IMA v. Columbia Hospital

Case: 20-20032 Document: 00515904031 Page: 1 Date Filed: 06/17/2021

United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit

FILED
June 17, 2021
No. 20-20032
Lyle W. Cayce
Clerk
IMA, Incorporated,

Plaintiff—Appellee,

versus

Columbia Hospital Medical City at Dallas, Subsidiary
L.P., doing business as Medical City Dallas Hospital,

Defendant—Appellant.

Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:19-CV-3500

Before Higginbotham, Jones, and Higginson, Circuit Judges.
Stephen A. Higginson, Circuit Judge:
Columbia Hospital Medical Center at Dallas, L.P., d/b/a Medical
City Dallas Hospital (“Columbia Hospital”) seeks to compel IMA, Inc., a
health plan administrator, to arbitrate a dispute involving unreimbursed
medical fees. The parties are connected by a series of intermediary
agreements within a preferred provider organization (“PPO”) network that
allows patients in covered health plans to receive medical services from
participating hospitals at discounted rates. One of those agreements contains
an arbitration clause. The district court denied Columbia Hospital’s motion
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No. 20-20032

to compel arbitration, holding that IMA is not a party to, and is not otherwise
bound by, the agreement containing the arbitration provision. On appeal,
Columbia Hospital argues that the district court erred in declining to compel
arbitration under direct benefits estoppel, or alternatively to construe the
series of agreements as a single, unified contract. We AFFIRM.
I.
IMA is the third-party administrator of the Central Management
Company, LLC Employer Health Plan (“Health Plan”), which IMA
maintains is covered by ERISA. In February 2016, T.S., a member of the
Health Plan, received two spinal surgeries at Columbia Hospital. Prior to the
surgeries, Columbia Hospital obtained authorization numbers confirming
that T.S. was a member of an in-network health plan. Columbia Hospital
subsequently sought reimbursement for the surgeries and spine implants
from IMA.
It is undisputed that IMA, a plan administrator, and Columbia
Hospital, a services provider, do not have a direct contract with one another.
Instead, they are connected through a series of intermediary agreements
entered into over approximately ten years that connect hospitals (like
Columbia Hospital) with various PPO networks, then to plan administrators
(like IMA), and finally to health plans and patients.
A. Relevant agreements
Effective April 2012, Columbia Hospital agreed to provide discounted
services to HealthSmart Preferred Care II, L.L.C. (“HealthSmart”), a PPO
network. The terms of this arrangement were entered in a “Hospital
Agreement” between Hospital Corporation of America North Texas
Division, Inc. (“HCA”), acting on behalf of Columbia Hospital and other
hospitals, and HealthSmart. Pursuant to this agreement, Columbia Hospital
would provide services as a “Participating Hospital” to the HealthSmart

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network and its “Groups,”1 based on the discounted reimbursement rates
specified in “Exhibit B,” which was attached to the agreement. In turn,
HealthSmart agreed to “ensure that any Group accessing [Columbia
Hospital’s] rates . . . is contractually bound to [Columbia Hospital] to adhere
to the terms and conditions of this Agreement,” and that HealthSmart “shall
require” the Group to pay the rates specified in Exhibit B. The Hospital
Agreement also contains the following arbitration provision:
Dispute Resolution. Any dispute arising out of, relating to,
involving the interpretation of, or in any other way pertaining
to this Agreement shall be resolved using alternative dispute
resolution mechanisms instead of litigation. Network, Group,
and Participating Hospital agree and acknowledge that it is
their mutual intention that this provision be construed broadly
so as to provide for mediation and/or arbitration of all disputes
arising out of this relationship.
IMA, as a plan administrator, similarly entered into agreements with
PPO networks so that its members could access discounted medical services
with “hundreds of providers.” One of those agreements was a Preferred
Provider Organization TPA Agreement with PPOplus, LLC, effective March
2003, so almost a decade earlier (the “IMA-PPOplus Agreement”). This

1
“Group” is defined as “any entity” including “an association, employer, federal
or state reimbursement program, . . . preferred provider organization, . . . third party
administrator, [or] healthcare service plan . . . that is approved by [Columbia Hospital] and
that provides a Plan and that pays or agrees to pay [Columbia Hospital] for the Covered
Services it provides to Covered Person(s) pursuant to terms and conditions of this
Agreement.”
“Plan” is defined as a “health benefits plan for which a Group has entered into a
Group Agreement with [HealthSmart] to arrange for the provision of Covered Services to
Covered Person(s).”

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contract allows IMA to access the “Participating Providers”2 in the PPOplus
network at the “PPO Contracted Rates,” which are defined as the “rates or
fees agreed upon by PPO and Participating Provider.” Relevant here, IMA
“agrees to pay claims of Participating Providers in accordance with the
applicable Plan and the PPO Contracted Rates,” and to pay PPOplus a
“Network Access Fee.” In exchange, PPOplus is required to “directly or
indirectly arrange for, enter into, maintain, and enforce Provider Agreements
with . . . Participating Providers.” This 2003 contract with IMA as a
signatory does not include an arbitration clause.
A year earlier in 2002, PPOplus entered into a “Network Cross
Access Agreement” with HealthSmart.3 This agreement provides
“reciprocal access” between PPOplus and HealthCare’s network of
providers. In return, both networks “shall require their respective Clients to
pay the claims of the other party’s Participating Providers in accordance with
the applicable Plan and the other party’s Contracted Rates.” This agreement
similarly does not have an arbitration clause.
In sum, Columbia Hospital contracted with HealthSmart, which
separately contracted with PPOplus, which had contracted almost a decade
earlier with IMA, which administered T.S.’s health plan. Only the 2012
Hospital Agreement between Columbia Hospital and HealthSmart contains
an arbitration provision.

2
“Participating Provider” is defined as a “provider or group of providers
(including any hospital, physician, or other health care provider) who has entered into a
contractual agreement with PPO to provide Covered Services to Beneficiaries.”
3
While the party to this agreement, HealthSmart Preferred Care, Inc., is different
from the party to the Hospital Agreement, HealthSmart Preferred Care II, L.L.C., neither
party disputes that the two entities are related or that IMA accessed HealthSmart’s
network, including Columbia Hospital, through the Network Cross Access Agreement.

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B. Claim reimbursement dispute
This dispute arises from Columbia Hospital’s attempt to collect over
$2.7 million for T.S.’s surgeries, including inpatient care and implants in his
back and spine. Columbia Hospital’s “billed charges” were $1,165,116.80
for the first surgery and $1,548,885.57 for the second surgery, totaling
$2,714.002.37. IMA at first declined to pay and requested further records to
explain the cost of the implants. In October 2016, HCA’s senior counsel sent
a letter on behalf of Columbia Hospital to HealthSmart related to these
unreimbursed claims “pursuant to [Columbia Hospital’s] agreement with
HealthSmart.” This letter further sought “HealthSmart’s position
regarding [IMA’s] refusal to process or pay claims until and unless the facility
provides cost invoicing for implants,” and stated that “[a]ction must be
taken to address the existing gap in understanding between [HealthSmart’s]
client and the facilities who serve their members.” A copy of this letter was
sent to IMA’s legal department.
In March 2018, IMA subsequently paid Columbia Hospital
$1,014,161.97. This payment did not cover any of the costs of the implants—
totaling an additional $1,361,786.46—which IMA deemed “ineligible” and
“exceed[ing] the maximum allowed based on the reasonable and customary
amount” under its plan. For the services IMA did reimburse, it paid a
discounted amount of 75% of the billed costs. Specifically, IMA’s explanation
of benefits indicated that the discount code, “2226,” was pursuant to the
“PPO Plus/HealthSmart/PHCS/1st Health . . . discount.” This discount
rate matches the discount stated in Exhibit B of the Hospital Agreement for
the “stop loss” provision of 75% of billed costs. Columbia Hospital
maintains, however, that IMA was required to further reimburse it for the
implants, at the same 75% discounted rate, totaling an additional
$1,021,339.85.

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C. Procedural history
In July 2019, Columbia Hospital filed a demand for arbitration against
IMA in Houston, Texas, alleging breach of contract for the unreimbursed
amount of T.S.’s surgery implants. In response, IMA initiated this lawsuit
in the Southern District of Texas seeking declaratory and injunctive relief
that it is not obligated to arbitrate the dispute because it is not a signatory to
the Hospital Agreement and that it is not obligated to pay the disputed
amount.
Columbia Hospital moved to stay the district court proceedings and
compel arbitration. It argued that IMA was bound by the 2012 arbitration
clause in the Hospital Agreement because the series of agreements between
Columbia Hospital, HealthSmart, PPOplus, and IMA form a “single, unified
contract.” Alternatively, Columbia Hospital argued that even as a non-
signatory to the Hospital Agreement, IMA was bound by the arbitration
clause because it knowingly received the benefits of the discounted services
provided in the agreement.
The district court disagreed on both grounds and denied the motion
to compel arbitration. IMA, Inc. v. Columbia Hosp. Med. City at Dallas,
Subsidiary, L.P., No. CV H-19-3500, 2019 WL 7168099, at *4 (S.D. Tex.
Dec. 23, 2019). Columbia Hospital timely appealed.
II.
A district court’s denial of a motion to compel arbitration is reviewed
de novo. Bowles v. OneMain Fin. Grp., L.L.C., 954 F.3d 722, 725 (5th Cir.
2020). We review the district court’s findings of fact for clear error.

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Crawford Prof’l Drugs, Inc. v. CVS Caremark Corp., 748 F.3d 249, 256 (5th
Cir. 2014).
The district court’s application of direct benefits estoppel is reviewed
for an abuse of discretion. Noble Drilling Servs., Inc. v. Certex USA, Inc., 620
F.3d 469, 472–73 (5th Cir. 2010). “To constitute an abuse of discretion, the
district court’s decision must be either premised on an application of the law
that is erroneous, or on an assessment of the evidence that is clearly
erroneous.’” Id. at 473 (quoting Grigson v. Creative Artists Agency L.L.C., 210
F.3d 524, 528 (5th Cir. 2000)).
III.
Whether IMA is compelled to arbitrate this reimbursement dispute
turns on the threshold question of “whether the parties entered into any
arbitration agreement at all.” Kubala v. Supreme Prod. Servs., Inc., 830 F.3d
199, 201 (5th Cir. 2016) (emphasis omitted); see also Will-Drill Res., Inc. v.
Samson Res. Co., 352 F.3d 211, 218 (5th Cir. 2003) (“[B]ecause arbitration is
a matter of contract, where a party contends that it has not signed any
agreement to arbitrate, the court must first determine if there is an agreement
to arbitrate before any additional dispute can be sent to arbitration.”). If no
arbitration contract between IMA and Columbia Hospital was formed, we
need not consider whether the scope of the arbitration agreement includes
the disputed reimbursement claim. Cf. Tittle v. Enron Corp., 463 F.3d 410,
419 (5th Cir. 2006) (determining scope of arbitration clause only because
there was no dispute that the parties were subject to a valid arbitration
agreement).
We apply “ordinary state-law principles that govern the formation of
contracts” to determine whether an arbitration contract was formed. First
Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Likewise,
whether a party can compel a non-signatory to arbitrate on equitable grounds

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is determined by state law. Crawford Pro. Drugs, Inc. v. CVS Caremark Corp.,
748 F.3d 249, 261 (5th Cir. 2014) (citing Arthur Andersen LLP v. Carlisle, 556
U.S. 624 (2009)). The parties do not dispute that Texas law applies here.
The “federal policy favoring arbitration does not apply to the determination
of whether there is a valid agreement to arbitrate between the parties.”
Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069, 1073 (5th Cir.), opinion
supplemented on denial of reh’g, 303 F.3d 570 (5th Cir. 2002).
“In order to be subject to arbitral jurisdiction, a party must generally
be a signatory to a contract containing an arbitration clause.” Bridas
S.A.P.I.C. v. Gov’t of Turkmenistan, 345 F.3d 347, 353 (5th Cir. 2003).
“Arbitration agreements apply to nonsignatories only in rare
circumstances.” Id. at 358. While it is undisputed that IMA is not a party or
signatory to the Hospital Agreement that contains the arbitration clause,
Columbia Hospital argues that IMA is nonetheless required to arbitrate
under direct benefits estoppel, or alternatively under a unified contract
theory.
A. Direct benefits estoppel
Direct benefits estoppel applies to “non-signatories who, during the
life of the contract, have embraced the contract despite their non-signatory
status but then, during litigation, attempt to repudiate the arbitration clause
in the contract.” Hellenic Inv. Fund, Inc. v. Det Norske Veritas, 464 F.3d 514,
517–18 (5th Cir. 2006) (internal quotation marks and citation omitted).
Texas’s application of direct benefits estoppel is consistent with federal law.
In re Weekley Homes, L.P., 180 S.W.3d 127, 134–35 (Tex. 2005).
“A non-signatory can ‘embrace’ a contract containing an arbitration
clause in two ways: (1) by knowingly seeking and obtaining ‘direct benefits’
from that contract; or (2) by seeking to enforce the terms of that contract or
asserting claims that must be determined by reference to that contract.”

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Noble Drilling, 620 F.3d at 473.4 Columbia Hospital asserts only that the first
ground applies here. Accordingly, “[t]o invoke direct-benefits estoppel
under this theory . . . [IMA] must have known about the existence of the
contract and its terms, and acted to exploit that contract. Second, [IMA]
must have obtained some benefit under the contract.” In re Lloyd’s Reg. N.
Am., Inc., 780 F.3d 283, 291 (5th Cir. 2015) (citing Noble Drilling, 620 F.3d
at 473–74).
The district court declined to apply direct benefits estoppel because it
determined that, factually, Columbia Hospital “failed to show that IMA had
knowledge of the existence and terms, including the arbitration provision, of
the Hospital [Agreement].” IMA, Inc., 2019 WL 7168099, at *3. It
emphasized that in order to comply with its obligations, IMA needed only “a
copy of the Plan and the PPO Contracted Rates,” the latter of which were
contained in “an attachment to the relevant contract, and are not set forth in
the contracts themselves.” Id. Because the district court concluded that
IMA was not shown to have the requisite knowledge of the Hospital
Agreement, it did not reach the second issue of whether IMA obtained
“direct benefits” from the Hospital Agreement.

4
While not dispositive, “the archetypal direct-benefits case” applies where “the
party opposing arbitration seeks to enforce the terms of an agreement with an arbitration
clause.” Jody James Farms, JV v. Altman Grp., Inc., 547 S.W.3d 624, 637 (Tex. 2018)
(citing Rachal v. Reitz, 403 S.W.3d 840, 847 (Tex. 2013)); see also Bridas, 345 F.3d at 362
(noting “an important distinction . . . between cases where the courts seriously consider
applying direct benefits estoppel” is whether the “nonsignatory had brought suit against a
signatory premised in part upon the agreement.”); Scott M. McElhaney, Enforcing and
Avoiding Arbitration Clauses Under Texas Law, 37 Corp. Couns. Rev. 109, 139 (2018) (“In
situation[s] in which signatories seek to compel arbitration of the claims they assert against
non-signatories . . . principles of estoppel have not been as successful.”).

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1.
Columbia Hospital first argues that the district court legally erred, and
thereby abused its discretion, by requiring that IMA have specific knowledge
of the arbitration provision for direct benefits estoppel to apply, when it is
sufficient that a “non-signatory have had actual knowledge of the contract
containing the arbitration clause.” Noble Drilling, 620 F.3d at 473 (emphasis
added). Not so. The district court correctly applied our circuit’s precedent
that knowledge of the agreement requires knowledge of the contract’s “basic
terms.” See In re Lloyd’s Reg., 780 F.3d at 292.
Columbia Hospital relies on Vloeibare Pret Ltd. v. Lloyd’s Register
North America, Inc., in which we applied direct benefits estoppel over the
non-signatory party’s objection that it was “unaware” of a specific forum
selection clause within a contract. 606 F. App’x 782, 785 (5th Cir. 2015) (per
curiam) (unpublished). In that case, we held that it was sufficient that the
non-signatory was “aware both of the existence of the . . . contract and its
basic terms” because its complaint referenced the contract and “outlined
extensively the obligations that [the signatory defendant] had under the
contract.” Id. Vloeibare is consistent with the district court’s application of
direct benefits estoppel here, as the district court concluded that IMA lacked
knowledge of the “existence and terms, including the arbitration provision,
of the Hospital [Agreement].” IMA, Inc., 2019 WL 7168099, at *3 (emphasis
added). The district court did not apply a heightened knowledge
requirement.
2.
Columbia Hospital next argues that the district court clearly erred
factually in concluding that IMA lacked knowledge of the basic terms of the

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Hospital Agreement.5 The crux of the district court’s decision was that IMA
neither was shown to have, nor needed, knowledge of the Hospital
Agreement in order to fulfill its obligations to the Health Plan and the IMA-
PPOplus Agreement; rather IMA could process the claims with “a copy of
the [Health] Plan and the PPO Contract Rates.” Id. Consequently, the
district court declined to infer that IMA’s partial reimbursement to
Columbia Hospital showed knowledge of the underlying Hospital Agreement
or its terms. Id.
Columbia Hospital asserts that the district court clearly erred because
it ignored the record evidence showing that IMA preauthorized T.S.’s
surgeries and subsequently reimbursed Columbia Hospital, in part, at the
discounted rates. To constitute an abuse of discretion, the district court’s
evaluation of the evidence must be “premised . . . on an assessment of the
evidence that is clearly erroneous.” Noble Drilling, 620 F.3d at 472–73.
First, Columbia Hospital says that IMA knew about the Hospital
Agreement when it twice preauthorized T.S.’s surgeries as in-network
services because such authorization “presupposes the existence of the
Hospital Agreement.” The record is sparse as to what this preauthorization
entails or the significance of IMA’s “authorization numbers.” The parties
agree that IMA’s preauthorization at a minimum confirmed that T.S. was a
member of the Health Plan and that Columbia Hospital was an in-network,
preferred services provider. But nothing in the record establishes that this
preauthorization “presupposes” knowledge of the Hospital Agreement, let

5
We reject Columbia Hospital’s contention that the district court legally erred by
concluding that IMA’s knowledge of the discount terms was insufficient to constitute
knowledge of the Hospital Agreement and its basic terms. Whether IMA knew of the
discount terms attached to the Hospital Agreement is a factual determination, which we
review for clear error. Noble Drilling, 602 F.3d at 472–73.

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alone its discount terms, beyond a generalized relationship between T.S.’s
health plan and the PPO network. See Noble Drilling, 620 F.3d at 473; see also
Pershing, L.L.C. v. Bevis, 606 F. App’x 754, 758 (5th Cir. 2015) (per curiam)
(unpublished) (“A nonsignatory must have specific knowledge of the
relevant agreement—a nonsignatory’s generalized sense that two
contracting parties have a course of dealing will not satisfy this
requirement.”). Consequently, the district court did not clearly err in
declining to rely on the authorization numbers as evidence that IMA had
knowledge of the Hospital Agreement and its basic terms.
Second, Columbia Hospital asserts that IMA knew the basic terms of
the Hospital Agreement when, in March 2018, it partially reimbursed
Columbia Hospital at the agreed-upon discounted rate. Specifically,
Columbia Hospital argues that IMA even referenced the
“PPOplus/HealthSmart” discount in its payment explanation.
IMA counters that its network providers—PPOplus, who in turn
contracted with HealthSmart—reprice the claims. In support, IMA points
to a declaration from its VP of Operations stating that “IMA does not receive
a copy of the agreements with the hospitals or other providers” and that
“IMA does not know the discount amount until after it has been repriced by
the PPO.”
Based on this record, the district court did not clearly err in relying on
IMA’s declaration to conclude that “[t]here is no reason IMA would need to
know the terms of the Hospital [Agreement], and there is no evidence that it
knew those terms.” IMA, Inc., 2019 WL 7168099, at *3. Additionally, the
discount code that Columbia Hospital principally relies on refers to three
other PPO networks in addition to PPOplus and HealthSmart, which is
further indicative of the parties’ participation in various network
arrangements rather than knowledge of one specific agreement.

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Alternatively, Columbia Hospital argues that IMA knew of the
Hospital Agreement upon receipt of the October 2016 demand letter, which
quoted various provisions of the Hospital Agreement including the applicable
discount rates. Specifically, the letter excerpted two lines from the Hospital
Agreement’s Exhibit B, including the discounted 75% “stop loss” provision
that IMA subsequently applied in its partial payment to Columbia Hospital.
Notably, this letter was addressed to HealthSmart (which similarly did not
have a direct contract with IMA), sought HealthSmart’s position regarding
IMA’s “refusal to process or pay claims,” and did not seek a response or
other action from IMA.
The district court noted that this letter “fail[ed] to present evidence
that IMA knew the arbitration terms of the Hospital [Agreement],” IMA, Inc.,
2019 WL 7168099, at *3 n.4 (emphasis added), but the district court did not
address whether this letter established that IMA then knew of the Hospital
Agreement’s existence or its basic terms. See In re Lloyd’s Reg., 780 F.3d at
292; Vloeibare, 606 F. App’x at 785. Nonetheless, the record does not show
that the district court clearly erred in concluding that IMA could comply with
its payment obligations at the discounted rates contained in the Hospital
Agreement by relying on the PPO networks, including PPOplus and
Healthsmart, to apply the agreed-upon discounts.
Consequently, the district court did not clearly err in concluding,
based on the record before it, that IMA lacked the requisite knowledge of the
Hospital Agreement and its basic terms to be compelled to arbitrate under
direct benefits estoppel.6

6
Like the district court, we do not reach the second direct benefits estoppel inquiry
of whether IMA directly benefitted from the contract. See In re Lloyd’s Reg., 780 F.3d at
292; see also Am. Bureau of Shipping v. Tencara Shipyard S.P.A., 170 F.3d 349, 351, 353 (2d
Cir. 1999) (concluding, where it was undisputed that all parties had knowledge of the

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B. Unified contract
Alternatively, Columbia Hospital argues that IMA is bound by the
arbitration clause in the Hospital Agreement because the series of contracts
between IMA, PPOplus, HealthSmart, and Columbia Hospital—which
together “created this preferred-provider network”—should be construed
as a single, unified contract.
Under Texas law, “instruments pertaining to the same transaction
may be read together to ascertain the parties’ intent.” Fort Worth Indep. Sch.
Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000). This can apply
“even if the parties executed the instruments at different times and the
instruments do not expressly refer to each other.” Id. In such circumstances,
“courts may construe all the documents as if they were part of a single,
unified instrument.” Id. However, the Texas Supreme Court has repeatedly
cautioned that “tethering documents to each other is ‘simply a device for
ascertaining and giving effect to the intention of the parties and cannot be
applied arbitrarily and without regard to the realities of the situation.’”
Rieder v. Woods, 603 S.W.3d 86, 94–95 (Tex. 2020) (quoting Miles v. Martin,
321 S.W.2d 62, 65 (Tex. 1959)).
The district court declined to construe the agreements as a single,
unified contract because they each contained “Entire Agreement”
provisions.7 On appeal, Columbia Hospital asserts that these provisions do
not bar construing the contracts together because “the agreements at issue
repeatedly cross-reference each other.” We review the district court’s legal

contract containing an arbitration clause, that the non-signatories directly benefitted from
that contract, and were thus bound to arbitrate).
7
An “entire-agreement clause” is also commonly termed an “entire-contract
clause,” “integration clause,” or “merger clause.” Black’s Law Dictionary (11th
ed. 2019).

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determinations de novo and factual findings for clear error. Bowles, 954 F.3d
at 725; Crawford, 748 F.3d at 256.
Both the Hospital Agreement and the IMA-PPOplus Agreement
contain similar “Entire Agreement” provisions.8 Texas law recognizes such
clauses as “contractual provision[s] stating that the contract represents the
parties’ complete and final agreement and supersedes all informal
understandings and oral agreements relating to the subject matter of the
contract.” Rieder, 603 S.W.3d at 96 (quoting Integration (Merger) Clause,
Black’s Law Dictionary (11th ed. 2019)).
The Hospital Agreement, entered nearly a decade after the IMA-
PPOplus Agreement, does not expressly reference IMA or the IMA-PPOplus
Agreement. However, it does contemplate that a “Group,” including a
“third party administrator,” like IMA, would be subject to the Hospital
Agreement and its arbitration provision. Additionally, a “Group
Agreement” is defined as any agreement “directly or indirectly, between
[HealthSmart] and a Group.” Contrary to the district court’s conclusion,

8
The Hospital Agreement states:
Entire Agreement: This Agreement, all Exhibits, and other documents
furnished pursuant to or in furtherance of this agreement and expressly
made a part hereof shall constitute the entire agreement relating to the
subject matter hereof between the parties hereto. Each party
acknowledges that no representation, inducement, promise or agreement
has been made, orally or otherwise, by the other party, or anyone acting on
behalf of the other party, unless such representation, inducement,
promise, or agreement is embodied in this Agreement, expressly, or by
incorporation.
The IMA-PPOplus Agreement states:
Entire Agreement: This Agreement and all attachments and other
documents furnished pursuant to this Agreement and expressly made a
part hereof shall constitute the entire Agreement relating to the subject
matter hereof between the parties hereto.

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this indicates that IMA (a “Group”) and the IMA-PPOplus Agreement (a
“Group Agreement”) are incorporated into the Hospital Agreement, and
thus not barred by its merger clause.
The converse—that the 2003 IMA-PPOplus Agreement similarly
incorporates the entirety of the 2012 Hospital Agreement—is not true.
While IMA agreed to “pay claims of Participating Providers in accordance
with the applicable Plan and the PPO Contracted Rates,” which means the
“rates or fees agreed upon by PPO and Participating Provider,” the IMA-
PPOplus Agreement does not incorporate all of the other, non-payment
terms in those agreements.9
Columbia Hospital argues that we disregard IMA’s contractual
language because the agreements “repeatedly cross-reference each other.”
It is true that the IMA-PPOplus Agreement contemplates other “Provider
Agreements”—defined as “any agreement for the provision of Covered
Services to Beneficiaries that is entered . . . indirectly with an entity
representing such Participating Provider”—including contracts like the
Hospital Agreement, which IMA entered indirectly through the Network
Cross Access Agreement. We agree with IMA, however, that IMA “never

9
Columbia Hospital passingly refers to a 2013 provision of the Texas Insurance
Code which Columbia Hospital says prohibits PPO networks—here, HealthSmart and
PPOplus—from providing an entity with “access to health care services or contractual
discounts under a provider network contract unless the provider network contract
specifically states that the person must comply with all applicable terms, limitations, and
conditions of the provider network contract.” Tex. Ins. Code § 1458.102(a). Columbia
Hospital did not raise this argument before the district court, nor does it explain on appeal
how this provision applies, if at all, to third-party administrators like IMA, or to the
agreements at issue here, all of which predate the 2013 statute. See Leverette v. Louisville
Ladder Co., 183 F.3d 339, 342 (5th Cir. 1999) (“This Court will not consider an issue that
a party fails to raise in the district court absent extraordinary circumstances.”); Cinel v.
Connick, 15 F.3d 1338, 1345 (5th Cir. 1994) (“A party who inadequately briefs an issue is
considered to have abandoned the claim.”).

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Case: 20-20032 Document: 00515904031 Page: 17 Date Filed: 06/17/2021

No. 20-20032

agreed to comply with or be a party to the ‘Provider Agreements.’” This
distinction is critical. Moreover, the IMA-PPO Plus Agreement discusses
“Provider Agreements” only in reference to the obligations imposed on
PPOplus, not IMA. Instead, the IMA-PPOplus Agreement emphasizes
IMA’s obligations to pay the “PPO Contracted Rates,” without referencing
the more expansive obligations of any individual Provider Agreement.10
Contrary to Columbia Health’s assertions, these obligations are not
co-extensive. Consequently, like the district court, we decline to construe
these agreements as a unified contract. See Reider, 603 S.W.3d at 94–95.11
IV.
For the foregoing reasons, the district court’s denial of Columbia
Hospital’s motion to compel arbitration is AFFIRMED.

10
By contrast, the Hospital Agreement requires “any Group accessing [Columbia
Hospital]’s rates under this Agreement is contractually bound to [Columbia Hospital] to
adhere to the terms and conditions of this Agreement.”
11
Because we conclude that the contracts cannot be construed together as a single,
unified contract, we need not consider the district court’s alternative holding that the
agreements can be deemed unified for reimbursement purposes but not to compel
arbitration. IMA, Inc., 2019 WL 7168099, at *3 (citing Baylor Univ. Med. Ctr. v. Nippon Life
Ins. Co., No. CIV.A.3:09CV1496L, 2010 WL 330238, at *4 (N.D. Tex. Jan. 28, 2010)).

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