010); Mass. Ass’n of Health Maint. Orgs. v. Ruthardt, 194 F.3d 176, 180 (1st 

Cir. 1999); Ardary v. AETNA Health Plans of Cal., Inc., 98 F.3d 496, 498 (9th 

Cir. 1996). For example, MAOs furnishing benefits to Part C participants 

must provide the same coverage and benefits as those provided to Medicare 

Part A and B participants. 42 U.S.C. § 1395w-22(a)(1)(B); 42 U.S.C. 

§ 1395mm(c)(2)(A); 42 C.F.R. § 417.440(b)(1). MAOs must also provide 

medically necessary treatment, comply with CMS manuals and directives 

regarding benefit coverage, and ensure access to emergency and skilled 

 

2 Pursuant to 42 U.S.C. § 1395ff(a), the “determination whether an 

individual is entitled to benefits . . . is entrusted to the Secretary [of HHS]

in accordance with regulations prescribed by him or her.” McCall v. 

PacifiCare of Cal., Inc., 21 P.3d 1189, 1193 (Cal. 2001). 

3 This broad statutory and regulatory scheme for Medicare Part C 

includes a provision stating that any state law or regulation that conflicts 

with the “standards established under [Part C]” is preempted. 42 U.S.C. 

§ 1395w-26(b)(3); see Do Sung Uhm v. Humana, Inc., 620 F.3d 1134, 1149-50 & 

n.23, (9th Cir. 2010); Potts v. Rawlings Co., LLC, 897 F. Supp. 2d 185, 195 & 

n.4 (S.D.N.Y. 2012); Estate of Ethridge, 235 Ariz. at 35, ¶¶ 16-18.
UNITED, et al. v. MIHS

Opinion of the Court

7

nursing services. 42 U.S.C. § 1395y(a)(1)(A) (medically necessary 

treatment); 42 U.S.C. § 1395w-22(d)(1) (access to emergency and skilled 

nursing services); 42 C.F.R. §§ 422.101(a), (b)(1)-(3), (c) (manuals and 

directives regarding benefit coverage).

¶21 As part of the extensive Medicare statutory and regulatory 

scheme, Congress has adopted the Social Security appeals process to 

resolve all coverage disputes involving Part C participants. 42 U.S.C. 

§ 1395w-22(g)(5); 42 U.S.C. §§ 405(g), (h) (Social Security administrative 

appeals process); see 42 U.S.C. § 1395ii (making appeals process in §§ 405(g), 

(h) applicable to Medicare Parts A and B); Heckler v. Ringer, 466 U.S. 602, 

604-06 (1984) (stating that Medicare has adopted the Social Security 

administrative appeals process). As a result, the Secretary of HHS has 

created a detailed administrative review procedure for appeals involving 

Medicare Part C coverage disputes. 42 C.F.R. §§ 422.560-.626. 

¶22 Under Medicare’s administrative review procedure, 

“[j]udicial review of a claim for benefits is available only after the Secretary 

[of HHS] has rendered a ‘final decision’ on the claim,” and a “final decision 

by the Secretary on a claim ‘arising under’ Medicare may be reviewed by 

no person, agency or tribunal except in an action brought in federal district 

court, and then only after exhausting administrative remedies.” McCall, 21 

P.3d at 1193-94 (quoting Heckler, 466 U.S. at 605). A claim “arises under” 

Medicare, and is therefore subject to the mandatory administrative review 

process, when the claim is “inextricably intertwined” with a claim for 

coverage under Medicare. Heckler, 466 U.S. at 614, 624; see Blue Cross & Blue 

Shield of Ala., 90 So. 3d 158, 164 (Ala. 2012); see also RenCare, 395 F.3d at 557 

(stating that a claim arises under Medicare if “the claim is ‘inextricably 

intertwined’ with a claim for Medicare Benefits”).

¶23 Medicare‘s administrative appeals procedure is the sole 

avenue for resolving coverage disputes. Heckler, 466 U.S. at 614-15 (stating 

that “the sole avenue for judicial review for all ‘claim[s] arising under’ the 

Medicare Act” is 42 U.S.C. § 405(g)). And the sole avenue of judicial review 

from such administrative procedures is in federal court. 42 U.S.C. §405(g); 

42 U.S.C. § 1395w-22(g)(5). As a result, federal courts lack jurisdiction to 

review coverage claims until the Medicare review process has been 

exhausted. Uhm, 620 F.3d at 1138, 1144; Giesse v. The Sec’y of the Dep’t of 

Health and Human Servs., 476 F. Supp. 2d 734, 739-40, 742 (N.D. Ohio 2006); 

McCall, 21 P.3d at 1193-94. At no point is the Secretary’s final decision 

reviewable by a state court. See 42 U.S.C. § 405(g); 42 U.S.C. § 1395w22(g)(5). 
UNITED, et al. v. MIHS

Opinion of the Court

8

¶24 We conclude that based on the extensive administrative 

appeals process outlined in the Medicare Act, Congress has expressed an 

intent to subject all Medicare coverage claims to this administrative process. 

Thus, Medicare coverage claims are nonarbitrable claims.

C. Coverage Claims vs. Payment Disputes

¶25 The Providers assert, however, that their claims are not 

coverage claims subject to the Medicare administrative appeals process. 

Rather, the Providers argue that their claims are payment disputes that do 

not involve Medicare or the Medicare administrative process. Specifically, 

the Providers allege that UBH determined the members’ services were 

covered, but then failed to pay the Providers the full amount owed for the 

services pursuant to the rates set out in the Facility Agreement.

¶26 Medicare coverage claims involve a beneficiary’s right to 

receive coverage for medical treatment, supplies or services. Blue Cross & 

Blue Shield of Ala., 90 So. 3d at 331. In a coverage claim, the harm, or injury, 

is based on the allegation that benefits were improperly denied; as a result, 

the remedy is reimbursement of benefits. Uhm, 620 F.3d at 1143-44; see 

Heckler, 466 U.S. at 618 (coverage claim involved denial of coverage for 

certain surgical procedures); Giesse, 476 F. Supp. 2d at 740, 743 (coverage 

claim involved denial of benefits for post-hospital skilled nursing facility). 

As a result, proof of a coverage claim necessarily involves reference to and 

interpretation of a Medicare benefit plan, as well as Medicare coverage 

standards. Blue Cross & Blue Shield of Ala., 90 So. 3d at 164; cf. Montefiore

Med. Ctr. v. Teamsters Local 272, 642 F.3d 321, 331 (2d Cir. 2011). 

¶27 In contrast, claims that are “wholly collateral” to a claim for 

coverage do not arise under the Medicare Act, and are not subject to 

Medicare’s administrative procedure. Heckler, 466 U.S. at 618; see Uhm, 620 

F.3d at 1145; Ardary, 98 F.3d at 499, 501; McCall, 21 P.3d at 1194-95, 1197-98. 

The harm involved in a wholly collateral claim is not the denial of coverage, 

and therefore the remedy sought is not payment of benefits. Uhm, 620 F.3d 

at 1145; see Ardary, 98 F.3d at 500 (wrongful death claim for compensatory 

and punitive damages based on provider’s failure to transfer or airlift 

decedent to intensive cardiac care facility not subject to Medicare 

administrative review process); McCall, 21 P.3d at 1200 (plaintiff’s claims 

for emotional distress, medical negligence and fraud, seeking tort damages 

for injuries suffered due to MAO and provider’s delays in providing 

referrals to specialists, were wholly collateral to Medicare and not subject 

to Medicare administrative appeals process). Moreover, a wholly collateral 

claim is not focused on interpreting a Medicare benefit plan or Medicare 
UNITED, et al. v. MIHS

Opinion of the Court

9

coverage standards, but rather the elements of the specific cause(s) of 

action. Uhm, 620 F.3d at 1145 (in establishing a wholly collateral claim, a 

plaintiff “may be able to prove elements of [his tort] causes of action 

without regard to any of the provisions of the [Medicare] Act relating to the 

provision of benefits”); McCall, 21 P.3d at 1200 (because the plaintiffs “may 

be able to prove the elements of some or all of their causes of action without 

regard, or only incidentally, to Medicare coverage determinations,” the 

court held that ”none of their causes of action seeks, at bottom, payment or 

reimbursement of a Medicare claim or falls within the Medicare 

administrative review process”).

¶28 One type of claim that is wholly collateral to a coverage claim 

is a “payment claim.” In a payment claim, there is no dispute that the 

benefits are covered by Medicare; the issue is the amount the MAO should 

pay the provider for the covered benefit. See RenCare, 395 F.3d at 558 

(holding that services for which payment was sought by provider had been 

approved by the MAO and, therefore, the dispute was a payment dispute, 

not a coverage dispute subject to Medicare appeals process); Lakeland, 871 

So. 2d at 382-83 (payment dispute concerning delay in payment for covered 

services was not subject to Medicare appeals process); Christus Health Gulf 

Coast v. AETNA, Inc., 237 S.W.3d 338, 340, 344 (Tex. 2007) (payment dispute 

between MAO and provider as to liability of MAO for covered services due 

to insolvency by MAO’s subsidiary was not subject to Medicare appeals 

process); cf. Montefiore, 642 F.3d at 331 (discussing the distinction between 

coverage disputes and payment disputes under ERISA); Canandaigua

Emergency Squad, Inc. v. Rochester Area Health Maint. Org., Inc., 780 F. Supp.

2d 313, 320-22 (W.D.N.Y. 2011) (payment dispute under ERISA based on 

fee schedules and offsets for payment of covered ambulance services). 

¶29 In payment disputes, since coverage is not disputed, 

resolution of the claim does not require construction of the Medicare benefit 

plan or Medicare coverage standards, but rather is focused on an 

independent contract or obligation between the MAO and the provider that 

specifies the amount of payment. RenCare, 395 F.3d at 559 (“At bottom, [the 

provider’s] claims are claims for payment pursuant to a contract between 

private parties.”); Christus, 237 S.W.3d at 344 (the parties’ “dispute concerns 

not whether the services were covered under Medicare, but rather who 

should bear the loss associated with [the MAO subsidiary’s] failure to 

pay”).
UNITED, et al. v. MIHS

Opinion of the Court

10

D. The Providers’ Claims Are Coverage Claims 

¶30 In determining whether a claim is inextricably intertwined 

with a claim for coverage, thereby making it a coverage claim, a party’s 

characterization or framing of its claim is not dispositive. Rather, a court 

must determine if the claim is, “at bottom,” a claim for coverage. Heckler, 

466 U.S. at 614. A party cannot evade the Medicare administrative process 

by creatively and “cleverly conceal[ing]” a coverage claim as arising under 

some source other than Medicare. Uhm, 620 F.3d at 1141-42; see Affiliated 

Prof’l Home Health Care Agency v. Shalala, 164 F.3d 282, 286 (5th Cir. 1999) 

(finding that claims, despite being presented as constitutional claims, were 

inextricably intertwined with a claim of entitlement to Medicare benefits 

and subject to the Medicare administrative appeals procedure). 

¶31 Here, the Providers seek to avoid the mandatory Medicare 

administrative procedure by casting their claims as payment disputes that 

do not arise under Medicare. The trial court in the MIHS case agreed, 

concluding the treatments were pre-authorized, and therefore determined 

to be covered services by UBH. 

¶32 The trial court’s determination in the MIHS case is not 

supported by the record. UBH authorized coverage for an initial period of 

treatment. However, when MIHS sought approval of continued acute 

inpatient care, UBH denied the request on the grounds acute inpatient care 

was no longer medically necessary. UBH notified MIHS of its denial of 

coverage prior to the dates of service. Accordingly, the services for which 

the Providers seek payment were not pre-authorized or determined by 

UBH to be covered services. Bennett v. Baxter Grp., Inc., 223 Ariz. 414, 419,

¶ 16 (App. 2010) (stating that the appellate court will not defer to the trial 

court’s factual findings if they are clearly erroneous). 

¶33 Moreover, despite the Providers’ efforts to recast their claims 

as payment claims, the record shows that they are coverage claims. At 

bottom, the Providers are challenging UBH’s denial of coverage for 

continued acute inpatient care on the grounds the treatment was not 

medically necessary. This is a coverage claim. Blue Cross & Blue Shield of 

Ala., 90 So. 3d at 167; see Lone Star OB/GYN Assoc. v. AETNAHealth Inc., 579 

F.3d 525, 531 (5th Cir. 2009) (holding that a coverage claim involves a 

“determination of benefits under the terms of a plan – i.e., what is 

‘medically necessary’ or a ‘Covered Service’”). Additionally, the remedy 

sought by the Providers is a coverage remedy: reimbursement for what they 

contend were medically necessary services. See supra, ¶ 26.
UNITED, et al. v. MIHS

Opinion of the Court

11

¶34 Finally, the Providers’ claims are coverage claims because 

resolution of their claims necessarily depends on construction of the 

members’ Medicare benefit plans and applicable Medicare standards. See 

supra, ¶ 26. The Facility Agreement does not define what constitutes 

medically necessary services; rather, the Agreements clearly state that 

“medically necessary” and “covered services” are defined and controlled 

by the provisions of the individual members’ Medicare benefit plans. The 

Facility Agreement also states that the parties must comply with “all 

applicable Medicare laws, regulations and CMS instructions.”

E. Arbitrability of the Providers’ Medicare Coverage Claims

¶35 We cannot ignore Congress’ intention that Medicare’s 

mandatory administrative procedure provides the exclusive remedy for the 

Providers’ Medicare coverage claims. As a result, the Providers’ coverage 

claims are not subject to arbitration under the FAA, and UBH cannot be 

compelled to arbitrate these claims.4

III. The FAA and Aurora’s ERISA Coverage Claims

¶36 Aurora’s coverage claims involving the members’ ERISA 

benefit plans are subject to ERISA’s exclusive legal standards and remedies. 

Montefiore, 642 F.3d at 327-28 (based on ERISA § 502(a)(1)(B), 29 U.S.C. § 

1132(a)(1)(B), an action “to recover benefits due” or to “enforce . . . rights 

under the terms of the plan” is a coverage claim subject to ERISA’s civil 

remedy provisions). The civil enforcement scheme created by ERISA is 

“comprehensive”; it “completely preempts any state-law cause of action 

that ‘duplicates, supplements, or supplants’ an ERISA remedy.”5 

Montefiore, 642 F.3d at 327.

¶37 Whether Aurora’s ERISA coverage claims are arbitrable is less 

clear. Compare Bird, 926 F.2d at 122 (holding that the FAA requires courts 

to enforce agreements to arbitrate statutory ERISA claims); with CardioNet, 

751 F.3d at 178 (stating that plan participants and their assignees have the 

right to pursue ERISA claims in court rather than through mandatory 

 

4 The issue of the Providers’ standing to file a Medicare administrative 

appeal based on 42 C.F.R. § 422.566(c)(1)(ii) (appeals from an organization 

determination denying benefits) is not before us in this case. 

5 Upon remand the trial court may determine that Aurora’s state-law 

claims, if any, are preempted by ERISA; however, we need not reach that 

issue in this opinion because the matter of standing remains unresolved.
UNITED, et al. v. MIHS

Opinion of the Court

12

arbitration). However, we need not decide this issue because the record is 

unclear as to whether the Providers have stated a valid ERISA claim. 

¶38 One of the first requirements in alleging an ERISA claim is 

that “the plaintiff be one entitled to assert a claim under ERISA.” Pentech 

Infusions, Inc. v. Anthem Health Plans of Ky., Inc., 387 F. Supp. 2d 712, 714 (W. 

D. Ky. 2005). Only a participant or a beneficiary may enforce rights under 

an ERISA plan. 29 U.S.C. § 1132(a). Aurora is neither a participant nor a 

beneficiary, and the record is not clear as to whether there has been a valid 

assignment of the ERISA plan members’ claims. Thus, we cannot 

determine whether Aurora has alleged a valid ERISA claim. Accordingly, 

we do not reach the issue of whether Aurora’s ERISA claims are subject to 

arbitration under the FAA.

CONCLUSION

¶39 We hold that the arbitration clause in the parties’ Facility 

Agreement, although broad enough to encompass the dispute at bar, 

cannot compel the parties to arbitrate their Medicare coverage claims. 

Congress has enacted a specific procedure for resolving Medicare coverage 

disputes such that compelling arbitration of these claims under the FAA 

would be in direct conflict with the Medicare statutes. Therefore, as to the 

claims involving Medicare coverage, we affirm the trial court’s order 

staying arbitration in UBH v. Aurora, and reverse the order compelling 

arbitration in UBH v. MIHS. 

¶40 However, because the record is unclear as to whether Aurora 

received a valid assignment of the members’ ERISA claims, we vacate the 

trial court’s order compelling arbitration in UBH v. Aurora, and remand for 

further proceedings consistent with this opinion.