Manfredi v. Blue Cross & Blue Shield of Kansas City

JAMES EDWARD WELSH, Judge.

As the majority notes, § 9.6.8 of both the Participation and Network Agreements between Blue Cross and Dr. Man-fredi contains the following limitation:

[Wjhere pursuant to the terms of this Agreement or governing law the disputed decision or determination is one which is committed to the discretion or medical judgment of either party, the arbitrators shall not disturb that decision or determination.

In my view, this provision removes the current dispute from the scope of the parties’ agreement to arbitrate and therefore mandates affirmance, without consideration of issues of unconscionability. I accordingly concur in the result.

The present dispute plainly concerns a matter “committed to the discretion or medical judgment of’ Blue Cross “pursuant to the terms of [the parties’] Agreements].” Both the Participation and Network Agreements specify that Blue Cross is only obligated to reimburse Dr. Man-fredi for his performance of “Covered Services” on insured individuals. The Network Agreement specifies that, in order to constitute “Covered Services,” particular services must be “Medically Necessary,” meaning that such services “are essential to the health of the Covered Individual for the diagnosis or care and treatment of a medical or surgical condition.” Among other things, in order to be considered “Medically Necessary” the services must be “consistent with acceptable medical practice according to the national Blue Cross and Blue Shield Association’s uniform medical policy, as amended from time to time.” The Agreement also provides that “[a] [Blue Cross] medical director or his/her authorized physician designee is the only person who may make a determination that a service or supply is not Medically Necessary.” 1 Blue Cross’s decision to cease coverage of electrical stimulation modalities was explicitly based on its determination that such services are not “Medically Necessary”: its announcement letter states that the coverage change is due to the fact that “[t]he current policy of the [Blue Cross and Blue Shield] Association states that transcutaneous electrical nerve stimulation is considered investiga-tional for the management of’ particular types of pain.

By denying the arbitrators the authority to resolve any dispute over a decision which is “committed to the discretion or medical judgment of either party” (what I dub a “discretionary determination”), § 9.6.3 wholly removes such disputes from the scope of the arbitration clause. The majority essentially recognizes that § 9.6.8 has the effect of removing discretionary determinations from the scope of arbitra-ble disputes, since it observes that, “[t]hough couched as a limitation on the arbitrator’s powers, the practical effect of this provision is to remove an entire class of disputes from the scope of the arbitration agreement.”

*137To the extent the parties did not agree that disputes over discretionary determinations would be resolved by arbitration, that should end the matter: in the absence of an agreement to arbitrate such disputes, arbitration obviously cannot be compelled. See Stolt-Nielsen S.A v. AnimalFeeds Int’l Corp., — U.S. -, 130 S.Ct. 1758, 1773, 176 L.Ed.2d 605 (2010) (“[T]he [Federal Arbitration Act] imposes certain rules of fundamental importance, including the basic precept that arbitration ‘is a matter of consent, not coercion.’ ” (citation omitted)); Kansas City Urology, P.A. v. United Healthcare Servs., 261 S.W.3d 7, 11 (Mo.App. W.D.2008) (en banc) (“A party cannot be compelled to arbitration unless the party has agreed to do so.”).

The majority avoids this result by concluding that Dr. Manfredi has not argued that the present dispute falls outside the scope of the arbitration clause, and that the trial court did not rule on this basis. But as the majority recognizes, under our standard of review we are “concerned primarily with the correctness of the trial court’s result, not the route taken by the trial court to reach that result.” Ruhl v. Lee’s Summit Honda, 322 S.W.3d 136, 138-39 (Mo. banc 2010). Whether or not the issue was decided below, or argued here, should be irrelevant when the issue is plain on the face of the record. In any event, I disagree with the majority’s characterization of the proceedings below. A section of the trial court’s interlocutory judgment is headed, “The Arbitration Provision Does Not Apply To A Declaratory Judgment or Injunction Action To Determine Whether Electrical Stimulation For Certain Pain Relief is Investigational.” Under that heading, the trial court concludes that the discretionary determination language of § 9.6.3 “prevents] arbitrators from considering the electrical stimulation issues involved here.” The conclusion of the court’s interlocutory judgment repeats its determination “that the arbitration provision does not apply to the claims made in the Petition,” although the court’s judgment also finds the arbitration clause procedurally and substantively unconscionable “even if this dispute is within the scope of the provision.” On appeal, Dr. Manfredi specifically argues that “[t]he circuit court properly found this dispute outside the scope of the arbitration provision,” in addition to defending the trial court’s finding of unconscionability. In these circumstances, the scope of the arbitration provision, and § 9.6.3’s impact on that scope, is properly before us.

The circuit court could not compel arbitration where the parties’ arbitration agreement specifically excludes disputes like the present one. Consideration of the scope of the agreement to arbitrate requires affirmance and renders any discussion of unconscionability unnecessary.2 I accordingly concur in the result.

. The provisions of the Network Agreement addressing medical necessity are primarily directed toward case-specific determinations made in the context of the treatment of individual patients. However, the provisions specifying that “Covered Services” must be "Medically Necessary,” and that the determination of medical necessity is vested in Blue Cross’s medical personnel, are equally applicable to the present dispute.

. When no lesser authority than the United States Supreme Court has admonished us that the "[Federal Arbitration Act] reflects ‘emphatic federal policy in favor of arbitral dispute resolution,’ " Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 729, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)), we ought not to volunteer a finding of unconscionability when it is not required by the case before us.