IN THE UNITED STATES DISTRICT COURT

OF THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION 

SAINT ANTHONY HOSPITAL

Plaintiff,

vs.

THERESA EAGLESON, in her official 

capacity as Director of the Illinois 

Department of Healthcare and Family 

Services

Defendant.

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Case No. 1:20-cv-02561

Honorable Steven C. Seeger 

JOINT MOTION TO COMPEL ARBITRATION AND STAY ACTION

Intervenors Meridian Health Plan of Illinois, Inc. (“Meridian”), Blue Cross and Blue Shield 

of Illinois, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company 

(“BCBSIL”), and IlliniCare Health Plan (“IlliniCare”) (collectively, the “MCOs”) hereby move to 

compel arbitration of the disputes set forth by Plaintiff Saint Anthony Hospital (“SAH”) in its 

Amended Complaint against Defendant Theresa Eagleson, in her capacity as Director of the 

Department of Healthcare and Family Services (“HFS”) for the State of Illinois (the “State”). In 

support of this Motion, the MCOs state as follows. 

I. INTRODUCTION.

This action is an attempt by SAH to make an end run around its obligations under the 

contracts it entered into with the MCOs, which include mandatory arbitration provisions. The 

MCOs are three of the managed care organizations which contracted with HFS to enroll Medicaid 

beneficiaries as health plan members. (See ECF No. 131, ¶¶ 29–33.) The MCOs entered into 

provider agreements with SAH (the “Provider Contracts”), which govern and control the MCOs’ 

obligations to pay SAH for services rendered. The Provider Contracts broadly concern all aspects 

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of the MCOs’ payment obligations to SAH, including the timing and manner in which the MCOs 

must process and pay claims. The Provider Contracts also include arbitration provisions that apply 

to all disputes arising out of these agreements, including any disputes related to claims payments.

SAH alleges that the MCOs “have systematically delayed and denied claims without 

justification, failed to pay undisputed claims, and when payments are made, they refuse to provide 

the detail necessary for SAH to determine if it is receiving proper payment or, if not, why not.” 

(Id. ¶ 6.) Despite these contentions, SAH did not demand from the MCOs either payment or 

mandatory arbitration under the Provider Contracts. Instead, SAH filed its Amended Complaint 

against HFS, claiming it “has no other recourse than this Court” and that the MCOs, and thereby 

HFS, have violated federal law. (Id. ¶ 104.) SAH asks this Court to require the State to compel 

the MCOs to pay amounts allegedly past due for claims submitted under the Provider Contracts 

and to change their remittances to include detailed payment calculations. (See id. ¶¶ 122, 131.) 

There is, however, a prescribed remedy for any purported wrongdoing: arbitration. SAH 

just chose not to use it, even though SAH does not dispute that the arbitration provisions in the 

Provider Contracts are valid and enforceable. Additionally, SAH neither mentions nor attaches 

the Provider Contracts, making it impossible for the Court to determine what amounts of money, 

if any, are actually due to SAH and when, as well as the agreed format for payments. It is clear 

that all of the issues in the Amended Complaint directly or indirectly pertain to SAH’s disputes 

with the MCOs. See Saint Anthony Hosp. v. Eagleson, 40 F.4th 492, 519 (7th Cir. 2022) (the 

“factual issues related to the MCOs appear intertwined with Saint Anthony’s claim against HFS”). 

Accordingly, these disputes must be resolved in binding arbitration—an issue on which the 

Seventh Circuit expressly did not rule—and this Court should stay this entire action pending the 

completion of arbitration. 

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II. BACKGROUND.

A. The Parties’ Contracts.

1. Medicaid Contracts & Background Law.

Pursuant to their Medicaid contracts with the State and federal government, the MCOs 

administer government-sponsored healthcare plans for the low-income individuals who are 

Medicaid members and enrolled in their respective health plans. (ECF No. 131, ¶¶ 20–33.) Under 

this managed-care arrangement, the State pays each MCO a capitated rate on a per-member, permonth basis; the MCOs contract with healthcare providers (like SAH); and the MCOs pay the 

providers for Medicaid-eligible costs incurred by their members pursuant to the terms of those 

contracts. (E.g., id. ¶ 24.) The MCOs’ payment obligations are subject to certain state and federal 

laws, with an important exception—statutory provisions for timely payment apply “unless the 

health care provider and the organization agree to an alternate payment schedule,” and the “MCO 

and its providers may, by mutual agreement, establish an alternative payment schedule.” See 42 

U.S.C. § 1396u-2(f); 42 C.F.R. § 447.46. 

2. The Provider Contracts.

While they follow State requirements for claims payments, the MCOs also entered into 

separate Provider Contracts with SAH. These contracts require: (1) SAH to provide authorized, 

covered medical services to the MCOs’ members and to submit timely claims for payment in a 

prescribed manner; and (2) the MCOs to process, adjust, pay or deny the claims in compliance 

with specified timeframes and other requirements. (See ECF No. 28-1; ECF No. 34-1; ECF No. 

41-2.) Importantly, the Provider Contracts also contain mandatory arbitration provisions that 

require SAH to submit any dispute arising out of them to binding arbitration. (ECF No. 78-1, Ex. 

A, §§ 4.9, 6.1–6.2; ECF No. 79, Ex. 1-A, § XIII; ECF No. 83, 3–4 (quoting §§ 9.1–9.2).)

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a. Meridian’s Provider Contract.

Under the “Payment for Services” and “Dispute Resolution” sections of Meridian’s 

Provider Contract with SAH, a contract which has been in effect since October 1, 2014,1the parties 

must “make a good faith effort to negotiate and resolve all billing disputes.” (ECF No. 78-1, ¶¶ 

2–4; id. at Ex. A, §§ 4.9, 6.1.) If this negotiation “fails[s] to resolve the dispute, either party may 

request mediation,” but mediation is required only if both parties agree to it. (Id. § 6.2.1.) Here, 

Meridian has chosen not to pursue mediation of the parties’ disputes. Under these circumstances, 

the parties’ disputes must be submitted to binding arbitration:

If Parties do not mediate or mediation does not resolve the dispute 

within sixty (60) days of the request for mediation, either party may 

seek binding arbitration either under the Rules for Arbitration of the 

Alternative Dispute Resolution Service of the American Health 

Lawyers Association or the American Arbitration Association. Both 

Parties agree to binding arbitration. 

(Id. § 6.2 (emphasis added).) 

b. BCBSIL’s Provider Contract.

Under the “Disputes” section of BCBSIL’s Provider Contract with SAH, a contract which 

has been in effect at all times relevant to the allegations in the Amended Complaint, the parties 

must resolve any dispute relating to the Provider Contract in accordance with certain alternative 

dispute resolution procedures “instead of litigation”:

In order to avoid the cost and time consuming nature of litigation, 

any dispute between Plan and Contracting Provider arising out of, 

relating to, involving the interpretation of, or in any other way 

pertaining to this Agreement . . . shall be resolved using the 

alternative disputes resolution procedures described in this Section 

instead of litigation.

 

1 Meridian and Saint Anthony entered into related practitioner agreements, which were also 

effective October 1, 2014. To the extent applicable, those agreements also control billing and payment 

disputes and include an arbitration provision. (See generally ECF No. 78-1, ¶¶ 2–4; id. at Exs. B–C.) 

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(ECF No. 41-3, Ex. 1, ¶¶ 6–7; id. at Ex. 1, Ex. A, § XIII(2) (emphasis added).) Under these 

procedures, if a dispute arises between the parties, either party must “give written notice to the 

other of the existence of a dispute.” (Id. at Ex. 1, Ex. A, § XIII(2)(A)(1).) Afterwards, the parties 

may meet by mutual agreement to attempt to resolve the dispute, but, if that fails, they must 

“submit the dispute to a confidential mediation before JAMS.” (Id. §§ XIII(2)(A)(2)–(3).) If the 

meeting and/or mediation is not successful in resolving the dispute, then the parties are required 

to “submit the dispute to final, binding and confidential arbitration [with] JAMS.” (Id. § 

XIII(2)(B); see also id. § XIII(2).)

c. IlliniCare’s Provider Contract.

Under IlliniCare’s Provider Contract with SAH, which has been in effect since November 

15, 2013, the parties must resolve any dispute relating to the Provider Contract in accordance with 

specified alternative dispute resolution procedures. (ECF No. 83, 3–4.) The parties must first 

attempt to resolve any disputes in accordance with the processes in IlliniCare’s Provider Manual; 

if that is not successful, the parties may attempt to settle the dispute “through good faith 

negotiations”; but, if that too fails, the parties must submit any dispute to binding arbitration:

If a Dispute it not resolved in accordance with the Informal Dispute 

Resolution section of this Agreement, either party wishing to pursue 

the Dispute shall submit it to binding arbitration conducted in 

accordance with the Commercial Arbitration Rules of the American 

Arbitration Association . . . . 

(Id. (emphasis added); see also id. at Exs. A (the Provider Contract), B (the Provider Manual).)

B. Procedural History.

1. SAH Initiates This Action, And The MCOs Pursue Arbitration. 

On April 27, 2020, SAH filed its original complaint, which alleged that the State had 

violated the Medicaid Act by failing to ensure that the MCOs “ma[d]e timely and accurate payment 

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for Medicaid services.” (See generally ECF No. 1, ¶¶ 1, 6, 38, 43–57, 60–61, 72.) These disputes 

directly relate to the Provider Contracts, so, in June 2020, the MCOs moved to intervene in order 

to compel arbitration. (ECF No. 28; ECF No. 34; ECF No. 41.) On July 14, 2020, the Court held 

that the MCOs were entitled to intervene as of right “for the limited purpose of filing motions to 

compel arbitration,” and the MCOs promptly moved to compel arbitration and stay the action 

insofar as it concerned them. (ECF No. 75; ECF No. 78; ECF No. 79; ECF No. 83; ECF No. 93.)

In the meantime, on June 16, 2020, Meridian filed an Arbitration Demand against SAH 

with the American Arbitration Association (“AAA”). (ECF No. 28-6.) In it, Meridian demanded 

arbitration with respect to all matters in dispute under its Provider Contract, including the disputes 

SAH raised in its original complaint. (See generally id.) This arbitration is currently stayed at 

SAH’s request. (ECF No. 96; ECF No. 97.)

On May 15, 2020, HFS moved to dismiss SAH’s original complaint for failure to state a 

claim, and on January 26, 2021, SAH moved to amend its complaint. (E.g., ECF No. 16.) On July 

9, 2021, the Court: (1) granted HFS’ motion to dismiss on the grounds that the Medicaid Act does 

not create a private right of action enforceable under Section 1983; and (2) therefore denied the 

MCOs’ motions to compel arbitration as moot. (ECF No. 107; ECF No. 108; ECF No. 109.) Then, 

on July 13, 2021, the Court denied as futile SAH’s request to amend its complaint. (ECF No. 109.)

2. The Seventh Circuit Appeal.

On July 19, 2021, SAH appealed. (ECF No. 112.) The MCOs did not appeal and never 

asked the Seventh Circuit to compel arbitration or to stay this case pending arbitration. The MCOs

did, however, join the appeal to ask for an affirmance and supplement the State’s brief by 

explaining: (1) that SAH’s demands ultimately target the MCOs; and (2) that arbitration is 

therefore the proper route forward. 

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On July 5, 2022, a divided Seventh Circuit panel: (1) reversed the dismissal of Count I of 

the complaint; (2) affirmed the dismissal of Count II; and (3) reversed “the denial of Saint

Anthony’s motion to supplement.” Saint Anthony Hosp., 40 F.4th at 519. With respect to

arbitration, the Seventh Circuit recognized that the “[a]rbitration provisions in [the Provider 

Contracts] would likely require arbitration” and that “requiring the district court to adjudicate

issues at the claim-by-claim level, would strain judicial resources and seem to conflict with the

arbitration clauses in the contracts between the MCOs and Saint Anthony.” Id. at 501, 511–12. 

The Seventh Circuit ultimately declined to stay the proceedings, but it also recognized that SAH’s

claims require the resolution of factual disputes with the MCOs and emphasized that it was not

addressing the merits of the MCOs’ motions to compel arbitration. See id. at 519. The Seventh 

Circuit later denied rehearing. Saint Anthony Hosp. v. Eagleson, 48 F.4th 737, 737 (7th Cir. 2022). 

The bottom line is that the MCOs’ motions to compel were not before the Seventh Circuit. 

The Seventh Circuit merely declined sua sponte to enter a stay and instead remanded the matter

for further proceedings. The issue of arbitration therefore remains open and unresolved.

3. The Amended Complaint.

After this appeal concluded, the Court granted SAH leave to file an amended complaint, 

and, on October 27, 2022, SAH filed its Amended Complaint, which adds a Due Process claim to 

the original complaint. (See generally ECF No. 125; ECF No. 131.) In its Amended Complaint, 

SAH alleges that HFS violated federal law by failing to ensure that the MCOs “make transparent, 

timely, and accurate payment for Medicaid services.” (E.g., ECF No. 131, ¶¶ 1, 6, 8, 25–26, 28, 

40–41, 63–92.) To support that premise, SAH disputes both the amounts of the payments it 

received from the MCOs and the manner in which it received them. In particular, SAH alleges 

that the MCOs have improperly: (1) denied claim payments; (2) imposed administrative burdens 

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on providers in processing and paying claims; (3) lacked transparency when making claim 

payments; and (4) delayed claim payments. (Id. ¶¶ 63–68 (claim denials), 69–70 (administrative 

burdens), 71–86 (transparency), 87–92 (payment delays).) 

SAH asks this Court to grant it declaratory and injunctive relief for: (1) the alleged violation 

of the Fourteenth Amendment’s Due Process Clause through the alleged failure of the MCOs to 

provide sufficiently transparent claims payment remittances (Count I); and (2) the alleged violation 

of the Medicaid Act’s timely payment requirements through the MCOs’ purported payment 

problems (Count II). (Id. ¶¶ 105–131.) Notably, SAH asks the Court to enter injunctions requiring 

the State to “use all available means” to cause the MCOs to use a particular format when issuing 

payment remittances and to make certain claim payments to SAH. (Id. ¶¶ 122, 131.) 

III. LEGAL STANDARD.

The FAA governs this matter. In enacting the FAA, Congress used “its powers to regulate 

interstate commerce to its fullest extent”; the FAA therefore “applies to all contracts involving 

interstate commerce.” J&JB Timberlands, LLC v. Woolsey Energy II, LLC, No. 14-CV-1318-

SMY-RJD, 2017 WL 396174, at *2 (S.D. Ill. Jan. 30, 2017) (citation omitted); Cooper v. WestEnd 

Cap. Mgmt., L.L.C., 832 F.3d 534, 544 n.2 (5th Cir. 2016) (citation omitted); Kong v. Allied Prof’l 

Ins. Co., 750 F.3d 1295, 1303 (11th Cir. 2014). In applying this rule, courts broadly construe the 

“interstate commerce” requirement to apply to any contract affecting interstate commerce. Cir.

City Stores, Inc. v. Adams, 532 U.S. 105, 115 (2001) (citation omitted).

Here, the interstate commerce requirement is satisfied because: (1) the parties’ disputes 

concern (a) the amounts allegedly owed for services provided by SAH to the MCOs’ Medicaid 

members, and (b) the remittances accompanying the MCOs’ payment for such services; and (2) 

the MCOs receive federal funding to pay for the services provided to their Medicaid members. 

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See THI of New Mexico at Hobbs Ctr., LLC v. Spradlin, 893 F. Supp. 2d 1172, 1184 (D.N.M. 

2012) (finding the FAA’s interstate commerce requirement is met where the plaintiff received 

federal funding from the Medicaid program), aff’d, 532 F. App’x 813 (10th Cir. 2013); Fosler v. 

Midwest Care Ctr. II, Inc., 928 N.E.2d 1, 14–15 (Ill. App. Ct. 2009) (finding the FAA applied 

where a facility received Medicaid funding). 

The FAA eliminates district court discretion and requires the Court “rigorously” to enforce 

the arbitration of issues covered by arbitration agreements. See Epic Sys. Corp. v. Lewis, 138 S. 

Ct. 1612, 1621 (2018) (citation omitted); Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 

(1985) (citations omitted); Saxon v. Sw. Airlines Co., 993 F.3d 492, 495 (7th Cir. 2021) (discussing 

the liberal federal policy favoring arbitration) (citations omitted). Specifically, upon a showing

that a party has failed to comply with a valid arbitration agreement, Section 4 of the FAA requires 

the Court to “make an order directing the parties to proceed to arbitration in accordance with the 

terms of the agreement.” 9 U.S.C. § 4. Section 3, in turn, requires the Court to stay an action 

“upon being satisfied” that an issue in the action is “referable to arbitration.” 9 U.S.C. § 3. Both 

provisions apply here. As detailed below, all of the parties’ disputes are covered by the valid, 

enforceable and mandatory arbitration provisions in the Provider Contracts. 

IV. ARGUMENT.

For the following reasons, the Court should: (A) compel arbitration of SAH’s disputes with 

the MCOs pursuant to Section 4 of the FAA; and (B) stay this action pursuant to Section 3 of the 

FAA and the discretionary factors required by the Seventh Circuit.

A. The Court Should Compel Arbitration.

In the Seventh Circuit, “[t]o compel arbitration, a party need only show: (1) an agreement 

to arbitrate, (2) a dispute within the scope of the arbitration agreement, and (3) a refusal by the 

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opposing party to proceed to arbitration.” Zurich Am. Ins. Co. v. Watts Indus., Inc., 466 F.3d 577, 

580 (7th Cir. 2006). All three elements are satisfied here. 

1. The Parties Have Valid Agreements To Arbitrate Their Disputes.

As detailed above in Section II.A.2, each moving MCO’s Provider Contract contains a 

dispute resolution provision requiring the arbitration of disputes between that MCO and SAH. 

SAH has not contested the validity of these provisions. (See generally ECF No. 131.) The first 

requirement to compel arbitration is therefore satisfied. 

2. The Parties’ Disputes Fall Within The Scope Of The Arbitration Provisions.

When deciding whether a dispute is arbitrable, the Court should focus on the factual 

allegations in the Amended Complaint, and not the legal claims. See Double Sunrise v. Morrison 

Mgmt., 149 F. Supp. 2d 1039, 1043 (N.D. Ill. 2001). Moreover, “[w]hether a particular claim is 

arbitrable depends not upon the characterization of the claim, but upon the relationship of the claim 

to the subject matter of the arbitration clause.” Gore v. Alltel Commc’ns, LLC, 666 F.3d 1027, 

1036 (7th Cir. 2012). Here, while SAH has the burden to show that the disputes alleged in its 

Amended Complaint are outside the scope of the valid arbitration provisions in the Provider 

Contracts, the core disputes asserted by SAH—that the MCOs have failed to pay for claims in a 

timely and appropriate manner and have not provided necessary transparency in their claim 

payment remittances—plainly fall within the scope of the parties’ arbitration provisions. 

As explained in Section II.A.2, the Provider Contracts govern in detail the parties’ entire 

claims submission and payment processes, including claim payments, denials, rejections and 

adjustments, and related timing requirements. (See generally ECF No. 28-1 (Meridian’s Provider 

Contract); ECF No. 37-2 (IlliniCare’s Provider Contract); ECF No. 41-2 (BCBSIL’s Provider 

Contract).) Moreover, subject to certain inapplicable exceptions, the mandatory arbitration 

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provisions in the Provider Contracts apply broadly to any and all disputes between the parties 

involving these contracts.2 

Here, the Amended Complaint raises numerous disputes between SAH and the MCOs that 

SAH cannot in good faith contend fall outside the coverage of these arbitration provisions, 

including the following examples: 

 Lack of Transparency. SAH alleges that “[t]he MCOs do not provide notice to 

Saint Anthony if or when they do or do not pay the HAP Claims Payment Increases 

and Other Add-On Payments on a claim. The remittance forms that the MCOs 

provide to Saint Anthony for paid claims do not state whether the payment includes 

any HAP Claims Payment Increases or Other Add-On Payments.” (ECF No. 131, 

¶ 110.) Additionally, SAH characterizes its transparency request as asking “that 

the calculations and variables used by the MCOs to determine payment amount be 

included in payment remittances” so that “Saint Anthony can[] know whether and 

how much the MCOs have underpaid it.” (Id. ¶ 114.) This dispute regarding what 

the MCOs disclose to SAH when they make claims payments is a dispute arising 

out of and relating to the Provider Contracts. What the MCOs are telling Saint 

Anthony about those payments is inextricably linked to what the MCOs are paying 

SAH. (Id. ¶¶ 76, 86, 114.) And all such billing disputes are governed by the 

provisions in the Provider Contracts that, for example, require the MCOs to adjust 

payments on submitted claims. (E.g., ECF No. 78-1, Ex. A, § 4.5; ECF No. 79, Ex. 

A, § VI(A) and Exhibit I; ECF No. 83 (citing §§ 5.1–5.5).)

 Claim Denials. SAH alleges that its claims “have been denied by the MCOs at 

rates that are multiples of those Saint Anthony experienced in the past” and that 

“[o]ften claims are denied because of administrative paperwork delays by the 

MCOs.” (ECF No. 131, ¶¶ 63, 65.) Such disputes arise out of and relate to the 

Provider Contracts, including the provisions addressing claim denials, rejections 

and adjustments. (E.g., ECF No. 78-1, Ex. A, §§ 4.4–4.5; ECF No. 83 (citing §§ 

5.1–5.5).)

 Delays in Payment. SAH alleges that “[t]he MCOs regularly delay making 

payments for claims even after the MCO determines that the claim is valid and 

owed” and that it “has had to wait anywhere from 90 days to 2 years to be paid by 

MCOs.” (ECF No. 131, ¶ 88.) SAH also alleges that “Meridian had an average 

monthly rate of only 39.9% of claims paid within 30 days, with some months with 

no claims that were submitted by Saint Anthony paid within 30 days.” (Id. ¶ 89.) 

 

2

(See ECF No. 78-1, Ex. A, §§ 6.1, 6.2 (covering any disputes “perceived” by the parties under the 

Provider Contract, including billing disputes); ECF No. 79, Ex. A, § XIII(2) (covering “any dispute . . .

arising out of, relating to, involving the interpretation of, or in any other way pertaining to” the Provider 

Contract); ECF No. 83, 3–4 (covering “[a]ny disputes between the parties arising with respect to the 

performance or interpretation of” the Provider Contract).)

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As for the other MCOs, SAH claims they “paid on average only 59% of the 

indisputably clean claims submitted to them by Saint Anthony within 30 days. The 

90-day monthly average was 92%.” (Id.) This dispute between SAH and the 

MCOs, like the others, also arises out of and relates to the Provider Contracts. Such 

disputes are governed by the provisions of the Provider Contracts that address 

timing requirements for the MCOs to process and pay SAH’s claims. (E.g., ECF 

No. 78-1, Ex. A, §§ 4.3–4.5; ECF No. 83 (citing §§ 5.1–5.5).)

In short, the only reasonable interpretation of the arbitration provisions in the Provider 

Contracts is that they cover the disputes at issue. To the extent this is debatable, binding precedent 

emphasizes that the Court “may not deny a party’s request to arbitrate an issue unless it may be 

said with positive assurance that the arbitration clause is not susceptible of an interpretation that 

covers the asserted dispute.” Fyrnetics (Hong Kong) Ltd. v. Quantum Grp., Inc., 293 F.3d 1023, 

1030 (7th Cir. 2002) (citation omitted); see also AT&T Techs., Inc. v. Commc’ns Workers of Am., 

475 U.S. 643, 650 (1986) (citations omitted). Consequently, if the Court determines that the 

arbitration provisions “arguably cover” the disputes between SAH and the MCOs, the Court should 

find that the second element required to compel arbitration is satisfied. See Pa. Chiropractic Ass'n 

v. Blue Cross Blue Shield Ass’n, 713 F. Supp. 2d 734, 741 (N.D. Ill. 2010) (citing Sweet Dreams 

Unlimited, Inc. v. Dial-A-Mattress Int’l, Ltd., 1 F.3d 639, 642 (7th Cir. 1993)). 

Additionally, should SAH contest the issue of scope, that dispute must itself be referred to 

arbitration. The FAA “allows parties to agree by contract that an arbitrator . . . will resolve 

threshold arbitrability questions,” “so long as the parties’ agreement does so by ‘clear and 

unmistakable’ evidence.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 527, 

530 (2019). Here, the parties clearly and unmistakably delegated scope questions to the arbitrators. 

Meridian’s Provider Contract does so by incorporating alternative sets of rules into its arbitration 

provision, both of which require arbitrators to resolve scope questions.3 IlliniCare’s Provider 

 

3 Meridian’s Provider Contract states: “either party may seek binding arbitration under either the 

Rules for Arbitration of the Alternative Dispute Resolutions Service of the American Health Lawyers 

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Contract does so by, like Meridian, incorporating the AAA’s Rules into its arbitration provision. 

(ECF No. 83, 3–4 (quoting § 9.2).) And BCBSIL’s Provider Contract does so by requiring 

arbitration under JAMS rules, which likewise require arbitrators to resolve any scope issue.4 Given 

this clear and unmistakable evidence of delegation, arbitrators must resolve any disputes 

concerning the scope of the parties’ arbitration provisions. See Nandorf, Inc. v. Applied 

Underwriters Captive Risk Assurance Co., Inc., 410 F. Supp. 3d 882, 889 (N.D. Ill. 2019).

3. SAH Has Refused To Arbitrate.

As for the third arbitrability question, SAH has not proceeded with the contractually 

required arbitrations of its disputes with the MCOs. Instead, SAH filed its Amended Complaint 

asking this Court to require HFS to “use all available means” to cause the MCOs: (1) to change 

their remittances to include certain information SAH deems necessary “to determine the basis for 

payment, denial of payment, or partial denial of payment, including the core, add-on, adjustor, 

partial, and other component parts of the payments necessary for Saint Anthony to know it has 

been paid what it is due”; and (2) to make certain claim payments to SAH. (ECF No. 131, ¶¶ 122, 

131.) As the Seventh Circuit has explained, “a plaintiff expresses his intent to submit to a judicial 

forum by filing a complaint” and “knowing selection of one forum over another and willing 

participation in the ensuing litigation” is “plainly inconsistent with a desire to arbitrate.” 

 

Association or the American Arbitration Association.” (ECF No. 78-1, Ex. A, § 6.2.2.) These rules 

provide: “The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections 

with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any 

claim or counterclaim,” and the arbitrator “shall have the power to determine his or her jurisdiction and any 

issues of arbitrability.” (See ECF No. 78-2, R-7; ECF No. 78-3, 3.1.) 

4 BCBSIL’s Provider Contract mandates that the parties must submit any disputes which are not 

resolved by the initial resolution methods “to final, binding and confidential arbitration to JAMS.” (ECF 

79, Ex. 1, Ex. A, § XIII(2)(B).) The pertinent JAMS rule, Rule 11(b), states that: “[j]urisidictional and 

arbitrability disputes, including disputes over the formulation, existence, validity, interpretation or scope of 

the agreement under which Arbitration is sought, and who are proper Parties to the Arbitration, shall be 

submitted to and ruled on by the Arbitrator. The Arbitrator has the authority to determine jurisdiction and 

arbitrability issues as a preliminary matter.” (See https://www.jamsadr.com/rules-comprehensivearbitration/#Rule-11.)

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Grumhaus v. Comerica Sec., Inc., 223 F.3d 648, 651 (7th Cir. 2000). SAH’s refusal to arbitrate 

here necessitates this Court’s intervention. 

Pursuant to the foregoing analysis, the requirements to compel arbitration are satisfied here, 

and the Court should compel arbitration of all of SAH’s disputes pertaining to the MCOs. 

B. The Court Should Stay This Action. 

1. The Court Must Stay The Arbitrable Disputes.

When a dispute is referred to arbitration, upon “the application of one of the parties,” courts 

must “stay the trial of the action until such arbitration has been had in accordance with the terms 

of the agreement.” 9 U.S.C. § 3. “For arbitrable issues, a § 3 stay is mandatory.” Volkswagen Of 

Am., Inc. v. Sud’s Of Peoria, Inc., 474 F.3d 966, 971 (7th Cir. 2007). As explained above, all of 

the disputes in the Amended Complaint involving the MCOs should be referred to arbitration; the 

Court therefore must stay all of these arbitrable issues.5

2. The Court Should Exercise Its Discretion To Stay The Entire Matter.

In addition, the Court should exercise its discretion to stay any non-arbitrable issues that 

directly or indirectly relate to the MCOs. Such a stay is proper and preferable where, as here, 

“arbitration might help resolve, or at least shed some light on, the issues remaining in federal 

court.” See Volkswagen Of Am., Inc., 474 F.3d at 972; see generally ECF No. 134 (explaining 

why this entire action should be stayed). In fact, courts regularly stay both arbitrable and non-

 

5 The Seventh Circuit stated in the concluding paragraph of its decision that it “decline[s] to stay 

the proceedings in favor of arbitration.” Saint Anthony Hosp., 40 F.4th at 519. The Seventh Circuit, 

however, expressly did not rule on the MCOs’ motions to compel arbitration. Id. (“The district court did 

not address this issue, and we decline to do so here as well.”). If this Court grants the MCOs’ renewed 

motion to compel arbitration, then a stay is mandatory under Section 3 of the FAA. Volkswagen, 474 F.3d 

at 971. Moreover, after the Seventh Circuit issued its decision, Saint Anthony itself proposed in a joint 

status report to stay its prompt pay claim pending the outcome of the Supreme Court’s decision in Talevski

v. Health and Hospital Corp., 6 F.4th 713 (7th Cir. 2021), cert. granted, 142 S. Ct. 2673 (2022). (See ECF 

No. 135, 5.) The case for a stay is even more compelling in the light of Saint Anthony’s lack of urgency 

with respect to its prompt pay claim and its own willingness to stay that claim.

Case: 1:20-cv-02561 Document #: 136 Filed: 11/23/22 Page 14 of 17 PageID #:3583
15

arbitrable issues in cases like this where there are overlapping facts and issues and the resolution 

of any individual issue risks inconsistent results.6 See, e.g., Elsasser v. DV Trading, LLC, No. 17-

CV-04825, 2020 WL 1248667, at *11 (N.D. Ill. Mar. 16, 2020) (staying litigation because 

nonarbitrable claim runs “a substantial risk of overlapping with facts and issues likely to arise in” 

arbitration); In re Dealer Mgmt. Sys. Antitrust Litig., No. 18-CV-864, 2020 WL 832365, at *7 

(N.D. Ill. Feb. 20, 2020) (staying litigation because the risk of inconsistent rulings is significant 

and the court would end up duplicating work if the action was not stayed). 

In sum, the Court should stay this entire matter while the MCOs arbitrate their disputes 

with SAH. See Volkswagen Of Am., Inc., 474 F.3d at 971 (recognizing that such a procedure may 

be necessary to avoid “inconsistent rulings because the pending arbitration is likely to resolve 

issues material to [the] lawsuit” and that district courts abuse their discretion to determine whether 

they will stay non-arbitrable issues when they risk “inconsistent rulings because the pending 

arbitration is likely to resolve issues material to [the] lawsuit”).

V. CONCLUSION.

For all of these reasons, the MCOs respectfully request that the Court grant this Motion, 

compel SAH to arbitrate its disputes with the MCOs and stay this entire action pending the 

completion of the Arbitration.

 

6 Here, there is substantial overlap between Saint Anthony’s prompt pay and transparency claims. 

Saint Anthony itself makes such a connection when it asserts that the MCOs’ purported lack of transparency 

“obscures the extent to which the MCO’s fail to pay Saint Anthony in compliance with the Prompt Pay 

Requirement.” (See ECF No. 131, ¶ 28; see also id. ¶ 76 (“Due to the lack of notice and transparency, 

however, Saint Anthony has been unable to determine the nature and extent of the MCOs’ 

underpayments.”).) According to Saint Anthony, “The guess work created by the MCOs [sic] lack of 

transparency makes it impossible to know if Saint Anthony has been paid properly. What is known, 

however, is the bottom line: Saint Anthony is being paid much less than before the Medicaid managed care 

expansion under the prior administration.” (Id. ¶ 86; see also id. ¶ 114.) Saint Anthony alleges that this 

purported lack of transparency deprives it of “full payment” from the MCOs. (Id. ¶¶ 120–21.) Given the 

overlap between these two claims, it makes little sense to proceed with litigating any non-arbitrable portion 

of the case (if any) unless and until an arbitrator decides the arbitrable portions of the case. Staying the 

entire case would avoid unnecessary and costly piecemeal litigation and duplicative discovery.

Case: 1:20-cv-02561 Document #: 136 Filed: 11/23/22 Page 15 of 17 PageID #:3584
16

Dated: November 23, 2022

Respectfully submitted,

Meridian Health Plan of Illinois, Inc.

By: /s/ Steven T. Whitmer

 One of its Attorneys

Steven T. Whitmer (ARDC 6244114)

swhitmer@lockelord.com

LOCKE LORD LLP 

111 South Wacker Drive

Chicago, Illinois 60606

Phone: (312) 443-0700

IlliniCare Health Plan

By: /s/ Kristin B. Ives

 One of its Attorneys

Kirstin B. Ives (ARDC 6289952)

kbi@falkenbergives.com

Megan A. Zmick

FALKENBERG IVES LLP

230 W. Monroe Street, Suite 2220

Chicago, Illinois 60606

Phone: (312) 566-4803

Blue Cross and Blue Shield of Illinois, a

Division of Health Care Service Corporation, 

a Mutual Legal Reserve Company

By: /s/ Kevin D. Tessier

 One of its Attorneys

Martin J. Bishop, Esq. (ARDC 6269425)

mbishop@reedsmith.com

Kevin D. Tessier, Esq. (ARDC 6238232)

ktessier@reedsmith.com

REED SMITH LLP

10 South Wacker Drive, 40th Floor

Chicago, Illinois 60606

Phone: (312) 207-1000

Case: 1:20-cv-02561 Document #: 136 Filed: 11/23/22 Page 16 of 17 PageID #:3585
17

CERTIFICATE OF SERVICE

I, Steven T. Whitmer, an attorney, hereby certify that I caused to be served a copy of the 

foregoing JOINT MOTION TO COMPEL ARBITRATION AND STAY ACTION on all counsel 

of record through the ECF system on this 23rd day of November, 2022.

Steven T. Whitmer

swhitmer@lockelord.com

LOCKE LORD LLP 

111 South Wacker Drive

Chicago, Illinois 60606

Phone: 312.443.1869

Fax: 312.896.6569

Counsel for Meridian Health Plan of Illinois, 

Inc.

By: /s/ Steven T. Whitmer

Case: 1:20-cv-02561 Document #: 136 Filed: 11/23/22 Page 17 of 17 PageID #:3586