945 F. Supp. 2d 620
E.D. Pa.2013Background
- CardioNet and LifeWatch are major OCT providers; OCT is real-time, physician-prescribed cardiac monitoring for undetected atrial fibrillation.
- CIGNA issued multiple policies (2007-2011) stating OCT is supported by literature for diagnosing dangerous arrhythmias; later, 2012 CEM Policy declared OCT not covered as EI U.
- Both Plaintiffs entered 2007 ASAs with CIGNA, providing negotiated rates but only paying for OCT when it is a Covered Service under a Participant Benefit Plan.
- In October 2012, CIGNA announced OCT would be EI U; policy could be superseded by less restrictive plans; some plans treat non-FDA-approved uses as EI U.
- CIGNA disseminated the August 2012 Physician Update stating OCT is EI U and would never be covered; Plaintiffs allege orders for OCT dropped for CIGNA patients and others.
- Plaintiffs filed suit on behalf of themselves and as assignees of patients’ rights, asserting ERISA claims (Counts I-II), fiduciary relief (Count III), contract and tort claims (Counts IV-VII).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of arbitration clause | Clauses are broad; cover disputes about interpretation or performance of the Agreement. | Clauses are narrow; limited to internal dispute resolution and related payments only. | Arbitration clause is broad; exclusive remedy governs disputes under the ASAs. |
| Derivations by assignees of Plan Participant claims | ERISA claims and related breach claims may be pursued by assignees of participants. | Arbitration binds only parties to the ASA; assignees cannot circumvent arbitration. | Plaintiffs cannot press Plan Participant claims via assignment due to preexisting arbitration obligations. |
| Arbitrability of Counts V-VII (tort/common-law claims) | Counts V-VII arise from mischaracterization of OCT and are outside the ASA scope. | Counts V-VII fall within broad arbitration clause. | Counts V-VII dismissed as within arbitration under the ASA. |
| Exclusivity of arbitration as the remedy | Relief sought through court reconsideration of cancellation and mischaracterizations. | Arbitration is exclusive remedy for disputes under the ASA. | Arbitration is the exclusive remedy for disputes under the ASAs; case compelled to arbitration. |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (federal policy favoring arbitration; enforce arbitration agreements)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (doubts concerning arbitrability resolved in favor of arbitration)
- Battaglia v. McKendry, 233 F.3d 720 (3d Cir.2000) (arbitration clause scope; broad vs. narrow interpretation)
- Lukens Steel Co. v. United Steelworkers of America (AFL-CIO), 989 F.2d 668 (3d Cir.1993) (arbitration clause broad when it covers meaning and application of the agreement)
- United Steelworkers of Am., AFL-CIO-CLC v. Rohm & Haas Co., 522 F.3d 324 (3d Cir.2008) (arbitration clause breadth and presumption of arbitrability)