Managed Care Insurance Consultants, Inc. v. United Healthcare Insurance Co.

228 So. 3d 588, 2017 WL 4417735
CourtDistrict Court of Appeal of Florida
DecidedOctober 4, 2017
Docket4D16-2767
StatusPublished
Cited by1 cases

This text of 228 So. 3d 588 (Managed Care Insurance Consultants, Inc. v. United Healthcare Insurance Co.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Managed Care Insurance Consultants, Inc. v. United Healthcare Insurance Co., 228 So. 3d 588, 2017 WL 4417735 (Fla. Ct. App. 2017).

Opinion

Warner, J.

We grant the motion for clarification, withdraw our prior opinion,- and substitute the following in its place.

Managed Care Insurance Consultants, Inc., appeals the order denying its motion to vacate an arbitration award based on the partiality of one of the arbitrators. It contends that it showed that the arbitrator had an actual conflict, as her husband’s medical practice had a business connection with the appellee, United Healthcare of Florida. Because the court found that the arbitrator did not have “actual knowledge of such a relationship or potential conflict prior to' or during the subject arbitration,” nor was there any actual bias shown, the court did not err in denying the motion. We affirm.

United Health Care (“United”) contracted with Centers for Medicare & Medicaid Services (“CMS”) to offer Medicare Advantage health plans to Medicare beneficiaries in South Florida. In exchange for United providing Medicare benefits, CMS made monthly payments to United for each of its Medicare Advantage members. United entered into a delegation agreement with Managed Care Insurance Consultants, Inc. (“MCIC”)', whereby United delegated to MCIC some of its medical management responsibilities under the contract with CMS, In return, United was to pay, the authorized claims and to fund the payments with funds it received from CMS. MCIC was to be compensated from revenue placed into a risk pool, based upon a ratio of expenses to revenue. Both parties -claimed that the other breached the agreement.

The contract had an arbitration provision through the American Arbitration Association (“AAA”). The AAA appointed three arbiters to hear the dispute, including the chairperson.

We need not detail the claims and the arbitral proceedings. In short, MCIC contended that United had not funded the risk pool properly, nor had it paid only authorized expenses from the pool. MCIC claimed lost revenues between $14 million and $21 million. United, on the other hand, claimed that there were deficits in the risk pool due to' MCIC’s management of patient care. It sought damages in the millions of dollars.

In the Final Arbitration Award, the panel found, that United had breached the agreement for funding the risk pool, but did not award any damages to MCIC because it found.the evidence in support of the claimed damages was too- speculative. Similarly, the panel found for MCIC on its claim that certain patient expenses should have been removed, from the risk pool reconciliation. Again, however, it did not award damages because of “its inability to quantify ' vrath reasonable certainty the amount of invalid claims that were paid by United.” As to United’s claim against MCIC, the panel denied relief because United could not establish that it had performed its part of the contract. Thus, neither party obtained a damage award from the other party. MCIC made a motion to affirm the portion of the arbitration award which found that United had breached the agreement and to vacate the portion which refused to award MCIC damages. The panel denied the motion and the order became final.

Subsequently, MCIC filed a petition in circuit court to confirm the award as to its findings of liability in its favor but to vacate the denial of damages. It claimed that the lack of damage award was contrary to Florida law, and the evidence was clear that it was entitled to at least $24 million in damages,

■ After filing its petition, MCIC filed an amended petition to vacate the-award in its entirety because of the chairperson’s failure to disclose the relationship between her physician' husband and United. The chairperson’s husband was a cardiologist associated with HeartWell, a large cardiology group in South Florida. He treated patients at HeartWell who were insured by United. He was also on the Board of Directors of HeartWell. The motion alleged that the chairperson was the primary architect of the arbitration award based on .the amounts she charged to the parties after the close of the final hearing. The motion also alleged that she never disclosed that her husband had a contractual relationship with United or that some of the medical claims at issue were actually-paid to her spouse. Because HeartWell was part of United’s network—and United reimbursed HeartWell for its .'doctors’ treatment of patients insured by United— the chairperson’s failure to disclose that she was married to a physician receiving payments from United established partiality on her part.

The court allowed limited discovery from the chairperson. In the chairperson’s deposition via written questions, she testified that she had asked her husband if he had any relationship with United and he told her he didn’t. She had him look at the witness lists, as well as the parties, and he said he had no dealings with any of them. She stated that if she had known he had a relationship' she would have disclosed it, but “[m]ost of the times he probably doesn’t even know who the insurance companies are for his patients, and he did not tell me that he had any relationship with United Healthcare,” She was not aware of any money that her husband, or his practice, received from- United; nor was she aware that'HeartWell had a contract with United. She was asked whether, between 2010 and 2015, HeartWell billed United $41.3 million, and United paid HeartWell $12.9 million for medical services, something she should háve disclosed. She testified that she had no idea that there was a relationship. After reviewing the AAA oath, which required her to do a reasonable investigation of. potential conflicts, she testified that she had made that investigation by questioning her husband and presenting him with the conflicts checklist of the parties and witnesses.

In lieu of testimony at the, hearing .on the motion to vacate, MCIC submitted the affidavit of another arbitrator. That arbitrator testified that the relationship between the physician husband and United should have been disclosed and that the chairperson arbitrator was obligated to . do an investigation to ascertain the business relationship. The affidavit did not opine on what a reasonable investigation would; include.

The trial court denied both motions to vacate the award. As to the issue of conflict on the part , of the chairperson, the court relied on Gianelli Money Purchase Plan & Trust v. ADM Investor Services, Inc., 146 F.3d 1309, 1313 (11th Cir. 1998), to conclude that MCIC had not proved an actual conflict nor that actual bias had beeh shown, The court ruled that “although there was evidence that [the arbitrator’s husband] treats patients who are insured by United.and, as a result, receives reimbursement from United, there was insufficient evidence demonstrating [that the arbitrator] had actual knowledge of such a relationship or potential conflict prior to or during the subject arbitration.” As to the original claim that the arbitration panel had exceeded its powers by not applying the correct law, the court found that this was not a statutory ground for vacating the award and denied the petition. From this order, MCIC appeals.

In order to vacate an arbitration award, one of the statutory grounds listed in section 682.13(1), Florida Statutes (2015), must be present.

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Cite This Page — Counsel Stack

Bluebook (online)
228 So. 3d 588, 2017 WL 4417735, Counsel Stack Legal Research, https://law.counselstack.com/opinion/managed-care-insurance-consultants-inc-v-united-healthcare-insurance-co-fladistctapp-2017.