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. e du/thir dc ir c uit_2014/465PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 1 3

- 2496

_____________

CARDIONET, INC

. ; LIFEWATCH SERVICES, INC., Appellants

v.

CIGNA HEALTH CORPORATION

____________

On Appeal from the United States Distric t Court

for the Eastern District of Pennsylvania (No. 2:13 Civ. 00191 ) District Judge: Honorable Eduardo C. Robreno

____________

Argued: January 22, 2014

Before: FUENTES, FISHER, Circuit Judges , and STARK

,

District Judge

. 1

1 Honorable Leonard P. Stark , United States District Court Judge for th e District of Delaware , sitting by designation.2 (Filed: May 6, 2014 )

________ ____

Mark H. Gallant, Esq. [ARGUED] Raymond A. Kresge, Esq. Aaron Krauss, Esq. Robert A. Chu, Esq.

Cozen O’Conn o r 1900 Market Street Philadelphia, PA 19103 Attorneys for Appellants

Paul M. Hummer, Esq. [ARGUED] Saul Ewing LLP

15 00 Market Street, 38th Floor, Centre Square West Philadelphia, PA 19102 Attorney for Appellee

________________________

OPINION OF THE COURT

________________________

FUENTES, Circuit Judge :

CardioNet, Inc. and LifeWatch Services, Inc. are providers o f medical devices that allow physicians to monitor cardiac arrhythmias in patients not confined to the hosp ital. For several years, CIGNA Health Corporation provided coverage for this service. Then, in 2012, CIGNA reversed

course and announced that it wo uld no longer do so.3 CardioNet and LifeWatch filed this action against CIGNA on

their own behalf and as the assigne e of patients who used their services. In response, CIGNA moved to compel arbitration under the parties’ agreement . The District Court

agr eed with CIGNA that CardioNet and LifeWatch ’s claims fell within the arbitration clause of the parties’ agreement and therefore compelled arbitration. Because we conclude that

none of CardioNet and LifeWatch’s claims fall within the

arbitration clause , we vacate the District Court’s judgment and remand for further proceedings

.

I. 2

A.

2 CIGNA bases its motion to compel arbitration on language in the parties’ contracts. Those contracts, though not appended to the Complaint, are integral to, and referenced in, the Complaint . Because the a rbitration clause at issue appears in a contract relied upon in the Complaint, we resolve the motion to compel arbitration under a motion to dismiss standard, Guidotti v. Legal Helpers Debt Resolution, L.L.C.

, 716 F.3d 764, 773

- 75 (3d Cir. 2013), and accep t as true the factual allegations set forth in the Complaint, Bell v. Cheswick Generating Station , 734 F.3d 188, 19 2 n. 2 (3d Cir. 2013). We are also permitted to consider the substance of the contracts that ostensibly compel arbitration. See In re

Burlin gton Coat Factory Sec. Litig. , 114 F.3d 1410, 1426 (3d Cir. 1997) (noting that “a document integral to or explicitly

relied upon in the complaint may be considered ” at the motion to dismiss stage (quotation marks and emphasis omitted)).4 CardioNet, Inc. and LifeWatch Services, Inc. (together, “the Pr oviders”) supply outpatient cardiac telemetry (“OCT”) services . OCT , an outpatient device

, is used by physic ians , usually cardiologists, to monitor cardiac arrhythmias

. The device differs from convention al technologies for detecting arrhythmias in that it transmits electrocardiographic (“EKG”) data in real time to certified
technicians, who then forward the dat a to the ordering physician. OCT is approved by the Food and Drug

Administration , and has been covered by Medicare and

commercial insurers for many years.

CIGNA Healthcare Corporation administers employer sponsored health and welfare benefit plans acr oss the country

. Like other health insurance companies, CIGNA maintains a network of health care providers. Pursuant to individual agreements between CIGNA and its in

- network providers

, CIGNA pays the providers directly for the services rendered

to patie nts

.

In 2007, CardioNet and LifeWatch joined CIGNA’s provider network by entering into identical Administrative Service Agreements with CIGNA (“the Agreement”)

. T he Agreement set s the rate at which CIGNA would reimburse

the Providers for the particula r services rendered to CIGNA patients. It also cir cumscribe s the services for which

reimbursement is available . Specifically, the Providers’

services are reimbursable under the Agreement only if th ey constitute “Covered Services.” App. at 65 , 72

. The

A greement define s “ Covered Services ” as “t hose health care

services for which a Participant is entitled to receive coverage under the terms and conditions of the Participant ’s Benefit5 Plan.” Id . at 64

. 3 According to the Agreement, “[n]o service

is a Cover ed Service u nless it is Medically Necessary,” that is

it “ satisfies the Medical Necessity requirements under the applicable Benefit Plan. ” Id

.

B.

CIGNA first announced a policy of covering OCT in

2007

. At the time, it determined that there was “suffic ient

evidence i n the published peer review ed medical literature

support ing the use of home

- based, real

- time surveillance systems.” App. at 35

. CIGNA maintained and reaffirmed its policy of covering OCT each year through 2011

. But then, in 2012, it abrup tly terminated its coverage of OCT; CIGNA

then issued a new policy statement, entitled 2012 Cardiac Event Monitor Coverage Policy (“the 2012 Policy”), announcing that it would no long er cover OCT “ for any indication because it is considered experimental,

i nv estigational or unproven .” Id. at 25, 37. The 2012 Policy acknowledged, however, that this new position would be trumped by any conflicting language in the coverage policies

themselves.

Although CIGNA’s OCT policy had changed, its medical knowledge had not: CIGNA relied on the same medical literature it had previously relied upon in concluding

that OCT should be covered

. Shortly after CIGNA’s

announcement, t he Providers asked CIGNA to reconsider its new position on OCT. According to the Complaint, CIGNA

3 The Agreement def

ines “ Participant ” as “any individual, or eligible dependent of such individual, . . . who is eligible and
enrolled to receive Covered Services.” Id

.6 intimated to the Providers that its motive for reversing course was financial, but refused to back away from the 2012 Policy.

Subsequently, CIGNA issued Medical Coverage Policy Update s for Heath Care Professionals (“the Physician Update”) to hun dreds of thousands of its network physicians, announcing that it would no t cover OCT “ for any indication

be cause it is considered [ e xperimen tal, i nvestigational

, and

u nproven ] .” App . 40

- 41. By letter, CardioNet objected to
CIGNA’s characteriz ation of OCT as e xperimental,

i nvestigational, and u nproven

. CardioNet’s letter also

observed that CIGNA’s unequivocal statement that CIGNA would not cover OCT “for any indication s ” conflicted with its acknowledgement in the 2012 Policy that CIGNA’s new position coul d be trumped by the specific coverage policies

included in employee benef it plans. Id. CIGNA neither responded to the letter nor amended the Physician Update

. The Providers allege that the Physician Update not only prevented patients with CIGNA insuranc e from ordering OCT, but also “ has caused and continues to cause physicians

to refrain from ordering OCT for patients whose employer plans . . . do cover OCT .” Id. at 41.

C.

The Providers filed this action in the Eastern District of Pennsylvania, “on their own behal ves and as assignees of the rights and claims of patients.” App. at 24. The Complaint

contains seven counts. The Providers bring Counts I

- IV as the assignees of the claims of five CIGNA plan participants (“the Participants”). The Partic ipant s all sought coverage for

OCT after the implementation of the 2012 Policy, and were all denied coverage by CIGNA

. After CIGNA denied7 coverage, the Participants received OCT from the Providers

, and in exchange assigned to the Providers “all of [their] rights (w ithout limitation) under the Employee Retirement Income Security Act of 1974 (ERISA) . . . along with any other rights under federal or state law that [they] may have as related to the reimbursement of coverage” for the uncovered treatment

. Id

. at 284.

Counts I

- I V, the so

- called “ derivative ” counts

, challenge CIGNA’s decision to deny the Participants OCT

coverage ; the Providers bring these claims standing in the shoes of the Participants . Specifically, in Count I, the Providers allege that C IGNA arbitrarily and capriciously changed its OCT coverage policy, and seek to recover
benefits due under ERISA § 502(a)(1)(B)

, 29 U.S.C. § 1132(a) (1)(B)

. In Count II, the Providers seek an injun ction, pursuant to ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3)

, directing CIGNA to withdraw its current coverage policy for

OCT and rescind the Physician Update regarding OCT

. In Count III, the Providers allege that, by systematically denying OCT coverage, CIGNA breached its duty to the Participants

to faithfully ap ply the ter ms of the governing ERISA plans; they seek an injunction, pursuant to ERISA § 502(a)(3)

, “requiring CIGNA to process claims for OCT benefits in all

instances based on the terms of the ERISA plans . . . and to cease and desist from processing suc h ERISA claims based on any conflicting terms . . . in the 2012 [] Policy. ” App. 52

. To the extent that any of the assigned claims do not arise

from or are exempt from ERISA

, Count IV asserts that CIGNA breached its contractual obligation to the Partic ipants by failing to cover medically necessary services.8 CardioNet and LifeWatch bring the remaining three

counts on their own behalf. These so

- called “direct” counts primarily concern an alleged harm stemming from CIGNA’s

distribution of the Physicia n Update

. In Count V

, the Providers allege that through the issuance of the Physician Update

, CIGNA tortiously interfered with the Providers’ current and prospective business relations with physicians who have ordered, or may in the future order, OCT for their patients

. In Count VI , they allege that the Physician Update

constituted a misleading and deceptive commercial or promotion , in violation of § 43(a)(1)(B) of the Lan ham Act

, 15 U.S.C. § 1125(a)(1)(B)

. Finally, Count VII alleges that the Physician U pdate constituted trade libel. Through Counts

V

- VII , the Providers seek damages, as well as the issuance of corrective advertising to the physicians who received the Physician Update.

Shortly after CardioNet and LifeWatch filed this action, CIGNA move d to compel arbitration , or in the alternative, to stay the action pending arbitration, under

Rule 12(b )( 6 ) of the Federal Rules of Civil Procedure and the

Federal Arbitration Act ( “ FAA ” ), 9 U.S.C. § § 3

- 4. 4 The

District Court agreed with CIGNA that all of the Providers’

claims , including those brought on behalf of the Participants, fell within the purview of the Agreement’s arbitration clause

. It therefore compelled arbitration

.

The District Court began by analyzing the relevant language in the Agreem ent concerning arbitration. It

4 CIGNA also moved to dismiss the Providers’ claims on other grounds. However, the District Court declin ed to reach these alternative arguments.9 concluded that the arbitration provision was broad, so that the presumption in favor of arbitration applied with particular

force. CardioNet, Inc. v. Cigna Health Corp. , 945 F. Supp. 2d 620, 62 5

- 26 (E.D. Pa. 2013). The Cou rt then assessed the arbitrability of the derivative and direct claims in turn. As to the derivative claims, the District Court acknowledged that the Agreement’s arbitration clause c ould not bind the Participants, as “an arbitration clause applies only to the parties to the agreement in which it is contained and those with whom there is privity of contract.” Id. at 627

. Nonetheless, it concluded that the Providers could not

“ pursue the Plan Participants ’ claims [in court] through an assignment from the P lan Participants to Plaintiffs .” Id. The

District Court reasoned that :

Plaintiffs have a preexisting duty under their agreements with CIGNA to arbitrate disputes that are substantively identical to the claims they now seek to bring as assignees. All o f Plaintiffs’ claims rest on the basic argument that

OCT services should be covered services and therefore should be paid for by CIGNA . This argument strikes at the heart of Plaintiffs’

contract s with CIGNA , i.e., claims for payment by Plaintiffs will be subject to arbitration. Plaintiffs cannot nullify their agreements to arbitrate these claims for payment by becoming assignees of the Plan Participants’ claims.

Id

. Accordingly, the District Court concluded that, while “[o] f course, the Plan Participan ts are free to pursue their claims independently, or via an assignment to another third
party, . . . [i] f Plaintiffs wish to challenge Defendant’s10 classification of OCT services as [experimental, investigative, and unproven] , they must arbitrate their clai ms, as they had agreed to do under the [Agreement]

. ” Id.

The District Court next evaluated the direct claims

. These too, it determined , were barred by the Agreement’s

arbitration clause

. T he District Court explained that “the

fou ndation of Counts V t hrough VII”

— the Providers’ allegation that the Physician Update de terred physician s from ordering OCT

— “clearly falls wit hin the scope of the [Agreement ’s] arbitration clause s

. To the extent that Plaintiffs disagree on whether OCT services should be

classi fied as [experimental, investigative, and unproven] or as covered, this disagreement must be resolved under the terms of the arbitration provision. ” Id. at 628.

The Providers now appeal the compulsion of

arbitration of both the direct and the derivati ve claims

. 5

II

.

A.

In the vast majority of cases , the arbitrability of a dispute is a question for judicial determination. See First Options of Chicago, Inc. v. Kaplan , 514 U.S. 938, 944 (1995)

5 The District Court had subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367(a) . We have appellate jurisdiction pursuant to 28 U.S.C. § 1291 and 9 U.S.C. § 16(a)(3). We exercise “plenary review over the District Court’s order compelling arbitration.” Bouriez v. Carnegie

Mellon Univ. , 359 F.3d 292, 294 (3d Cir. 2004).11 (“C ourts should not assume that the parties agreed to a rbitrate arbitrability unless there is ‘clea[r] and unmistak abl [ e]’

evidence that they did so.” (quoting AT & T Techs ., Inc. v.

Commc’ ns Workers of Am

. , 475 U.S. 643, 649 (1986) ) (alteration s in original ). Because neither party question s the propriety of the District Court determining whether the dispute is arbitrable, we assume

, without further analysis

, that the Agreement leaves the question of arbitrability to judicial

determination. See Granite Rock Co. v. Int ’l Bhd. of

Teamsters

, 561 U.S. 287, 130 S. Ct

. 2847, 285 6 n.5 (2010).

Until a court determines whether arbitration should be compelled, however, judicial review is limited to two threshold questions: “(1) Did the parties seeking or resisting arbitration enter into a valid arbitration agreement ? (2) Does the dispute between those parties fall with the langua ge of the arbitration agreement? ” John Hancock Mut. Life Ins. Co. v. Olick , 151 F.3d 132, 137 (3d Cir. 1998). Because n either

party contests the validity of the Agreement

, we confi ne oursel ves to assessing whether the disputes at issue fall within the scope of the Agreement’s arbitration clause.

The FAA , 9 U.S.C. §§ 1

- 13, establishes “a uniform

fe deral law over contracts which fall within its scope. ”

Goodwin v. Elkins & Co. , 730 F. 2 d 9 9, 108 (3d Cir. 1984).

This uniform federal law places “ arbitration agreements on an equal footing with other contracts, ” and requires courts to

“ enforce them according to their terms.” AT & T Mobility

LLC v. Concep c ion , 131 S.Ct. 1740 , 1745 (2011) ; see also

Rent

- A

- Center, West, Inc. v. Jackson

, 561 U.S. 63, 130 S.Ct. 2772, 2776 (2010) (“The FAA reflects the fundamental principle that arbitration is a matter of contract.”) ; Dean Witter Reynolds, Inc. v. Byrd , 470 U.S. 213, 221 (1985) ( “The12 preeminent conc ern of Congress in passing the [FAA] was to enforce private agreements into which parties had entered, and that concern requires that we rigorously enforce agreements to arbitrate . . . . ” ). Thus, where a written
agreement evidences an intent on the part of the contracting parties to arbitrate the dispute in question, a court must compel the parties to arbitrate that dispute. See Mitsubishi Motors Corp. v. Soler Chrysler

- Plymouth, Inc. , 473 U.S. 614,

626 (1985).

But the fact that the parties have agreed to arbitrate

some disputes does not necessarily manifest an intent to
arbitrate every dispute that might arise between the parties

, since “[u] nder the FAA, ‘parties are generally free to

structure their arbitration agreements as they see fit.’” Green

Tree Fin. Corp. v. Bazzle , 539 U.S. 444, 458 (2003) (Rehnquist, J., dissenting) (quoting Volt In fo. Sci s

. , Inc. v. B d

. of Tr s . of the Leland Stanford Junior Univ.

, 489 U.S. 468, 479 (1989) )

. Accordingly, “a court may order arbitration of a particular dispute only where the court is satisfied that the parties agreed to arbitrate that dispute .” Granite Rock , 130 S.

Ct. at 2856 (emphasis in original)

. Ultimately, then, whether a dispute falls within the scope of an arbitration clause depends upon the relationsh ip between (1) the breadth of the arbitration clause, and (2) the nature of the given claim.

W e must resolve “any doubts concerning the scope of

arbitrable issues . . . in favor of arbitration.” Moses H. Cone

Mem’ l Hosp. v. Mercury Const. Corp. , 460 U .S. 1, 24

- 25 (1983) ; see also Medtronic AVE, Inc. v. Advanced Cardiovascular Sys., Inc. , 247 F.3d 44 , 55 (3d Cir. 2001) (noting that “federal policy favors arbitration”). However,

t he Supreme Court has repeatedly warned against13 “overread[ing its] preceden t [] ” concerning th e presumption of arbitrability. E.g. Granite Rock

, 130 S. Ct. at 2857. T he presumption in favor of arbitration does not “take[] courts outside [the] settled framework” of using principles of contract interpretation to determine the scop e of an arbitration

clause

. Id. at 2859

. Quite the contrary

, the presumption “derives its legitimacy from ” the judicial supposition “ that arbitration of a particular dispute is what the parties intended because their express agreement to arbitrate was va lidly formed and (absent a provision clearly and validly committing such issues to an arbitrator) is legally enforceable and best construed to encompass the dispute.” Id. at 2859

- 60 ;

see also Sweet Dreams Unlimite d, Inc. v. Dial

- A

- Mattress

Int ’l, Ltd ., 1 F.3d 639, 641 (7th Cir. 1993)

. Indeed, while the FAA “embodies a strong federal policy in favor of arbitration, . . . the duty to arbitrate remains one assumed by contract

. ”

Sweet Dreams Unlimited

, 1 F.3d at 641. Thus, the presumption of arbitrabilit y a pplies only where an a rbitration agreement is ambiguous about whether it co vers the dispute at

hand

. See Granite Rock , 130 S. Ct. at 2858

- 59

. Otherwise, the plain language of the contract controls.

In assessing whether a particular dispute falls within the scope of an arbitration clause, we “ focus [] on the factual underpinnings of the claim rather than the legal theory alleged in the complaint.” Medtronic AVE, Inc.

, 247 F.3d at 55 ( quotation marks omitted ). In so doing, we “prevent[] a creative and a rtful pleader from drafting around an otherwise

applicable arbitration clause.” Chelsea Family Pharmacy, PLLC v. Medco Health Solutions, Inc. , 567 F.3d 1191, 1198 (10th Cir. 2009)

.14 B.

W e begin by “carefully analyz[ing] the contractual language ” in t he arbitration clause at issue

. Trap Rock Indus.

, Inc. v. Local 825

, Int’l Union of Operating Eng’rs , 9 82 F.2d 884, 888 (3d Cir. 1992). T he Agreement contain s the following two paragraphs concerning alternative dispute

resolution , and no other : 6

6.3 Int ernal Dispute Resolution

. Disputes that might arise between the parties regarding the performance or interpretation of the Agreement must first be resolved through the applicable internal dispute resolution process outlined in

the Administrative Guideline s. In the event the dispute is not resolved through that process, either party can request in writing that the parties attempt in good faith to resolve the dispute promptly by negotiation . . . . If the matter is not resolved within 60 days of such a

req uest, either party may initiate arbitration by providing written notice to the other. With respect to a payment or termination dispute, Provider must submit a request for arbitration

within 12 months . . . If arbitration is not requested within that 12 m onth period,

CIGNA’s final decision under its internal dispute resolution process will be binding on Provider, and Provider shall not bill CIGNA,

6 The full text of Sections 6.3 and 6.4 is set forth in Appendix “A” to this Opinion.15 Payor or the Participant for any payment denied because of the failure to timely submit a request

for arbitrat ion.

6.4 Arbitration

. If the dispute is not resolved through CIGNA’s internal dispute resolution process, either party can initiate arbitration by providing written notice to the other. If one of the parties initiates arbitration, the proceeding

will be held in the jurisdiction of Provider’s domicile. The parties will jointly appoint a mutually acceptable arbitrator. . .

. Arbitration is the exclusive remedy for the resolutions of disputes under this Agreement . The decision of

the arbitrator will be final, conclusive and binding . . . .

App. 69 (emphas i s added).

The above

- quoted language makes clear that only those disputes “regarding the performance or interpretation of the Agreement” must be arbitrated. True, t he phrase “regarding the performan ce or interpretation of the Agre ement” appears in t he internal dispute resolution paragraph (Section 6.3 )

, rather than the mandatory arbitration paragraph (Section 6.4 ). But i t is clear from the language of

the two sections that the parties intended them to be read together , as two stages of mandatory dispute resolution

. Section 6.3 explains that where a dispute subject to that provision cannot be resolved using the internal dispute resolution process, “either party may initiate arbitration.”

Section 6.4 then outlines what form such an arbitration will

take. T he first sentence of Section 6.4 requires arbitration not16 of “all” or “any” disputes between the parties, but of only

“the dispute” that the parties failed to resolve through the internal pr ocess ou tlined in Section 6.3. Hence , Section 6.4

mandates the arbitration of only those disputes subject to the internal dispute resolution p rocess outlined in Section 6.3.

And Section 6.3 only applies to those “[d]isputes that might arise between the parties concerning the performance and interpr etation of the Agreement

. ” Accordingly, Section 6.4

must be limited to disputes concerning the Agreement’s “performance or interpretation.”

The District Court similarly reached the conclusion

that Sections 6.3 and 6 .4 call for “ the arbitration of disputes related to the ‘interpretation or performance’ of the agreement.” CardioNet , 945 F. Supp. 2d at 626. The District Court intimated, however, that the statement in the middle of Section 6.4 that “[a]rbitration is th e exclusive remedy for the resolutions of disputes under this Agreement” broadens the scope of mandatory arbitration. Id. We believe that the term “disputes” as used here refers solely to those disputes concerning the “performance or interpretation of th e Agreement.” As we have explained previously , courts “ are required to read contract language in a way that allows all the language to be read together, reconciling conflicts in the language without rendering any of it nugatory if possible

. ”

CTF Hotel H

olding, Inc. v. Marriott Int’l , Inc. , 381 F.3d 131, 137 (3d Cir. 2004)

. Were we to hold that “disputes” as used here signifies a broader swath of disagreements, it would

render the first sentence of Section 6.4 devoid of meaning

. Moreover, as the Provide rs note, the words “dispute” and “disputes” are used three other times in these two sections, each time clearly referring to the narrower set of disputes concerning the Agreement’s performance and interpretation.17 Accordingly, we believe that the word “dis putes,” as employed here, must be circumscribed. See Restatement (Second) of Contracts § 202 cmt. d (“Meaning is inevitably dependent on context. A word changes meaning when it becomes part of a sentence, the sentence when it becomes part of a paragraph. ”).

We therefore conclude that the arbitration clause in

this case is limited in scope to disputes “regarding the performance or interpretation of the Agreement

. ” 7

7 The parties spend sizeable portions of their briefs disputing whether this arbitration clause is properly categorized as “broad” or “narrow.” The presumption of arbitrability is “particularly applicable” where the arbitration clause is a

broad one. AT & T Techs. , 475 U.S. at 650. However, as we have noted, the presumption of arbitrability is relevant only where the scope of the arbitration clause is ambiguous. See

Granite Rock , 130 S. Ct. at 2858

- 60. Here, the arbitration provision is not ambiguous. In any event, as the arbitration provision h ere “implicate[s only] interpretation or performance of the contract per se,” it does not sweep beyond the confines of the contract, and is therefore narrow in scope.

Sweet Dreams , 1 F.3d at 642; see also Mediterranean Enters., Inc. v. Ssangyong Corp. , 70 8 F.2d 1458, 1464 (9th Cir. 1983) (contrasting arbitration clauses that sweep broadly with those “intended to cover a much narrower scope of disputes, i.e.

, only those relating to the interpretation and performance of the contract itself”); cf. Battaglia v . McKendry , 233 F.3d 720,

724

- 25 (3d Cir. 2000) (an arbitration clause not “limited to disputes involving the interpretation and performance of the Settlement Agreement” is broad).18 C.

W e next consider whether the claims at issue relate to the performance or inter pretation of the Agreement.

First, we examine whether the Providers’ direct claims fall under the scope of the arbitration clause. CIGNA

contends that the direct claims relate to the performance and interpretation of the Agreement , because they “ unavoi dably implicate C igna ’s contractual obligation to treat as ‘Covered Services’ any services that participants are entitled to receive under their benefits plans.” Appellee’s Br. at 30. We disagree.

Again, in determining whether these claims a t issue

rel ate to the performance and interpretation of the Agreement, we focus on the factual underpinnings of the claim rather than the legal theories asserted in the Complaint. Although styled as distinct statutory and common law causes of action, the

Providers’ trade libel, Lanham Act, and tortious interference

claims rest upon identical factual assertions: CIGNA made false and misleading statements in the Physician Update about the nature and quality of OCT ; CIGNA conveyed the false impression that OCT would ne ver be covered under any health plans CIGNA administers ; and the Physician Update injured them by decreasing the number of physicians willing

to use OCT services. 8

8 We take no position here on CIGNA’s argument in the

District Court that t he direct counts fail to state cognizable claims. We simply assume for the time being that they do.19 T hus, the adjudication of CIGNA’s direct claims depends on whether the Physician Update

— a document completely distinct from the Agreement

— is deceptive and misleading, and whether any deceptions therein caused a cognizable injury to the Providers

. T he resolution of these

claim s does not require construction of, or even reference to, any provis ion in the Agreement

. Cf. RCM Tech s ., Inc. v. Brignik Tech., Inc. , 137 F. Supp. 2d 550 , 555 (D.N.J. 2001) (fra udulent inducement claims were subject to arbitration

where “the claims in this case almost undoubtedly will require interpretation of the partie s’ agreement”)

. Quite the

contrary, w hether CIGNA performed its obligations unde r the Agreement has no bearing on whether it harmed the Providers by providing physicians with misleading information on OCT.

Indeed, it is not even clear to us that the Agr eement is a factual predicate to these claims . T heoretically, a ny OCT

manufacture r , whether it had entered into an in

- network Agreement with CIGNA or no t

, would be harmed by the misleading statements ostensibly made by CIGNA about the

OCT technology and w ould have a basis for bringing claims

identical to the Providers’ claims here

. In any event, factual connections between the Agreement and the factual underpinnings of the Complaint do not render these claims

arbitrable. 9

9 Thus, the fact that the “[C]omplaint references the Agreements extensively” is of no moment. See Appellee’s

B r. at 21. T he Complaint does indeed dis cuss the Agreement,

b ut it hardly follows from this that the parties’ “performance or interpretation” of the Agreement is implicated by the

Providers’ claims. Accord Ford v. NYLCare Health Plans of20 CIGNA brings to our attention a n array of circuit and

district cou rt cases where Lanham Act, tort , and trade disparagement claims were held to be arbitrable, noting that “[Lanham Act] and tort claims such as those pled in Counts

V

- VII are frequently referred to arbitration when they ari se out of a contractual relationship.” Appellee’s Br. at 30. To be sure, CIGNA is correct that Lanham Act and tort claims often fall within the scope of different arbitration clauses

. B ut that bears little relevance to whether these Lanham Act

and tort claims fall within the scope of this arbitration clause. Again, the arbitrability of a given dispute depends not on the particular cause of action pleaded, but on the relationship of

the arbitration clause at issue to the facts underpinning a plaintiff’s claims. Hence , the cases cited by CIGNA would

be relevant only if they (1) contained arbitration clauses of a similar scope to the one here, and (2) concerned claims whose underlying facts bore a similar relationship to the parties’

contracts.

A s the P roviders note, CIGNA’s cases are similar in neither respect. First, th o se cases c oncern arbitration clauses

u ndisputedly broader than the clause at issue here. See, e.g.

, Sweet Dreams Unlimited , 1 F.3d at 64 2

- 4 3 ( assessing the scope of an arbitration cla use that sweeps beyond the

“ interpretation or performance of the contract per se ” and concluding that several of plaintiff’s counts fall within the clause’s scope despite the fact that they “ do not raise issues of

the Gulf Coast, Inc. , 141 F.3d 243 , 250

- 51 (5th Cir. 1998 ) (rejecting the argument that a plaintiff’s decision to

“r eferenc[e] the agreement in the factual allegations of his complaint ” suggests that the action falls within the scope of an arbitration clause broader than the clause at issue here).21 contract interpretation or performance ”). Second, the vast majority of CIGNA’s cases involve disputes that , unlike the direct claims here, clearly do relate to the performance and interpretation of the parties’ contracts. See, e.g.

, Simula, Inc.

v. Autoliv , Inc. , 175 F.3d 71 6, 72 4 (9th Cir. 199 9 ) (compelling arbitration of a Lanham Act claim where

“ resolving Simula ’ s factual allegations against Autoliv requires interpreting Autoliv ’ s performance and conduct

under the [parties’] Agreement ”) ; see also Norcom Elec s

. Corp. v. CIM USA Inc. , 104 F. Sup p. 2d 198, 204 (S.D.N.Y. 2000)

. Thus, the cases cited by CIGNA are inapplicable

.

In sum, the facts underpinning these direct claims do not concern the performance or interpretation of the parties’ Agreement. Accordingly, the direct claims fall outside the scope of the Agreement’s arbitration clause. The Providers

may pursue these claims in court.

D.

We next address the Providers’ derivative claims. Again, t hese claims challenge CIGNA’s decision to deny OCT to the Participants and more broadly the i mplementation of the 2012 Policy, which barred future coverage of OCT. Through the derivative claims, the Providers seek

reimbursement for the cost of the OCT services provided to

the five Participants , as well as injunctive relief requiring

CIGNA to reve rse its policy of denying all claims for OCT.

We conclude that these claims are not subject to arbitration

. 10

10 I n Pascack V

alley H osp., Inc. v. Local 464 A UFCW Welfare Reimbursement Plan

, 388 F.3d 393, 40 0 n.7 (3d Cir. 2004) , we declined to take a position on whether a health care22 CIGNA concedes that, as non

- signatories, the Participants would not be bound by the arbitration clause were they to bring the c laims directly . C IGNA nonetheless

maintains that allowing the Providers to pursue the Participants’ ERISA claims in court would “ vitiate the arbitration provision of the [Agreement] ,” Appellee’s Br. at
2 7 , since at the core of the Providers’ dispute is simply a

claim for r e imbursement under the Agreement. The District Court reached the same conclusion, stating that “the arbitration provision provides the exclusive remedy for Plaintiffs’ claims regarding pay ment for covered services”

and that “ Plaintiffs cannot nullif y thei r agreements to arbitrat e these claims for payment by becoming assignees of the Plan Participants’ claims. ” CardioNet

, 945 F. Supp. 2d at 627.

As we see it, t his line of argument suffers from two independent infirmities. First, we do not agree that t he

provider has standing to assert claims assigned by a patient

under Section 502(a) of ERISA. We noted, however, that “almost every circuit to have considered the issue ” had concluded that providers have standing, and we rejected the argument that we had previously taken a contrary view. Id.

In the wake of Pascack Valley , the lower courts in this Ci rcuit have assumed that we, like our sister circuits, permit health care providers to assert properly assigned ERISA claims on behalf of their patients. See, e.g.

, N. Jersey Brain & Spine

Ct r

. v. St. Peter’s Univ. Hosp. , 2013 WL 536640 0 , at *3 (D.N.J. Sep t. 25, 2013). Here, unlike in Pascack Valley , the ability of providers to bring properly assigned ERISA claims is squarely before us. We adopt the majority position that health care providers may obtain standing to sue by assignment from a plan participa nt.23 allegations underlying these claims concern the interpretation or performance of the Agreement. N o provision in the Agreement concerns the Providers’ underlying contention

here that CI GNA had a duty to cover OCT. Rather, the Agreement specifically ack nowledges that such determinations shall be made pursuant to “the terms or conditions of the app licable Benefit Plan ” governed by

ERISA. App. at 6 4

. Therefore, interpreting the Agreement is

not required, or even useful, in resolving the derivative

actions

. For the same reason, the allegations underpinning

these claims cannot be recast as claim s for failure to perform on the Agreement

.

True, as CIGNA notes, the Agreement provides that

CIGNA must reimburse the Prov iders for “Cov ered Services,” and that “[n]o service is a Covered Service unless it is Medically Necessary.” App. at 64. But this language

creates no contractual duty on CIGNA to provide specific

services to its patients, or to construe OCT as a “ Covered

Service. ” I rrespective of the referen ce to the terms “Covered Services” and “Medically Necessary” in the Agreement

, the

Providers lack the ability to bring a claim on their own behalf against CIGNA for failing to provide adequate coverage to the Participants: a ny such claim would be preempted by

ERISA , and therefore would belong , unless and until assigned, to the participants and beneficiaries of the ERISA plan

. See Pryzbowski v. U.S. Healthcare, Inc. , 245 F.3d 266, 278 (3d Cir. 2001) (suits against insurance companies for

denial of b enefits are preempted by ERISA, “even when the claim is couched in terms of common law negligence and breach of contract”); see also Lone Star OB/GYN Assoc s . v. Aetna Health Inc. , 579 F.3d 525, 53 0

- 3 1 (5th Cir. 2009) ( explaining that “ any determination of benefits under the24 terms of a plan

— i.e.

, what is ‘medically necessary’ or a

‘Covered Service’

— [] fall[s] within ERISA ” and would be preempted)

. T h is is not an instance where a plaintiff sidesteps an identical contractual right in an attempt to sidestep an otherwi se

- applica ble arbitration clause. Rather,

claims challenging the denial of service may be brought only outside the confines of the Agreement , through ERISA claims assigned by CIGNA patients

. T he claims clearly do not

concern the performance and interpret ation of the Agreement.

As the Providers correctly note, CIGNA’s argument to the contrary rests on a conflation of claims, such as this one, seeking coverage under a benefit plan, and claim s seeking

reimbursement for c overage provided. T he distinction is key. As we explained in Pascack Valley , a provider may bring a

contract action for a n insurer’s failure to reimburse the provider pursuant to the terms of the agreement, while a claim seeking coverage of a service may only be brought under

ERISA. 388 F.3d at 40 3

- 0 4 ( holding that a hospital had an independent breach of contract action against the insurer

because “t he dispute here is not over the right to payment, which might be said to depend on the patients’ assignments to

the Providers , but the amoun t, or level, of payment, which depends on the term s of the provider a greement s ” ( emphasis in original; quotation marks and alterations omitted )) ; see also Blue Cross of C al . v. Anesthesia Care Assoc s. Med. Grp., Inc. , 187 F.3d 1045, 1051 (9th Cir. 1999) ( p roviders’ claim not preempted by ERISA where they “ arise from [insure r ’s] alleged breach of the provider agreements’ provision s regarding fee schedules, and the procedure for setting them, not what charges are ‘covered’ under the []

Plan ” )

. Here, the Prov iders’ claims do not concern the amount of payment to which they are entitled under the25 Agreement, but the right to payment under the terms of the relevant plans. Thus, we reject the argument that claims

“ substantively identical ” to these would fall withi n the scope

of the arbitration clause. Cf. CardioNet, Inc. , 945 F. Supp. 2d

at 627.

Second, even if these claims would fall within the

arbitration clause if brought directly, it does not follow that

these claims when brought derivatively on behalf of o thers would necessarily fal l within the arbitration clause. Stated differently , w e fail to see how bringing an assignee’s claim derivatively nullifies an assignor’s promise to bring its own

dir ect claim through arbitration

— at least where, as here, the Agr eement does not explicitly require the arbitration of assigned claims

.

It is a basic principle of assignment law that an assignee’s rights derive from the assignor. That is , “an assignee of a contract occupies the same legal position under

a contract as did the original contracting party, he or she can acquire through the assignment no more and no fewer rights than the assignor had, and cannot recover under the assignment any more than the assignor could recover.” 6A

C.J.S. Assignments § 110 (footnote s omitted) (emphasis added). Thus, assuming the validity of the Participants’ assignments to the Provider s, CardioNet and LifeWatch now stand in the shoes of the Participants, and have “ standing to assert whatever rights the assignor[s] possessed .” Misic v. Bldg. Serv. Emp. Health & Welfare Trust , 789 F.2d 13 74,

13 78 n.4 (9th Cir. 1986) (emphasis added)

.

Here, it is undisputed that the Participants possess the right to pursue their ERISA c laims in court, rather than26 through mandatory ar bitration. T hat right does not dissipate simply because the claim is brought by assignees who have promised to arbitrate certain direct claims they might bring against the defendant. Cf. Conn

. State Dental Assoc. v. Anthem Health Plans, Inc. , 591 F.3d 1337, 1347 (11th Ci r. 2009) (“[A] provider that has received an assignment of benefits and has a[n independent] state law claim . . . holds two separate claims

. ” (emphasis added))

. Surely

, where an assignor has agreed to arbitrate its claims with a defendant, the assignor c annot circumvent the arbitration clause by assigning her claim to an assignee whose contract with the

defendant contains no such clause. J ust as the burden of arbitration must travel with a claim, so too

, must the right to litigate.

Moreover, w e have concerns about the policy implications of forcing a provider to arbitrate participants’ claims against an insurer. CIGNA proposes that compelling arbitration of such claims when brought deriv atively by a provider does not dimi ni sh the substantive rights o f participants, since “they are free to pursue such claims directly in federal court .” Appellee’s Br. at 29. But this

contention trivializes the important public policy i nterests served by permitting provider s to bring such claim s on behalf of plan parti cipants

. As th e Fifth Circuit has observed , the assignment of ERISA claims to providers serves the interests

of patients by increasing their access to care:

Many providers seek assignments of benefits to avoid billing the beneficiary directly and upsetti ng his finances and to reduce the risk of

non

- payment. If their status as assignees does not entitle them to federal standing against the27 plan, providers would either have to rely on the beneficiary to maintain an ERISA suit, or they

would have to sue the beneficiary. Either alternative, indirect and uncertain as they are, would discourage providers from becoming assignees and possibly from helping beneficiaries who were unable to pay them “up

front.” The providers are better situated and financed to purs ue an action for benefits owed

for their services.

Hermann Hosp. v. MEBA Med. & Benefit Plan , 845 F.2d 1286, 1289 n.13 (5th Cir. 1988)

, abrogated on other grounds by Access Mediquip, L.C.C. v. UnitedHealthcare Ins. Co.

, 698 F.3d 229 (5th Cir. 2012)

. Were we to prevent providers that have promised to arbitrate their own claims against an

insurer from bring ing patients’ claims in court, these provider s would be less likely to accept patients’ claims in exchange for services. This, in turn, would make it mo re difficult for patients to receive necessary services where their

insurers have denied coverage

.

Accordingly, even if these claims would be arbitrable if brought directly by the Providers, we would not force the

Providers to arbitrate the c laims deriv atively

— at least, absent

a clear statement in that A greement intimating that the parties

intended to arbitrate such claims.

II I.

For the foregoing reasons, we hold that the Providers’

direct and derivative claims fall outside the scope of the Agreeme nt’s arbitration clause. Accordingly, w e vacate the28 order of the District Court and remand for further proceedings in accordance with this Opinion.29 Appendix A

6.3 Internal Dispute Resolution

. Disputes that might arise

between the parties regardi ng the performance or interpretation of the Agreement must first be resolved through the applicable internal dispute resolution process outlined in the Administrative Guidelines. In the event the dispute is not resolved through that process, either party can request in writing that the parties attempt in good faith to
resolve the dispute promptly by negotiation between designated representatives of the parties who have authority

to settle the dispute. If the matter is not resolved within 60 days of such a request, either part y may initiate arbitration by providing written notice to the other. With respect to a
payment or termination dispute, Provider must submit a request for arbitration within 12 months of the date of the

letter communicating the final decision under CIGNA’ s internal dispute resolution process unless applicable law specifically requires a longer time period to request
arbitration. If arbitration is not requested within that 12

month period, CIGNA’ s final decision under its internal

dis pute resolution process will be binding on Provider, and

Provider shall not bill CIGNA, Payor or the Participant for

an y payment denied because of the failure to timely submit a request for arbitration.

6.4 Arbitration

. If the dispute is not resolved th rough CIGNA's

internal dispute resolution process, either party can initiate

arbitration by providing written notice to the other. If one of

the parties initiates arbitration, the proceeding will be held in

the jurisdiction of Provider’ s domicile. The p arties will jointly appoint a mutually acceptable arbitrator. If the parties

are unable to agree upon such an arbitrator within 30 days

after one of the parties has notified the other of the desire to
submit a dispute for arbitration, then the parties wil l prepare

a Request for a Dispute Resolution List and submit it to the

American Health Lawyers Association Alternative Dispute30 Resolution Service (AHLA ADR Service) along with the appropriate administration fee. Under the Codes of Ethics

and Rules of Pro cedure developed by the AHLA ADR Service, the parties will be sent a list of 10 arbitrators along

with a background and experience description, references and

fee schedule for each. The 10 will be chosen by the AHLA

A D R Service on the basis of their exper ience in the area of

the dispute, geographic location and other criteria as indicated

on the request form. The parties will review the qualifications of the 10 suggested arbitrators and rank them

in order of preference from 1 to 9. Each party has the ri ght to
strike 1 of the names from the list. The person with the

lowest total will be appointed to resolve the case. Each party
will assume its own costs, but the compensation and expenses

of the arbitrator and any administrative fees or costs will be

bor ne equally by the parties, subject to any limitation on fees

or costs required under the MDL No. 1334 Settlement Agreement Among CIGNA HealthCare and Healthcare

Providers during the period of time such requirements are in

effect. Arbitration is the excl usive remedy for the resolution

of disputes under this Agreement. The decision of the

arbitrator will be final, conclusive and binding, and no action

at law or in equity may be instituted by CIGNA or Provider

other than to enforce the award of the arbitra tor. The parties

intend this alternative dispute resolution procedure to be a private undertaking and agree that an arbitration conducted

under this provision will not be consolidated with an arbitration involving other physicians or third parties, and th at
the arbitrator will be without power to conduct an arbitration

on a class basis. Judgment upon the award rendered by the

arbitrator may be entered in any court of competent jurisdiction.