Court Rejects Appeal In Medicare Advantage Dispute

Jul 20, 2017

An appeals court Wednesday rejected arguments that an arbitrator could have been biased in a dispute involving an insurance firm's attempt to receive $24 million in damages from UnitedHealthcare.

The ruling by the 4th District Court of Appeal involved a UnitedHealthcare contract with the federal government to provide Medicare Advantage health plans in South Florida. UnitedHealthcare entered an agreement with Managed Care Insurance Consultants, Inc. to handle some medical-management duties under the contract, according to Wednesday's ruling. The companies later got into a dispute about whether the contract had been breached, and the dispute went before a three-member arbitration panel.

The panel sided with Managed Care Insurance Consultants on two issues but did not award damages because evidence in support of the damages was too speculative, the appeals court said. Managed Care Insurance Consultants, which contended it was entitled to $24 million in damages, argued in the appeal that the arbitration decision should be vacated because the panel's chairwoman was married to a cardiologist whose medical practice was part of UnitedHealthcare's network.

But the appeals court, which did not name the arbitration chairwoman or her husband, issued a six-page ruling that refused to overturn the panel's decision.

“There was no actual bias shown by the arbitrator in this case, nor was there an actual conflict,” said the ruling, written by appeals-court Judge Martha Warner and joined by judges Dorian Damoorgian and Alan Forst. “The arbitrator did not know of the business relationship between her husband's corporate employer and United (nor apparently, did her husband).”