Aetna Health of the Carolinas v. Piedmont Endocrinology Med. Associates
| Decision Date | 07 June 2011 |
| Docket Number | NO. COA10-1049,COA10-1049 |
| Court | North Carolina Court of Appeals |
| Parties | AETNA HEALTH OF THE CAROLINAS, F/K/A AETNA U.S. HEALTHCARE OF THE CAROLINAS, INC.; AETNA HEALTH, INC., F/K/A AETNA HEALTH MANAGEMENT, INC., PlaintiffS, v. PIEDMONT ENDOCRINOLOGY MEDICAL ASSOCIATES, P.A. and GODWIN UZOMBA, M.D., Defendants. |
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
Mecklenburg County
Appeal by defendants from judgment entered 6 April 2010 by Judge Richard D. Boner in Mecklenburg County Superior Court. Heard in the Court of Appeals 26 January 2011.
Gallivan, White & Boyd, P.A., by James M. Dedman, IV and Nicole Judd Buntin, for Plaintiffs-Appellees.
Law Office of H. Morris Caddell, Jr., by H. Morris Caddell, Jr., for the Defendants-Appellants.
Defendants, Piedmont Endocrinology Medical Associates, P.A., and Piedmont's President, Godwin Uzomba, M.D., appeal from a judgment entered by the trial court on 6 April 2010 confirming an arbitration award in favor of Plaintiffs Aetna Health of the Carolinas, f/k/a Aetna U.S. Healthcare of the Carolinas, Inc., and Aetna Health, Inc.,f/k/a Aetna Health Management, Inc., and granting Plaintiffs' motion to recover reasonable costs and attorney's fees from Defendants. On appeal, Defendants contend that the trial court erred by failing to conclude that the arbitrator exceeded her authority by failing to recognize that Plaintiffs' claims lacked validity under the Employee Retirement Income Security Act of 1974 (ERISA) and were barred by the applicable statute of limitations, by failing to conclude that Plaintiffs' claims were preempted by ERISA, and by failing to make adequate findings of fact to support the award of attorney's fees. After careful consideration of Defendants' challenges to the trial court's order in light of the record and the applicable law, we conclude that the trial court's order should be affirmed.
On 20 May 2003, Plaintiffs, an insurance company providing insurance benefits to individuals and entities located within Mecklenburg County, entered into a Physician Group Agreement (PGA) with Defendants. Pursuant to the PGA, Defendants agreed to serve as participating providers in Plaintiffs' provider networks in exchange for payment for covered services rendered to Plaintiffs' members. The PGA further provides that the payor, ordinarily Plaintiffs, "shall have final authority to determine whether any services provided by Participating Group Providers [PGP] were Covered Services and to adjust or deny payment for services renderedby [PGPs] to Members in accordance with such determinations." According to Section 10.2.1 of the PGA:
. . . . 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 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 exclusion of state laws inconsistent therewith or that would produce a different result, and judgment on the award rendered by the arbitrator may be entered by any court having jurisdiction thereof.
After the parties entered into the PGA, a dispute relating to Defendants' submission of claims associated with the performance of a series of procedures billed under CPT Code 95904, 1 the code applicable to sensory nerve conduction studies, arose between the parties. After reimbursing Defendants for the performance of theseprocedures, Plaintiffs discovered that the procedures in question were not, in fact, sensory nerve conduction studies, but instead were incorrectly coded and billed under CPT Code 95904. Plaintiffs further determined that the procedures actually performed by Defendants were not covered under the PGA and would not have been subject to reimbursement if correctly coded. As a result, Plaintiffs filed a demand for arbitration seeking to recover $136,344.52 from Defendants relating to incorrectly coded, non-covered procedures performed between December 2003 and July 2007.
An arbitration hearing was held on 1 and 2 July 2009. At this hearing, Defendants were represented by counsel and did not object to the use of arbitration to resolve the dispute between the parties. On the contrary, Defendants asserted a counterclaim against Plaintiffs during the proceedings before the arbitrator. The record indicates that "each party affirmatively agreed to [the] Arbitrator[,]" that the arbitrator heard testimony from witnesses presented by both parties, and that both parties introduced exhibits into evidence for the arbitrator's consideration. After "hear[ing] the testimony of the witnesses and [reviewing] the exhibits and the post hearing briefs of the parties," the arbitrator entered an award on 6 August 2009 requiring Defendants to pay Plaintiffs the fullamount that Plaintiffs claimed and rejecting Defendants' counterclaim.
After Defendants failed to make the payments required by the arbitrator's award, Plaintiffs filed a complaint and a motion seeking confirmation of the arbitration award in Mecklenburg County Superior Court in late 2009. On 6 January 2010, Defendants filed an answer in which they denied that Plaintiffs were entitled to enforce the arbitrator's award, asserted a number of affirmative defenses, and requested that "all or part of the Award of Arbitrator" be set aside. Although Defendants admitted that "the arbitration . . . was supposed to be a binding arbitration if conducted in accordance with the rules and provisions of the [PGA] and the [AAA,]" they denied that "the arbitration [had been] conducted in such a manner" and alleged that:
Plaintiffs responded by filing a motion to strike Defendants' defenses, withdrawing their original motion to confirm the arbitration award, and filing an amended motion seeking confirmation of the arbitrator's award in which they requested that the trial court:
confirm the award and enter judgment against [Defendants] in the total sum of [$136,344,52] plus interest as provided by law from the date of entry of this judgment. Pursuant to [N.C. Gen. Stat.] § 1-569.25, and because Defendants now seek to challenge the award on various grounds, [Plaintiffs] seek[] the recovery of reasonable costs of the motion and subsequent judicial proceedings as well as reasonable attorneys' fees and other reasonable expenses of litigation incurred in a judicial proceeding after the award is made to a judgment confirming the award.
The issues raised by the parties' pleadings came on for hearing before the trial court during the 4 March 2010 civil session of the Mecklenburg County Superior Court. After providing all parties with an opportunity to be heard, the trial court entered a judgment stating that:
Defendants noted an appeal to this Court from the trial court's judgment.
In their first challenge to the trial court's judgment, Defendants argue that the trial court erred by confirming the arbitration award on the grounds that the arbitrator exceeded her authority in rendering a decision for Plaintiffs. We disagree.
At the outset, we note that the PGA includes language indicating that it is governed by the Federal Arbitration Act (FAA). Pursuantto the FAA, which is codified in 9 U.S.C. §§ 1-16, "any party to [an] arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title." 9 U.S.C. § 9. In reviewing a trial court's decision confirming an arbitration award, we ...
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