Lifestream Complete Senior Living Incorporated et al v. Arizona Healthcare Cost Containment System et alMOTION to Dismiss Case or, in the Alternative, Stay Pending ArbitrationD. Ariz.October 6, 2016 {00254311.1 } 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Andrew S. Gordon (003660) Shelley Tolman (030945) COPPERSMITH BROCKELMAN PLC 2800 North Central Avenue, Suite 1200 Phoenix, Arizona 85004 T: (602) 381-5460 F: (602) 224-6020 agordon@cblawyers.com stolman@cblawyers.com Attorneys for Defendant Mercy Care Plan UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Lifestream Complete Senior Living, Inc. d/b/a Cook Health Care and Lifestream Complete Senior Living at Sun Ridge, Inc.; The Evangelical Lutheran Good Samaritan Society d/b/a Good Samaritan Society – Quiburi Mission, Good Samaritan Society – Peoria Good Shepherd and Good Samaritan Society – Prescott Valley, Plaintiffs, v. Thomas Betlach in his official capacity as the Director of the Arizona Healthcare Cost Containment System; Southwest Catholic Health Network, Inc. d/b/a Mercy Care Plan, Mercy Care Advantage, Mercy Care Long Term Care, an Arizona non-profit corporation; UnitedHealthcare of Arizona, Inc., an Arizona corporation; Banner Health, Inc., an Arizona non-profit corporation; CIGNA Healthcare of Arizona, Inc., an Arizona corporation; Lifeprint Health, Inc., a Delaware Corporation, Defendants. No. 2:16-cv-00589-PHX-NVW DEFENDANT SOUTHWEST CATHOLIC HEALTH NETWORK INC., dba MERCY CARE PLAN’S MOTION TO DISMISS OR, IN THE ALTERNATIVE, STAY PENDING ARBITRATION (Oral Argument Requested) Defendant Southwest Catholic Health Network, Inc. d/b/a Mercy Care Plan, Mercy Care Advantage, and Mercy Healthcare Group (“Mercy Care”) requests the dismissal of Plaintiffs’ claims against it, or in the alternative, a stay of the proceedings against it pending arbitration. Case 2:16-cv-00589-NVW Document 42 Filed 10/06/16 Page 1 of 9 {00254311.1 } 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Introduction On October 1, 2013, Plaintiffs the Evangelical Lutheran Good Samaritan Society Inc. d/b/a Good Shepherd Care Center and Good Shepherd Villa (“Good Samaritan”) and Lifestream Complete Senior Living, Inc. d/b/a Lifestream Cook Health Care and Lifestream at Sunridge (“Lifestream”) entered into Facility Service Agreements with Mercy Care (the “Agreements”). [Complaint, ¶ 21; Exs. 1-2.] Under these Agreements, Plaintiffs agreed to become Mercy Care participating providers for purposes of providing health care services at their skilled nursing facilities, and Mercy Care agreed to provide payment under the terms of the parties’ Agreements. [Exs. 1-2.] All Agreements require the arbitration of any claim “arising out of or relating to” the Agreement. [Exs. 1-2 § 8.3.1.] Mercy Care properly paid Plaintiffs according to these Agreements, which require the submission of all claims within a 90-180 day billing period. [See Complaint, ¶¶ 20-21.] Plaintiffs now assert that payment according to the terms of their Agreements violates 42 C.F.R. § 447.45(d)(1) (incorrectly identified as 42 U.S.C. § 447.45(d)(1)) and 42 U.S.C. § 1983. [Complaint, Counts One and Four.] Despite the fact that these claims arise out of and relate to the parties’ Agreements, Plaintiffs brought these claims in the District of Arizona. The Federal Arbitration Act (“FAA”) requires the dismissal of the claims against Mercy Care, or in the alternative, a stay of these claims allowing for the parties to proceed to arbitration. In the alternative, Mercy Care joins in and incorporates by reference the arguments asserted by Defendants LifePrint Health, Inc. and Arizona Physicians IPA, Inc., which require dismissal of the claims against Mercy Care as well. Argument I. The FAA Requires Arbitration of Plaintiffs’ Claims Against Mercy Care. Under Section 8.3.1 of the parties’ Agreements and the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., Plaintiffs must arbitrate their claims against Mercy Care. The FAA, 9 U.S.C. § 1 et seq., provides that: Case 2:16-cv-00589-NVW Document 42 Filed 10/06/16 Page 2 of 9 {00254311.1 } 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2. The FAA embodies a broad federal policy favoring arbitration. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25 (1991). It “leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Chiron Corp., 207 F.3d at 1130 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985)). A court must compel arbitration when “a valid agreement to arbitrate exists,” and “the agreement encompasses the dispute at issue.” Coup v. Scottsdale Plaza Resort, LLC, 823 F. Supp. 2d 931, 940 (D. Ariz. 2011) (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000); EEOC v. Cheesecake Factory, Inc., No. CV08-1207-PHX-NVW, 2009 WL 1259359, at *2 (D. Ariz. May 6, 2009) (same). A. A Valid Agreement to Arbitrate Exists. Here, both Plaintiffs entered into Agreements with Mercy Care that require the arbitration of all claims arising out of or relating to the Agreements. The Good Samaritan Agreements are attached as Exhibit 1. The Lifestream Agreements are attached as Exhibit 2. Under Section 8.3, all Agreements include the following dispute resolution provision that broadly requires the arbitration of all claims arising out of or relating to the Agreement: Submission of Claim or Controversy to Arbitration. Any controversy or claim arising out of or relating to this Agreement or the breach, termination, or validity thereof, except for temporary, preliminary, or permanent injunctive relief or any other form of equitable relief, shall be settled by binding arbitration administered by the American Arbitration Association (“AAA”) and conducted by a sole Arbitrator (“Arbitrator”) in accordance with the AAA’s Commercial Arbitration Rules (“Rules”). The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, to the Case 2:16-cv-00589-NVW Document 42 Filed 10/06/16 Page 3 of 9 {00254311.1 } 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 exclusion of state law inconsistent therewith or that would produce a different result, and judgment on the award rendered by the Arbitrator (the “Award”) may be entered by any court having jurisdiction thereof. [Exs. 1-2.] There is no allegation in the Complaint that this arbitration provision is unenforceable, however, Plaintiffs generally assert that the terms of their Agreements were not “mutually agreed upon.” [Complaint, ¶ 21.] But the allegation that a plaintiff did not have equal bargaining power regarding the terms of an Agreement does not render an arbitration agreement unenforceable. “Mere inequality in bargaining power is not sufficient to invalidate an arbitration agreement.” Crawford Professional Drugs, Inc., 748 F.3d at 264 (quoting EEOC, 2009 WL 1259359 at *3); Coup, 823 F. Supp. 2d at 948. Courts addressing similar allegations regarding alleged contracts of adhesion routinely enforce the relevant arbitration provision under the FAA. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 346–47 (2011) (noting that “the times in which consumer contracts were anything other than adhesive are long past” and finding arbitration provision in contract of adhesion enforceable). These courts find that “a contract of adhesion is fully enforceable . . . unless the contract is also unduly oppressive or unconscionable.” Crawford Prof’l Drugs, Inc., 748 F.3d at 264; Coup, 823 F. Supp. 2d at 944 (enforcing arbitration clause and rejecting argument that the agreement was an unconscionable contract of adhesion when plaintiffs failed to establish that they could not have rejected the arbitration provision); Brady v. Universal Tech. Inst. of Ariz., Inc., No. CV-09-1044-PHX-FJM, 2009 WL 5128577, at *2 (D. Ariz. Dec. 17, 2009)) (finding arbitration provision in contract of adhesion enforceable when “[t]he parties are equally bound by the terms of the arbitration agreement”). For example, in Crawford Professional Drugs, Inc. v. CVS Caremark Corporation, the Fifth Circuit rejected a similar argument asserting that the contract at issue was offered on a “take it or leave it” basis and found the arbitration clause valid and enforceable under Arizona law. There, the court addressed an arbitration clause in provider agreements between locally-owned drug stores and pharmacy benefit Case 2:16-cv-00589-NVW Document 42 Filed 10/06/16 Page 4 of 9 {00254311.1 } 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 management networks (“PBMs”) that administer the payment of claims for prescription drugs. Id. at 254-55. The drug stores asserted, among other things, that the PBMs violated Mississippi’s Any Willing Provider Law, which protects a patient’s right to use any pharmacy of its choosing. Id. at 254. The PBMs moved to compel arbitration under the applicable provider agreements. Id. In response, the drug stores contended that the contracts were unenforceable contracts of adhesion. Applying Arizona law, the Fifth Circuit noted that the distinctive feature of contracts of adhesion is that “the weaker party has no realistic choice as to its terms.” Id. at 264. It then noted that there was not even a potential issue of unconscionability because there was no evidence that the drug stores “were prevented from contracting with another PBM or could not have abstained from contracting with the Defendants at all.” Id. Similarly, the contracts between Plaintiffs and Mercy Care, all sophisticated businesses, do not raise any potential issue of unconscionability. Like in Crawford and Coup, there is no evidence that Plaintiffs lacked a realistic choice regarding the terms of the Agreements. In particular, there is no allegation or evidence that these well- established Arizona businesses were prevented from contracting with other MCOs or could not have decided against contracting with Mercy Care. Finally, the arbitration provision does not raise any issue of unconscionability as it is a standard clause that equally binds both parties. The arbitration provision is valid and enforceable. B. The Arbitration Clause Encompasses Plaintiffs’ Claims. The arbitration clause at issue here covers any “controversy or claim arising out of or relating to this Agreement.” [Exs. 1-2 § 8.3.1.] It is “the paradigm of a broad clause.” Candrian v. RS Indus., Inc., No. CIV 13-088-TUC-CKJ, 2013 WL 6147223, at *7 (D. Ariz. Nov. 22, 2013). The strong presumption in favor of arbitrability is strengthened when, as here, the arbitration provision contains such broad language. Phoenix Newspapers, Inc. v. Phoenix Mailers Union Local 752, Int’l Bhd. of Teamsters, 989 F.2d 1077, 1080 (9th Cir. 1993). “Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the Case 2:16-cv-00589-NVW Document 42 Filed 10/06/16 Page 5 of 9 {00254311.1 } 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Mastrobouno v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 62 n.8 (1995). Plaintiffs’ claims against Mercy Care fall squarely within the parties’ broad arbitration provision. Plaintiffs assert that Mercy Care’s refusal to reimburse them for claims submitted after 180 days violates various laws. But Plaintiffs would not have a claim for reimbursement without the Good Samaritan and Lifestream Agreements containing the arbitration provisions. These are “claim[s] arising out of or relating to” these Agreements, clearly encompassed by the arbitration clause. [Exs. 1-2 § 8.3.1.] Finally, it is well-settled that Plaintiffs’ “statutory claims may be the subject of an arbitration agreement, enforceable pursuant to the FAA.” Gilmer, 500 U.S. at 26; Coup. A party is held to an agreement to arbitrate statutory rights “unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.” Brady, 2009 WL 5128577 at *1. Here, there is no evidence of any intention to preclude a waiver of judicial remedies. See Morgan v. Robinson, No. 8:14CV212, 2014 WL 6612582, at *4 (D. Neb. Nov. 20, 2014) (enforcing arbitration clause with regarding to Section 1983 claim); McGill v. Rural/Metro Corp., 2:00CV192-B, 2001 WL 484796, at *3 (N.D. Miss. Feb. 20, 2001) (dismissing Section 1983 claim based on arbitration clause). Further, Plaintiffs may assert their statutory claims in arbitration and the statutes at issue will continue to serve their remedial and deterrent functions. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991) (“[S]o long as the prospective litigant effectively may vindicate [his or her] statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function.” (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 (1985))). Plaintiffs’ claims are within the scope of the arbitration provision. II. Dismissal Is Appropriate Under Substantive Grounds. Alternatively, Mercy Care joins in and incorporates fully by reference the substantive grounds supporting dismissal as set forth by Defendants LifePrint Health, Inc. and Arizona Physicians IPA, Inc. As explained by these Defendants, Count One fails as a Case 2:16-cv-00589-NVW Document 42 Filed 10/06/16 Page 6 of 9 {00254311.1 } 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 matter of law because Plaintiffs misinterpret 42 C.F.R. § 447.45(d)(1), which sets the maximum amount of time that a state Medicaid agency (e.g., AHCCCS) can allow a Medicaid provider to submit a claim, not the minimum amount of time. The Section 1983 claim under Count Four fails as a matter of law because Plaintiffs fail to identify any predicate violation of federal law and fail to allege any facts establishing that Mercy Care, a private entity, was acting under the color of State law. Counts One and Four also fail because Plaintiffs failed to meet Article III standing requirements, failed to provide the detail required by Rule 8’s pleading standard, and failed to exhaust their administrative remedies. III. Mercy Care’s Entitlement to Its Attorneys’ Fees. Finally, Mercy Care request its attorneys’ fees under A.R.S. § 12-341.01(A), which provides that “[i]n any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees.” A defendant in a contract action in which the complaint is dismissed without prejudice is considered a “successful party.” See Britt v. Steffen, 220 Ariz. 265, 267, 205 P.3d 357, 359 (App. 2008); cf. Harris v. Reserve Life Ins. Co., 158 Ariz. 380, 385, 762 P.2d 1334, 1339 (App. 1988) (holding that “when a plaintiff’s complaint is dismissed because of plaintiff’s failure to prosecute, the defendant may be considered the successful party for purposes of recovering costs pursuant to A.R.S. § 12-341”). The court considers various factors in determining whether attorneys’ fees should be awarded pursuant to A.R.S. § 12- 341.01(A), including the merits of the unsuccessful party’s claim, whether the claim could have been avoided or settled, and the novelty of the legal question presented. See Assoc. Indem. Corp. v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1985). Here, the Agreements plainly require Plaintiffs’ claims against Mercy Care to be brought in arbitration rather than in this Court. Plaintiffs’ insistence on bringing these claims in this forum is in violation of clearly applicable law and the plain language of the contracts and warrants an award of attorneys’ fees to Mercy Care. Case 2:16-cv-00589-NVW Document 42 Filed 10/06/16 Page 7 of 9 {00254311.1 } 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Conclusion For these reasons, all claims against Mercy Care should be dismissed, or in the alternative stayed pending the completion of arbitration. Respectfully submitted this 6th day of October, 2016. COPPERSMITH BROCKELMAN PLC By s/ Andrew S. Gordon Andrew S. Gordon Shelley Tolman Attorneys for Defendant Southwest Catholic Health Network dba Mercy Care Plan, Mercy Care Advantage, and Mercy Care Long Term Care Case 2:16-cv-00589-NVW Document 42 Filed 10/06/16 Page 8 of 9 {00254311.1 } 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE I hereby certify that on October 6, 2016, I electronically transmitted the attached document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to all CM/ECF registrants. s/ Georgina S. Hadley Georgina S. Hadley Case 2:16-cv-00589-NVW Document 42 Filed 10/06/16 Page 9 of 9 Exhibit 1 Case 2:16-cv-00589-NVW Document 42-1 Filed 10/06/16 Page 1 of 18 FACilJTY SERVICES AGUEMENT The 1mD ofdllll Fufllty Services Agreement (the wA~t") by aud between S®thwest Cltholi~ HCIII!h Netwolk Corpomion dba M~y Care Plan, ~Care Ad.vam.ae and Mercy Healtbcue Group, 011 bdlalf ofitHU' IIDd its Afllliltcs (hereinafter "Company"), and GOOD SlfEPIIUl) VILLA (boreinafter "F~'), sbaU ccmmeDQe cft'octive OCTOBER l, 2013 [Date to be eompletccl by C~y] (the t4Ef&dive o.te"). Company and PICillty may be R~&ucd to individualJy as a "Party" tnd col~lvely 111 the ~.>· The ~ Complfuwe Addmduut attached to ahl& A.pment as Exhibit A. Is exp111Ssly intotpcnted into this Agreement Jbd is biodin& upon the Parties. In tbc event of any ioconaiatent or CQntrary lqulae betwtea the Replatory Compliance Addcruhlm awl any otbct pa1 of 1hia Apment, iuoluding but not Jimi1ed to exhibits, IIUIIchmonts or amendments, the Parties agree tbat the provisions ofdte Regulatory Complimc;e Addendum shall pnwail. WHEUAS, Company admildstcrs Plans fbr Govenunent Sponsors that provide accesa to health care servieCll to Members or amnges for the provision ofboaltlt care ~to Members of Oovemmeat Proarmu; and WHEREAS, Company c:oncncta with c:ertaln health oarc provldm and tw:iUiies to provide aeceu to am:b bWth care ii«Vic:ts to Membem; lllKl WHEREASt Facility ptOVides healtb we services to patienta within the scope of its Uceusure or ~on; and WHEREAS, Compmy and Facility mutually d.eme to enter into an IIJ':I'"IDiCmcnt wbmt1y F"illty will ~ • Partlcip.ltlng Provider and rmdcr beahb (:IU'C services to Members; and WH~ in ~tum far the provision of health care IICl'Vius by Facility, Comp.lllly will pay FuiUty for Cowred Serv:i'* 111\dertb.e tctrns of this Agreeme~~t; and WHEREAS, Facility undetstanoge 14 of26 Case 2:16-cv-00589-NVW Document 42-1 Filed 10/06/16 Page 12 of 18 8.3.1 Subroissio!!_Qf Claim gr CQntroycrs~ to ArbitrD\i911. Any controversy or claim arising out of or relating to this Agreement or the breach, termination, or validity thereof, ucept for temporary, preliminary, or pennanent injunctive relief or any other form of equitable relief, shall be settled by binding arbitration administered by the American Arbitration Association ("AAA") and conducted by a sole Arbitrator ("Arbitrator") in accordance with the AAA 's Commercial Arbitration Rules ("Ruh:s"), The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1·16, to the exclmion of state laws inconsistent therewith or that would produce a different result, and judgment on the award rendered by the Arbitrator (the "Award") may be entered by any court having jurisdiction thereof. A stenographic record shall be made of all testimony in any arbitration in which any disclosed claim or counterclaim exceeds $250,000. An Award for $250,000 or more shall be accompanied by a short statem1.1nt ofthe reasoning on which the Award rests. 8,3.2 bRR!i!!.l of Arbitration Award. In the event a Party believes there is a clear error of law and within thirty (30) days of receipt of an Award of $250,000 or more (which shall not be binding if an appeal is taken), a Party may notify the AAA of its intention to appeal the Award to a second Arbitrator (the "Appeal Arbitrator"), designAted in the same manner as the Arbitrator except that the Appeal Arbitrator must have at least twenty (20) yean' experience in the active practice of law or as a judge, The Award, as confirmed, modified or replaced by the Appeal Arbitrator, shall be final and binding, and judgment thereon may be entered by any court having jurisdiction thereof. No other arbitration appeals may be made. 8.3.3 Qonfideotia!ity. Except as may be required t>y law or to the extent necessary in connection with a judicial challenge, pennitted appeal, or enforcement of an Award, neither a Plll't)' nor an arbitrator may disclose the existence, content, record, status or results of a negotiation or arbitration. Any information, document, or record (in whatever fonn preserved) referring to, discussing, or otherwise related to a negotiation or arbitration, or reflecting the existence, content, record, smtus, or rcsu Its of n negotiation ("Negotiation Record") or arbitration (''Arbitration Record"), is confidential. The arbitration hearing shall be closed to any person or entity other than the arbitrator, the parties, witne$ses during their testimony, and attorneys of record. Upon the request of a Party, an lll'bitrator may take such actions as are necessary to enforce this Section 8.3.3, including the imposition of sanctions. 8.3.4 Pre·hearing Procedure for Arbitration. The Parties will cooperate in good faith fn the voluntary, prompt and informal exchange of all documents and information (thilt are neither privileged nor proprietary) relevant to the dispute or claim, all documents in their possession or control on which they rely in support of their positions or which they intend to introduce as exhibits at the hearing, the identities of all individuals with knowledge about the dispute or claim and a brief description of such knowledge, and the identities, qualifications and anticipated testimony of all experts who may be called upon to testify or whose report may be introduced at the hearing. The Parties and Arbitrator will make commercially reasonable efforts to conclude the document and information exchange process within sixty (60) calendar days after all pleadings or notices of claims have been received. At the request of a Plll't)' in any arbitration In which any disclosed claim or counterclaim exceeds $250,000, the Arbitrator may also order pre-hearing discovery lly deposition upon good cause shown. Such depositions shall be limited to a maximum of three (3) per Party and shall be limited to a maximum of six (6) hours' duration each. As they become aware of new documents or infonnation (including experts who may be called upon to testify), all Parties remain under a continuing obligation to provide relevant, non·privileged documents, to supplement their identification of witneSs!!$ and experts, and to honor any understandings between the Parties regarding documents or infonnation to be exchanged. Documents that have not been previously exchanged, or witnesses and experts not previously identified, will not be considered by the Arbitrator at the hearing. Fourteen (14) calendar days before the hearing, the Parties will exchange and provide to the Arbitrator (a) a list of witnesses they intend to call (including any experts) with a short description of the anticipated direct testimony of each witness ~~nd an estimate of the length thereof, and (b) prema.rked copies of all exhibits they intend to use at the heating, 8.3 ,5 Arbltration.A wi!1J!, The arbitrator may award only monetary relief and is not empowered to award damages other than as set forth in this Agreement. The Award shall be in satisfaction of all claims by all Parties. Arbitrator fees and expenses shall be bome equally by the Parties. Postponement and cancellation fees and expenses shall be borne by the Party causing the postponement or cancellation. Fees and expenses incurred Page IS of26 Case 2:16-cv-00589-NVW Document 42-1 Filed 10/06/16 Page 13 of 18 by u Party In successfully enforcing an Award shall be borne by the other Pany. f:xcept as otherwise provided in this Agreement, each Party shall beat all other fees and expenses it incurs, including all filing, witnes.~, cxpcn witness, transcript, and attorneys' fees. HJ .6 Survival. The provisions of Section 8.3 shall survive expiration or tennination of this Agreement, regardless of the cause giving rise hereto. 8.4 9.0 9.1 9.2 9.3 9.4 9.5 Arbitration $q_lely j3etween Parties: No CoJlgliidatjQ.r.LQL<;:2!.ru_/.l_<;li.Qu. Company and Facility agree that any arbitration or other proceeding related to a dispute arising under this Agreement shall be conducted solely between them. Neither Party shall request, nor consent to any request, that their dispute be joined or consolidated for any purpose, including without limitation any class action or similar procedural device, with any other proceeding between such Party and any third party. MISCELLANEOUS Amendments. This Agreement constitutes the entire understanding of the Parties hereto and no changes, amendments or alterations shall be effective unless signed by both Parties, except as expressly provided herein. Company may amend this Agreement upon thirty (30) days prior written notice, by Jetter, newsletter, electronic mail or other media (an "Amendment"). Fajlure by Facility to object in writing to any such Amendment within thirty (30) days following receipt thereof constitutes Facility's acceptance of such Amendment. In the event that Facility reasonably believes that an Amendment is likely to have a material adverse impact upon Facility, Facility agrees to notify Company in writing, specifying the specific bases demonstrating a likely material adverse impact, and the Parties will negotiate in good faith an appropriate revised Amendment, if any, to this Agreement. Notwithstanding the foregoing, at Company's discretion, Company may amend this Agreement to comply with applicable Jaw or regulation, or any order or directive of any governmental agency, without the consent of Facility, and this Agreement shall be deemed to be automatically amended to conform with all laws and regulations promulgated at any time by any state or federal regulatory agency or authority having supervisory authority over this Agreement. Facility agrees that noncompliance with any requirements of this Section 9.1 will relieve Company or Government Sponsors and Members from any financial liability for the applicable portion of the Facility Services. Changes to Policies are addressed by Section 5, I hereto. Mercy Care Plan wl/1 refrain from any amendment or contract additionsldeleJions without PJIP's express 1 ..-("" wriften agreement, witll tile exception of State or Federal mandated Regulatory Requirements. !fV;J-. .. ~j.. Waiver. The waiver by either Party of a breach or violation of any provision of this Agreement shall not operate as or be construed to be a waiver of any subsequent breach thereof. To be effective, all waivers must be in writing and signed by an authorized officer of the Party to be charged. Facility waives any claims or cause of action for fraud in tbe inducement or execution related hereto, governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed, interpreted, and enforced in accordance with, and governed by, the laws of the State where Facility is located. L,igbilitY. Notwithstanding Section 9.3, either Party's liability, if any, for damages to the other Party for any cause whatsoever arising out of or related to this Agreement, and regardless of the form of the action, shall be limited to the damaged Party's actual damages. Neither Party shall be liable for any indirect, incidental, punitive, exemplary, special or consequential damages of any kind Whatsoever sustained as a result of a breach of this Agreement or any action, inaction, alleged tortious conduct, or delay by the other Party. Severabi I izy. SNf AgJ('ernen1 IO Ol 20Jl dne Page 16 of2~ Case 2:16-cv-00589-NVW Document 42-1 Filed 10/06/16 Page 14 of 18 FACILITY SERVICES AGREEMENT The tenn of this Facility Services Agreement (the "Agreement") by and between Southwest Catholic Health Network Corporation dba Mercy Care Plan, Mercy Care Advantage and Mercy HcalUlcare Group, on behalf of itself and its Affiliates (hereinafter "Company''), and LIFESTREAM COOK REALm CAR.It (berebutfter "FacUlty"), shall comme~ effective OCI'OBER I, :ZOil [Date to be completed by Company] {the "Bffi:K:tive Date''). Company and Facility may be I'Citerred to individually as a "Party" 1111d collectively as the "Parties." The Regulatory Compliance Addendum attached to this Agreement as Exhibit A, is expressly incorporated into this Agreement and is binding upon the Parties. In the event of any Inconsistent or contrary language between the Regulatory Compliance Addendum and any other part of this Agreement, including but not limited to exhibits, attachments or amendments, the Parties agree that the provisions of the Regulatory Compliance Addendum shall prevail. WHEREAS, Company administers Plans for Government Sponsors that provide access to bcalth care services to Members or amnges for the provision ofhcelth care services to Members of Government Programs; and WHEREAS, Company contracts with certain health care providers and facilities to provide access to such health care services to Members; and WHEREAS. Facility provides health oarc services to patients within the scope of its licensure or acQ'C(fitatfon i and WHEREAS, Company and Facility mutually desire to enter into an arrangement whereby Facility will become a Participating Provider and render health care services to Members; and WHEREAS, in rctum for the provision of health care services by Facility, Company will pay Facility for Covered Services under the terms of this Agreement; and WHEREAS, F~Wility understands and agrees that Government Sponsors or other aovemment entitles may require certain changes to the terms of this Agreement before Facility can provide services to Members under the tenns of any Plans that arc awarded, by the Govemmcnt Sponsors, to Company. NOW, THEREFORE, in consideration of the foregoing IUid of the mutual covenants, promises and undertakln,p herein, the sufficiency of which Is hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows: 1.0 DEFINITIONS When used in this Agreement, all capitalized terms shall have the following meanings: tJiililt!. Any corporation, partnership or other legal entity (including any Plan) directly or indirectly owned or controlled by, or which owns or controls, or which is under common ownership or control with Company. ~leAn C!ajm, A claim that can be processed without obtainins additional lnfonnation from the Facility who provided lhe service or from a third party, except that lt shall not mean a claim submitted by or on behalf of a Facility who is under investigation for ftaud or abuse, or a claim that is under review for medical necessity; provided, further, unless otherwise required by law or regulation, a claim which (a) Is submitted within the prqper tbneftame as et forth in this Agreement and (b) has (i) detailed and descriptive medical and patient data, (li) a corresponding referral (whether in paper or electronic fonnat), if required for the applicable claim, (iii) whether submitted via an clactronlc transaction using pennitted standard code sets (e.g., CPT-4, lCD-9, HCPCS) a3 required by the applicable Federal or state regulatory authority (e.g., U.S. Dept. of Health & Human Services, U.S. Dept. of Labor, state law or regulation) or otherwise, all the data clements of the UB-M or CMS~I500 (or successor standard) fonns (Including but not limited to Member identification number, national provider idcntifier("NPI"), Pace 1 of26 Case 2:16-cv-00589-NVW Document 42-1 Filed 10/06/16 Page 15 of 18 injury or damage. Facility acknowledges that all Member care and related decisions are lbc responsibility of Facility and its medical staff, and that Policies do not dictate or control Facility's clinical decisions with respect to the care of Members. Facility agrees to indemnify and hold harm leu the Government Sponsor and Company from any and all claims, liabilities and third party causes of action arising out of the Facility's provision of care to Members. Company agrees to indemnify and hold hannless the Facility from any and all claims, liabilities and third party causes of action arising out of the Company's administration of health care services In connection with the Plans. This provision shall survive the expiration or termination of this Agreement, regardless of tho reason for termination. 7.2 ll•c of Name. Facility consents to the usc of Facility's name and other identifying and descriptive material in provider directories and In other materials and marketing literature of Company in all formats, Including, but not limited to, electronic media. Facility may use Company's names, logos, trademarks or service marks in marketing materials or othcrwisc, upon receipt of Company's prior written consent, which shall not be unreuonably withheld. 7.3 Interference with Conl@ctual &clotiom. Facility shall not engage in activities that will uuse Company to lose existing or potential Members, including but not limited to: (a) lldvising Company customers, Government Sponsors or other entities currently under contract with Company to cancel, or not renew said contracts; (b) impeding or otherwise interfering with negotiations which Company is conducting for the provision of health benefits or Plans; or (c) using or disclosing to any third party membership lists a<:quired during the term of this Agreement for the purpose of soliciting individuals who were or are Members or otherwise to compete with Company. Notwithstanding the foregoing, Coinpany shall not prohibit, or otherwi5e restrict, Facility trorn advising or advocating on behalf of a Member who is Its patient, for the following: (i) the Member's health status, medical care, or treatment options, including any alternative treatment that may be: self-administered; (ii) any infonnation the Member needs in order to decide among all relewant treatment options; (iii) the risks, benefits, and consequences of treatment or nontrcatment; and (iv) the Member's right to participate in deci$ions regarding his or her health care, lnch!ding the right to refuse treatment, and to express preferences about future treatment decisions. This section shall continue to be in effect for a period of one (I) year after the expiration or termination of this Agreement. 8.0 DISPUTE RESOLUTION 8.1 M'mbcr Qrimn® Di§pUte RcsolutiQn. Facility agrees to (a) cooperate with and participate In Company's applicable appeal, grievance and external review procedures (including, but not limited to, Medicaid appeals ll'ld expedited appeals procedures), (b) provide Company with the information necessary to resolve same, and (c) abide by decisions of the applicable appeals, grievance and review committees. Company will make available to Facility Information concerning the Member appeal, grievance and external review procedures at the time of entering into this Agreement 8.2 facjlity Dj$pyte Resolution. Company shall provide a mechanism whereby Facility may raise issu~. concerns; controversies or claims regarding the obligations of the Parties under this Agreement. Facility shall exhllust this medlan!sm prior to instituting any arbilrlltion or other permitted legal proceeding. The Parties agree that any dispute that may arise be$Yeen the Parties shall not disrupt or interfere with the provision of seNicell to Members. Discussions and negotiations held pursuant to this Section 8.2 shall be lreatcd as inadmissible compromise and s~ttlernent negotiations for purposes of applicable rules of evidence. 8.3 b,rbjtta!ign. SNFChlilllonC"' Nu"i"l JOOI!Oil tloc Pase 14 of26 Case 2:16-cv-00589-NVW Document 42-1 Filed 10/06/16 Page 16 of 18 8.3, I S}lb!nisaion of Claim or ControvmY to Arbjlration, Any controvony or claim arising out of or relating to this Agreement or the breach, termination, or validity thereof, except for temporary, preliminary, or pennanent iqjunctive relief or any other form of equitable relict; shall be settled by binding arbitntion adminlatmd by the American Arbitration Association ("AAA") and conducted by a sole Arbitrator ("Arbitrator") !n accordance with tho AAA 's Commercial Arbitration Rules ("Rules''). The vbitration shall be govemeG by the Federal Arbitration Act, 9 U.S.C. §§ 1·16, to the excl!Uion of state laws inconsistent therewith or that would produce a different result, and judgment on the aw11rd rendered by the Arbltre.tor (the "A wvd") may be entered by any court having jurisdiction theroof. A Shmo&l'Phic record •hall be made of all testimony in any arbitration In which 1ny discloiJCd claim or counterclaim exceed~ $250,000. An Award for $250,000 or more shall be accompanied by 11 short statement of the ~tasonlng on which the Award rests. 8.3.2 t\ppcal of Arbjtatign f,ytwd. ln tho event a Party believes there is a clear error of law and within thirty (30) days of receipt of an A ward of $250,000 or more (which shall not be binding if an appeal is taken}, 11 Party may notifY the AAA of Its intention to appul the Aw11rd to a sc:cond Arbitnltor (the "Appeal Arbitrator"), designated in the same manner as the Arbhrator except that the Appeal Arbitnltor must have at least twenty (20) years' experience In the active practice of law or as a judge. The Award, as confirmed, modified or replaced by the Appeal Arbitrt.tor, shall be final and binding, and judgment thereon may be entered by any court having jurisdiction thereof. No other arbitration appeals lliiiY be made. s.JJ Cgnfidcntloljt¥. Except u may be required by law or to the eJy an authorized officer of the l'arty to be charged. Facility waives any claims or cause of action for fraud in the inducement or execution related hereto. Qgveming. La¥!· This Agreement and the rights and obligations of the parties hereunder shall be constrUed, interpreted, and enforced in accordance with, and governed by, the laws of the State where Facility is located. J:.iability. Notwithstanding Section 9.3, either Party's liability, if any, for dmnages to the other Party for any cause whatsoever arising out of or related to this Agreement, and regardless of the form of the action, shall be limited to the damaged Party's actual damages. Neither Pw1y sbal1 be liable for any indirect, incidental, punitive, exemplary, special or co~seq~enti~l damages of any kind whatsoever sustained as a result of a breach of this Agreement or any act10n, Ill action, alleged tortious conduct, or delay by the other Party. SNI' Asr....,
